What’s up everyone? I’m giovanni welcome to another coin: telegraph live stream. Today i have the pleasure to be joined by mike mcglone senior commodity strategist at bloomberg, intelligence and scott melker veteran trader.
We are here today to celebrate uh. Very important news, a very important event, which is tesla, buying 1.5 billion dollars worth of bitcoin and bitcoin breaking its all-time highs, reaching about uh, 44 000, the benchmark so mike and scott.
How are you doing today, good thanks for having me good to see you doing great any day that i get to talk to mike it’s a good day that’s? Mutual, oh, so i didn’t know that you were already acquainted but uh that’s great.
So i want to know first, what was your first reaction when you got to know that tesla bought 1.5 billion dollars worth of bitcoin uh for first use code? What was your reaction? I’ve, been bouncing off the walls all day, honestly um.
I i don’t, usually get particularly emotional about trading or assets, but i was really legitimately excited and not as a trader just more as an investor, and as i’ve kind of uh already hinted to on twitter.
It’s, not really about the price. It’s, just one more step in, i guess, being vindicated from calling a being called a crazy person for all these years and uh. It’s, nice to see confirmations like a company like tesla, putting bitcoin into their uh.
You know treasury as a reserve asset. It’s, just one more confirmation that we’re, not nuts, and our belief in this thing is justified and real. So, honestly, i’ve, been in a great mood. I think that uh this is potentially one of the biggest events uh in history for bitcoin, so very excited.
Actually, i saw a video of you in the car listening to some rap. It sounded like pretty exciting that’s very exciting. It’s very exciting and uh. I know that mike you are like an analyst at bloomberg.
You have a more balanced, neutral stance in the industry, but still i want to know what was your take of the of the today’s. Big news, i think the best thing i i can echo what scott said um to me. This is just the next iteration, so i put on my trading hat as a trader and a market person you’re, always looking for catalysts to me.
This was the catalyst to break bitcoin out of that 30 40 000 range, which is only in for a little bit over a month and to convert what was 40 000 resistance into support and move it up to 50 000.. So tesla’s, the biggest name.
I mean micro strategy, wasn’t as big of a name but tesla is and then it’s. Also, what’s? The next iteration um? We all know it’s, probably not just the one off and there’s. Also unique concept about this.
I’ve, been writing about how bitcoin’s, going to get the upper hand over tesla. One thing to note is they both are right now about in just over an 800 billion dollar market cap, and i see um, you know my quote.
Is i fully expect bitcoin to resume outperforming tesla? Despite the fact, it pulled back a little bit last year and one of the key things is supply. So here’s, a unique thing about what tesla just did they can issue unlimited number of shares.
They can issue an unlimited amount of debt until the market pushes back and with that they can buy bitcoin. Yet there’s, a limited supply of bitcoin, so you see where the uh, the dominoes are falling to higher prices for bitcoin, yeah and actually tesla said in in the security filing uh today that they made this investment in bitcoin.
But they also consider the idea to invest in other digital assets as well as gold, bullion and gold exchange traded funds, so they they open up their investment policy to these other assets. So what do you think guys? Can we expect tesla to discover, apart from bitcoin? Also other cryptocurrencies, like ethereum scott, what do you think uh? I i don’t really want to speculate on that, to be quite honest, um at the end of the day, i think the statement that they’re making is that they they view the dollar as an inflationary asset that you can’t hold dollars in your cash reserve, or at least you need to limit your exposure to the dollar.
So bitcoin is a great first step. Gold would be a reasonable treasury asset but far less exciting, obviously, and perhaps down the road they find ethereum or something else, but i have no idea so i don’t want to speak to it.
I mean for me bitcoin’s enough um. I don ‘ T really need all that. I don’t, think they’ll, be investing in doge. If that’s. The next question um just because uh we find it to be a funny meme and elon musk talks about it all the time, but at the end of the day, i think it’s, just a very firm statement.
Much like we’ve, seen from microstrategy and other companies that you don’t want to hold dollars and you need to limit the exposure. I think i think that’s, the key point, but to me it makes a lot of sense to diversify your holdings in a basket of precious metals.
That includes bitcoin to me that’s. Really the narrative shifted towards the end of last year is the world the history of the world. That has been allocating this certain group that is allocated to gold and precious metals over time to preserve and store value is now realizing that if they don’t have some of that portion of that basket in bitcoin.
They might be missing out. So here’s, a simple narrative, let’s, say um. You know, bitcoin goes up. Who knows how many x’s from here over the next 10 20 30 years? If that happens, which i fully, i think the market’s, coming to the conclusion that it’s gaining a higher probability, what does that do for gold and precious metals? So to me that’s? What’s happening the whole world’s? Realizing okay, i have to diversify my holdings and things that have limited supply might become a reserve asset store value.
Bitcoin’s, a key one, the rest of the space dogecoin. They’re speculative digital assets. You know some of those are going to go away there’s, 8 000 of them, so you go ahead, pick which one you want last year was 4 000.
as and where i said i get the questions mostly about bitcoin. Certainly, you know, i hear economics departments of major banks and institutions, they might look at the other ones, but to me that’s, what’s happening.
Is that major? This is a paradigm shift and i think our key point is okay. So tesla’s, jumping on board who and what’s next, and the way i see is the next potentially um iteration in this space is central banks, because why they hold a huge amount of gold.
I know virtually anybody in planet who’s been holding gold knows they need to have some bitcoin in that bucket, and you know there’s, a sore thumb there and that’s, central banks, yeah and, of course, we Need to point out that now uh not long ago, elon musk became the world’s richest man, because tesla had a huge success.
Last year here this tesla stocks, uh skyrocketed, many falls and uh. So it’s. One of the most successful and innovative companies in the world and uh for sure such a company buying into bitcoin uh cannot but have a huge impact on the perception of bitcoin from other major players.
Um. I want to explore a little bit more. The consequences of this event so mike you in your latest analyst in your latest analysis, you said that tesla’s. Move could propel the bitcoin market cap to one trillion dollar.
Can you just guide us through this prediction of yours? Well, that’s, that’s, my initial iteration for this year, which, by the way, is a very modest prediction for bitcoins. It gets to near 50 000 this year, that’s.
Initial to me, the initial target resistance, just above 50 000, is about 1 trillion market cap tesla’s very close, so i love the battle they’re both battling to get there. The key point about that is tesla is doing it.
Um on rapidly increasing supply shares outstanding on a 12-month basis, are increasing around five percent on average, and we all know what happens there as long as the market will justify little quick, adding shares combating debt, it’s just the way it is um, But bitcoins do it on one thing: price and it’s more organic and it’s global.
So to me that’s, it’s. A global is becoming a global reserve asset. So to me, we have potentially the most expensive stock ever that’s been added to the s. P 500 has tons of competition. That was a key thing that struck me at the super bowl.
Um was gm. Had this ad for evs, i have a gm ev. I love it. It’s that’s, something you wouldn’t have heard of 20 years ago, so they’re. We’re, replacing um demand for petroleum with um electric cars and tesla has tons of competitors.
Every car maker in the planet does but there’s. Only one bitcoin, it’s, limited supply and i think the key point you made about um elon, musk, being one of the richest men in the world. Just like we hear from mexican billionaires.
They know they have to diversify that um asset. Obviously there’s, a major responsibility and bitcoin’s, a just a classic target of diversification. If you look forward um it’s potentially becoming a reserve asset volatility will probably decline below that and go.
Why? Because supply is fixed, gold supply and demand are both uncertain and precious metals are in. That and equities are very expensive. He knows i mean everybody knows that tesla’s, one of the most expensive stocks on the planet and it’s.
Got tons of competition so to me, what’s happening is very prudent. It makes sense. The key question i ask myself is: what can it strip it up? What’s going to make it stop, and i don’t see that at the moment, so that’s, why i see getting a trillion hanging out there for a while um and it’s? A good bridge to have to worry about i shouldn’t say i should say if, but i think it’s more of a win scott.
What do you think? Do you agree with with mike’s? Forecasts yeah and i think, as he said it’s. Conservative and i mean rationally 50. 000. 60 000. These sound, like massively huge numbers, but relative percentage, gain it’s.
Nothing for bitcoin. In fact, from here, 50 000 bitcoin is with in a day of volatility on some of uh bitcoin’s most volatile days. So i i don’t think that that’s, uh crazy at all, and i would expect it to happen.
I mean i honestly i wouldn’t have been surprised if bitcoin hits 50 000. Today i’m, not saying it will it’s, certainly not a prediction, but nobody would think you were crazy for saying it and you’ll, be pushing a trillion dollar market cap already.
If that happened so um, i think you know 50k is squarely in the sights one trillion market cap squarely in sights and that likely will be seeing much much higher. I mean this is the first day of this.
The you know the world’s. Going to need time to process this, but there’s, no single individual on the planet, who could probably influence the bias about this asset? More than elon musk. As you said, he’s, the richest man in the world and he’s kind of i think a lot of people certainly feel like he’s, one of us to a degree.
You know he’s. The guy who you can somewhat relate to and and he’s out there shooting off memes and he’s. A part of the community, bitcoin and otherwise um, and i think it just can’t, be understated how important this is.
If tesla does it everyone’s watching we’re gonna just see, i think the flood gates open way more companies way more billionaires, uh gaining exposure or more likely telling us that they’ve already gained exposure, and We’re, just afraid to talk about it, which i think is far more likely yeah, and i think that’s to your point that now um elon musk is probably one of the charac one of the protagonists that influenced bitcoin more Uh, especially on twitter, we saw that donald trump was banned not long ago out of twitter, and he was also influencing things with his tweets a lot, but now that he he’s.
Not there anymore, elon musk is probably taking the lead in terms of like one of the most loud and influential people on twitter uh, even though, fortunately, in a different kind of way than trump, but let’s.
Uh! Let’s, move on with questions from the audience, so we have isham sada. Who is asking? How long do you think alz will keep going along with btc on this kind of uh on this kind of search? So we saw that elon is super bullish on bitcoin, but what about alts will they follow along all the way or they will they will not keep up with bitcoin? What do you think? What do you think scott? Yet again, i hate to make predictions that are come going to come back and bite me in the ass.
I think that uh, it depends as usual, on whether you’re watching the uh dollar pair or the bitcoin pair um. If you’re, a trader who trades the dollar pair, you probably looked at your all coins today and said: hey my you know, i’m.
I’m about even today it’s. Great you know, bitcoin went up, my portfolio is good. I haven’t lost any dollars. Then you flip over to the the bitcoin value of your portfolio and you’re down 12 14. So i think it just depends on your perspective.
If you’re trading to stack sats as many people are in in uh in this industry um, i would expect that if bitcoin continues to rage upward uh with without taking a breath, that alts will suffer. But one thing that we ‘
Ve always seen is that eventually bitcoin breathes and all to catch up. So i would hate for anyone to you know, take that prediction or or view that as actionable information, because each and every person trades or invests in something for a very different reason, with a very different time frame in mind um.
So you know you could tell hey you see you guys on twitter, hey get out of your alts bitcoins moving! Well that works if you’re a day trader. But if you’ve invested in altcoin that you’re planning on holding for two years, you don’t react to uh every little move, so i think it just really depends um as far as dollar value.
I think that they would trail but continue to rise if bitcoin continues to rise, but i think that if you know in bitcoin value they’re likely to drop if we see continued movement. I’d, like to echo on that.
A little bit, i think that’s, one thing where scott and i have a lot in common with think like traders and i like to really focus more on investment standpoint. So i i completely agree that everything and the whole space is tied to bitcoin.
If bitcoin is going down, all the alts will probably go down with a higher gamma and the same thing bitcoins going up, so some of them are going up with a higher gamma um and let’s point out one key fact, and they should Continue, but one key fact is the number two number three um cryptocurrency on the planet is tether, um and um.
It’s running. It has aum of almost 29 billion dollars. Okay, so that’s, simply organic demand. Remember this tether has been under the uh microscope of the usda for since april 2019., so but they don’t speculate in tether.
Although the volume, the tether for 24 hours right now, is 150 billion dollars, it’s, almost double the volume of bitcoin, so that’s. Something people need to point out that i like to focus on a lot is to me.
This is indicative of the organic demand in the whole space. The whole thing, the rising tide moving higher. But what’s? Not what’s, not mince words here, virtually everything else are speculative digital assets with a little bit less extent.
Um ethereum and tethers, not tethers, focused on being a you know, stable it’s. It’s, a stable dollar. I mean it’s, a digital dollar, the rest of the cbdc ‘ S are just trying to catch up, and then there’s, bitcoin store value.
I don’t, you know it’s. Great you have to. You have to have traders to create volume and open interest, but i look at bitcoin as the thing that the whole planet’s, starting to realize there’s, going to be a potential difference between the haves and have-nots in the future Of bitcoin – and you might as well just have get some to take to alleviate that risk.
Everything else purely speculative good luck. It’s great for traders, but as an ex trader traders in the long term lose money and buy and hold people are typically the ones who make the most. Let’s. Look at elon musk’s.
Example. Most of the old like there’s potential, so satoshi nakamoto might become the richest man in the world yeah and actually i was pretty curious to follow up on the on one main thing that scott said before, regarding elon musk being perceived as someone Of us, someone like uh uh, it has this kind of uh mood of feeling of being one of us uh that kind of connects with all this story regarding uh gamestop.
So we i’m sure that everybody heard about this story about the fact that uh this company’s, stocks were were pushed very high uh by um this group on reddit, in order to um. In order to how you say to harm these hedge funds that that were um short selling, very heavily, the the stocks of of gamestops um, and so this group of traders decided to to to join and to to to come together and uh and push against these Hedge funds, so it became a sort of uh david versus goliath situation, and we saw that many people in the crypto space uh have been also joining.
This kind of narrative, saying uh short, the hedge funds uh some sort of uh calling for the democratization of finance, uh and also um, criticizing uh, criticizing robin hood for for having um restricted trading on their platform.
Some because they apparently uh at a certain point. They restricted trading on their platform and many people were accusing them to to be allied with the with these hedge funds. So elon musk seemed to be sympathetic towards the uh towards this whole movement of uh um of the of traders that were moving against the the big giants of finance.
So do you see any connection between elon musk moving into bitcoin and this whole wave of um kind of democratization of finance and uh yeah, like this whole movement around around the gamestop? What do you think scott? I think it’s, a fun narrative but likely incorrect um, and i don’t think that that’s, necessarily what is happening or what did happen.
I think that uh, that would be a very, very slow wave to fundamentally change the market or uh. You know democratize, finance or you know, have d5 replace banks, and all these things i mean, as more information has come out uh.
It seems very likely, as you would expect, that the the redditors and your average person who was buy and hold no matter what on gamestop, were the pawns in a much bigger chess game being played by the same hedge funds that uh they believed they were.
That was the machine they were raging against, so to speak. So i think the big money was still who was profiting largely on those moves and manipulating those moves. So and even if it was david and goliath for a moment, it’s.
Sort of like uh david won the battle and then uh. You know goliath got called in his 30, more goliath, friends and won the war. So i i don ‘ T really think it’s going to change much. I think it’s.
Fun, like i said to talk about. I think that uh bitcoiners have been sort of uh pounding that narrative for years and it’s, something that could come true, but i don’t think it’s happening in the short term.
I think that uh, sadly, i think that the gamestop saga will be forgotten soon. I don’t, think they’ll have the power to do it again, because i think that regulators and hedge funds are aware of what they’re trying now, and i think that if there is any regulation that comes Out of it, it will be in the guise of protecting the consumers and the little guy, but will actually hurt them and help the hedge funds again.
So you don’t you don’t, see um these uh. These events surrounding gamestops somehow pushing the crypto narrative forward and like as a sort of sort of catalyst for people joining the crypto space. Well that that it is um.
So there’s, the there’s, the overwhelming narrative and what we believe will happen with institutions and all this and then there’s. The fact that people literally left robin hood and tried to sign up to crypto exchanges.
So fast that crypto exchanges, couldn’t onboard them, so there’s, no question that the metrics support the fact that a lot of those retail traders were fed up with what happened at robin hood, and i mean you know i was Talking to steve ehrlich, the ceo of voyager – and there was a point where they were getting a hundred signups a minute to voyager on those days so that there’s, no question that the demand is there and maybe it’s.
A grand awakening, but if we’re talking about something actually changing on a grand scale right now, i think that’s, going to take a lot of time mike what’s? Your take on his narrative, i think scott nailed that very well for a lot of us traders.
It’s very it’s, a great story for the media and the press, and the big picture means nothing um from a trading standpoint. I mean i look back to long-term capital management when they failed, and that was actually one of my best trading with customers positions ever because we’re long, a lot of things.
They were short just because it looked like they were short stuff and they were wrong, but um this case the narrative plays well, but i think um. One thing i always have to point out is a lot of these people are buying calls most calls expire worthless.
Certainly me, as an ex-option trader, i guarantee, if i’m, longer call out of the money. The market will go there, the call will expire and then market will go up. That’s just the way it works. So a lot of them lost money, but here’s, a famous market analyst, his name was john liscio.
I used to read his reports every day he bought. He died a few years ago. He called a lot of the traders in the pits when they used to have them as dope sniffing dogs. That’s. What hedge funds are. They are professional dope, sniffing dogs.
You might win once in a while, but they will crush you. It’s, a lesson i learned you might as well, just not fight them just get long and let them beat each other up, because i guarantee, as scott said, there was a lot of other hedge funds who found out who was short and just Tweaked that short, we used to call it running, stops in the trading pit.
You find it where the stops are, and you run them. This is the way life is in in trading, but i think i want to bring back to the narrative that’s plain that’s; speculation; that’s pure pure just speculation, get back to fundamentals, and that is where You’re, going to see more and more buying and allocating to bitcoin, and i think the small person needs to realize.
Um there’s, a risk of the haves and have-nots in the future, and now the institutions are getting involved. Why take the risk of being a have-not and allocate the bitcoin don’t trade it and to me that’s? What’s happening um kicked in the last year was more the volatility this year.
The narrative is going to be: did you or didn’t you own bitcoin by the end of the year yeah, and actually you’re right mike? Probably it’s better to look at numbers instead of narratives, which can be easily manipulated or or blown out of proportion.
Uh we received not long ago a statement from kraken that says that um they had a 1 000 increase in sign ups in the weekend of the gamestop rally and uh so yeah that’s, that’s, pretty significant, i would say: Uh, that’s more than the whole of 2019 uh combined, so that’s, uh that’s, pretty impressive.
I would say that’s, amazing yeah and uh. Actually, i would like to like move to more of a maybe psychological kind of topic, so elon musk’s. Behavior uh has been quite enigmatic on twitter uh. It looked a little bit like trolling.
Sometimes he he put bitcoin on his twitter profile. Then he took it down, then he started shielding dogecoin. Then it came out that he actually bought bitcoin. So what do you make of of musk behavior on twitter? Some people say that uh shilling, dogecoin or like this kind of products is reckless and irresponsible, because actually people might get financially hurt because of tweets don’t.
What’s? Your take on on musk’s behavior? Should he behave should should he be blamed for this behavior or is it just like innocent fun? What do you think scott um? I think he can do whatever he wants and if we’ve learned anything from twitter in the past few years um.
I mean we had our president, showing things on on twitter that were potentially damaging financially to the american people so to to take the jump and blame blame elon musk, because he’s, posting pictures of the lion king with his face on it.
I think is a it &: # 39 s, a vast jump, the guy’s, kidding right um and there’s, traders who will be able to use his tweets and things like that to uh to to make money and – and there Will be people who lose money and yes, perhaps he should be more responsible, but the fact is it’s, a social media platform and he ‘
S generally behaved like this for a very long time. Right i mean he’s. He’s, expressing his personality on a social media platform and uh. He’s having a good time doing it. If you believe that doge is a good investment, because elon musk tweeted it, then you probably have bigger problems financially um than you want to admit already and shouldn’t be following the tweets of someone.
You know you’re, probably the same person who tweets uh, who buys something that some crypto influence or tweets or or whatever right i mean people are responsible for their own behavior. I don’t, have any problem with elon musk being elon musk on on twitter and in fact i quite enjoy it.
I i got ta echo that, because scott again i mean you just nailed just exactly what i’m thinking as an ex traders. The number one lesson you learn as a trader: no one forces you to take that position. When you hear about someone losing a position, they take it’s completely.
If they’re, not responsible for it, then they’re lying and then they’re, not a trader, so that’s. Where you have to look at is, if you’re trading off the tweets good luck to some people. Who can do that? Well, but, and if you’re, not a complete professional with a massive amount of quants and computer power behind behind you in the long term, you’ll lose money.
I’ve, just seen it happen. I mean i was a broker for 20 30 years and 90 percent of our clients lost money um and so you just go. The goal is to keep them alive, but i think the key thing to focus on is what’s? The next next iteration we’re in this bit of, i would say it’s, nothing but the biggest bubble ever in stocks.
When you look at – and this is part of it um, and so i look at what’s – the next iteration we saw today with with tesla tesla’s. The biggest name in the space is probably the most um elon. Musk is one probably the most widely respected young people amongst millennials.
Certainly among my kids, are all millennials and on the planet and to me the next potential iteration is going. We see tesla there’s, nothing there’s, a lot to look forward to in crypto and there’s, a lot of risk, but a next risk.
I think think i would see potential to look forward to as a big headline at some point is getting an etf in the u.s. Now canada is getting close and i didn’t, say etp, maybe an etf. We already have a lot of exchange traded products, but the reason i say that also it’s brought me up to let’s.
Look at um – and i’ll finish on this to me that next, that’s. The next iteration to potentially look for, amongst others and an etf would really solidify a bottom below the market. Just like we saw this year with with institutions getting getting that held, thirty thousand support, elon musk might hold forty thousand important bitcoin.
So if you look at average volume on bitcoin futures right now, let’s, get some facts. It’s by 30-day average is like 2.5 billion when the wheat etf was launched in 2011. The average volume the year before was right about where it is now for bitcoin etf.
So the point is that case that the sec is making that there’s, not liquid enough. It’s, not liquid enough on a regulated exchange is no longer true. Now it is the fact it is just as liquid as the meat etf was when it was launched and that one’s still trained, so that’s right guys.
Do you think that we are about to see this bitcoin? You have coming up soon because of this elon musk story. It’s, not because it’s, just the next potential it’ll race right. I was just going to say that the question was whether you know elon musk was manipulating bitcoin or putting the hashtag in all those things.
Anyone who’s a trader and believes in technical analysis, which i have my own feelings on. You believe that the news is in the chart right – and i was posting charts literally for a week the last week, showing a massive full flag price was re-testing it.
It was coming back to retest, support and then elon musk. Of course they announced the test like and bitcoin goes up, but if you were simply looking at the chart, you also saw that in the chart, as you know, building building up some pressure to break through to break through this level.
So that was the catalyst, but i think that it was going to happen with or without tesla. First of all, so i agree that maybe tesla becomes the 40k floor and the etf is the next big big thing. I you know i’ve.
Actually, i mean full transparency. I invested in a company that has filed for an etf called valkyrie um, so i’m, pretty uh intimately involved in what that process looks like. I can tell you that the people i work with believe it’ll, be within three years.
Uh, as usual, i’m, a bit hyperbolic and excited, so i think we could see that within a year um, and i think that we’re, going to see very, very interesting products but, as mike most importantly said, the arguments that They have against an etf, are failing one by one.
You know the dominoes are just sort of falling down. The only reason not to approve it at this point would be some sort of bias or i don’t know a you know. Some regulation coming that we’re unaware of uh that would be prohibitive to it or something, but i think the etf is inevitable and what’s important now? You take tesla as the floor right.
Tesla found a way, but it’s, not that easy to buy 1.5 billion. You know we’ve, seen michael saylor kind of break down the playbook of his tens of thousands of small transactions to be able to do it. Hey there’s, a lot of companies that don’t want to do that and b there’s.
A lot of companies that still can’t really get past compliance to buy bitcoin even with grayscale. Even you know, obviously, the underlying asset etf opens the gates to everyone. There’s, no company that can’t, justify buying an etf and can’t legally.
Do it. So anyone who’s sitting on the sidelines and waiting anyone who’s waiting for market cap to be higher anyone who’s waiting for a vehicle that allows them to do it legally without the friction will be able To do it when the etf comes, so i would like to take a chance uh to ask our audience if you, if you have any questions regarding this big news regarding tesla buying wine, 1.
5 billion dollars worth of bitcoin and bitcoin skyrocketing almost to around 44 000 Write your questions in the chat and i will ask our guests to answer so uh moving moving on to the following question.
I was pretty curious to know your opinion about this, because uh elon musk, just uh, got into bitcoin at a we don’t know what price level he bought these bitcoins for, like we don’t, know for for how much he Bought those bitcoins uh, but we can assume it was around.
Perhaps 35 000 uh price. So what do you think was elon a bit late in jumping on the bitcoin bandwagon? Why did it take him so long to join um mike? Maybe you can go first with this. Oh well, that’s, always relative.
As we know, everybody who’s bought bitcoin, most people said they bought and held it felt they were late at the time starting around 10 and then 100. Then a thousand and then 10 000 and to me that’s, where we’ve been going with zeros last year, lock in was really ten thousand.
I think the next lock-in is really going to be a hundred thousand, so it’s only late. If the narrative, if it fails it’s early by many measures, if it does continue to do what it’s been doing, which has been accelerating, become a global reserve asset store value that’s.
No one else’s, liability and no one else’s um project and to me that’s. What’s happening on a global scale? Ian musk is the biggest name to jump into space, so that’s. Why, as a trader and strategist, i’m, always looking to say what’s, the next iteration.
Something can go wrong. I don’t know that’s, why i had to bring in tether a little bit because people been bringing that up, and i said, tether that whole narrative with tether was so um got. We got past that in april 20, um 2019.
. I can go there if we want it’s been um, the space is just rising, so something has to go wrong with the technology. Otherwise it’s potentially very early and um. I don’t see why what should stop bitcoin from i mean the next.
Iteration is 50 000 a normal year like this. Unless something goes wrong with, but and and the history of bitcoins, it would get to near a hundred thousand. But you add in the macro you add in the institutions you add, in the volume value of the open interest is declining and was i’m, saying not open interest, but volatility was less than gold and was less than the nasdaq on basically a 180 day, 260 day basis, ever the lowest ever versus the stock market, and to me it’s like i, don’t see what should stop bitcoin from continuing to do what it’s been doing, and i was saying Before at a slower pace, but why not the same pace as simply as 2017 was a 15x okay? Let’s.
Just take, you know, bring that down to four or five x. It gets us well over two hundred thousand the key question. I always ask is what can go wrong and obviously mr um, mr musk thinks there’s, less risk on the downside than the upside scott? What do you think about this? Do you also think that uh elon went into in at the right at the right time there’s? No, there’s, no delay in his moving into bitcoin.
First, i think it’s. Important to differentiate tesla came in at this price. We have no idea what elon musk did and i would be very, very, very, very surprised if elon musk doesn’t already own bitcoin personally um and very surprised if he didn’t.
Do it early so the question, because the only fact we have is that tesla bought bitcoin as a treasury asset is whether tesla is early or late, because we have no idea. I think that’s, a important differentiation but um.
No, i, like you, said uh late is relative um. If and it depends on your narrative, if bitcoin, you know, barely rose, but the dollar continues to inflate it’s, still a good investment right. So um i like mike don’t, see a reason that this won’t continue up, but the biggest companies need a higher market cap to invest in bitcoin, so it has to be get.
It has to get bigger. It had to be at this price: tesla couldn’t, buy ten thousand dollar bitcoin. Frankly, it was too small uh it just couldn’t have happened, so i think that this is really the right moment.
The moment that it makes sense – and i think they’ll – be buying a lot more. I think it’s, important also to to to discuss the fact that you know tesla’s. Market cap, as mike says 800. Something 800 odd billion dollars right.
They bought 1.5 billion worth of bitcoins. Nothing right. Microstrategy is an eight billion dollar company that has just as much bitcoin. So, like you know, michael saylor is the one who’s. Making this insanely bold bet on bitcoin, with a huge percentage of the company’s.
You know market cap to me, tesla’s, testing the waters here right, and so i i think that they’ll, be buying they would they would be more inclined to buy more, as it goes up than to buy more if it Went down yeah for sure elon musk seemed to be a little bit more cautious than uh than michael sailor in this respect.
Uh, but of course, we’ll, see how how it goes in the future. Also, i want to point out that it’s, not just that tesla bought 1.5 million billion dollar dollar worth of bitcoin, but also yeah. It announced that they are going to accept bitcoin for purchases of their products.
So, probably in the future we’re, going to be able to buy tesla cars using bitcoin. What do you think about the significance of this side of the news uh mike uh? You could tell i wanted to respond to that one.
I’m glad you mentioned that one giovanni, because i look at bitcoin. Is it’s? A great thing you want to accept for payment, but i don’t see why anybody would ever want to use it for payment unless they really have to, because there’s limited supply.
We all know what’s happening at some point. It’s, going to get too expensive. It might correct 50, but using dollars using fiat currency using stable coins to buy something sure. But i just like the history of buying anything with bitcoin and going for adding five years to that um, 10.
000 bitcoins worth of pizza and stuff um. I think it’s really smart to accept it for payment. I think it’s, really smart for people to get credit cards when you earn it for cash back, but why spend it uh? It’s.
A collectible um spend dollars certain country and that’s. The key thing i want to bring in – and we can move on to this one is tesla – is an american-based company and their treasuries u.s dollars, u.
s reserve countries, we think of the rest of the world that doesn’t have that reserve currency status And this is a thing that michael slayer brought up in some of his other companies, where they have much more incentive for their treasuries.
To use add a little, maybe gold silver pressure, maybe not so much silver but bitcoin um, because they don’t have that dollar they don’t have, and so many places have a currency. Let’s. Look at mexico! It’s, declined 50 versus a dollar in the last 10 years.
So if you’re a mexican company and you need to pay dollars for certain inputs, they’re, double the price, almost um, and just from 10 years ago. You need to protect yourself from that to me that’s. What’s happening? This is prudent protection on a global scale to protect the bumps which happened in fiat currencies typically in history.
Historically, it was precious metals and gold, but now, like i said, you cannot hold gold. I don’t think without having some allocation of bitcoin. Are you potentially naked, and what about you? Scott? What do you make of this uh of the significance of of tesla accepting bitcoin for payments? Do you see it as a like as a coherent move with the with allocating with allocating bitcoin in terms of reserve assets for the company yeah? I think it’s, an amazing move for the company and a terrible move for the consumer who considers doing it sort of as mike touched on.
For a few reasons, especially you know. I only speak as an american, but if you buy a tesla uh with bitcoin, you’ve just sold. You know 85 90, 000 worth of bitcoin and have a taxable transaction to do so so it’s.
It’s. It’s really prohibitive in this country to buy things in general, with bitcoin like it’s, fun to talk about running around and buying cups of coffee and lunch with bitcoin. But you have to record every single one of those transactions and calculate your taxable uh gain on every single one of those, so until they change that law i can say at least here it’s very difficult, but what i do think is important.
Um is that i think this will put pressure on every car manufacturer to accept bitcoin um. You know just like them, holding it as a reserve asset will make other people consider it. I think that if people start buying uh tesla’s because they can do it with bitcoin, if they choose to do so, other car companies will do the same.
So i think, if you want to talk about bitcoin as a method of payment, whether it’s, smart to use bitcoin as a method of payment. I think that this is yet again the biggest news that we’ve, seen because it’s, going to force the hand of a lot of other people to accept bitcoin as payment yeah.
Actually it’s surprising because usually these two narratives bitcoin as a means of payment and as a store of value uh are pointed as some somehow contradictory for for many people. But it seems that tesla is like opening up both uh, both paths to a mainstream uh to a mainstream audience um.
Now i would like to talk about uh bitcoin naysayers, so this uh, these news about tesla, seem to be quite um. Quite a strong piece of news for also many bitcoin naysayers who uh, who are being made fun of now on twitter and uh.
I saw that you also scott, took a little bit part in his uh in this fun, especially peter schiff, who is a very well-known bitcoin critic. Uh has been a favorite target, so what do you think uh bitcoin naysayers are gonna consider defeat.
After this event, scott, the minute that he does, we should probably sell because that’s, usually the top when the, when the the people who are the biggest and fiercest critics. Finally capitulate and come on to your side um.
So let’s hope that peter remains uh, extremely emotional and uh and angry um. Listen, peter schiff is a brilliant, brilliant person. I think, and i think he has a long history of um. You know great ideas.
He calls he’s. Just wrong on this one, and he’s, not willing to admit it and every human being has experienced being wrong and not willing to admit it. It just happens that he does it in spectacular fashion, on a major public forum with an aggressive audience against him.
You know in the face of our whole community, i mean he literally tweeted that at cz from finance that elon musk would never be stupid enough to purchase bitcoin as a treasury asset right i mean a month ago.
So, of course, you’re, going to get pushback when you have it so publicly out there and you’re uh completely wrong, but i think the most important point is. I would prefer that uh peter still be talking about how stupid bitcoin is when it’s, three hundred thousand dollars.
Well, that’s, a key one problem with me and scott. We agree too much and that’s. A lesson to learn as a strategist and a day trader and a trader as a strategist is the more naysayers. The better here’s, an example i remember being in the trading pitch, and i’d, have seven people i’d, be on the phones all over the world and say this is a position i really agree with.
You. Should do strategy and if everybody liked it it was almost virtually guaranteed. It was wrong if everybody said mike, you’re, an idiot, it was guaranteed. Almost it was going to be right, so the thing is we need naysayers.
In fact, by the way, peter shift is a neighbor. We used to live right behind by each other in western connecticut before he moved. We’ve, seen each other around town and been at different events, but this is one of the key parts of the narrative.
We need the naysayers, they’re following life lies, but one of the key things that was out this weekend was that i remember i listened to so many podcasts, including them, including yours, scott and one of them, was the narrative about when jamie dime Was quoted to say it was just stupid for his employees to hold bitcoin and there’s.
Also a fact he said i would fire them. So there’s, a liability there. What if people um sold their bitcoin because they want to work for him and then later realized they had a multi-million dollar asset? Could they come back and say you know i wanted my job with, but you’ve ruined my you know potential future to get ahead here.
That’s, a bit of a liability. So i think this is what people are realizing. Is the people the naysayers and the professionals are learning the risks are greater to not say things like. He said, because if you’re an employee and you’ve sold because your risk of getting fired to me.
That’s, something that a judge and a jury might say. Oh well, you’re, probably unduly pressured to get out of this reserve asset because your manager um, i think the the professionals are getting it there’s, a greater risks now of being a nac or being in norway, nor mr robini And and telling people, if you’re professional and your job is to help people make money and things that are new and different, and you’re wrong.
You should be fired. I mean that’s. What happens that &? # 39 s, what life is that’s? Why? I said if i don’t help people in the terminal make money. I’m, not going to last here very long that’s just the way.
It is, and i’ve – been wrong in some things and hopefully stay right in others, but to me that’s, what has the naysayers are now at greater risk of of being wrong that this becomes a global reserve asset awesome um.
I think that uh, you scott, might need to drop out from the conversation right yeah i’ve got about two or three more minutes; okay, so maybe just in time for one last question that we can wrap up so um a lot of uh Bitcoin critics are pointing out a contradiction, but probably you can respond to them, so they are saying that uh elon musk’s.
Buying buying bitcoin like tesla buying bitcoins is uh is contradictory in some in some way, because tesla is a a green company that produces electric cars, while bitcoin is often blamed for consuming energy and impacting negatively the environment.
So what do you?