The Decrypt Daily: Bitcoin & Cryptocurrency News Podcast - Feb 23: Bear Trap or Bear Market: Mark Yusko

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00:00:00
From the Crypt media. This is the record daily in my name is Matthew Aaron today on the show Heather just got his comeuppance. I don't know if you noticed but Bitcoin is down a little bit today and we welcome our cute. Is this a bear trap or bear Market that's coming up today on the decrypt daily.

00:00:23
Good morning, everyone. Welcome to the show. Today is Tuesday, February 23rd 2021 again, I think that you guys noticed that Bitcoin took a little pull back, but please keep everything in perspective Bitcoin plunge 13% in 24 hours. But even after that plunge, he was still up 50% on the month and up over 350% since August of last year. So again, I want everybody to breathe woosah woosah.

00:00:55
Revenge breathe out. Everything's going to be okay and even if it isn't do you think it's over do you think that this is over? Do you think that we just tapped Out $59,000 Bitcoin in in the future will never see $59,000 Bitcoin again, 2024 Endeavor 2028 32 if we can't stomach a little bit of pull back a little bit of turbulence a little bit of volatility. That's what bonds are for. That's what mutual funds are for isn't that Financial advice. I'm not giving Financial advice, but I'm trying to be the rational person here that if you're handling Bitcoin hodl Bitcoin.

00:01:37
4 reason for a purpose for future not for the month to month date add a minute to minute or 1 minute candle swings. If you do that, you're going to be very stressed out and waking up in the middle of night refreshing your blockfolio with anxiety and have an ulcers in your belly. Let's get is crypto prices.

00:01:59
Do we do money talk at 10:50 Eastern Standard Time Bitcoin is at the number one spot at $49,066 down 7.5% from yesterday, but hold on to 50% in 2 days at Darien $1,590 down 7.3% b&bs at the number three spot at 2:30 360 down 10.8% polka dots in the number 5 by 3442 down 2.3% in cardano just under $8.98 even down 44% total market cap. Where at one point for 7 trillion dollars down to 7.5% BTC dominance at 61.9% And I want to see this again overnight. We went down to $45,000 bounce back up to 49. Now. Are we down training still or we going back up, but I am hoping you guys up today my listeners. We have Marquess going on. He's going to give us some inspiration for the future. Here's Mark. Yusko CEO of Morgan Creek Capital Management.

00:02:59
Who is Chad we talked about Heather Janet Yellen the market that dip and so much more. So enjoy and I'll see you after the show with other news this morning looking forward to the conversation me to look and I'm really happy you're here today of all days because we had a very big pool back and my basic question to you for everybody out there. That's listening. Bear trap or bear Market where we at. We are in a bull market a cyclical bull market within a secular bull market. So we're in a secular bull market for Bitcoin the development of Bitcoin and every single fundamental you could look at is pause right from hashrate difficulty two blocks two transactions to number of wallets to users to number of mentions in the media to

00:03:59
The types of Institutions that are investing to corporations putting on the balance sheet. So everything is possible that is all secular bull market, you know evolution of technology and we're still you do three years away from the evolution of this technology technology cycle that I've been talking about for a long time, right 54 Mainframe 68 microchip 82 personal computer 96 internet 2010 mobilenet in 2024, the trustnet and Bitcoins right at the beach the base layer that so bad will be cyclical bull market that occur for 18 months around having events. And so the having happened last May here. We are, you know 9 months in or about halfway through and in a bull market is cyclical bull market. You're going to get pull that and what I think is interesting.

00:04:59
Sweet me at 8 a meeting for pullback.

00:05:05
I mean

00:05:09
Chat, is that the numbers change as you get to a bigger number in terms of percentage it so what used to be a gigantic move $5,000 on a $10,000 move. That's a really big move. Right when it's 60 thousand or 50000 a $10,000 move. Interesting is kind of like round numbers in the stock market. Nobody celebrates in every thousand points. Well at Dow 30 thousand a thousand points is just not even that meaning.

00:05:46
And so I think if you go back to 2017 or 2013 or 2009 for that matter and you look at those. They aren't straight up 45 degree lines. They are up down up down up down in the sing about it is the the Lowe's continue to rise. That's the thing. I love about about this market. So from a secular perspective 12 years in all but one of those twelve years the low for the year is higher than the previous low, which means we're in an uptrend sexual eruption in a cyclical bull market. You're going to have periods where you have pulled acts and I think there were nine 25% full backs in 2017. I think I bet number right and what's really stink Matthew is you go back to the second week of January 2017.

00:06:46
There was a 40% pullback on the thud right fear uncertainty and doubt about China Banning Bitcoin and within it went from 1400 back to under a thousand and then you know by the end of the year we were at 11,000 ever hit 20000 for a while but finish their 11,000 this year second week in January. There's fun on u.s. Going to ban Bitcoin know they're not going to try to regulate certain on Ramseur off ramps, but they're not going to be an exchange or maybe they do there's a stupid right like she had china was stupid cuz all happens is the exchanges move somewhere else in the world cuz we have a borderless Global Network. And so we had a situation like that right after Thanksgiving to write. I mean, I woke up this morning. I was on TV 4:45 in the morning.

00:07:46
I know it's just people in Europe were watching and Penguins falling from 20,000 to 16000 overnight on that manukyan was going to do something and it's change the regulations before he got kicked out of office and long story short. The guy says to call today, which is buy some today and you should buy some next week and the week after and the week after and same advice today, right? What should you do? And you should buy a little today by Lil next week and keep a commitment because at the outlet at the end of the day price is a liar price doesn't mean anything relative to value of anything right price is simply what two people you and I decide to exchange some unit whether it's art baseball cards Pokemon or you know,

00:08:46
Stock or Bond or crypto? It's just what we decide to trade a small amount. That's that's what price is value is determined very differently and it's like a pendulum how much time is the pendulum spend in exactly the center almost zero it's either to one side or the other and price is either overbite or underbite is very rarely on Fair Value. I have only just make a statement and I have a question about this because you said a lot there the Bitcoin crypto space is a different than say other Industries is different than say Tesla's rise it different than Apple. I mean look we can leave beerus on on Tesla's price. We're not Bears on Tesla or not. We we Bears on Apple Spice will not be erased on Apple or Google or any of these other companies that are out there baking products yet. We are Harlot Peddler of Bitcoin and you see $50,000 Bitcoin we have is PTSD because not only do we see the bear Market, you know in act for 3 years or so it before we see the next having to go.

00:09:46
The next bull market. We we also see the media treat Bitcoin unfairly to pair two cities other companies won't test has a future self-driving cars electric car is renewable energy Bitcoin fud fraud money laundering drugs, you know, all these other things. It's what it's you're going to lose your money and even the biggest investors or some of the biggest you don't Financial. No Talking Heads out there or just saying you don't put your money and get out or you're going to lose all your money. It's a different narrative. So how can people feel confident houghtaling Bitcoin even though there's historical precedent? How do we feel confident moving toward the future and in that goes into my next message? That's the first part of that question. How do we feel confident in the second one is where are we on the Bitcoins development. So if you could cuddle together, please keep Point Matthew in the sense that we're talking about. His technology we're talking about is the development of a monetary Network and if you talk about those companies all are

00:10:46
The top 5 most valuable companies quote-unquote stocks are companies at all their networks, right Amazon is a network. They don't make any they're not like an old-school company. They don't manufacture widgets. What does Amazon actually do?

00:11:04
There a search engine what do they do there searching and they match buyers and sellers and they take a cut and I've gotten into Logistics to book bottom and they do a WIC but they are a network. What is Google or Facebook even apple? Right? It's a network of these supercomputers that we're all connected. And yes, they manufacture the widgets, but they they make their money on the network effect and network effects are very very powerful. And so when we think about, you know a Communications Network, right, which is cell phones. Are we think about a social network, which is Facebook. We think about a monetary Network a monetary Network and currency is simply created by custom.

00:11:51
green pieces of paper

00:11:55
Why do we exchange green piece of paper that no one actually uses green piece of paper anymore use plastic cards and another thing for a venmo but but somewhere to take those to China now I can get that out of here. I want to read piece of paper and if you go to Israel, they want a yellow piece of paper. So money is simply based on custom and for 5,000 years there been 875 paper currencies three-quarters of them have disappeared from the face of the planet. They're gone and the oldest surviving today at the pound sterling Brown 381 years and back 381 years ago a pound note. Got you a pound of sterling silver today. It would take you a hundred and seventy-four pounds of sterling silver to get a pound note that's called devaluation of currency and all paper currencies off Fiat currencies will devalue but the one asset that hasn't do value is gold.

00:12:54
So gone for five thousand years five thousand years. That's a long time has 1 oz of butter Fine Man suit from a suit of armor to a suit during the American Revolution to a suit on Savile Row today 1, oz by the financing. Well, let's take gold all gold in the world fits into olympic size swimming pool two times my library here very heavy very hard to transport very hard to divide all the big one in the world. But the key is that it is more portable. It's more divisible. I can break it down to eight decimal point Douglas Satoshi part of of the reality is we created a non duplicable.

00:13:45
Asset electronic mean Eric Schmidt said you said a digital asset that can't be copied. That's a Technologies. A lot of companies are going to be built on hundreds thousands of companies will be built on that basic technology that base layer technology. So we are so early I said this on Friday, I did a podcast celebrating you trillion-dollar day and now we're under a trillion, but for the moment we hit a trillion dollars of of market cap in the Bitcoin Network and we will hit 2 trillion + 3 trillion + 5 trillion + 8 trillion + will be gold equivalent and then the assault starts on fiat currency around the world know that we ever get that far. But the idea that this monetary Network that were late to the party or that it disappearing what's technology takes hold it doesn't disappear people said that you should never use a cellular phone right was going to cause brain cancer or it wouldn't work and you couldn't take it anywhere.

00:14:45
It wouldn't be enough infrastructure a better cell service and major cities than I do, you know landline service because they feel good technology. And so if I can find the most your listeners don't even know what a telephone booth is watch Superman. You understand. So it's a long rambling answer to say look. We the Star-Spangled Banner just finished playing the game is about to start your 12 years in to the development of a multi-sensory. Maybe the multi Millenia asset. Are you out before we came I ever talk about the tether foot go back to 2017. There was a flood go back to 2013. There was two other fun today their tether fun. Just tell her have a mismatch of assets and liabilities certainly possible.

00:15:37
N t a g deem that they do and they're going to get fine, but at the end of the day that doesn't matter in the big picture is that it's a small percentage of overall exposure. Could there be in the short run pressure on liquidation of those positions? But on the flip side leads to amplification of moves on the upside and then the Speculator come in a Speculator someone who doesn't have a need for hedging and they just buy the price I pay by with the moving so Politically Incorrect with us guys right to hate go get the ketchup in the fridge and I'll open the fridge. There's no ketchup and she'll walk up and go grab ketchup bottle. I can't see it cuz it ain't moving. He's not moving guys don't see it and that's how speculators are.

00:16:37
Price isn't moving. They're not interested. But it's price removing. They will flow their dollars there really quick Mark. I want you to explain just briefly please on that the tether Fudd because look this is something that we've been talking about for a while. It's always been fun, but about tether however, now there's actual movement in a legal manner of the New York attorney general is finding them. I think it's 18 or 19 million dollars. They're saying you can't use Southern trade in New York because I don't want to starting but his bills and I was today's brand new news. If you're going to look at that and go out there. It is the Domino's Arabic writing on those are the cars are crashing down and that that's that's at the liquidity for Bitcoin is gone to the price of Bitcoin is going down. Just can you just please briefly just talk on that? How it how do you think that's going to turn out? Like, I think it's like every other bank fine. Now it's a cost of doing business there lots of banks right here. You mentioned earlier that you know Bitcoin is

00:17:37
Used for in illegal activities illicit activities like really think about it everyday way more green dollar bills usually counterfeit are used for illicit activities than Bitcoin. But, you know, there's a difference between and we found out in 2016 to 2022 the difference between truth and facts and narrative in the narrative might win with this one.

00:18:10
Is money is currency used in illicit activities. Of course, of course, not. That's the nature of the Beast and and here's the thing is it's incontrovertible just the size of of dollars in the world paper dollars versus the size of the Bitcoin Network that more is used in paper. But the most important Point Katie Haun right that the principal at Andreessen Horowitz for 20 years and I was going and the choice between Sako money and fingers on a keyboard. I'll take fingers on keyboard everyday cuz I have a chance to catch those guys. It's not that I don't think there is illicit activity being done in the Bitcoin network. Of course there is because all technology I joke, I spent my whole career hanging out with the bad guys talk about I've been after an early stage technology my whole life who was the first user of a pager drug dealer who was the first user

00:19:10
Porn who is the first one the first use a Bitcoin cannabis industry why cuz they were locked out of the main banking system. So good new technology does something well will be adopted by the people who can't get the existing technology, right? You're not going to walk into a landline phone booth and you'll make a called. It's being monitored. You're going to go use a pager. So but back to the Doterra thing, I think you think about Banks. Yo Deutsche Bank and HSBC in all these big bang. They get find the least once a year right huge amounts way bigger than 18 or 19 million billion for money laundering for spoofing for manipulating gold price, whatever it is and what it is doing business as the gold market collapse because suddenly JP Morgan isn't allowed spoon prices.

00:20:10
Is gold young become more of a free market. Is there out of the market from the other side of the smooth? And yes, same things through here is the leverage this being created by a tether or or other forms of of derivative around a bit coin. Yes, but that liquidity why little wrote it'll go down in the short run but let's say there was a Polish the liquidity would certainly shrink in the short run and that would have a deleterious impact on the price short-term. What will happen is other liquidity forms will rise over here because ultimately the end users are not all speculators, right? There are real use cases for Bitcoin today either as a store of value and store values a great story and I'm sure you can use the power lock chart, which is

00:21:10
Stores in value going from bottom left upper right in terms of size at the very tippy-top. He got real estate right below that you got gold and diamonds and you got silver and Bitcoins right here and I need to be way down here at the bottom. And now it's right there below silver and eventually it'll pass over eventual pass time and eventually get to gold get up to your real estate, maybe because if you think about it, would I rather store my well in a digital asset that has perfect liquidity or an asset that if I wanted to sell my interest in a office building right now, what would I get I get, you know fraction of of the value because who's going to use oxygen mean we're sitting in home then I think

00:21:59
Are there going to be lots of stories along the way? Yes, whether its tether whether it's another ban, whether it's some government saying hey, you know, we want our own digital currency and we don't want people to use Bitcoin put the end of the day technology good technology wins and it displaces bad technology good money wins and it displaces bad money. Think about being in Venezuela. If you transfer your bolivars to US dollars or even better to Dash or Bitcoin you win. Where is the people who were stuck in Bolivars and got crushed or Zimbabwe dollars or pesos in Argentina or right now in the United States, right? The plan is to devalue the dollar.

00:22:54
Every single day the dollars being too bad in the back. Did Janet Yellen gets up and says, oh, that's not my plan. That means it is the plan right the lady doth protest too much methinks. And so that the interesting thing is we have to talk about right we have to do new shows and we have to talk about the movement and I said guys and we only see movement so we all have to talk about what's going on day today, but if you step back or zoom out and you just look at the long-term Trend both secular and cyclical you say we're in a bull market. We're going to have natural creations and everything. Why does anybody think that an asset that has compounded at 213% for 12 years to 13% per year?

00:23:42
With about 80% volatility. Why does anyone think that there's not going to be a lot of down days and down weeks and then months but the volatility is your friend investors great investors seek volatile assets that are uncorrelated to one another combined them into a portfolio and reduce their risk.

00:24:05
That's the whole purpose of Markowitz diversification. You won the Nobel Prize for this content. You take cash riskiest at acid on the planet cuz it's devalued Everyday by inflation and you add bonds which is more risky than cash your risk the poor fellow to go down at stocks. Briscoe's down at hedge fund risk go down and real estate Frisco Town add Bitcoin, which is the most uncorrelated assets that I've ever seen in my career and I got white haired we've been around a long time.

00:24:33
It is .15 correlated stocks 0% correlated Bond. If you add it to a portfolio of stocks and bonds your risk goes down not up and you returned because it has volatility because it has a higher expected long-term return. So this idea that we should run or flee from a Polack is nonsensical. In fact I said, it's all time investing the only business I know.

00:25:03
When things go on sale people run out of the store and the cheaper the price the faster they run just stay in the store buy some today buy some next week buy some the week after this is this is a great place to the end. And so the more of this whole story is btfd Mark, yusko CEO of Morgan Creek Capital Management. Thank you very much for coming out of the crib daily, and I hope to see you back soon. Love to do it. Thanks, Matthew.

00:25:30
Any other news this a longer one today? So I'm a try to keep this brief as possible. Operator of the world's biggest Bitcoin. Mine is north and data IPO in the USA that could raise around 500 billion dollars and this public listing to be launched before the end of 2021. So am I right here right now, there's this company and of course coinbase launching their DP direct public offering which requires a star to be launched directly on the NASDAQ.

00:26:00
Richmond Federal Reserve Bank got a new Chief Innovation officer, and she is a self-described crypto nerd is now the chief Innovation officer and she's a big believer in Bitcoin and crypto and this is important because as you can see people who believe in Bitcoin and blockchain in the technology and The Innovation the financial Innovation are showing up in different aspects of our government from the Senate to Congress the SEC so slowly, but surely this idea is spreading

00:26:35
And finally, this is the headline. That's probably going to get me a little bit worked up today what Janet Yellen gets wrong about Bitcoin. Look be skeptical be a realist. Look at it from different points of views always look at Bitcoin and cryptocurrency and anything that comes out from Tesla to the new iPhone with a critical view of critical eye. But if you're just going to only bud and poop on different Innovations and ideas in Tech as well get swear word. I'm trying to keep it PG these days, but you're probably getting it wrong specially when it comes to innovating the financial system with transparency and scarcity. I mean Hello white people think they know what Innovations going to catch on and they know what's going to win and what's going to lose and usually when it comes to big things a lot of people are wrong, so here's some

00:27:35
Knowledge of the past that people just got wrong number one. And by the way, these are all arbitrary but they're just really interesting things that we kind of got wrong had a lot of fun when they came out the electric light bulb. Look this is really dumb founds me to think that the electric light bulb was shit on when it came out. They had a lightbulb sitting there little by electricity and they would look at that and then look over at 20 candles and go now those are going to win ridiculous number to alternating current. Now. This one has a lesson with in it now Thomas Edison had recurrent as we know and Tesla made alternating current which was more efficient and more practical but Edison needed to protect his money his patent. Now this may be more like Janet Yellen who try to protect the old way even though it's not the best way but we know which one won out in the end and it wasn't DC or the old way number three the telephone they called the telephone hardly more.

00:28:35
Then a toy when it came out like think about that communicating across distance in real time is just a toy. How do I say that's lack of vision speaking of vision. The television was also getting shit. I'm going to come out and they called this device a commercial and financial impossibility. Of course is on this list. I think I was kind of thing but I forgot to count. So we're airplanes is on this list. What is because we weren't supposed to fly into a flu and then it doesn't go that far until in park until I had 10 and then a 10-seater Boeing 247 would be the biggest plane ever rebuild until they don't want bigger and then it can never cross the ocean until across the Atlantic and the Pacific Was Out Of Reach until they cross that and now we see where flight is today.

00:29:23
Automobiles automobiles literally crack me up because you literally looking at a horse pooping in the street pulling people around and then you see this motorized coach over here. It's faster goes farther to be fixed doesn't get tired and you're like the horse is going to win. I mean that's just kind of dissidents right there and find the one that I would have got wrong and I think has a biggest lesson it personal computers when computers come out there a big as a room and it went like click click click and they did some rudimentary Matt, you know, but with vision and Innovation and hard work and seeing the potential in this device and really learning about it, but we know computers are today during our pocket the recording this podcast and it's only because of vision of innovation of Entrepreneurship of risk that the computer is what it is today, but I beginning like I said myself I would never seen that big monstrosity.

00:30:23
Loud clunky overly complex machine being what it was today. And it's what it is today because of Visionaries that didn't mind getting shit on the kept on moving forward.

00:30:38
Thank you for listening to this episode of the recruit Bailey. My name is Matt here. And don't forget to go over to Apple podcasts like subscribe share and leave us a comment in until tomorrow. Happy houghtaling everyone.
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