Valuetainment - January 22, 2024


BlackRock Launches Bitcoin ETF： Unlocking $19 Trillion of Investment Money？

Hosted by
Patrick Bet-David
Mentioned
Bitcoin Gary Gensler Arthur Hayes Cathie Wood Elon Musk John McAfee John Doe Gen Z Bitcoins Coinbase
Border Crisis： Shocking Data Reveals Illegal Immigrants Outnumber American Births Doomsday Prepping： From $1,000 Kits to Billionaire Bunkers

Episode Stats


Length

10 minutes

Words per minute

189.35

Word count

1,983

Sentence count

174

Harmful content

Hate speech

5

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

11 applications submitted for Bitcoin ETFs have been approved by the SEC, could this be a step toward Bitcoin becoming a fully fledged ETF? Will this be good or bad for Bitcoin? Recorded in Los Angeles, CA!

Transcript

Transcript generated with Whisper (turbo).
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 Big news, SEC officially approved 11 applications for Bitcoin ETFs, and this is a big deal because
00:00:06.500 some people are saying, wait a minute, doesn't this make this official?
00:00:09.680 Cathie Wood came out saying, I think Bitcoin's about to go to a million and a half.
00:00:14.120 She's saying it made 30x what it is today.
00:00:17.360 Many people are losing their minds.
00:00:19.160 BlackRock, Fidelity Investments, ARK Investments, Invesco, WisdomTree, Bitwise Asset Management,
00:00:25.700 Valkyrie, Grayscale are some of the applications that are being submitted.
00:00:29.360 Now, SEC Chair Gary Gensler comes out, and by the way, Gary Gensler is loved by the XRP folks.
00:00:34.780 He's a sweetheart.
00:00:35.840 They just love him.
00:00:36.720 They always send him nice love letters.
00:00:38.600 But he comes out and says the following.
00:00:40.480 He says, accompanying the agency's approval of Bitcoin ETFs, warned that the fund's approval
00:00:45.500 shouldn't be taken as an indication the agency is backing off crypto enforcement.
00:00:50.340 Here's his quote.
00:00:51.140 Today's action does not approve or endorse crypto trading platforms or intermediaries,
00:00:55.940 which, for the most part, are non-compliant with the federal securities law and often
00:01:01.100 have conflict of interest.
00:01:02.920 So some may say, well, isn't this kind of like if ETF approves of these 11 applications,
00:01:07.200 isn't this like one step closer for regulation?
00:01:09.920 Like, that's exactly what Gary wants.
00:01:11.540 No?
00:01:11.880 Isn't he trying to find out exactly what's going on with the money there?
00:01:14.500 Possibly we can talk about that as well.
00:01:15.980 But here's the key.
00:01:16.600 The reason why this is important, when you look at all the asset classes of different generations,
00:01:21.060 this is what you'll find.
00:01:22.200 There's roughly $156 trillion in U.S. assets, and you can see the dark green to the left is
00:01:28.060 boomers, half of it boomers have, Gen X has 30% of it, Silent Generation has 12% of it, 0.71
00:01:35.500 and Millennials have 8.5% of it.
00:01:38.220 But on the baby boomer side, look at equities and mutual funds.
00:01:41.700 How big is that?
00:01:42.800 $19 trillion.
00:01:44.820 Can you imagine now these companies reaching out to these boomer clients and saying, hey, 0.54
00:01:48.200 you got all this money, how about we take some of your $19 trillion and put a small percentage
00:01:52.760 of it in ETF?
00:01:53.640 What could that do to the Bitcoin ETF?
00:01:56.140 Who knows?
00:01:56.920 But we're going to talk about all of that today.
00:01:58.760 So if you get value out of this video, give it a thumbs up and subscribe to the channel.
00:02:01.900 So now if you're watching this, you're like, Pat, the last thing you said is $19 trillion
00:02:04.980 of the boomer's assets, if they take a small percentage of it, what could that do to Bitcoin?
00:02:10.020 Because currently, Bitcoin's market cap is only around $800 billion.
00:02:13.100 So when Cathie Wood says 30x, that means $800 billion would be what?
00:02:18.060 $24 trillion?
00:02:19.240 Maybe that's kind of crazy.
00:02:20.800 By 2030, I'll give you Elon Musk's prediction at the end as well.
00:02:23.800 But could the $800 billion go to $8 trillion?
00:02:26.280 That's 10x.
00:02:27.140 Could that happen?
00:02:28.140 Maybe.
00:02:28.740 That's something to think about.
00:02:29.900 And have people already started putting money into the ETFs?
00:02:32.600 They have.
00:02:33.100 Here's what it's looking like.
00:02:33.940 On their initial trading date Thursday, Bitcoin ETFs recorded inflows exceeding $4.3 billion,
00:02:39.040 establishing an unprecedented milestone for exchange-traded funds.
00:02:43.080 Products BlackRock Inc.'s iShare Bitcoin Trust ETF attracted over a billion dollars,
00:02:48.100 and Grayscale's Bitcoin Trust experienced inflows surpassing $2 billion.
00:02:51.820 The reason why this is important is take a look at some of the dates here and see what
00:02:54.700 happened.
00:02:55.180 On June 16, 2023, BlackRock filed for a spot Bitcoin ETF.
00:03:00.540 They called it iShare's Bitcoin Trust.
00:03:02.880 At the time, Bitcoin was trading at $25,500, but quickly shot up beyond $30,000.
00:03:08.340 Bitcoin has gained roughly 63% since BlackRock filed its ETF application, and BlackRock names
00:03:16.040 JP Morgan as authorized participant for spot Bitcoin ETF, which means, in a way, JP Morgan
00:03:22.380 Chase and BlackRock is saying, Bitcoin is here to stay.
00:03:25.640 It's not going anywhere.
00:03:26.660 However, this can't all be good, right?
00:03:28.120 Like, you got to sit there and say, there's got to be something bad about this.
00:03:30.640 Does it hurt any aspect of Bitcoin?
00:03:32.800 Here's what Arthur Hayes had to say.
00:03:35.100 He's the co-founder of BitMEX.
00:03:36.480 He says, BlackRock will completely destroy Bitcoin.
00:03:41.200 Now, why is that?
00:03:42.340 Based on their direct and indirect investment, it is estimated that BlackRock, State Street,
00:03:46.760 and Vanguard collectively own 1% and 2% of all Bitcoin in circulation.
00:03:52.640 Hayes' argument is that if BlackRock, which is in the asset accumulation game, vacuums up
00:03:58.320 all the Bitcoin, there will be no more Bitcoin transactions, and those who secure the Bitcoin
00:04:02.680 network in return for fees and newly minted Bitcoin, known as miners, would be unable to
00:04:09.320 afford the energy it costs to secure the network.
00:04:11.820 As a result, they would shut off their machines without the miners.
00:04:15.040 The network dies, and Bitcoin vanishes.
00:04:17.420 So, now, why is he saying this?
00:04:18.960 What's the big deal with miners?
00:04:20.240 Like, what do you mean if they don't do anything with it?
00:04:22.120 Are miners that important?
00:04:23.500 Look how much Bitcoin devours electricity.
00:04:26.700 More than many countries out there.
00:04:28.920 When you look at this chart at the top, you'll see annual electricity consumption in comparison.
00:04:34.300 China's number one.
00:04:35.540 US is two.
00:04:36.780 Germany's three.
00:04:37.800 All the world's data centers is four.
00:04:40.060 Look what's next.
00:04:41.080 Bitcoin.
00:04:41.780 More than Norway. 0.72
00:04:43.000 More than Bangladesh. 0.99
00:04:44.220 More than Switzerland.
00:04:45.280 More than Google.
00:04:46.020 More than Facebook.
00:04:47.380 It's more than Google and Facebook combined times eight.
00:04:51.380 That's a lot of energy.
00:04:53.760 So, his argument comes back to how Bitcoin transactions work to limit inflation.
00:04:59.440 Bitcoin creator designed Bitcoin to only have 21 million Bitcoins.
00:05:03.500 However, Bitcoin only exists if it moves.
00:05:05.920 When a Bitcoin transaction is made, miners take the information and apply a mathematical formula
00:05:11.500 verifying the transaction and adding it to the blockchain.
00:05:14.600 This process is known as proof of work.
00:05:17.800 It's called that because the process of mining is very hard and time consuming, requiring large
00:05:22.720 amounts of processing power and time, multiple confirmations, other miners verifying the
00:05:27.500 blocks, are typically needed for a transaction to be considered secure.
00:05:30.740 As a reward for their services, miners are paid in Bitcoin for each new block they add
00:05:35.900 to the blockchain.
00:05:37.020 So now, there's a lot of predictions being made about, is this thing going to hit $100,000
00:05:39.980 before the end of the year or not?
00:05:41.380 There's one chart that shows it will because of the history of what happens to Bitcoin when
00:05:46.340 it goes through halving.
00:05:47.480 Let me kind of explain to you what this means.
00:05:48.720 The size of Bitcoin block rewards is halved after the creation of every 210,000 blocks,
00:05:54.180 which takes around four years.
00:05:55.580 At Bitcoin's inception in 2009, each block reward was worth 50 Bitcoins.
00:06:01.240 In May 2020, the block reward was halved a third time to 6.25 Bitcoins.
00:06:06.880 In 2023, there were 19.4 million Bitcoins in existence, 92% of the total planned supply.
00:06:12.240 The block reward is scheduled to reach zero around May of 2140, but mining will likely no
00:06:17.520 longer be profitable long before that date is reached.
00:06:20.100 As of April 2039, about 99.6% of Bitcoins will already have been issued, and the block
00:06:26.860 reward will be just 0.19531250 Bitcoins.
00:06:34.080 So when you look at this chart, this is what you'll notice.
00:06:36.180 First halving that took place November 28, 2012, Bitcoin was roughly $12.22.
00:06:41.040 Now, four years later, July 9th of 2016, Bitcoin at the time, that's the second halving, it
00:06:46.360 was priced at $6.57.61.
00:06:48.820 Then go back four years later, which is May of 2020, third halving, Bitcoin was worth $9,500.
00:06:56.040 And then this year, the date they're looking at that's going to halve again is April 22nd
00:07:00.280 of 2024.
00:07:01.720 Nobody knows what number it's exactly going to be at, but everyone's guesstimating that
00:07:05.600 number's going to be higher, and that's why some people are speculating Bitcoin's going
00:07:09.640 to hit $100,000 this year.
00:07:11.180 And by the way, remember, this is all just hypotheticals, what we're talking about.
00:07:14.380 I don't want you to get off this thing here and go buy Bitcoin and say, well, you know,
00:07:16.980 according to this video, that path that Bitcoin's going to go, no, no, I'm just giving you data
00:07:20.860 and trends for you to consider.
00:07:22.400 Yes, Elon Musk says it's going to go to a million dollars.
00:07:24.660 Yes, Cathie Wood says it goes to a million and a half.
00:07:26.600 But John McAfee, a few years ago, said it was going to go to $100,000 when it was at nine,
00:07:30.920 and it didn't happen.
00:07:31.760 So don't jump to conclusion with all these different predictions people are making.
00:07:35.720 It's just look at the numbers and then see your risk tolerance, time horizon, make the
00:07:40.340 decision based on that.
00:07:41.260 Here's another one to consider.
00:07:42.820 Global liquidity.
00:07:44.180 If you look at this chart, what do you notice?
00:07:46.380 The more liquid money that we have worldwide, look what happens to Bitcoin.
00:07:50.620 And this same applies to S&P.
00:07:52.620 It's not like this is an epiphany moment of a chart we're looking at.
00:07:55.480 This goes with everything.
00:07:56.660 The more liquid assets, liquid money that's out there.
00:07:59.040 Last but not least, to compare the three, gold, fiat, which is a US dollar, and crypto.
00:08:04.100 This is the argument that's made by the Bitcoin community.
00:08:07.220 Fungible, interchangeable, high, high, high.
00:08:09.840 Non-consumable, the same.
00:08:11.520 Portability, gold, moderate, the rest, high, high.
00:08:14.280 Durable, high.
00:08:15.500 Fiat, moderate, crypto high.
00:08:17.460 Secure, you see moderate, moderate, high.
00:08:19.760 Easily transactable, low, gold.
00:08:22.960 High, high.
00:08:24.360 Scarce, moderate, low, high.
00:08:26.620 Sovereign, government issued, low, high, low.
00:08:30.380 Decentralized, as of today.
00:08:32.000 Because if Gary Gensler has it his way, this may change.
00:08:35.320 Low, low, high.
00:08:36.180 Smart, programmable, low, low, high.
00:08:38.680 And by the way, this is not a, you know, article written by, you know, Coinbase or something.
00:08:44.020 This is Investopedia that puts something out there for the average person to be thinking about.
00:08:47.640 They're not leaning one way or another.
00:08:49.020 They're just kind of giving you the feedback.
00:08:50.260 So look, I mean, obviously, to me, when a BlackRock and a JPMorgan Chase is approving something like this,
00:08:58.240 that's the closest thing to the US government, given the okay that you're doing this.
00:09:02.540 So what does that really mean?
00:09:03.840 Does that mean it's official, it's real?
00:09:06.900 The biggest critics that said they would never, ever do anything like this, now they're doing it?
00:09:11.260 What does that do?
00:09:11.880 It means yes.
00:09:12.960 It means boomers who trust level and risk tolerance is probably the lowest. 0.97
00:09:18.500 They don't trust anything new.
00:09:19.780 They don't like any changes.
00:09:21.160 They don't want to do anything that's out of the ordinary.
00:09:23.540 Now this gets the boomer who are the richest people, 50%, who are like, hey, what do you think, John Doe at Goldman Sachs, Morgan Stanley?
00:09:31.620 You may want to put 5%.
00:09:32.980 You may want to put 3% of what?
00:09:34.660 Of $19 trillion?
00:09:35.760 What's 5% of $19 trillion?
00:09:37.800 It's a trillion dollars.
00:09:38.880 What does that do?
00:09:39.840 Instant double.
00:09:40.820 Is that what that means?
00:09:41.860 Maybe.
00:09:42.140 Again, everything I said is pure speculation, but I'm researching and looking at the topic myself, just like you are.
00:09:50.540 Before you make any crazy decision with your money, go do more research on your own.
00:09:54.540 Talk to your advisor if it makes sense, then consider it.
00:09:57.660 But this is definitely a very big event, maybe one of the biggest historic events that took place with Bitcoin.
00:10:02.760 That's why the entire industry is talking about this.
00:10:05.100 If you got value out of this video, give it a thumbs up and subscribe to the channel.
00:10:08.060 At the same time, we did a video on collapsing of the U.S. dollar.
00:10:11.660 Then we studied currencies that we've had, how many currencies we've had worldwide, like world currencies, and the cycle.
00:10:18.280 Could this be a change that's taking place?
00:10:20.120 Nobody knows, but I suggest you go watch that video.
00:10:23.280 Very, very interesting on what's happened with the history of currency.
00:10:26.940 Take care, everybody.
00:10:27.900 Bye-bye, bye-bye.