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Samson Mow Says 'Time is Running Out to Buy Bitcoin at Low Prices' | Markets Outlook
00:26:33
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- [00:00]
A
There are people lining up, forming queues to buy gold. Gold is at an all time high. Nobody wants bitcoin when it's in the low 100ks, but once we get to like half a million dollars per bitcoin, I think the world's going to wake up. Central banks are going to wake up, Nation states are going to start joining the race and that's when you go to 1 million very quickly and beyond.
- [00:28]
B
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- [01:33]
A
Hey, Jen. Good to be here.
- [01:35]
B
Yeah, great to have you back on the show. And we just got to start here. Q4 is supposed to be a good quarter. We're supposed to be in October. But bitcoin is far from up. Talk to me a little bit about what you're watching and how we maybe recover from here.
- [01:52]
A
Right, so I'm very bullish and I have a very bullish thesis, but I've been kind of mildly bearish for the last maybe five, six months just because I've seen the alts and meme coins running very hot. And just historically when that happens, we come back down and this is exactly what we saw. I think there's been a lot of capital flooding the markets with altcoin treasury companies and the like and I think it's just been a massive distraction. It was always due to overcorrect and I think that's where we are at now. And bitcoin usually will come down with everything else when it comes crashing down. And we hit 107ish today. So I think this is probably a good correction. Also, we saw a massive amount of liquidations also largely due to alts speculation over the past three days. Maybe I think people were getting liquidated five or six times. Right? The big crash liquidated them and then they went long again and then they got liquidated and then I think maybe some shorted the market and then we went down again. So it's been a wild ride for a lot of these traders. I think when a lot of this capital is flushed out, that's when we have more solid price discovery and sounder footing to go up on. And I think we got a taste of early October and there's still some days left in the month to go.
- [03:23]
C
One of the clearer trends zooming out a little bit is that bitcoin's volatility is declined. Any other asset whose volatility declined that much, you'd almost wonder what's going on. But going from a hundred vol asset to 70 to 50 and now many, many days, kind of around 3, 30% volatility, is this a sign of maturity or is it a sign that there's just so much adoption and user base and different wrappers that it naturally kind of dampens volatility? And do you think it's a healthy thing or is it a sign that there's just too much distribution of bitcoin into different packaging?
- [04:04]
A
Yeah, Andy, that's a pretty good way to look at it. I would say as bitcoin matures, we're going to see less volatility. And this is a function of, I would say, two things. One is the bitcoin treasury companies especially strategy, which is scooped up a large amount and they are a very consistent, very reliable buyer at any price. The second is the ETFs. The Bitcoin spot ETFs, largely ibit. And they have also proven to be a very reliable source of demand for bitcoin. And I think with these two driving forces, it was always bound to reduce volatility, at least in the near term. But longer term, I just don't see bitcoin sitting idly in this range or even in the 200,000 range. And I think we're seeing a foreshadowing of this with gold, which is the largest asset on the planet, which has skyrocketed and went up by 50% this year. It would be more like bitcoin's trying to lull everyone into A false sense of security that they have time to accumulate. But unlike gold, Bitcoin is incredibly scarce and finite. There are only 21 million coins. Gold production will ramp up as demand increases, and we will see that. And we just don't know how much gold there is out there in the world. It's impossible to mathematically definitively quantify that, but you can with Bitcoin. So I think we're going to see Bitcoin do its thing. It'll mirror gold, but probably in a more spectacular fashion.
- [05:39]
C
So just to follow up on that, you could argue there's somewhere between 15 and 20% of all Bitcoin now is held in these secondary derivative forms. Right? And if I trade a DAT stock, or if I trade an ETF, or if I trade an option on an ETF or a futures contract, that's not creating a transaction on the bitcoin network. So there's interest on the positive side, there's a broader user base, easier access, easier on ramping broader user base, but at the same time there's less actual activity on the network, which some people cite as a sustainability threat. So, you know, this is your space. So is, is the diversification of packaging of bitcoin net healthy or is it kind of net dangerous to, you know, to bitcoin the network and to bitcoin's internal ecosystem?
- [06:33]
A
So I've theorized about this before that you might have a bifurcation of the bitcoin network or a split between approved Bitcoin that sits in treasury companies or with corporations. And then you have free Bitcoin which is free flowing and people are transacting it as money and self custodying it. And that's still a possibility down the road. I don't think it's a near term phenomenon, but down the road definitely is possible. But I would say bitcoin moves in cycles, not the price cycle, but just in terms of adoption and usage. And you see spikes in high transaction volumes, high fees, and then there's mass panic that oak is too expensive to transact Bitcoin. And then you have lulls like now, which is a period of less activity. People are not really transacting on chain. And in part it could be due to other layers of Bitcoin, like liquid, like lightning, or just transacting on centralized exchanges and you know, through custody swap agreements with custodians and whatnot. But I think this is just a temporary phenomenon. And as you get more bitcoin adoption, especially in the emerging world, Latin America and Africa, where people don't have access to those vehicles, they're going to be forced more or less to hold it in self custodial wallets or just a wallet of their own. And that will lead to on chain usage. But it's a interesting phenomenon. When it's busy on chain then the sky is falling because fees are high. When it's low then people say oh, there's no to pay the miners and there's no security budget. But I think overall bitcoin does manage to balance out both sides eventually. But there is a skewing of bitcoin development priorities towards layer twos, which I think means we need to make some adjustments to make spam reduction a thing on the main chain too. Because if everyone's working on a layer two, there's not much incentive to transact on the main chain, especially if people are spamming the chain with JPEGs and NFTs.
- [08:39]
B
Can you tell us a little bit more about your split theory just for our audience? You know, like what would that look like theoretically?
- [08:46]
A
Well, theoretically it would just be like two prices of bitcoin similar to Argentina. You have the dollar blue and then you have the other price, the official price. Right. So you would probably see a lower bitcoin price with an ETF and a higher price for bitcoin. Free flowing spot bitcoin in your wallet.
- [09:05]
B
Samson, the last time you and I spoke, I believe we touched on your $1 million Bitcoin prediction. I think you said that that was within the next five years and that was probably about a year ago now. Is that still in play or have you revised it given some of the things we've talked about so far?
- [09:24]
A
No, I think it's just delayed. And I've been predicting 1 million for maybe two years now because all of the factors to catalyze that shift to 1 million are here. Right. The previous double factors for bull runs has been exchanges and their inability to onboard a lot of people quickly because they're bottlenecked. But with ETFs I think this is the key factor in my theory is that there is no bottleneck anymore because the ETFs can accumulate any amount at any time because they'll buy on behalf of the users. So you mitigate that retail barrier that kind of stimmied previous bull runs. And the matter of the 1 million run is just time and things can delay it. Like crypto heating up I think will always delay it because people allocate capital. Even serious investors might allocate capital. Like I think cathie Wood was buying Ethereum, treasury companies. Right. All of that has to come back to bitcoin and I think all of it will be very violent. I also have another theory called max pain theory and that is like the most painful outcome for the most people is the most likely outcome. So if we think that bitcoin volatility is always going to be low and we just gradually stair step up to a million and to 10 and to dollar parity with SATs, that is the best case for the world. Everyone has a long time frame to accumulate, everyone has time to buy. And I don't think that's going to be the case. And I think a lot of people realize this. If you look at Saylor and strategy, he's buying anytime like it, it doesn't matter if it's a top, he doesn't care about dips because there is this urgency because the time is running out to buy bitcoin at these low prices. So we're going to see a fast run up and gold is a good parallel for what we're likely to experience with bitcoin. If you look at the picture circulating right now on the Internet, there are people lining up, forming queues to buy gold and gold is at an all time high. So nobody wants bitcoin when it's in the low 100ks. But once we get to like half a million dollars per bitcoin, I think the world's going to wake up, central banks are going to wake up and nation states are going to start joining the race. And that's when you go to 1 million very quickly and beyond.
- [11:48]
B
So what's the time frame? You said it's delayed. I'm sorry Andy, you know, I gotta, I gotta get a timeframe.
- [11:53]
C
Yeah, no, go for it.
- [11:54]
B
What's the timeframe for that $1 million prediction now?
- [11:58]
A
It's difficult to say, but I would say sooner than later. So every day I wake up, I'm expecting we're going to see like 100k Omega candle on the charts because it's been suppressed for so long. Like we should probably be at 200,000 I think is a fair market price based on demand. And if you look at inflation, just if you assume inflation, I did a calculation, inflation's real. Inflation is probably 11% or something like that. If you base off of eggs. And if you factor in our previous high peak in 2021, we're just keeping up with inflation. So we're kind of tracking M2, we're maybe tracking gold a little bit, but we're nowhere near where we should be in terms of real price discovery happening.
- [12:47]
C
It's a good. I'm glad that, that you got that follow up in. Because it's important those folks, few of those folks will be intimately aware of the fact that you brought up earlier of the L2 folks and the spammers and, you know, core versus knots and all these kind of internal drama. So two questions about that. Is this a bit of fun within the community or does it pose a real serious threat? And looking forward 10, 20 years, when you have this initial generation of development people who have maybe moved on or retired, does Bitcoin's administration become a little bit more boring or do you still think that there are these sustainability and passionate and sometimes polarizing issues? Because I think ETF issuers certainly don't see a lot of this unless they start spelunking through YouTube. Right. Should they be concerned?
- [13:39]
A
I don't think there's an immediate need to be concerned. This is more of a directional disagreement, I think, within the bitcoin community. So there are a lot of discussions and arguments out there about Opera Turn and other things. But looking at the discussion from a very high level, my conclusion is it's really coming down to the direction of Bitcoin software node development. Is it hardening it and reducing attack surface and making it sound money and focusing on sound money, hard money, or is it adding more programmability? Because this is the root of the issue, right? A lot of these changes, like the removing of Opera Turn and removing of filters, is to encourage or help layer two protocols that require new things. There are a lot of layer twos that don't require new changes to Bitcoin like liquidity, rgb, those are two. But there are new ones and there are theories of more in the future that will require more changes. And if you look at bitcoin core development, they have a lot of soft fork proposals out there to add more programmability to Bitcoin. And I think this kind of is at odds with the idea that we're hardening, fixing bugs, fixing security issues and kind of hunkering down. So this is really the divide and I don't think it's going to kill Bitcoin. There are obviously people that are saying that, but it's more of a directional thing. And I don't believe there's ill will from the core developers. It's really just different priorities. There are no soft forks to fix spam or reduce bloat on the main chain, but there are A lot of proposals for soft forks that restore opcodes, restore more programmability, more expressiveness Moving towards more Ethereum like capabilities for Bitcoin this.
- [16:03]
B
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- [17:09]
A
Well, the state of the US economy is a problem, right? There is $37 trillion of debt and I don't think people fully appreciate how big that is and how much of a problem it is globally. And I think we're seeing countries move away from the US dollar at the same time, brics countries trying to de dollarize a lack of demand for buying US Treasuries. So it's not like bitcoin is a problem for the us. If anything, it's a solution. I think the US can rebase to the dollar. There's lots of precedent for fiat currencies rebasing to a harder currency. But overall, regardless of bitcoin, there are problems in the US and those problems are coming to a head. If you look at the US policy on a whole, they've largely embraced stablecoins and that is because they need a buyer for Treasuries and stablecoins are that buyer. So we're seeing, I think new companies, new entrants. Sony is one of them, Cloudflare is another. Just companies that you wouldn't traditionally associate with Bitcoin, crypto or stablecoins. They're trying to make a push here and this is because the US needs that and they need that because there are problems with the economy.
- [18:22]
B
I want to pivot the conversation now. The last time we spoke, I believe it was at Consensus Hong Kong Samson and we talked about nation states adopting bitcoin. I know we heard from an IMF managing director, I think just a few days ago she said, except reality, fiat is moving digital. I just want to see if you'll give us any intel here. What can we expect in the next year? When it comes to nation states adopting.
- [18:45]
A
Bitcoin, I think it's heating back up. We've been working on nation state adoption as Gen3 for years now and we always hit roadblocks. But we do get a lot of meetings. We've met with maybe five or six central banks now and our pitch is really you should buy bitcoin and put it on your balance sheet. But it's really difficult to get a country to move. There are always more pressing issues. There are scandals, there are reelections to consider. So the window of opportunity and the ability for a country to do something is limited. But we have some interesting discussions going on right now and if one of them materializes, I think we're going to see a large wave of nation state adoption coming in 2026.
- [19:28]
C
Is it still too hard for an individual person to just buy bitcoin in self custody?
- [19:34]
A
No, not at all. And I think that is probably the best thing anyone can do at this time. Governments are usually followers just like bitcoin became valuable and then governments started embracing it. But people should buy spot bitcoin and they should custody it themselves. I believe as the world gets more chaotic and governments are looking for ways to fund themselves, you're going to see more pressure exerted on people. And this is not necessarily saying there will be a 6102 executive order, but there will be attempts to take your bitcoin away either through taxing unrealized capital gains or similar programs to that. The intent of that is to finance the government. So self custody bitcoin is the best defense against that.
- [20:23]
B
You said you hit some roadblocks and sometimes more pressing issues come up when it comes to nation state adoption. I got to get your perspective on the U.S. of course there's a strategic bitcoin reserve that was pitched. I don't think there is a strategy for acquiring more bitcoin. It really is about holding the bitcoin that the US Already has. Now the government is shut down. I think that there are some issues, more pressing issues ahead as we head into midterm elections. What do you think is going to happen with the strategic bitcoin reserve in the U.S. just given the experience you've had trying to get these kind of strategies done with other nation states.
- [21:01]
A
So the US is quite far ahead, more so than many other countries. We've talked to government officials in Japan and Korea and even though we point to the US and we say look at everything that's happening there, they've passed legislation and we sort of outline the long process in which it takes for a country to buy bitcoin. It's not just about creating svr, it's figuring out how you will acquire, how you will custody. Because the whole point of having bitcoin is it's a sovereign asset that you have yourself. If you buy bitcoin as another country and you just keep it with a custodian in the US that kind of defeats the purpose. It's like Venezuela keeping their gold in London or something like that. So there's a ton of stuff that countries need to do ahead of that, but they seem to largely not place the urgency upon it, even though the US is moving ahead so much. And I think the US will keep moving ahead, if nothing else, because of necessity, because of the debt and the lack of buyers for treasuries. So we're seeing that they have an SBIR and they have approval to acquire a budget neutrally. And there is the Bitcoin act from Cynthia Lummis that is being pushed. And I think there is also legislation for de minimis tax exemptions for spending bitcoin as well. So there are so many positive developments for bitcoin in the US right now that it's difficult to not see other countries emulating bitcoin that. But the US did actually accumulate some bitcoin. I think it was announced yesterday they seized another 121,000 bitcoin from the proceeds of a pig butchering scam. So the US just added. But the thing to keep in mind here is like having a bitcoin reserve that's largely based on seized assets is a bit dangerous because the incentives are to go and seize more if they're not buying more. So I think there should be a push to pass a legislation like the Bitcoin act that allows for not budget neutral accumulation or perhaps a bitcoin bond structure where they can sell sovereign debt to buy bitcoin, which was I think presented at bitcoin policy event last year. They are called bitbonds. And the plan was to buy $200 billion worth of Bitcoin in this vehicle. So there are a lot of ways that the US can even move further along and I think they should.
- [23:19]
B
We got to ask you before we let you go about something that you recently posted on X. You said that Korean retail investors are propping up Ethereum. Talk to us a little bit about what you mean there and should people who participate in the Ethereum ecosystem be worried?
- [23:34]
A
I would say so. I mean Ethereum was largely in massive decline. The Ethereum treasury companies have largely been the reason that it's resuscitated itself. And what I've heard from my contacts in Korea is that there's something to the order of 5 or 6 billion dollars of Korean retail money. Soha Gae me that's what they're called. Like the Korean retail investors that focus on Western stocks, particularly the US ones that have put a ton of money into these Ethereum treasury companies. And the Ethereum treasury companies have been flying to Korea quite regularly to promote their wares. And the sad thing is a lot of the these investors have no idea about the ETH BTC chart. It's the Ethereum plotted against Bitcoin chart. They're looking at the dollar price of Ethereum and you know, they're not really looking back in time either. But if you were, you would see, you know, you're buying an Ethereum derivative for roughly the same all time high from years back. But if you look at the ETH BTC chart that's even more damning. That's almost a constant decline. And then you see the Ethereum treasury companies make it uptick a little bit and that is what people are excited about now. But Korean retail investors are due for a very rude awakening when capital is going to get pulled and there's a lot of Ethereum that is likely going to sell. We see a large amount being unstaked constantly.
- [25:03]
C
Does Ethereum and do other blockchain assets have to I guess fail so that more focus can go on bitcoin accumulation? And then does the asset class survive with the same amount of attention and and care as it seems to be getting this year? It's, you know, like it or not, we have kind of more of an asset class like viewpoint and the legislation stablecoins tokenization have helped to support that. Bitcoin certainly is unique, but unique and alone are two different things. So what's the healthiest outcome with respect to education and acceptance of blockchain technology for Bitcoin's adoption?
- [25:44]
A
Well, I would say the healthiest thing is we see alts continue to decline and we don't see DATS or digital asset treasury companies pushed onto retail investors, but just bitcoin treasury companies because if you look at alts, they always decline. Ethereum has had the longest staying power, but. But if you look at it in BTC terms, it's declining just like every other one and it's really not good when people lose money. Bitcoin is really the only game in town where you can expect it to compete with gold, an asset like gold, and appreciate over time.
- [26:18]
B
Samson, we gotta go. But thank you so much for joining Markets Outlook this week. It's always a pleasure having you on.
- [26:26]
A
Yeah, thanks Jen, it's been great. Thanks, Andy.