On this episode of A Wiser Retirement™ Podcast, Casey Smith is joined by Robert Swarthout, to talk about their concerns over AI platforms like ChatGPT and Google's Gemini, the ongoing bankruptcy proceedings for FTX, the potential for Ethereum to receive an ETF, as well as the potential implications of Bitcoin reaching a million dollars.
Podcast Episodes Referenced:
- Ep 206: Bitcoin ETF Launch Update, SEC's X Account Hacked, & Greyscale's Outflow
- Ep 202: Bitcoin Halving and the Upcoming Bull Run
Learn More about Wiser Wealth Management:
- Our website
- Schedule a complimentary consultation (learn more about our services)
- Click here to download one of our free guides that covers financial planning topics like retirement, investing, taxes, divorce, and more!
Connect With Wiser Wealth Management:
- YouTube Channel
- Facebook
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- Instagram
- Twitter
- Casey Smith's Twitter
- Podcast
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This podcast was produced by Wiser Wealth Management. Thanks for listening!
On this episode of A Wiser Retirement™ Podcast, Casey Smith is joined by Robert Swarthout, to talk about their concerns over AI platforms like ChatGPT and Google's Gemini, the ongoing bankruptcy proceedings for FTX, the potential for Ethereum to receive an ETF, as well as the potential implications of Bitcoin reaching a million dollars.
Podcast Episodes Referenced:
- Ep 206: Bitcoin ETF Launch Update, SEC's X Account Hacked, & Greyscale's Outflow
- Ep 202: Bitcoin Halving and the Upcoming Bull Run
Learn More about Wiser Wealth Management:
- Our website
- Schedule a complimentary consultation (learn more about our services)
- Click here to download one of our free guides that covers financial planning topics like retirement, investing, taxes, divorce, and more!
Connect With Wiser Wealth Management:
- YouTube Channel
- Facebook
- LinkedIn
- Instagram
- Twitter
- Casey Smith's Twitter
- Podcast
- Blog
This podcast was produced by Wiser Wealth Management. Thanks for listening!
Absolutely. You know, my hunch would be that right now, what you're seeing is probably hedge funds yeah, if they weren't buying it direct. Or you have people that kind of do their own management of their brokerage accounts and retirement accounts and they can go in and buy these things because it's it's obviously move the price of Bitcoin, but it's not like trillions of dollars. I mean, we've seen I don't even know what the market cap of all these ETFs combined is, but it's less than $10 billion. So it's you know the grand scheme of things. That's dropping the bucket.
Speaker 2:still, Welcome to our time at podcast. We believe the best financial advice should always be conflict free. I'm your host, casey Smith, getting into financial freedom. Today's my co-host, robert Swarthout, founder CEO portfolio manager at Teton Crypto Capital today. Today we're going to be talking about the title that's to be determined.
Speaker 1:Well, you know, it's obviously crypto, because here I am I don't want to start with that, I just like that title. I was like oh interesting.
Speaker 2:Let's, let's, okay, let's. I didn't expect that. I looked up and it's like oh, wait a minute, let's, let's just do crypto and technology update, because we can work in all the things we want to talk about. All right, here we go, starting again. Welcome to the wiser retirement podcast. We believe the best financial advice should be always, should always be, conflict free. I'm your host, casey Smith, guiding you to financial freedom Today's. My co-host, robert Swarthout. Founder CEO portfolio manager at Teton Crypto Capital. Today, we're just going to talk about technology and what's happening in the crypto world. Obviously, bitcoin is still in the news with the ETFs that have rolled out that have been very successful.
Speaker 2:I want to start with something that's not, that's not entirely crypto, but in the AI space. So in the AI space everyone knows about or should know about, chat, gpt 4.0 and man. It just makes searching and learning things a little more efficient right. And then this is Bard came out through Google and Bard, you could Well.
Speaker 2:Bard got updated to Gemini Exactly, so that's my point is that Bard was the first generation, now they're calling it Gemini, that I have an offer here and Google, google workplace, to be able to add it to my emails and it would help me respond, and all that fun stuff for 20 bucks a month. Yeah, and I'm kind of scrolling through Twitter and I'm start reading all these things about Gemini and I'm like what the heck is going on? Basically, you know, dei is at full force in Google, and so the team that developed this wanted to be very and it's not even politically correct. That's not saying in the right phrase anymore. It's way beyond this. Now.
Speaker 1:They're in California, so it may be politically correct there but nowhere else.
Speaker 2:So they're trying to reshape history. So if you, if the image Gemini will create images based on some words you give it. And these images, you would say, people learn very quickly. Hey, draw me an image of the founding fathers and the founding fathers. Evidently I had no idea are black and Asian.
Speaker 1:I mean what is going on here Founding fathers, or if you asked to just draw some, you know some images of the Vikings that would have come across. They were all a bunch of black guys, like they were pretty racist group. They were definitely not black. It was just sad that, like you have a relatively or very small group of people at a technology company that can have this kind of power on society. And this was very. It was called out very quickly and it turned into a game trying to get it to draw a white person.
Speaker 2:It would not draw a white person, which is which is crazy because you know how much damage was done to the Google brand and all those.
Speaker 1:Yeah, I think it was down like 5% the day that it really came out. So I mean, I don't know what the market cap is, but it's billions of dollars?
Speaker 2:How about just truth? Why can't we have AI that just tells us the truth?
Speaker 1:The truth can be very subjective.
Speaker 1:Right, your truth can be different than my truth or offensive Right or, yes, correct, you know, if you want to believe that Elon is a fighter for free speech. Grock AI that is part of Twitter, kind of not part of Twitter Now seems to be a little bit more straightforward. It doesn't seem to be as advanced as chat, gpt or the Gemini thing, but it's. It's an interesting world, like you know. And then the flip side said that was just the Gemini piece. So like, where else is it plugged into Google? Or where is that ethos that helped to develop that? Where does it show up? Yeah, and you know, just this morning I saw somebody found out that if you did an image search on Google for stock image photography of theft, it would only show white people.
Speaker 2:It would not show a black person, so it flipped. You could see a white person in Google.
Speaker 1:I'm just like, and what I find ironic is, there's a very good chance because technology is largely white people I mean there's some Asian and some Indian people in it, but like the team that developed this probably is majority white. Not to say it needs to be a black or white thing, but like it just blows your mind.
Speaker 2:Well, I just go back to the founding fathers. Like that happened, that's real, that's history, we know. It's recent history, if you want to look at it within a week it's not like what color was Jesus Right? There's a lot of different variations of that right. But, but you're, you're. It's how. How could it generate that? And and how would you not know that this was going to be a problem when you launched it?
Speaker 1:Yeah, so I had. I was, so I had some knee surgery two weeks ago, so I've had a lot of time to do reading because I'm on the couch.
Speaker 1:And what I found fascinating about this whole episode was the somebody finally asked the Gemini system to describe its thought processor or its decision-making process and how it draws what it draws, and it finally basically, you know, gave the formula of being like it. It adds words like inclusive and all these other words to the, to the sentence that you put in, whether you include it or not. And then I'm so now here, cause now the system has understood, inclusive means all the things that are showing up that probably shouldn't be showing up in these cases, right, so it's over biased.
Speaker 2:So maybe what they were going for is give me a good clip art picture from my website of an working office, right, so it shows people different, different diversity. Okay, that's fine, but then it applied that that same formula it's the same formula to to actual historical events where we know actually what people look like, right?
Speaker 1:So it's a sad state of affairs, you know, and the Google claims are working on it. You know, to me, the only way you work on that is you fire the whole team. You have to figure out how to change the, the culture within the business. Cause that that is not just. Oh, a product manager made a decision.
Speaker 2:Right.
Speaker 1:That is an ethos, that is, it may have been going on for years at Google, but they finally decided to make it pretty overt.
Speaker 2:So Well, here we are. Yeah, and this chat. Gbt 4.0,. Does it draw images?
Speaker 1:So it doesn't do images, but they just showed a demo of something called SORO S-O-R-A, where you give it a sentence and it does. A real life video.
Speaker 2:Yes, which is?
Speaker 1:even more impressive than an image, in my opinion.
Speaker 2:Yes, I saw, I actually saw that demo. That was impressive, Like like if you're in the movie business. Right Movie business or, if you're like, like there were like trees blowing and leaves coming off the tree and the person was like walking down this path and you should go check out the video.
Speaker 1:It's on their website. I think they said show draw a 30 second video of a couple holding hands walking through Japan in the spring, or something. I forget exactly what it was, but there was like the, the pink leaves coming from the Japanese maples and just in a, I mean it looked like real life.
Speaker 2:That's version 1.0. Right.
Speaker 1:So you can't believe anything. You see if officially at this point, yeah.
Speaker 2:Yeah, that's crazy. Well, jeez. It just makes you wonder, like what. 90% of people use Google search, right, so you make you wonder what's being screened when you use search for Google search. Yeah, when you get to more of the political type things, absolutely. I mean, from their standpoint, it's a tough job. I mean if you're trying to show truth and what's actually happening, I mean there's a lot of people who believe it's a flat earth.
Speaker 1:Yeah, I mean. Their motto is to organize, yeah, to organize the world's information, but not to also opine on it. Opine on it. I mean, and that's where they've gotten to you, so that's crazy.
Speaker 2:Well, anyway, it was also a good laugh. We had, robert had a birthday, so we were at your birthday dinner last night, so it was a good laugh on that front.
Speaker 1:Front yeah.
Speaker 2:Technology conversation last night. Well, let's move back to the crypto realm. What's Bitcoin at today?
Speaker 1:Bitcoin is at 56,000 and change Almost 57. It has touched 57 today, so roughly 10% up 24 hour period. You know, ho hum.
Speaker 2:It was like at 12,000, I feel like a year and a half ago.
Speaker 1:Well, it was at 12,000 in November of 22 when the FTX stuff blew up. You know, and we do have that in our notes the FTX People that you know part of that bank or see the creditors you know if you had your funds in FTX, that's right Are going to get made whole, but in 2022 value, not 2024 value, which is functionally. I mean, if you was Bitcoin, it's up 5X or 4X.
Speaker 2:Yeah, so you know they're made whole, but are they really made whole Good win for the trustee, though you say you got 100% of their money back?
Speaker 1:Got them and they got to suck all the money out in attorney's fees. So everybody wins.
Speaker 2:Sam's banging his head against the prison cell wall. Yeah.
Speaker 1:So it was, you know, talking about Sam, so people hadn't seen much on me. He said we're about a month out from his sentencing. That's going to happen in March, but he was you know, they have those lineups will to bring like six or eight people in and say, oh, pick your criminal, or you recognize. He just was part of the randomized group that brought in. He looks pretty rough. He was in this first one of those. About a week ago I saw a photo. I'm like oof, Like prison's not doing him any favors.
Speaker 2:Which is probably the point. Would that be crazy if your wallet got stolen and you actually know who Sam is and you're standing there in the line and I'm like can I talk to him for a minute please?
Speaker 1:Or you had, or, on top of it, you had money in FTX and you're one of the creditors. You might be biased.
Speaker 2:He did it. He stole my wallet. Yeah, like literally yeah. So you know luckily.
Speaker 1:you know, if you kind of think back, I mean, the fall of 2022 seems so long ago. You know it's just a year and a quarter away and at this point you know the crypto industry feels healed from that FTX mess. I mean, obviously, if you're a creditor, you probably don't feel that way.
Speaker 1:But the industry's moved on it's. You know the Binance thing has gotten cleaned up late last year, so roughly a year after the FTX stuff, it feels like a new chapter and I don't know if it's just because the prices are up and people are optimistic.
Speaker 2:I feel like Wall Street is kind of taking over Bitcoin at this point.
Speaker 1:Well, you know, crypto used to be like. Oh you know, prior to the ETF launching, it could be crypto was having a good week and then it would have a really good weekend, because people at home do have free time. Crypto takes the weekend off, just like the stock market now Like, but it's still tradable. It's tradable, yes, absolutely. It's just kind of quiet, but the prices aren't moving nearly as much, which says to me that the ETFs are having a good size impact on Bitcoin, which obviously trickles down to the rest of the market.
Speaker 2:So, speaking of ETFs, you know, just looking at the launch since early January, I mean crypto or the Bitcoin, had a pretty big drop by the end of January is down 16% on the year.
Speaker 2:Well, at the same time you know you're sitting here looking at the S&P 500. At the same time was was actually up about 1.8%. Man, you fast forward to February 26, close. Bitcoin's now up 16.8% on the year, that the S&P 500 is up 6.23. I'm happy with the 6.23. But then you start looking. I go, hey, who's this guy? That, just right, just just blew past me.
Speaker 1:Right, you know, and it's you know that people love to make that comparison. I make the comparison a lot of times in my newsletters, but at the end of the day, if you rewind over time, this is not a fair fight. You, granted, it's something coming from zero 12, 13 years ago. You know, if it's successful, it's likely going to have a higher rate of return than the S&P, right, Right, Pure, all of averages, but it's a, you know, it's. It's. The volatility is certainly higher than even the Nasdaq, but it's, it's just crypto. You know I I often will go and look at my brokerage account. I'm kind of like, oh it's, it moved 1.5%, Like it didn't move today. Right, I'm so used to the crypto numbers.
Speaker 2:So With the volatility? Yeah, Absolutely yeah. I mean, I I'm still in my circle of financial advisors. I don't have anyone using crypto right now, but I'm not sure who the buyers are of the ETFs. You think it's baby boomers?
Speaker 1:Well, I saw individual investors. I think it's individual investors, but you can't buy it in all the accounts right now. Like Vanguard still says, nope, you're not allowed to buy this which is just insane.
Speaker 2:Like yeah, cool, they are working on their disclosures. If I had to guess.
Speaker 1:But why did they wait?
Speaker 2:Like well Vanguard. Vanguard has never been one that On the bleeding edge. Yes they, they are on the back end. They were one of the last ones. That will not be last, but they were the last.
Speaker 1:ETFs yeah, I would love to see the amount of outflows of accounts they've had, because people are pissed off. They can't buy it. It's probably nothing like material for them.
Speaker 2:No.
Speaker 1:But it's probably an interesting number I'm. I imagine they're watching it, Right.
Speaker 2:Right, they buy it and end up with a Bitcoin ETF. I haven't really talked to anybody there but it would be like two years from now.
Speaker 1:Right, and at that point, like BlackRock is like owns, you know, half a Bitcoin, yeah, they back when everyone was buying commodities, they didn't.
Speaker 2:They may I haven't checked in a while, but they they didn't have a commodity ETF back in the day or even a mutual fund Other than an actively managed one. They had an actively managed.
Speaker 1:Yeah, you know, I guess naively, I just assumed when the ETFs launched it would just be everywhere, but like it wasn't, obviously it wasn't in Vanguard, it wasn't in some other big provider, I forget, it wasn't the the.
Speaker 2:The Bitcoin ETF has kind of fallen into the same category as leverage ETFs, and so I feel like the people like, oh, people don't understand this product, they understand what they're buying. To me, a Bitcoin ETF is much more clear as what it is than a leverage ETF.
Speaker 1:Oh, absolutely.
Speaker 2:Leverage ETFs reset daily, they're, they're, they're more complicated and some people have gotten lucky, but that's not something that we would ever invest in on this side. But yeah, we're watching Andrew here. Our investment manager is actually going through the DACFP certification program. He's going to be a certified crypto blockchain destination here in probably I guess probably a month or so.
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Speaker 1:Yeah, you know it's. You know not to turn this. We're certainly not going to turn this whole thing into a Bitcoin ETF podcast here, but you know the volume of Bitcoin that is being bought by the ETFs to satisfy demand for their share of creation has been pretty incredible. Now all the ETFs certainly account for more than five billion of value. People had thought that was like the goal for the end of 2024. Oh, wow, like we're there two months out, or it was me a month out.
Speaker 2:Yeah.
Speaker 1:And we're already past it. So where this thing goes, I don't know, but the amount of Bitcoin being bought by the ETFs, depending on which day it is, is, in you know, ranging from around 4x to 8x the amount of Bitcoin being created by the miners, so that the rest of that has to come from holders elsewhere.
Speaker 3:Okay.
Speaker 2:So, so that would push the price up.
Speaker 1:That's supply and demand. I mean, that's very simple supply and demand.
Speaker 2:That explains the increase, then Right.
Speaker 1:You see a 10% move and you know these ETFs they batch everything they buy at the end of the day, or sometimes in the mornings or overnight, and you kind of can see that in the price movement, say at 5 or 530, kind of watch Bitcoin and it might move it. Just it's an interesting dynamic because it allows an individual that wants to, that is savvy enough to be a trader, to really trade this thing Sure, not necessarily the ETFs, but to trade the spot Bitcoin against ETFs. So I don't know it's. You know, last Friday, last Monday, when it was was it President's Day, the market was closed. Bitcoin didn't do anything Like.
Speaker 2:That's so weird. It's like we had a three-day weekend.
Speaker 1:It would have, it would have, you would have never known the difference Like.
Speaker 2:Is that how much volume the ETFs are carrying?
Speaker 1:That they sway the price that much.
Speaker 2:They are the ETFs on a notional value Because ETFs typically are tracking the asset.
Speaker 1:Yes, they're tracking the asset. They're counting for about 20 to 25% of global Bitcoin trading volume on a daily basis.
Speaker 3:Okay.
Speaker 1:On an open market day, so we can just and that is that's. That's bigger than any other trader.
Speaker 2:Yeah, true, and which, which means you'd have less ability to do pricing manipulation, manipulation, as that continues to grow. Which makes Bitcoin more legitimate in my mind. Right.
Speaker 1:And I think that's the reason why Binance kind of got pushed to the side, because they had a huge, they controlled like 80% of the Bitcoin market up until they had their Settlement with the DOJ back in. November. So I think that once they got pushed to the side and kind of got dealt with whether it was right or wrong, you know that's a different discussion but like it kind of opened the door for, you know, larry to have his control. So I Say that half sarcastically, half sarcastically.
Speaker 2:Franklin Templeton. Are they getting into the game? What's going?
Speaker 1:on they. Are they filed for an ethereum ETF?
Speaker 2:Oh, I just saw that. Yeah, okay, I thought they were denied.
Speaker 1:No, somebody was denied somebody I don't think it was them, I think it was Somebody else that a smaller name I figured that was. It might have been the other one that's shutting down their Bitcoin ETF.
Speaker 2:But everybody thinks that there's gonna be a theory and eventually ETF right?
Speaker 1:I? You know, I think, depending on what half what you define eventually to mean eventually, I think they'll be the top 20 assets will have ETFs. I think that's where we're going.
Speaker 2:I was wondering what the third one would be.
Speaker 1:The ethereum one is interesting because I Think it's in most people's minds the next logical one and I can partially subscribe to that because it's by market cap. It is the second biggest crypto.
Speaker 1:Yeah but it also has a ton of it. Has this black cloud hanging around it like is it a security, is it not? The SEC will not say it's not a security. Obviously that's their hammer, but a year, year and a half ago, ethereum moved from proof of work to proof of stake and now there's like three Quote-unquote wallets, slash validators that control over 50% of the voting power of the network hmm, that's proof of stake is about voting, and, and as part of voting, you get rewards or Ethereum kind of kick back to you.
Speaker 1:Think of it as interest, okay, like. Is that a security kind of acts like one.
Speaker 2:Yeah.
Speaker 1:So you know, I have put in my newsletter and I guess I can say on here I think Ethereum is the last big lawsuit the SEC files before we get a clean slate in the SEC and kind of get rid of this, this Mental issue that they have around crypto. Right, you know, I hope I'm wrong about that, but it feels like they're working towards that. You know there's the court case with Ripple still ongoing. It's it's in the remedies case portion and Most of it has been decided, but there's a small pieces that are not. Like I, if anything, you can make the case that XRP should be the second one with an ETF because it has clarity in the courts.
Speaker 1:Yeah even though the case is not over with Ripple. But that it's with Ripple, it's not with XRP. The token Right the judge was very clear on that part, the differentiation. So I don't know. You know, ceo of a ripple breadgarling house was asked recently on Bloomberg if he would be for a bit Queen ETF, because block rock has made some rumblings and there might be one.
Speaker 1:Larry actually even talked about it and Brad's like no comment. Okay, you could have easily said I don't know anything, that's happening Right. And then Larry was kind of wishy-washy on it when he was asked about it. But, like, seems like something's there, so I don't know. I think that in some ways, any asset against losses and ETF has an advantage over the rest of crypto market because they have extra liquidity right.
Speaker 1:You know, I the my fund doesn't hold Bitcoin. My phone does hold XRP, so I probably would be biased. I would like to see that. I actually like seeing the Bitcoin one, for that matter, because it just helps the whole market. But right, I don't know. So we're early days. I would say it's a 50-50 shot. We get an ethereum ETF this year in some form. We already have a futures, so it feels like we've already checked that box. That seems to be the path. Bitcoin had its futures for a good while.
Speaker 1:Yeah and then it got its spot one. So.
Speaker 2:It's about volume, you know. We you note here that the trading volume on Bitcoin ETFs ranking the top 10 of all ETFs by volume.
Speaker 1:Yeah, if you kind of lump all the all the Bitcoin ETFs into one big basket, it would be in the top 10 of all ETFs volume and top 20 of stocks Roughly on a daily basis, which is again pretty incredible for something that's only been in the market for, you know, roughly a month.
Speaker 3:Yeah right, I mean that that shows demand.
Speaker 2:No, there's definitely. There's definitely demand and the volume is insane. Mm-hmm, how much is being exchanged? No, I don't know who the sellers are.
Speaker 1:That's you know? I think it's um, you think they're just it could be all buys it. I mean the price definitely reflects there's. Obviously, for every buy there has to be a seller. I mean that's the way it works.
Speaker 2:Well, an ETF said you can create, you can create more shares. So, and this is unique and where we're, a stock is has unlimited right, has limited Bitcoin.
Speaker 1:They just go buy more Right, but the created the nav value with shares in each ETF is supposed to be reflective of the Bitcoin price. I don't think that they can get terribly out of whack there.
Speaker 2:Okay, yeah, that's true.
Speaker 1:That's true, you know I. It certainly can't be the issuers doing that. Maybe that the market makers are doing that underneath the hood, or like buying trying to arb. Yeah some stuff there, but I you know Wall Street people are far more intelligent and I kind of stuff than I ever will be.
Speaker 2:It's about volume, you know, a billion dollars worth.
Speaker 1:Yes, yes, yesterday I don't know if yesterday means the 26th or the 23rd Friday, but yesterday being it was the first day that a single ETF Bitcoin ETF had a billion dollars in trading volume. So that was the I shares BlackRock one. Then kind of you know, they're by far the kind of I would say they're pulling away, but they definitely are the leader in the market of those nine different ETFs.
Speaker 2:Yeah, I'm just I'm still not seeing it in financial advisors jumping on shep yet. So I think that when you get the institutional buy-in, Then there's there's probably just a hole in their leg up.
Speaker 1:Oh, absolutely I. You know my hunch would be that right now, what you're seeing is probably hedge funds.
Speaker 1:Yeah if they weren't buying a direct. Or you have people that kind of do their own management of their brokerage accounts and retirement accounts and they can go in and buy these things because it's it's obviously move the price of Bitcoin, but it's not like trillions of dollars. I mean, we've seen I don't even know what the market cap of all these ETFs combined is, but it's less than ten billion dollars. So it's, yeah, the grand scheme of things, that's a drop in the bucket.
Speaker 2:Still, I mean, if you believe anything on Google these days, there are non-white private bankers, investment advisors, wealth managers and row boat advisors buying the buying the Bitcoin spot ETFs. So, yeah, I just it may be the people I surround myself for just really conservative and not really the jump on the man wagon yet, but I could certainly see it in In hedge funds. That would make sense. Robo advisors yes, it's already there, but they weren't. It's weird as though that a better meant they're not buying the ETF. They better meant they're buying spot.
Speaker 1:Yeah so they're doing custody somehow. I'm right. Right, you know. I Saw a meme the other day about how all the millennials can't afford houses. So to be able to afford their house, they're selling all their Bitcoin that they've had for five years to the millennial, to all the boomers. That have the houses that they want.
Speaker 2:Or trying to get how to afford nursing home right at a you know if 5,000% profit.
Speaker 1:So yeah, it's a. You know, it's just a fascinating space right now because it's all the stuff that's happening around the ETFs Is basically the news cycle right now.
Speaker 2:Yeah.
Speaker 1:I'm finding other stuff to talk about is a bit of a challenge. It's it's I don't know if it's because it's early part in the year but you know there's optimism that prices are certainly going higher because the ETFs. There's optimism in the price of going higher because the halving that's gonna happen In mid, mid to late April, which will be very fascinating to watch, because all sudden, you know, say, it's a 4x Difference that the ETFs are buying on a basis that's gonna turn into an 8x overnight Because the amount of Bitcoin is gonna be cut in half that's being created.
Speaker 2:So when a stock splits, people go the stock split, I need to buy. You know, buy more, I keep splitting a game, more shares, and what? The phenomenon there is more psychological because really the stock splits, so your total value doesn't change. The dividends get split too, so your income doesn't change. But people just think, oh, the stock split, then I Made all this money. And that doesn't really happen in Bitcoin's case it. Can you describe it that the same way, or is it just different?
Speaker 1:It. There's no, there's no splitting. I mean the number shares aren't being changed at all.
Speaker 2:There's only gonna 21 million. Bitcoin ever okay, so when the price.
Speaker 1:So the miners, they they're functionally doing a lottery. They're doing work, but they're doing a lottery every. Call it 10 minutes, okay and for all the guesses that they're doing right now. They're getting 900. I believe Bitcoin per block. Yeah that's gonna turn into 450, which means they're going to do so right now, put the kid the same amount of money. That that's one way to think about it. Yes, or they're gonna demand the price to be higher Because they're doing the same amount of work to get half as much.
Speaker 1:Okay, you know that could support price improvement it has in the past. Interesting, but I was just looking at it like the last time this happened would have been May of 2020, and the price that was in trying to get back to the right spot May of 2020, it was I don't know the exact number say, call it 10,000 a share, and then by the end of the year, and granted, we went into a bit of a bull run there and this same thing's gonna happen, I think, this year. By the end of the year we were at 30,000, so it tripled, I don't know. And then we have the dynamic that the ETF added on top. This time, like we're certainly in uncharted territory for Bitcoin and, I think, the rest of crypto, because it, whatever Bitcoin does, there's a goes, it kind of stalls, people take some profits that are trading it and then a lot of times it trickles down into all coins, kind of the cycle.
Speaker 2:Yeah.
Speaker 1:So we'll be interesting. You've heard crazy numbers. You mean the Cathie Wood like oh some, I forget how many years away she thinks it's worth a million dollars a piece. You know, if the ETF volume continues like it has for a year, where are we at? I'm not saying we're gonna be a million dollars, certainly not putting that out there but like I mean to think that we're not. A quarter million dollars doesn't seem all that outlandish, which to have a forex increase from here does seem crazy. In general, I guess, s&p terms.
Speaker 2:Right, right. So if you think about that, if it goes to a million, you think about the market cap of that and the value of what that means versus like even where the US dollar is.
Speaker 1:Right, I mean often. You know that's crazy comparison Right and you know. My question is do you want to be living in a world where Bitcoin's a million dollars because the US dollar could have been debased so far? That it's functioning worth the same it is today. Yeah, that is often left out in the discussions in crypto about like oh, he's going to these numbers. I'm like, okay, maybe.
Speaker 4:Right.
Speaker 1:But what else is changing? Because this is not in isolation Correct. Yeah, so Correct. And if it is good for you for holding it, if you did. Most people don't have that kind of diamond hands, if you want to use the mean terminology, correct? There's certainly the Bitcoiners who are like never sell on the Bitcoin. I'm like, then why are you in it? If you're never selling it, like, what are you going to do with it? Like, I mean, I guess you could get loans against it and kind of live off of it. That way.
Speaker 2:But like Right, at some point you would have to liquidate, you think yeah?
Speaker 1:interesting. But you know, it kind of takes us to a point that we have on here. The IRS does care about this stuff. They've cared about it for years. But the fourth question on the 1040 this year is do you own crypto and what?
Speaker 2:happens if you check. Yes, Well you better be honest, it's a tax return. They just want to know at this point it's a census Right Do you own?
Speaker 1:crypto In some sense, I could see that. Yeah, yeah. But yeah, do you own crypto? And you know it's kind of like the question of please tell us the amount of money you made from illegal activities on your tax return. That's how they get the mobsters right.
Speaker 2:Yeah, that's right.
Speaker 1:And so it's. You know, I think that they've bumped the question up. I've not mistaken, two years ago it was sixth or seventh place, so it's becoming apparently more important.
Speaker 2:Or more prominent.
Speaker 1:Yeah, cause you know, doing taxes or calculating taxes in crypto can be very challenging If you're, especially if you're in the more esoteric stuff like DeFi, like that there's no tooling built up around it to help you calculate your taxes, so you're having to do spreadsheets manually, which stab my eyeballs out. I'm not interested in doing that, right? So it should be a lot of volume, geez, right, I mean, and it's not just like a single line item for a trade. A lot of times trades are broken into like thousands of pieces, so you have all these different lots that you have to deal with. Like it can be mind blowing on how much time goes into it to make your couple pennies that you're gonna make whatever you're trading. So, but yeah, always pay your taxes on crypto.
Speaker 2:All right. Well, thank you, robert, for the update. We've got a couple other episodes that you might be interested in If you want to learn more about crypto. Episode two or two we actually talked about having Bitcoin having in the upcoming bull run, which I guess we kind of called that, didn't we? Yeah, you did. Episode 206, the ETF launch update, is another crypto episode that we produced, and then we'll also link here to a couple of the articles we referenced. I think these are X links. We'll add those to the show notes as well. Anyway, thanks for listening to me, thanks for being on the podcast, robert, and we'll talk to you next week, take care.
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Speaker 1:This episode was produced by Edward Versandes.
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