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Markets Outlook
Crypto Update | BTC's $100K Threshold, ETF's Liquidity Concern and MicroStrategy's BTC Bags
00:17:53
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- [00:00]
Chris Klein
Hey prime members, have you heard you can listen to your favorite podcasts ad free. Good news with Amazon Music you have access to the largest catalog of ad free top podcasts included with your prime membership. To start listening download the Amazon Music app for free or go to Amazon.com ad free podcast that's Amazon.com ad free podcast to catch up on the latest episodes without the ads. T mobile 5G Internet keeps getting better. Boost your connection to harder to reach places with Home Internet plus and get Internet right where you want it. With wi fi that reaches the app.
- [00:32]
Jen Senasi
Attic I finally have a home office.
- [00:34]
Chris Klein
Get a free upgrade to T Mobile Home Internet plus while supplies last. Home Internet plus starts at 50 bucks a month with autopay and any voice line. Check availability@t mobile.com home Internet during congestion customers on this plan may notice speeds lower than other customers and further reduction of using greater than 1.2 terabytes per month due to data prioritization. After 20 bill credit plus $5 per month without auto pay debit bank account required regulatory fees included for qualifying accounts 35 connection charge applies. You got to know the utility of the token. So if you think that you're going to buy say Ripple and it's going to go to the price of Bitcoin, you're misinformed. Ripple is designed to be a alternative to the Swift banking system. If all of a sudden one ripple cost $50,000, it's now priced itself out of its disruption and so it will never go there. And that's something to consider. Also look at the amount of the currency. Some are infinite, some have supply constraints. And just do your research before you just jump in.
- [01:28]
Jen Senasi
Hello and welcome to Markets Daily, hosted by me, Jen Senasi. On this show we navigate the currents shaping the crypto markets, providing insights against the broader financial landscape. So whether you're actively trading or simply fascinated by the volatility that is the crypto markets, this show is your compass to understanding what's happened, where we are, and where we're going. Joining today's show is Bitcoin Ira co founder and COO Chris Klein. Chris, welcome.
- [01:53]
Chris Klein
Hi Jen. Thanks so much for having me today. It's a pleasure to be here, of.
- [01:56]
Jen Senasi
Course, thanks for being here. A really exciting time for crypto markets. I thought that we were going to see Bitcoin break 100k on the weekend and we didn't. We had a little bit of a pullback. So why don't we start there. Talk to me about what you're watching this morning and make sense of that pullback we saw over the weekend.
- [02:14]
Chris Klein
Oh, yeah, absolutely. So we're in price discovery zone right now. Volatility is going to be rampant. I was also too hoping to come on here today with you and be like celebrating 100k. We dropped some balloons, confetti everywhere. It's just a matter of time. There's definitely some resistance. Just like we saw at 80k for quite a while. We teased with it and then we pulled back and we teased with it and then eventually you just burst past it. And within a day, I think we were up $10,000 in a single day. A lot is happening. This is a perfect storm for bitcoin to just simply be bitcoin. You've got a lot of activity here domestically. An agenda from the new, the new administration coming through. You have a having event, we're halfway to peak. You've got driving from ETFs, you've got international action happening and you've got micro strategy quadrupling down with another 55,000 Bitcoin this week over the, over the last week and announcing it this morning. So it is a perfect storm for price volatility as well as price discovery, where we'll be next.
- [03:16]
Jen Senasi
We talk a lot on the show about what's happening in the United States as it pertains to the crypto markets. But you just mentioned looking at what's happening internationally. Talk to me a little bit about what you're watching from an international perspective.
- [03:31]
Chris Klein
So for me, one of the things specifically is America's been very public since Nashville in July about the intent for a national strategic bitcoin reserve, or as Trump called it, a stockpile when he was there in Nashville in July. And what we see now is this is like oil. Why do we have a strategic reserve of oil? Well, we don't want to have oil crunch like the 70s and our people can't get to work and can't get gasoline. Why do countries have a strategic reserve of gold? So that they have some backing. So these reserves are part of geopolitics. And I'm not surprised that other countries are already intending to build out their stockpile of bitcoin as well, or have already started accumulating it in preparation for the U.S. now, what's interesting is I did this math last night, actually. Funny you asked this question. I'm so happy you did. And I was looking at a chart of one bitcoin on the left for every line item and then how much of the local currency for a given set of nations would cost so if you woke up in the UK this morning, it'd be about 77, 78,000 great British pounds that you would need. In the US we're around 98, 95, 97, maybe even back down to 96. It's fluctuating. But then you start going down the line to places, places like Tunisia, which Tunisia is the, arguably the strongest currency in Africa, the Tunisian dinar. And you'd still need 331,000 dinar to get a bitcoin. And you'll keep going down the list. And the worst one who had a chance at bitcoin as a strategic reserve asset many years ago before the IMF stopped them was Argentina to the Argentine. Real, I think it's real or peso, it's one of the two. It's 10 million plus of that currency that you need if you are a resident there to get one Bitcoin today. And that really to me is something I'm going to be doing a little bit more homework on and put a piece together about the, I call it the future relativity of currency. So we always talk about the theory of relativity from Einstein. This is relativity happening geopolitically where countries will want to have a strategic reserve as a backing possibly to their currency. And this is a whole new ballgame. This is not where a year ago we weren't talking about this. And this is where you see not just countries but also companies building out their strategic reserve. Now I represent a group of freedom loving Americans that like the freedom of their crypto retirements and they're building their own individual strategic reserve of bitcoin. So it's, it's a wild time to be in crypto and I think just an exciting time to be in the marketplace.
- [05:59]
Jen Senasi
Make a little bit of sense of that for me. If we have nation states all over the world with strategic reserves of bitcoin, what does that mean for the asset moving forward? What does that mean for retail investors and individuals who are holding bitcoin?
- [06:16]
Chris Klein
Well, I got, there's only one game in town of all those currencies I was studying last night that has a finite fixed supply and that's Bitcoin. 21 million will only be ever mined. We're, we're not even, I guess we're, I think we're like 6, 16 now. I don't, I'd have to look at the block. That is a finite asset. It's scarce comparative to everything we grew up with, where we just kept printing more and more money here at the US Our monetary supply Is exponentially larger than when I was a kid. The other countries have followed suit. So what that means for the individual is, okay, I'm losing purchasing power with my dollars. Every time we cut rates, quantitative easing, or we print more stimulus, that affects the dollars that are sitting in my savings account. It may still be $100,000 sitting there, but that $100,000 is not going nearly as far as it used to. And that was really part of the mandate that was on the ballot earlier this month. And what America spoke for was, hey, we've got to get prices under control. Inflation is killing me. I can't. What did they say about even people making 100, $120,000 a year? We're living paycheck to paycheck, which is just insane. Now, in my world. Retirement. Three years ago, Northwest mutual did this study asking Americans how much money do they think they need to retire comfortably? And it was around, I think, about 800, $900,000, which is a pretty large number. Fast forward. Just three years after this was 2020. When they did it in 2023, they reassessed people. Now it's 1.5 million plus. So people feel like they need 50% more money to retire in just three short years. And that could get even worse as these impacts of the relativity of currency happen and inflation and prices and continue to grow. Your dollar's just not going as far as it used to. Now, we're not as bad as Argentina, right, where we need $10 million to buy a bitcoin, but we're on track to really understand the impact. And so as an individual, you're looking for options, diversification. Real estate's always been something strong. People have bought gold and silver as a hedge against these things. And now bitcoin is center stage as an alternative potential for this. And we've been helping folks with this since 2016. So a lot of them, they were back when Bitcoin was at $250 a unit, and they're still holding for their future retirement.
- [08:34]
Jen Senasi
Wow. I bet they're really happy today.
- [08:36]
Chris Klein
They're pretty thrilled. I know a lot of them personally. One's actually a great story. Rocket Ron or rocket Roy? One of our first, he was number 11. He was a former NASA engineer. His specialty is heat shields. And with all the advent of technology, you still need an old guy that knows how heat shields work for all these new rocket programs. Well, the 2008 financial crisis actually took him out of retirement from NASA. He had to go back and work to build back up from the losses that he had in his portfolio. Then he found us in 16, just getting started in crypto. And now he is his own. He sets his rules. He works with several of the companies like Blue Origin and others to help them with their heat shield technology. But he's doing it as a passion. It's his freedom of choice as a passion in retirement as opposed to an obligation because he made these.
- [09:23]
Jen Senasi
There are people who have just heard that story and they're feeling a little bit of fomo. If people are looking to allocate Bitcoin into their portfolio today and you're looking at a traditional, otherwise traditional portfolio, how would you advise them?
- [09:38]
Chris Klein
Well, you, there's a lot of options now, so one thing you can do, back in 2016, we were the only choice, but now you, you can also, obviously you could just invest in micro strategy. With what they've done over there, they have a. They've, they've proven that they can turn their balance sheet into a successful business profitability model by accumulating Bitcoin. You also have the ETFs that are available now. They, they're very. You can get them with a click and a click of a mouse. But something to remember about ETFs is there is it comes at a cost of liquidity. So I was running the numbers over the weekend with a friend of mine, and from now until the end of the year, there are 10 banking holidays, and if you add in nights and weekends, ETFs only trade during traditional Wall street hours. So all the other times you're not going to be able to trade your asset. It actually narrows you down to 22% of the time from now until the end of the year that you can buy and sell with ETF. Well, here's the thing. Bitcoin was built for a 24, 7 future, and I've always joked that it's kind of like putting gas in a Tesla. It just doesn't make sense. So don't hold yourself back necessarily with a proxy certificate, there's all kinds of options to get access to Bitcoin out there. Probably most of the listeners have tried one of the exchanges. Make sure you use security measures, use cold storage devices, all those things. Now, why, and of course I'm biased, why I love our platform is not only do you get the security you need, you get the beneficiaries you need. So if something happens to you, like me, it's my wife and then my daughter that would get my crypto that's in our platform. But Also, I guess those are the two big things there. And when, if you're thinking about long term, a Roth IRA or a traditional ira, the government gives us this beautiful place where we can get tax free or tax deferred growth. What better place to have the hot, fastest growing asset class in the world sitting in a nice little tax advantage setting for yourself.
- [11:31]
Jen Senasi
You brought up a good point there. A bunch of banking holidays coming up towards the end of the year. ETFs only trade during regular trading hours. What do you think that means for the ETF moving forward? As people get more and more comfortable with crypto, start to understand what it means to hold your own crypto, what do you think that means for the ETFs? Are we going to see this massive growth continue like we've seen for the past year?
- [11:57]
Chris Klein
I think so. You're always going to have some users that can only use the ETF. Right. So if you have a 401k for example, those funds are locked up until you either retire or turn 59 and a half or you leave your job. So their option is the etf. A lot of institutions, corporations, don't necessarily want to build out an entire treasury management system for crypto. So an ETF is an easy access point for them. But I think what you'll see, like folks like myself and others on our platform, we get a little bit of everything. We buy micro strategy shares, we have the real thing sitting in a wallet and we have some ETF because they're all part of this overall ecosystem. And every time an ETF is sold, more demand on bitcoin, which is good for all of us. Right, so. And it's a scarce asset, only 21 million.
- [12:40]
Jen Senasi
Yeah, I mean we've talked a lot about bitcoin throughout the show. I want to talk about meme coins and altcoins because they are a big driver during this cycle. I read this morning that Doge, XRP and XLM are the most traded cryptos since Donald Trump's election victory. And that's the most traded on upbit, which is the largest exchange in South Korea. Talk to me about what memes you're watching, what alts you're watching, what you think is driving the narrative and why people are interested in, let's say Doge, XRP and XLM lately.
- [13:10]
Chris Klein
Well, Doge I think definitely has a fanboy behind it, which is Elon Musk, and he's going to have a pretty critical and strategic role in this new administration. As we can tell from how things are transpiring in this transition. Some of the other ones, what you'll find is alt season kicks in. So you go from bitcoin makes this big run and traditionally people start taking the profits off the table and then they'll start investing in other coins like Alts, like Ethereum, Solana and these meme coins. We just actually added two batches to our platform so we're up to now 75 different assets available. So you're not limited but I think the two most popular, the new ones are, I don't know if you're supposed to say it, Sui or Sui and Fet which is an artificial intelligence. Is it Sui? That's how they say Sui, Sui and Fet among others. Salon has obviously had an amazing year and I was talking about that with some friends last week. It can take some more market share from Ethereum and if it does that its price has a lot of upward potential. So a lot of folks will jump in in those spaces because either they feel like they missed out or their profit taking profits off the table from Bitcoin. It is a very vol. If you want to talk about volatility and price fluctuations in price discovery it is not for the weak of stomach. You will almost become a little bit of a day trader in your brain checking it constantly. But yeah, they are part of this ecosystem and as you can tell people are very excited about them. Now it's important to remember this is something I talk to folks about all the time is that you got to know the utility of the token. So if you think that you're going to buy say Ripple and it's going to go to the price of Bitcoin, you're misinformed. Ripple is designed to be a alternative to the swift banking system. If all of a sudden one ripple cost $50,000 it's now priced itself out of its disruption and so it will never go there. And that's something to consider. Also look at the amount of the currency. Some are infinite, some have supply constraints and just do your research before you just jump in because there are as every year there are, there are several of these coins that come up that just doesn't work out. And, and there's, and you can see the horror stories I saw. There was that young kid that they said did a rug pull live on a video stream lat two weeks ago and that was all over. Tick tock. These things happen in these spaces. Anything that is brand new and definitely a wild west kind of space and.
- [15:35]
Jen Senasi
That'S so important to remember always do your own research don't FOMO in these stories you read about people becoming rich overnight are too good to be true. So don't think that that's going to happen to you. I think that's very important to tell people who are actively investing in crypto. Okay, we talked about bitcoin, we talked about memes and altcoins. You mentioned ETH there. ETH has been had a little bit of a weaker narrative I think as the cycle starts to ramp up. What do you expect to see when it comes to eth as we head to the end of the year, I.
- [16:05]
Chris Klein
Have noticed how sluggish it's been as well as its ETF launch really did not go off with a bang like Bitcoin's ETF launch earlier this year, but that, you know, it's a, it's a, you know, what do they say? The rabbit and the tortoise or the tortoise and the hare? Slow and steady may win the race. Ethereum people have not, at least those who have been in the industry a long time have not forgotten what happened in 19 and 18 and into 20 with the congestion on the network and then gas prices going really high, which is eth. E gas is what you pay as a fee for transactions, so. And it also has competitors in its space like Solana now. So I would expect to see it still performing very well the amount of the daps that are being built on it. It's a, it's an infrastructure piece. So it's like to me buying, if I could have, if I wasn't five years old, I would have bought shares of the Internet if they were available back in the late 80s, early 90s or like my grandfather used to buy telecom stocks because then you have people always need utility, right? They always need the power lines and the, and the, and the energy lines to run things on. So those are sound investments for infrastructure. So I would see it catching up for sure a little bit more this towards the end of the year it will be probably one of the leaders of the alt season to come with some memes and some unknowns just coming out of left field for sure.
- [17:23]
Jen Senasi
All right, and the question that's on everyone's mind, when do you think we're going to hit 100k?
- [17:28]
Chris Klein
Oh, I would love to see it happen. I saw Pop said the other day and much kudos to him. I would love to see it happen on an off day. So like on Thanksgiving when all the markets are asleep, Bitcoin does it. I, I, I always said a few months ago in July when I was in Nashville, I said 100k by Christmas Day because I like to rhyme. And that was what I was thinking. It obviously got closer much faster than I thought. But I think it's just important to remember we're only halfway through the HAL cycle. So the peaks traditionally hit in the 550 to 600 days post having, which was in April. So that would put us somewhere in late May, beginning of summer to really start seeing some peaks here. And I don't think it's outlandish, some of these numbers that I'm hearing of 200 to 250,000 sometime next year. So it is going to be an exciting year ahead. We have a lot to celebrate and give thanks for this week. If you're a crypto newbie or if you're a crypto veteran, it's just exciting times.
- [18:23]
Jen Senasi
Chris, thanks so much for joining the show today. It was a pleasure having you on.
- [18:27]
Chris Klein
Thanks for having me.
- [18:28]
Jen Senasi
And thank you to everyone who watched or listened to today's show. If you enjoy watching or listening to markets daily, subscribe to the Coindesk Podcast network that is available on all podcast platforms. And we're also on YouTube hit subscribe like this video. Thank you for watching and we'll see you tomorrow.