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Bitcoin Rally: 90% Chance of SEC Spot ETF Approval But What Happens Next? – Fred Thiel (Pt 1/2)

November 10, 2023

This interview with Fred Thiel discusses the recent Bitcoin price rally, driven by speculation about the approval of a spot Bitcoin ETF by the SEC. It explores the potential impact of ETF approval on Bitcoin miners and delves into macroeconomic factors that could influence Bitcoin's role as a safe haven asset and its price in the near future. The conversation also touches on the broader implications of institutional involvement in the Bitcoin market.

00:00 Intro

01:58 What's driving Bitcoin rally?

05:42 SEC approval of spot Bitcoin ETF: when & what's next?

10:00 Shift in sentiment & reaction to ETF approval

23:57 Impact of geopolitical tensions on Bitcoin

29:57 Marathon's price forecast: bull, bear, base-case

Transcripts are autogenerated. May contain typos.


[Music] on the spot with Michelle mccy is brought to you by Swan Bitcoin hello I'm Michelle mcy thank you for watching the Bitcoin rally is gaining steam fueled by speculation that a spot Bitcoin ETF approval is imminent Bitcoin prices crossed the 37,000 level for the first time since May of 2022 on Thursday and just hit 38,000 on some EX exchanges and this comes exactly a year after the big collapse of FTX that saw Bitcoin tumble to $116,000 we here to break down these moves give us a sense of what's next for


the world's largest cryptocurrency and to weigh in on whether a spot Bitcoin ETF is actually a positive for Bitcoin in the long run is Fred teal chairman and CEO at Marathon digital Holdings one of the largest Bitcoin miners in the world fr is a Titan in the fintech sphere and has over three decades of hands-on experience in high-tech Industries and it's a pleasure to welcome you to Kitco it's great to be here thank you for having me great to have you Fred look we also want to get your thoughts on the macroeconomy and of


course on marathon's results for the third quarter you beat earnings estimates missed on Revenue but share is up about what 10% as we speak and up over 180% year to dat but before we get onto Marathon let's start off with this big bitcoin price move and ever since Black Rock filed for a spot Bitcoin ETF in June there has been positive sentiment that this was going to happen given that this is Black Rock the world's largest asset manager with uh over9 trillion doar of assets under management any a perfect record for ETF


approvals and we've seen that really lift the price of Bitcoin but what is driving this dramatic pushup today Fred well you have a couple of things uh parti Bitcoin has a liquidity Supply limit in the marketplace today there's a lot of Bitcoin sitting off exchanges in Cold Storage uh by long-term hudders and the belief that the ETF is imminent is driving increase speculation people wanting to buy Bitcoin because they believe that as soon as the ETF is approved billions of dollars of liquidity will flood the market which


will cause a lot of Bitcoin to have to be purchased which will drive the price up of course because it's not like other Industries where you can just print more Bitcoin there's a limited number of Bitcoin and there's a very limited Supply Supply in the marketplace today so as we look at Bitcoin um today November 9th or uh this week is when the SEC window for approving potentially a grayscale ETF happens there's some speculation around that I think happening you have institutional buyers coming in and buying uh you also have


binance that listed the um uh it's the um uh it's a new token relative to ordinal so it's the or token oddi I believe it is and by listing that token it's a brc2 token which settles on the Bitcoin blockchain that's driving a lot of backlog in the mempool which is the buffer of transactions wanting to get processed on the Bitcoin blockchain and so now you're seeing even transaction fees um earlier today we won a block with a transaction fee of three .


25 Bitcoin which is more than half of the block subsidy we get when we process a block so we believe there's just a lot of Demand right now that's driving price up um and we'll have to see if and when the ETF is approved what happens to the big price of Bitcoin but it'll be very interesting to see yeah absolutely and as you mentioned the SEC has set a window from November 8th to November 17th to approve the first spot Bitcoin ETF but could this be delayed they don't have to make a decision by the state or


do they no absolutely they could delay um they could flatly deny them again um but that would be I think you know the market is has right now the odds are 90% that they're going to approve the question is do they approve now or do they approve in January when more of these applications are due to be approved my personal opinion is that they're going to want to approve a block of these ETFs um the news lately has been that the SEC has been in active dialogue with grayscale and others uh which is a lot of progress since before


which means they're kind of dotting the eyes crossing the te's uh going through to make sure that everything is is buttoned up and ready to go custodial Agreements are set up all of the processing is going to work in the back end um and then likely I would assume five of these would be approved in one block because the first few of these to get approved are going to have a first mover advantage they're going to get suck up a lot of the capital that's going to want to move into these instruments um and then they'll likely


be a wave two and a wave three potentially and now you're also seeing u a number of the applicants applying for uh ethereum ETFs also so it's going to be an interesting time here over the next month or two yeah definitely I mean there's been a rally in other altcoins as well not just in e but let's focus on bitcoin and Fred as you mentioned uh several applications for spot Bitcoin ETF I believe there's a total of 12 asset managers filing at the moment uh due to get a result but you said you expect a


chunk of five to be approved at once do you have any picks on on who those may be Black Rock I'm assuming in there yeah I think you know grayscale Black Rock uh likely Arc um and then you know we'll we'll see who the next in line Franklin Templeton was a late Comer to the list um but I think really you know Arc uh Arc Black Rock and grayscale you know grayscale doesn't have to go buy Bitcoin so grayscale being approved um really won't suck up a lot of demand for Bitcoin what it will do is release


potentially Bitcoin Black Rock um you know will need to buy Bitcoin to put into the fund they may have been seeding the fund seeding is a process by which they can buy in advance of of um opening trading on the ETF uh and then I think it's going to be very interesting see also how these ETFs settle meaning uh in the traditional world where people are buying ETFs in stocks and equities it's the closing price at the end of the day well there is no closing price for Bitcoin it trades 247 so are these going


to be live meaning that when you buy the ETF share uh it prices the Bitcoin at that time or does it settle once a day which would then create interesting opportunities for Arbitrage so that'll be very interesting to follow yeah I know that's an excellent exent point that you bring up over there in terms of the price move that we've seen Alfred do you expect a price rally on news of approval or is already priced in is it one of those um you know Buy on the rumor sell on the news type of events uh yeah it's a great question uh


I think typically with these things you would expect Buy on the rumor sell on the news though they're going to be waves of news with this the first wave is going to be it's approved there'll be an initial bump I think uh and then that initial demand will settle down and then it'll be how many billions of dollars go into the first of these ETFs and if that number is a spectacular number then you'll see another runup again what you're also just going to see naturally is you know as Bitcoin is having to be


bought to be put into these funds it's going to have to move up in and of itself so it's kind of um unique in that the the speculative instrument in and of itself is the commodity that makes up these ETFs so it could be actually a self-fulfilling cycle very virtuous cycle but we'll have to see uh this will be a firsttime kind of event and if you look at gold ETFs as the model um they were very successful initially and a very large portion of the funds that were being you know could be invested in


Gold went into these ETFs that drove a lot of demand and I think the market is optimistic that Bitcoin will follow suit somehow do you expect some kind of negative reaction if we don't get approval in this time frame in by November 17th or maybe even by January 10th I I think if we don't have approval by mid January you're going to see some definite price declines most probably because the speculative kind of interest will Wan and will be back on macro driving Bitcoin accumulation um but you know Bitcoin is an instrument that


trades or a commodity that trades a lot on news um as can be seen by the past you know 18 months though the volatility in the Bitcoin Market has normalized a little bit um it's decreased over the years but it's now kind of um at a type of volatility which is uh acceptable to a lot of uh investors and when you look at the risk adjusted uh returns of Bitcoin uh I think you're seeing more and more people stand Ruck and Miller included um saying that you know hey you know small position in Bitcoin one or


two% of your portfolio makes sense and when you do the math on what one or two% of a portfolio means when there are trillions of dollars of Assets in portfolios uh that in and of itself means a lot of Bitcoin is going to have to get acquired if people are going to load that into their portfolio so whether it's an ETF or spot Bitcoin I think the long-term future for Bitcoin is very optimistic obviously we wouldn't be in the business that we're in if we didn't think that was the case yeah a big turnaround from Stanley dren


Miller you know uh all of a sudden coming out and saying that he does see Bitcoin as a store of value perceived that way by you know younger Generations so it's interesting to see that shift in sentiment and of course we saw a huge shift in sentiment from Black Rock Co Larry thinkink who used to refer to bitcoin as an index for money laundering so a big turnaround there but I just want to make the distinction though uh between approval and the actual launch because I believe it takes quite a bit of time between approval and then the procedural


delays that need to happen before you can actually launched some complicated filings uh the 19 B4 form the S1 filing prospectus we won't get into those technical details but there there is a lag between approval and launch right so what would that mean for the price of Bitcoin in in the interim do you think I think bitcoin price will jump initially on approval and then again as soon as they actually the ETFs start trading is when you'll start seeing you know is it living up to the hype is the demand there are the the


initial deposits or purchases living up to the hype and if they do then you'll see a a second pulse upwards uh likely and if it doesn't live up to the hype then you know things will settle down and you may even see a drift downwards um what what do you anticipate the impact of a spot Bitcoin ETF approval or several as you say being on Marathon um so it's interesting that you ask that because um if you look at Warren Buffett's perspective on gold he doesn't like to buy gold he prefers to buy gold miners because you can


participate then in the margin gain um a lot of people buy Bitcoin miners because of the beta in our stocks um if you look at how minor stocks move relative to the price of Bitcoin we move with an amplified uh reaction because of the V there's more volatility if you would there's more beta in our stock or the stock of our peers um when it comes to moves in the price of Bitcoin so Bitcoin might move 1% we might move 4% both up and down so there's more risk obviously so if the price of Bitcoin runs up for


an ETF you will still see people who want that Amplified beta trading in the minor stocks now the real impact of the ETF is for institutions that can't necessarily hold spot Bitcoin they want exposure to spot Bitcoin they don't want the beta of mining stocks though um and so there you'll find um uh a large number of investors going into ETFs I think also the consumer Market is really one where um you know where for example uh a millennial or a gen z may go through the the opening of an account on coin shares


and or rather um coinbase or gemini or one of these other exchanges and be willing to go through all the rigoll of doing that and the risk whereas a you know um a baby boomer may be more interested in hey if I can buy it on Fidelity or if it's an ETF I can put it in my retirement accounts or whatever uh that might be more attractive so I think it opens up the market to a broader audience of people it removes friction in people going into the asset class which only will serve to increase the demand and again the key thing with


Bitcoin that differentiates it from equities or other Commodities is there will only ever be 21 million Bitcoin and we already have produced 19 A5 million Bitcoin and it's not like miners can turn on the crank and make more of it there will only be released 900 Bitcoin per day until April of next year which point it goes to 450 per day and then four years later it drops by half again so there's a supply constraint and so as demand grows price can only grow right and I want to focus on the Haring in April but before we get


to that I just want to ask what about this idea that some have bought Marathon as a proxy for Bitcoin because it's easier you than buying Bitcoin as you quite rightly said barriers to entry potentially problematic for some so is there any way that you see a negative impact for those that have been saying I too complicated to buy Bitcoin therefore I buy Marathon as a proxy for that but now that I have a spot Bitcoin ETF I'm just going to go that route well I think micro strategy is the better uh comparable to an ETF right


micro strategy buy Spot Bitcoin they leverage their balance sheet to buy it to buy Spot Bitcoin they hold it on their balance sheet so it's kind of like a any investment fund would do a hedge fund can leverage their balance sheet to buy Bitcoin and hold it a minor is actually generating a profit and as a minor grows it produces more and more and so it's a different investment category will there be an impact uh there may very well be I mean you know I'm not going to say there isn't a likelihood but I think micr strategy uh


would be something more ACH to an ETF and if you can choose do I hold micro strategy or do I hold an ETF I think Michael sailor would say that well he can leverage his balance sheet so he can generate more more return on the Bitcoin that he holds than an ETF could so I think there's definitely a a spectrum as you look at it depending on the risk you want to take and the potential for upside you know minor stocks are uh give you better upside opportunity I think um micro strategy is kind of a midpoint uh


like any hedge fund would be almost and then you have spot Bitcoin as kind of the U conservative approach to it okay well let's talk about the Hing which is expected to happen in April and for our viewers that aren't familiar the Bitcoin Hing is an event that occurs when the reward for mining Bitcoin transactions is effectively cut in half uh it reduces the rate at which new coins are created and therefore it lowers the available amount of new Supply Bitcoin lost HED on May 11th of 2020 uh resulting in a block


reward of 6.25 Bitcoin and as we just mentioned the next Hing is expect expected to occur in early to mid 2024 the block reward will then fall to 3.125 so you're going to have less Supply and arguably more Demand with the Bitcoin spot ETF and the institutions getting in so when you take those combinations do you have a price forecast for Bitcoin by say may of 2024 so um I'm a a macroeconomist by belief when when it comes to the price of Bitcoin and like any asset um there has to be available liquidity for people


to invest it in something uh if you think about a supply shock you know at even today at 900 Bitcoin made per day 6.25 per block um there are roughly 10 billion dollar worth of bitcoin traded a day 900 Bitcoin being sold into the market doesn't have a huge impact on Supply uh as you go to the having going from 900 to 400 50 on arguably what will be a higher volume of Bitcoin traded a day with ETFs coming into the market potentially I think will have even less impact so I'm not a believer in the stock to flow Dynamic today there's just


too little Bitcoin Supply going into the market and that's with miners selling the bulk of what they produce most miners today sell almost all of what they produce there are very few miners that are hodling uh like ourselves or or um HUD eight for example but most miners are selling everything they produce so I don't think it's a supply issue I think it's all about demand for there to be demand there has to be liquidity uh there has to be ease of investment so I think removing friction from buying


Bitcoin and holding Bitcoin making it easier making it safer that's what ETFs are all about I think that's going to drive demand as an alternative to other Investments uh you know there's a risk we're looking at a recession going into next year all the macro indicators certainly are saying that if a recession happens there's less discretionary uh spending by consumers where are they going to put their money they're going to put their money where they get the best return well guess what


right now money market funds are paying five six per. that's pretty attractive so you've got to believe in Bitcoin to want to put your money there um granted I'm a big believer in Bitcoin but I think it's really going to be driven by liquidity over time uh the government is going to have to slow quantitative tightening they're going to have to reduce rates eventually all of that's going to drive uh more liquidity which will long-term Drive um more purchases of Bitcoin but I really think the ETF by


removing friction making it safer making it easier for people to hold Bitcoin uh is going to drive a lot of increased allocation to bitcoin uh then you're going to have retirement accounts opening up to being able to invest in Bitcoin because of the ETF other things like that uh which will drive more demand and so I think those are the key drivers the having as an event um though historically price has moved on the having um I don't think you're going to see Supply shock having any impact because there is no real Supply


shock today even okay so let's talk about that push pull of the macro landscape between the positive news of the ETF and potential recession and also what a potential recession May mean for fed action because as you say um you know quantitative tightening there may be backing off of that if we start to get real signs of of tension in the market and in the economy the last fed meeting we know that the FED paused at five and a quarter to 5 and a half perc it doesn't seem as though there is more than a 25 basis point hike in there if


that even so what what Dynamics do you see winning out and over what time frame I mean do you expect a Fed pivot by say half uh second half of 2024 and that freeing up some liquidity yeah I think a couple of things uh are happening one is uh there are fewer and fewer buyers of US debt out there China stopped buying debt Japan has now stopped or slowed their buying of of treasuries because of their change in their whole philosophy regarding uh uh curve control um and other nations are dialing it back as they don't want to


have as much exposure to the dollar I think dollar Futures are looking like they're going to decrease um which is going to help other currencies and so make other um government securities more interesting uh the FED is going to have to do something to be able to sell more bonds so they don't really have an interest or motivation in lowering interest rates um on bonds because that's what keeps buyers buying uh on the other hand uh quantitative tightening is flooding the market with us treasuries and so one way


the FED can actually create more demand for treasuries is to stop selling treasuries into the marketplace on the QT side so I believe that we'll see a decrease in QT before we see a decrease in interest rates um you know the economy is still running quite warm uh you're seeing um a number of signs that consumers are still spending but Consumer Debt continues to increase uh delinquencies are increasing um you know go try and buy a car today it's very hard to find a leasing uh contract people are moving from you know a car at


One Price Point down to cars at lower price points because of interest rates houses are harder to buy because mortgage rates are high it's people are having to step back their spending uh but people are still spending a lot on travel they're spending a lot on entertainment and um you know incomes are up uh you know unions have driven wage increases in the automobile industry uh we're going to continue to see a lot of wage pressure uh continue I think so uh they going to be sectors that'll be you know definitely impacted


by recession commercial real estate obviously is a big one uh you're seeing it in financial markets uh you know go talk to somebody who's graduating with an MBA and see how easy it is to get a job today these are high income earners who are having problems getting jobs uh so I think we're going to see this sort of bleed into a recession so interest rates I don't for see dropping before the end of next year most probably I see the fed's going to have to do other things unless of course there's a big


you know we have a huge uh event that causes uh the economy to slow down um and then there are all the uncertainties of Glo geopolitics that are going on in the world today that are impacting things um but you know the big the big things impacting inflation today are energy and housing so you know gasoline prices are coming down oil is down in the 70s um housing 30-year mortgage rates have come down somewhat you're starting to see people willing to take on a mortgage at a higher interest rate in the hope that they can refinance in


two three four years at a lower interest rate so uh you know the American Consumer is very resilient my concern is the global consumer uh and what's going on but we'll just have to see right a lot of uncertainties on the horizon and as you mentioned obviously there is a big geopolitical factor here with tensions escalating in the Middle East and concern that they could be uh the spread of the conflict Beyond Israel and Hamas I mean we've already seen that there's been some us involvement to a degree


taking out some um weapons facilities in Syria believed to be Iranian weapons facilities some strikes there there have been some strikes at uh us uh forces in Iraq and Strikes coming out of Yemen so there is concern that this conflict spreads outside of the Israel and Israel Hamas Dynamic mhm what impact do you see that having on bitcoin if there is some kind of spread of this conflict and of course no one wants that but as as a safe haven which Bitcoin is supposed to be do you see Bitcoin then fulfilling its role as a safe haven if this


conflict does in fact escalate yeah it's a great question so the there are two worlds of Bitcoin you have the developed world view of Bitcoin which is a store of value it's an area where I invest I put my money in it but that's because I live in a country where things are safe and stable and the fiat currency and the government works in the developing World um where you have potential for high inflation you have uh currency and capital flight controls you have unstable governments um Bitcoin plays a very different role which is you


know in the go back to a 100 years ago in Prior conflicts people would buy diamonds and SE diamonds in their close when they needed to cross borders and um leave countries now Bitcoin plays that role so you clearly saw with the Ukraine crisis Bitcoin take a jump up as um people on both sides of the conflict uh wanted to assure that their uh assets would be easily transportable or at least portable uh and safe and have self- sovereignty I think you're seeing some of that in this conflict um you the difference is the the scope of the


conflict today is uh Limited in the number of people that are directly being impacted by it but is it spreads potentially uh Across The Wider Gulf region uh that would then drive I think uh a definite flight to asset protection and self- sovereignty which would bitcoin's the perfect instrument for that um so I I think that that could have an impact you you wouldn't see potentially a move away from riskier assets if there is a spread excuse me um yes I mean it all depends this is like a test for Bitcoin as a safe haven asset


like for example if there is a conflict um that escalates and remember Iran being a major player in this conflict the sponsor of the terrorist groups kisah and Hamas which are involved here there's always concern with oil in that area and what that could mean and if we have some kind of blockade or some kind of friction in the straights of hermuz where 20% of the world's oil supply flows through that could see oil shooting up on the one hand that could be that effect that sees the FED forcing to to loosen and perhaps even more money


printing which could be good for Bitcoin but on the other hand that could just create a very risky allround environment which may have people you know back off all risk assets so what kind of dynamic do you see playing out for Bitcoin there is it more as a safe haven in that scenario or more as a you know risk off asset so I I think Bitcoin has shown itself to decorrelate itself from everything recently uh you know it has the correlation to equities has has diminished uh the correlation to Gold has diminished as an inflation hedge


it's diminished you know I think in a world of lots of uncertainty people who are believers in Bitcoin will only double down and move more of their assets into Bitcoin um you're correct to say that in the event of a crisis in the gulf and oil being impacted at oil prices shooting up um that would cause a huge impact on inflation in uh the Western World certainly because of uh Energy prices going up you know the US is one of the largest producers of oil in the world we don't refine a lot of our own oil and so that causes an impact


you know the petrol that people use in the US uh you know a good portion of it has to actually be refined outside of the US so all of these issues create risk and people who are want to make sure that they can have their assets close at hand um you know is there risk of bank failures or there risk of defaults things like that I think people will to a certain extent move funding into Bitcoin um just like gold previously has been a Haven and the advantage Bitcoin has over gold is it's fungible it's transportable uh because it's you know


it's in The Ether the only thing that can harm Bitcoin is you know if the internet were to go down essentially when you you think about it right which would arguably mean we have much much bigger problems if uh we have a global internet outage of course you know some would say that gold has been proven as a safe haven for thousands of years so this would be an interesting test for Bitcoin as a safe haven if this conflict escalates which of course we certainly hope that it does not Fred but let's assume things remain contained in the


Middle East as tragic as a situation is at the moment let's assume that this is as as bad as it's going to get and that it just sort of maintains the current Dynamic what is your price forecast because as a miner you must have a price Model in order to determine how much activity and how much um investment you put into your mining facilities what is your price Model forecast for say and I don't know how you guys do it is it within a six- month period is it within a Year's period but let's say middle of


of 2024 June July 2024 uh yeah so uh I'm not going to give you an exact number um but what I can tell you is we run three scenarios Bare Base bull um where the base is the one we really run our business on and the base scenario is very much driven by global liquidity uh and so it's a very conservative estimate we're already well above our internal estimates on where bitcoin price should be today um so we're obviously very happy because of that um because there's upside and we're even borderline on the edge of and


beyond our bull case scenario right now so um you know we have been estimating Bitcoin pricing uh immediately post the having so say June of next year to be really in the territory where it's edging up to now um so if all things remain the same then uh and Bitcoin remains flat which I don't think it will uh today um then we would be kind of on track you know now I think uh we would be increasing our forecast somewhat um based on what's going on and you know if an ETF is approved we'll increase them


again but we typically look at kind of the having and then the end of the year and then the end of the following year and the end of the following year Etc until the next having as kind of our our goal posts all right well let me try get you to give me a range and I'll use Bernstein as an example here to get way in on on their estimates because analysts there have projected Bitcoin hitting 150,000 by 2025 all on the same sort of conditions and factors that we've discussed is that something that's


consistent with your views and your models so if by 2025 you mean the end of 2024 so January 1 I think uh a more likely scenario is will be somewhere between 50 and 80 uh thousand um I don't see us being over a 100,000 by then um unless there's some major demand driver uh so ETFs are hugely successful so by beginning of 2025 you don't see Bitcoin above 100,000 beginning of 2025 no I think end of 2025 uh you would if Bitcoin were to follow historical Cycles that's when we start seeing six-digit price of Bitcoin


um there's a huge psychological factor in crossing over the prior alltime High high of the high 60,000 range and so I think the there's a a you we're going to hit resistance at various points if you're a technical Trader there's this concept of resistance and support levels there are a lot of resistance levels we have to break through 40 the mid-40s is a major one right now and then you get to the all-time high is another one um and for us to maintain support it above those levels you then have a lot of


Bitcoin that has been purchased in the between 20 and 30,000 kind of range which is all of a sudden going to be looking to be sold and then you're going to have new holders at higher levels and uh so you know these things go in waves and I think that it's not just a straight line to the upper right hand corner of the chart I think it's going to go up and then it's going to drop and it'll go up and it'll go up right like that uh and some profit taking as you say is probably going to be on the cards


for many keeping in mind Fred that this time last year the sentiment in Bitcoin in cryptocurrencies at large was so negative as FTX was starting to unravel and we had Bitcoin drop to 16,000 and you had the bearers saying see we told you this was all a scam we told you that Bitcoin was a bubble this is all coming apart now it's a year later are you surprised at the resilience that exactly a year later we have Bitcoin more than doubling from where it was a year ago are you surprised Ur rised at at the rate of say


recovery that we've seen in the market over this time period so I if um if you were to look at sentiment charts for Bitcoin and you're very right in pointing out that it was very bearish at this time last year um but you look over a longer term perspective there was a belief in 2021 that you know the institutions were going to get more involved and that is now starting to happen FTX caused a big delay but it also provided the institutions with the time to kind of figure out how they were going to play


in this you have to realize that you know Black Rock and Larry very Savvy listen if this Market is just running up and to the right like it was in 2021 it would make no sense for them to go in and launch an ETF because uh it just would be very difficult but now that you had The Regulators kind of hammer uh on a lot of crypto companies they saw an opening where they could come into the market and build uh demand for their product their ETF when there isn't all this hyper demand going on uh because they don't want a huge


bump up and then a crash uh so they what they want is this nice steady continual climb because if they get a good steady continual climb they're going to get momentum and more and more people because this is a process of learning you know there are a lot of people out there who if you say how do you invest in Bitcoin they say I have no idea right there are logically fewer than most probably I would say 25% of this country's population adult age population knows how to go and buy Bitcoin today uh and an even fewer percentage have done so


and are willing to do so so as an ETF comes in you have an education process people have to learn about it oh it's normal I'm reading about it the Press is talking positively about the ETF oh the ETF is performing maybe I should allocate some money to it so it's a process they an ETF um issuer wants there to have a good period of time to build momentum and it's really hard to do that when there's hyper demand going on and so I think that this is the perfect time for them to launch you're


seeing all of the financial institutions starting to lean into Bitcoin you're seeing a great bifurcation between Bitcoin and crypto in general um which is fabulous for Bitcoin Bitcoin is a commodity the SEC has already determined how Bitcoin is going to be treated I think we're the the two other events that will drive Bitcoin here um one is the fby accounting change which will allow companies and institutions to hold Bitcoin directly on their balance sheet because they'll be able to Market to Market that is a huge thing for


corporate balance sheets and corporate holders of Bitcoin and the other would be a tax change where people who are transacting in Bitcoin don't have to pay Capital Gains when they buy a bus ticket with Bitcoin right well I don't recommend anybody buys a bus ticket with Bitcoin but I I I I get your point there Fred and look this idea that FTX collapse kind of paved the way for these big institutional plays to step in does have some conspiracy theorists uh sort of tingling with their spidey sense there


um you know there has been some kind of talk that maybe some of this was perhaps by Design and intentional that Regulators kind of look the other way and let FTX implode but we we won't necessarily go down that road only to mention that has been something that has been flagged but there has been another big issue with regards to Black Rock getting into this market and it does have a lot of people concerned for various reasons which I'll go into that this is not necessarily good for the long term and for the long run and for


the broader mission of Bitcoin I mean we just mentioned how in 2018 Larry thinkink said that Bitcoin was an index for how much money laundering is being done in the world he was very much against it they've done a complete 180 in terms of sentiment we know that you know they were launching the CTF as we've just discussed and most likely will be one of the ones approved but they were also investing in some of the miners we have data that shows that black rock has invested in four of the five largest Bitcoin miners by market


cap and this has some Bitcoin purists and not necessarily purists but some Bitcoin supporters concerned that between control of the mining is and a spot Bitcoin ETF that black rock may be consolidating too much Bitcoin power you're going to have some centralized custody in the spot Bitcoin ETF you got you have them getting into the mining space they're consolidating power in the whole ecosystem at large and it could be jeopardizing bitcoin's decentralized money mission the original idea of why Bitcoin was conceived is that a concern


you share do you see the spot Bitcoin ETF potentially being problematic for the broad emission year on the spot with Michelle mcy is brought to you by Swan Bitcoin Swan Bitcoin Ira your legacy your way real Bitcoin not proxies traditional and Roth IRA fast easy setup start now at sw.com retire