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I appreciate the irony of what started out as libertarian pipe dream internet money now being dependent on massive Wall Street establishment companies to boost the price.
@@Steve-fh3si But the _raison d'etre_ of crypto is that blockchain replaces intermediaries - and an ETF is an intermediary. So if BTC needs an ETF to succeed as a store of value, isn't that bad news for BTC's future as a medium of exchange? Conversely, if BTC is destined to succeed as a medium of exchange, doesn't that destiny doom BTC ETFs? I'm a diehard HODLer but these are troubling questions.
@@cisium1184 My thoughts: What makes Bitcoin different from other currency systems is that you do not neccessarily need an intermediary. This gives everyone the freedom to decide wether or not he wants to trust a third party. This does not mean that self custody will be the best option for everyone (e.g. people that want to keep things simple and comfortable). But the option to "be my own bank" and to avoid a centralized trusted party if I want to or if it is neccessary makes Bitcoin unique. The ETFs give people that are "too lazy" or just too busy for self-custody the oportunity to participate in all the other positive aspects of bitcoin, such as scarcity and transparency.
I can't help but imagine you on the beach, absolutely frosted with sunscreen, under an umbrella, and generally looking unimpressed with the whole experience. I hope you had a fun vacation though 😅
Loved your point at the end about how a lot of this goes against the very principle of crypto. As much as I hate seeing people getting ripped off, I've laughed my ass off every time I see someone get scammed then turn around and cry to the cameras about how there needs to be regulation. You all wanted a system outside of government control; you got it, and you fumbled it.
Not just that but if banks buy up huge amounts of bitcoin just to lend out as ETF’s, the Bitcoin miners will be out of a job since the blockchain isn’t being edited on a regular basis. It’s the same system we had with credit cards, where cash sits in a vault while an excel sheet gets updated with each purchase. There’s no innovation.
Doesn't matter how much BTC banks buy up. If they buy up a bunch and don't sell then price will go up. People will just transact with smaller units of BTC to transfer the same fiat value. It wouldn't affect block space demand whatsoever. @@awesometwitchy
If the end result is more value being traded through ETFs instead of actual BTC, then yes. But BTC is a worldwide network, not just in the USA. People will still use the actual network to transact if they want to. And if that still accounts for more transactions, then it's all fine and functioning as intended.
They wanted a way to make free money with no effort, everything else they say is lip service. Bitcoin could be completely centralised and government run and they wouldn't care if they got to sell for more than they bought
8:00 This is good to remember for investments in general: expectations are already priced in. Maybe the markets are inefficient in the _probabilities_ they’re pricing in, but it’s not as if hodlers don’t already know about the ETFs or the halving.
the market is not efficient. the market is complex. i've retired after 10 years of saving in bitcoin with a minimum wage job. i was shocked how dumb the world is. similar to the internet in the 90s, nobody understood it and laughed it off.
A part of me thinks people just say it's the ETF because that's the only good news in the time its gone from under 25 to over 40k and in reality nobody has a clue.
There is likely a lot of BTC trading/"investing" through enormous leverages, that's why the priced plumbed back then when rates got higher due to this inflation thing, and with the last months people (overly) expecting rates to go down again, the leverage to go into BTC got bigger again.. As if investing in BTC wasnt risky enough some even take out huge loans for it..
Why is this a surprise? Bitcoin value has always been a 100% speculative there's a lot of private hedge funds like a16z or Pantera Capital and companies who manipulate the market and flood it with investor money till they decide it's time to get profits that's why the price went down these weeks
My I add that during that climb from $16K to $40K Bitcoin was the target of quite a few bad news and yet, price climbed up. This is called climbing a wall of worry, and should tell you something.
@@glensmith491ain't that the truth. I bought 4 dollars of Bitcoin and it went up a good bit. If I would have put more in I'd be sitting pretty right now. But when you can see it happening it's like yup too late to do anything else 😂 If I put money into it right now it's almost guaranteed I'd lose a decent chunk of it when it creeps back down. Too many variables with the world and what will affect it tomorrow
@@crackedtvgaming No. Literally all investments have some sort of intrinsic value--companies have profits, bonds have interest, real estate has cash flow and appreciation, commodities have all sorts of productive uses... Bitcoin, on the other hand, has an intrinsic value of exactly $0.
@@crackedtvgaming Nope, investing opens up opportunities for businesses to expand, be more productive and generate more wealth. Cryptocurrency purely speculative, provides nothing of value and the only way to profit is by finding a greater fool to pay more for it than you did.
@@crackedtvgaming I disagree. An investor can use sound and logical methods to put their capital to work for a reasonable risk instead of loaning their cash to a bank for some interest.
Great explanation. I am a btc enthousiast, but appriciate the respectfull and objective information. You really let know what is fact and what is your opinion.
Have you ran the numbers on how a small allocation of bitcoin to your portfolio, when you first started talking about it over five years ago, would’ve done for your performance?
Sure I’ve commented on it before - it would have been a nice 30% annual return from the very first video, so certainly would have helped performance with a small allocation. It’s why I don’t try to predict where it will go from here - my videos are only intended to counteract some of the exuberant and irrational hype I see people sharing about how any day now it will skyrocket - back then, I was arguing against claims that Bitcoin would replace the US dollar.
Were any bitcoin related books on your reading list when you took your holiday? The Price Of Tomorrow, The Bitcoin Standard, Broken Money, Layered Money, Inventing Bitcoin... are all good places to start. @@ThePlainBagel
I’ve read the Bitcoin Standard. It was good for explaining how Bitcoin works, but I thought it made some really dumb arguments - “fiat money financed Miley Cyrus’ twerks” is I believe one of the lines.
Your Content Stands Out In A Refreshing Way! I Truly Appreciate The Absence Of Background Music In Your Videos, As It Allows Your Message And Personality To Shine Through Without Distractions. Keep Up The Great Work!
Imagine being bearish at a $40k Bitcoin. You people are insane. You’ll be bearish again when Bitcoin “crashes” from $500k to $90k. You’ll be making fun of the bulls for saying it’s going to $1 million, but instead it’s at $90k. Do you not see how foolish this is? At some point you need to educate yourself about what Bitcoin is.
As someone with no Bitcoin holdings, but is connected to the crypto industry both professionally and as a hobbyist, I think Richard's take here is unbiased and fair. He misses a couple pieces of key information in his analysis though: - The fine details around Grayscale's GBTC fund are important. It was an inefficient, close-ended fund. That is part of the reason for the large outflows after the ETF conversion. - ETF-ifying Bitcoin unlocks it as an asset that companies can hold on their balance sheet without the gigantic headache of self-custody. So comparing it to the rate of individuals holding gold in their investment portfolio is ignoring institutional adoption. - SEC chairman Gary Gensler has been *illegally* blocking bitcoin as a formal asset class in the US and it absolutely has put a huge suppression on its price. The ETF for bitcoin is symbolic of bitcoin being rightfully acknowledged as an investment in the US and that will carry a lot of weight in the long term.
Non-sense. They were being sued by FTX and other hedge funds for not allowing redemptions and Grayscale offered the ETF conversion as legal remedy. And then they implement a carefully calculated optimal management fee rate reduction that would stem some of the expected outflows due to cap gain considerations. Money will come out of GBTC over time. There is zero institutional interest in BTC.
@@winstonwolfe2537 exactly. Tons of investors bought into the fund at a discount, and wanted out when it became possible, not to mention FTX selling $1 billion of it. Hard to know which investors reinvested in ETFs or directly in bitcoin, but it was all out of Grayscale’s hands.
I went from not caring about bitcoin, to “holy crap buy!”, to “oh yeah maybe I should calm down” 😂 your videos really put a clearer picture on what’s going on thanks!
A lot of IPOs go like this: lots of anticipatory activity followed by anticlimax. Not a reflection on the asset, just the way markets work. There won't be any "watershed moment," at least not one everyone sees coming.
In order to make a valid comparison, you need to compare like to like. Comparing the futures ETF which launched during peak bull run hype with the spot ETF which launched recently during a recovering market is not a valid comparison. Also, saying that the spot ETF volumes were large compared to other ETF launches but still did not meet people's expectations is a bit pointless imo. Why does it matter what people's expectations are? What matters is how this spot ETF compares with other traditional asset ETFs. That's what determines if it's a flop or not. Bitcoin is still seen as a very risky and speculative asset in the eyes of most (which it is). It will take some time for fund managers to legitimise it. But if it can be done, you're looking at billions funneled into crypto given it's the only large asset class that hasn't achieved full mainstream adoption in the same way that stocks and real estate has. I hope if this happens you will reconsider your thoughts on crypto.
Yeah not many people would still have this up and he actually mentions the times he's been wrong. Thing is he is wrong a lot, especially when it comes to crypto. Don't take crypto advice from him, otherwise this channel is top notch of course. (You probably shouldnt take crypto advice from randoms on the internet either lol)
The entire theory of bitcoin: Why is the price of bitcoin going to increase? Because more people will want to buy it. Why will more people want to buy it? Because the price is going to increase.
@@gregfields011 most assets create cash flow though. Gold didnt perform that well for the most part because of this as well. People investing because the price goes up leads to bubbles, for which bitcoin is a nice case study.
Welcome back Richard - we've missed you! Great episode Man! Even the segues to the sponsor spot was as smooth as silk! Glad you enjoyed the water - the books, will wait... (for Blinkist).
I understood nothing from listening to any of this aside from passive knowledge, I don’t have the capabilities to invest. i just like listening to the man’s voice
The price didnt go up, because bitcoin sellers were expecting a huge increase in prices, if the ETF for bitcoin launches, so they adjusted their selling price accordingly and big investors and institutions like the SEC still do not like bitcoin, so investors have less reason to buy it
Agree that the whole point is to not have regulated middlemen. I imagine the inclusion of bitcoin deeper into the financial system could help to create an array financial product that companies can use to manage risk associated with bitcoin.
1. Buying illegal goods and services on the dark web 2. Money laundering 3. Gambling 4. Making payments to extortionists 5. Pyramid schemes 6. Pump and dump scams
Cults require leaders and doctrine. Bitcoin is decentralized and has no such examples of either. There are outspoken people in the space and many people in the space do share similar ideas, but cult doesn't seem appropriate to me.
It transfers billions in value every single day. And please don't say something like "it's all ransomware". No, bitcoin does not transfer trillions of scam money every year.
@13:10 It's only a matter of time.... ...before governments realize that banning crypto would seriously cripple criminal economies. Imagine how hard it would be to move BitCoin if it showing up in your paper trail raised serious questions.
Ah yes, like how the government banning alcohol or drugs somehow prevented those from being widely produced/consumed. Pls explain how the gov can realistically ban btc
Question for you Richard: over any 4-year period you choose, a portfolio with only 2% BTC/98% cash far outperformed the S&P500, so would you consider risking only 2% of any portfolio in Bitcoin high risk? To me, that is the greatest low risk/high reward play of our generation, worse case scenario being you only lose 2%
I don't believe that's true. S&P 500 from Feb 7, 2020 to today: 48.9% BTC from Feb 7, 2020 to today: 334.9% A portfolio with 2% BTC and 98% cash would have a cumulative return of 8.7% over that time period (assuming cash return was 0%) vs the S&P 500 of 48.9%.
@@ThePlainBagel Thanks for the answer. That lie has been spread around in the cryptoverse and people are swallowing it. Funny because a strong motto in crypto is ''don't trust, verify''. That being said I still believe it to be relevant, as in exceptions are rare. In the end, it's all about learning when to sell to realize those gains.
Could it be that the Bitcoin ETF managers knew ahead of time that the approval is coming, and purchased a bunch of Bitcoin in advance of the launch? They could use those bags of Bitcoin to issue new ETF shares, so there would be not so much buying pressure resulting from the launch of the ETFs.
There have been Bitcoin ETNs for some time and I wonder a bit about the differences. An ETN is only a certificate, of course, so you don’t actually own the assets but are only promised their worth on this paper. In case of bankruptcy, you’re SOL. But the company buys actual Bitcoin and stores it in cold storage, so this part seems identical to the spot ETF. Why would ETNs be allowed, but secure ETFs take so long?
Sounds like some financial companies are trying to make a buck. It was overhyped....or it was market manipulation. Personal curiosity: ETFs are asset backed securities?
GBTC shares traded below 'peg' of BTC for long time. Clever speculators could have bought lot of shares at 40% discount, and on the rally their profit would be just shy of astronomical. this both with the most established sell the news behaviour
You missed another reason why investing into Bitcoin through ETFs isn't the smartest thing to do. Investing into Bitcoin through an ETF means you have to pay taxes on your investment even when holding it longer than the one year period to receive it tax free. Thou as always it was a great video!
It's my (possibly faulty) understanding that certain technical characteristics inherent to the blockchain prevent Bitcoin from suffering a conventional panic. The cost of transacting Bitcoin is a multiplicative function of the value of the transaction and the number of concurrent transactions taking place on the chain. In a panic (when many holders of the asset attempt to sell it off) the price of selling goes up. At some point the falling returns on sale should always meet the rising costs of sale, at which points transactions cease and a conventional panic is prevented. Not so Bitcoin ETF's! ETF fund prices now allow investors to express their lack of confidence in Bitcoin's value without actually transacting the asset. Could it be that ETF activity is what finally KILLS Bitcoin, because a free expression of its value (or lack of same) is now possible? (EDITed because en-dash is hard on TH-cam comments)
No, because the ETFs have to buy and sell the underlying asset. As stated in the video, the ETFs are a small part of the market. If an ETF is sold entirely it just shuts down, and Bitcoin goes on
@@gragnaktube My theory is that, unlike actual blockchain transactions involving Bitcoin, declining price of ETFs could allow for continued expression of (lack of) valuation of that asset. Bitcoin's value as a traded asset can never drop below the cost of trading it, which rises rapidly based on the number of concurrent transactions pending on the blockchain. But the EFT share valuation could continue to impact the perceived value of the asset, particularly when the asset has no "inherent" value or associated revenue stream; even if actual Bitcoin transactions are halted by rising transaction costs, the EFT shares can continue to be traded. It is true (at least for now) that the EFT's are a small part of the overall market, but if EFT valuation becomes the ONLY persistent means of valuation (as would happen in a transaction price-limited panic) their share prices might continue to drive down the asset value, even though trading of the asset has halted completely.
It is just pathetic that Gensler approves these gryft instruments then goes on every finance c channel and says stay away from these insanely volatile and highly speculative products. He should have held his ground and frought whatever legal challenges arose. This gryfto shite should not be nowhere any avenue on mainstreet or availabe for retail access.
I swear this same hype happened in 2021 with BTCC and BTCQ on the Canadian exchange, that ETFs would lead to widespread adoption, and it's been crickets. So give it another, another few years
You’re wrong to say that historically anybody could buy Bitcoin. Institutions in many jurisdictions had limited or no access to holding BTC - the spot Bitcoin ETF changed that
No BTC speculator was really expecting the recent steep price increases to have anything to do with the pending halving. That is a few months away, but the price doesn't ever actually take off right at that point. Historically, the 4-year cyclic peak is 12-18 months after the halving, so probably in late 2025. And the steep run-up starts many months prior to the peak, so possibly this fall at the earliest. There is likely lots of time for up, down, and sideways market action before then.
I am assuming that a lot of people went short on those ETFs. While people were buying the „hype“ others (institutions) were shortselling. The short interest is not yet available.
What I haven’t seen is a video on how to smartly invest in a new and speculative asset like bitcoin. Something simple like building the position over time and buying dips and only a small portion of your overall portfolio. A few percent ish.
Remember when weed stocks went mainstream and got etf’s or their own? Party ended, lights came on, and the valuations utterly cratered. When real money shows up, it expects real results. Bitcoin can’t ride the hype wave anymore, there are questions and expectations that the bros can’t bs their way through. The lights are on, the party is over, the crater is on its way.
Not really. The whole point is to, "change the world!" as as true believer might say. But for the more cynical or savvy (or both), as you've stated, the point is to sell it to someone for more than you bought it for.
@@XxChuyoxX but equites are backed by real things that produce stuff. like apple, with Iphones and Profits. what does bitcoin produce. heck what do you use it for besides ransom demands. LOL.
BTC doesn’t yield, unlike equities… the whole point of equities in retirement accounts is they grow in value while their dividend yield % remains consistent; thus improving the absolute returns to the investor to keep up with inflation over time. If you’re selling the underlying equities to wholly fund retirement, and not using their dividend returns to slow that bleed while you draw down the value of your portfolio, you’re doing it wrong. Lol 😂 BTC is more like ‘digital gold’, with an emphasis on capital preservation rather than yield… Both provide alternate mechanisms for exchange to sovereign ‘currencies’… except BTC doesn’t have the benefits of being actual gold, or its utility. Both can be traded in exactly the same ways electronically. I.e. gold backed tokens on blockchain with the gold held in secure custody. Gold can be traded physically also, and in digital exchange is superior to BTC because the gold backing has intrinsic value where the BTC itself does not… BTC is really just a community developed digital fiat currency, no different to dollars. It’s also deflationary by nature. If you expect it to go up in value, why would you exchange it for groceries? The answer is the same thing as for gold: you don’t. You trade dollars instead, which diminishes the value of BTC as a medium of exchange (its primary use case). Gold bugs call that greshams law, where bad money chases out good. So yeah… Bitcoin is inferior digital gold to gold backed tokens. Equities are a yielding asset, not intended to be sold for funding retirement. And gold preserves capital with no counterparty risk, and can be exchanged physically or electronically using the same technology as bitcoin.
@@MrPaulervin78744 Bitcoin produces plenty of things like carbon emissions, burnt out computer hardware, and wealth for a minority of market manipulators at the expense of greater fools like @XxChuyoxX
The combined money of all the traders that is input to an exchange decreases. Only some people make the profit. But the exchange.....it is always in profit as long as trades are happening.
Sure! I'll also share a link to a past video of mine on some of my favourite investing books: th-cam.com/video/3Ei2DHqOO8g/w-d-xo.html. - The Dhandho Investor (I've read this one, but it's not part of the above video and its a good beginner one) - The Deficit Myth (this is based on a somewhat-debunked economic theory, but I'm still interested in reading it) - The Essays of Warren Buffett - Flash Boys (This has nothing to do with investment analysis, just a book I want to read about the markets) - The Elements of Investing - The Little Book That Beats the Market (I'd be skeptical of the strategy they share, but I've been meaning to go over this one) - The 5 Mistakes Every Investor Makes and How to Avoid Them I also have a Reddit post saved somewhere of someone sharing more that I want to go through - I don't have it handy but a search would probably find it. Hope this helps!
I'm pretty confident the wash trade rule wouldn't even prevent you from realizing a loss in a bitcoin ETF while buying another. Selling VOO to buy SPY is not a wash sale.
This is going to be a gray area... The rule applies to "substantially identical" securities; what that means is actually up to the IRS. You can get away with it with VOO and SPY because technically they are not substantially identical since, at any given point in time, they will actually hold different securities (index funds use sampling to replicate the index, they don't buy every stock). Bitcoin ETFs only have one holding, so the IRS could make a case that they are "substantially identical." I'm not sure there is any precedent, but it's the IRS we are dealing with here...
I truly appreciate Richard's point of view; it gives us a good idea of what dumb money (technical term here, not an insult) thinks of Bitcoin, which is good because it means we are still very early. Bitcoin is following its usual cycle; not even the ETF vibe changed the regular course. Sideways and up from here until mid-late 2026 and then the usual crash, coinciding with a major financial crisis in all major markets, should 200 years of historical data be any indication and should this time not be different (hint: it never is).
How does the IRS monitor a wash sale exactly? If I sell VONG for a loss and then buy SCHG later that day, who gets to judge if those are “substantially identical” Thanks as always Mr. Bagel.
The rules are pretty vague since situations differ and investors love to exploit loopholes. The main thing they mention is rebuying the same security or another security from the same company (e.g., BRK/A and BRK/B or GOOG and GOOGL). In my experience with the IRS, as long as your argument isn’t total nonsense or clearly bad faith, they’ll allow it. In this case if they’re held by different companies or based on different indices (say one’s the S&P 500 Growth and another is the Russell 1000 Growth) it’s much easier to argue they’re different. And of course you could always park the money somewhere for a month and come back.
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I appreciate the irony of what started out as libertarian pipe dream internet money now being dependent on massive Wall Street establishment companies to boost the price.
Libertarians are weird. Bitcoin is for everyone, even Wall Street.
It's the Expectations vs. Reality meme, money edition.
@@Steve-fh3si But the _raison d'etre_ of crypto is that blockchain replaces intermediaries - and an ETF is an intermediary. So if BTC needs an ETF to succeed as a store of value, isn't that bad news for BTC's future as a medium of exchange? Conversely, if BTC is destined to succeed as a medium of exchange, doesn't that destiny doom BTC ETFs?
I'm a diehard HODLer but these are troubling questions.
@@cisium1184 My thoughts: What makes Bitcoin different from other currency systems is that you do not neccessarily need an intermediary. This gives everyone the freedom to decide wether or not he wants to trust a third party. This does not mean that self custody will be the best option for everyone (e.g. people that want to keep things simple and comfortable). But the option to "be my own bank" and to avoid a centralized trusted party if I want to or if it is neccessary makes Bitcoin unique.
The ETFs give people that are "too lazy" or just too busy for self-custody the oportunity to participate in all the other positive aspects of bitcoin, such as scarcity and transparency.
To be frank, the last time libertarian tried building a settlement it got mauled by bears
I can't help but imagine you on the beach, absolutely frosted with sunscreen, under an umbrella, and generally looking unimpressed with the whole experience. I hope you had a fun vacation though 😅
lmao
> frosted with sunscreen
Hahahaha. I like that. I'm gonna steal it. It's mine now.
we can definitely say the Richard is a Bagel of integrity.
He's so. Plain
lol nice
Jobu Tupaki would be disappointed
10/10 bagel
Loved your point at the end about how a lot of this goes against the very principle of crypto. As much as I hate seeing people getting ripped off, I've laughed my ass off every time I see someone get scammed then turn around and cry to the cameras about how there needs to be regulation.
You all wanted a system outside of government control; you got it, and you fumbled it.
Not just that but if banks buy up huge amounts of bitcoin just to lend out as ETF’s, the Bitcoin miners will be out of a job since the blockchain isn’t being edited on a regular basis.
It’s the same system we had with credit cards, where cash sits in a vault while an excel sheet gets updated with each purchase. There’s no innovation.
Doesn't matter how much BTC banks buy up. If they buy up a bunch and don't sell then price will go up. People will just transact with smaller units of BTC to transfer the same fiat value. It wouldn't affect block space demand whatsoever. @@awesometwitchy
If the end result is more value being traded through ETFs instead of actual BTC, then yes. But BTC is a worldwide network, not just in the USA. People will still use the actual network to transact if they want to. And if that still accounts for more transactions, then it's all fine and functioning as intended.
They wanted a way to make free money with no effort, everything else they say is lip service. Bitcoin could be completely centralised and government run and they wouldn't care if they got to sell for more than they bought
Live by the gun, die by the gun.
Nice to have you back man! Hope you had a nice time off from youtube and a good holiday!
8:00 This is good to remember for investments in general: expectations are already priced in. Maybe the markets are inefficient in the _probabilities_ they’re pricing in, but it’s not as if hodlers don’t already know about the ETFs or the halving.
Except if everyone thinks like that, then it won't be priced in because everyone is waiting for after the news.
the market is not efficient. the market is complex.
i've retired after 10 years of saving in bitcoin with a minimum wage job.
i was shocked how dumb the world is.
similar to the internet in the 90s, nobody understood it and laughed it off.
A part of me thinks people just say it's the ETF because that's the only good news in the time its gone from under 25 to over 40k and in reality nobody has a clue.
Very good point! There's a lot of volume we have no explanation for.
There is likely a lot of BTC trading/"investing" through enormous leverages, that's why the priced plumbed back then when rates got higher due to this inflation thing, and with the last months people (overly) expecting rates to go down again, the leverage to go into BTC got bigger again.. As if investing in BTC wasnt risky enough some even take out huge loans for it..
Why is this a surprise? Bitcoin value has always been a 100% speculative there's a lot of private hedge funds like a16z or Pantera Capital and companies who manipulate the market and flood it with investor money till they decide it's time to get profits that's why the price went down these weeks
Market dynamics are emergent phenomena, not the results of simple narratives.
My I add that during that climb from $16K to $40K Bitcoin was the target of quite a few bad news and yet, price climbed up. This is called climbing a wall of worry, and should tell you something.
This is classic "buy the rumor, sell the news" behavior.
One of my basic rules is that once I know something is going to happen it is probably to late for me to profit.
@@glensmith491ain't that the truth. I bought 4 dollars of Bitcoin and it went up a good bit. If I would have put more in I'd be sitting pretty right now. But when you can see it happening it's like yup too late to do anything else 😂 If I put money into it right now it's almost guaranteed I'd lose a decent chunk of it when it creeps back down. Too many variables with the world and what will affect it tomorrow
@@glensmith491 Or it's too early and would be illegal insider trading.
Dump is stage 2 in “Pump and Dump”.
step 3: wait for hype to pass
step 4: buy back in
My issue with Bitcoin since day 1 is that I cannot make a business case for buying it outside of working to convince other “investors” to buy it.
That’s what investing is in general…
@@crackedtvgaming No. Literally all investments have some sort of intrinsic value--companies have profits, bonds have interest, real estate has cash flow and appreciation, commodities have all sorts of productive uses... Bitcoin, on the other hand, has an intrinsic value of exactly $0.
@@crackedtvgaming Nope, investing opens up opportunities for businesses to expand, be more productive and generate more wealth. Cryptocurrency purely speculative, provides nothing of value and the only way to profit is by finding a greater fool to pay more for it than you did.
@@crackedtvgaming I disagree.
An investor can use sound and logical methods to put their capital to work for a reasonable risk instead of loaning their cash to a bank for some interest.
It's greather fool theory.
You forgot to mention that Jim Cramer is currently bearish on BTC which might be the most bullish thing since the covid stim checks.
Great explanation. I am a btc enthousiast, but appriciate the respectfull and objective information. You really let know what is fact and what is your opinion.
100% agree with this
Have you ran the numbers on how a small allocation of bitcoin to your portfolio, when you first started talking about it over five years ago, would’ve done for your performance?
Sure I’ve commented on it before - it would have been a nice 30% annual return from the very first video, so certainly would have helped performance with a small allocation. It’s why I don’t try to predict where it will go from here - my videos are only intended to counteract some of the exuberant and irrational hype I see people sharing about how any day now it will skyrocket - back then, I was arguing against claims that Bitcoin would replace the US dollar.
What about Nvidia or tesla? Each of them will have gave 5× so what? The is still risk in this
Were any bitcoin related books on your reading list when you took your holiday? The Price Of Tomorrow, The Bitcoin Standard, Broken Money, Layered Money, Inventing Bitcoin... are all good places to start. @@ThePlainBagel
I’ve read the Bitcoin Standard. It was good for explaining how Bitcoin works, but I thought it made some really dumb arguments - “fiat money financed Miley Cyrus’ twerks” is I believe one of the lines.
You called it! Doubled!
Your Content Stands Out In A Refreshing Way! I Truly Appreciate The Absence Of Background Music In Your Videos, As It Allows Your Message And Personality To Shine Through Without Distractions. Keep Up The Great Work!
This video is exactly what I wanted
Yeah, there's the level-headed analysis I've been wanting.
But perhaps not what you needed
That moment when you’re actually eating a plain bagel when TH-cam tells you there is a new Plain Bagel video. It’s gonna be a great Friday!
interesting watching this as BTC hit an ATH yesterday with a 75% move up since Jan
Imagine being bearish at a $40k Bitcoin. You people are insane. You’ll be bearish again when Bitcoin “crashes” from $500k to $90k. You’ll be making fun of the bulls for saying it’s going to $1 million, but instead it’s at $90k. Do you not see how foolish this is? At some point you need to educate yourself about what Bitcoin is.
Its a store of value intended to be used as a currency that has no intrinsic value 😂
Bitcoin is up 70% in 6 weeks from the time this video dropped, Breaking all time high.
Plain Bagel, you're giving me Kramer vibes lol
Hyper nitpicky licensed correction - the SEC does not “approve” any security or listing, they merely refrain from preventing the listing
As someone with no Bitcoin holdings, but is connected to the crypto industry both professionally and as a hobbyist, I think Richard's take here is unbiased and fair. He misses a couple pieces of key information in his analysis though:
- The fine details around Grayscale's GBTC fund are important. It was an inefficient, close-ended fund. That is part of the reason for the large outflows after the ETF conversion.
- ETF-ifying Bitcoin unlocks it as an asset that companies can hold on their balance sheet without the gigantic headache of self-custody. So comparing it to the rate of individuals holding gold in their investment portfolio is ignoring institutional adoption.
- SEC chairman Gary Gensler has been *illegally* blocking bitcoin as a formal asset class in the US and it absolutely has put a huge suppression on its price. The ETF for bitcoin is symbolic of bitcoin being rightfully acknowledged as an investment in the US and that will carry a lot of weight in the long term.
Illegally blocking until all the major legacy finance institutions were ready for custody and filed themselves. SEC and Gensler are blatantly corrupt.
14:35 well... not far off. 72,000 as of today.
now 58k 5 months later. Almost like bitcoin is pure gambling and has not underlying value
Clearly, whoever is in charge of grayscale felt like the ETF approval would be better for their bitcoin holdings long-term than not.
Non-sense. They were being sued by FTX and other hedge funds for not allowing redemptions and Grayscale offered the ETF conversion as legal remedy. And then they implement a carefully calculated optimal management fee rate reduction that would stem some of the expected outflows due to cap gain considerations. Money will come out of GBTC over time. There is zero institutional interest in BTC.
@@winstonwolfe2537 exactly. Tons of investors bought into the fund at a discount, and wanted out when it became possible, not to mention FTX selling $1 billion of it. Hard to know which investors reinvested in ETFs or directly in bitcoin, but it was all out of Grayscale’s hands.
Superbly neutral take, just like a plain bagel should be.
Did. Not. Age. Well.
I went from not caring about bitcoin, to “holy crap buy!”, to “oh yeah maybe I should calm down” 😂 your videos really put a clearer picture on what’s going on thanks!
Clearer picture, or rather how clueless the masses are about Bitcoin and crypto.
What a mistake that was
I hope you didn't listen to him. You'd be up 70% lol
Whenever you see a thumbnail with Plain Bagel making that, "Umm.... No" face, you know you're in for a good one.😁
I appreciate that as soon as Richard posted this, Bitcoin surged ~5% over 8 hours.
That aged badly
Holy shit it really aged badly
Can to explain why ? Genuinely curious
bitcoin is zig zagging buddy.
How much did you lose?
ETF or not. Every 10 minutes a block is created with scarce space to allocate transactions in the most secure network humanity has every seen
I was like “FINALLY” because Richard is one of the only few experts I trust how he exposes the information. Thank you sir ❤
Love watching these a month later. Good way to find out if the youtuber generally knows what hes talking about or not
Background is back! We love it!!
This is a refreshing, empirical analysis of bitcoin that was well cited. I wish more TH-camrs would reference their sources.
Hope you enjoyed your time off Richard. We are glad to have you back!
A lot of IPOs go like this: lots of anticipatory activity followed by anticlimax. Not a reflection on the asset, just the way markets work. There won't be any "watershed moment," at least not one everyone sees coming.
In order to make a valid comparison, you need to compare like to like. Comparing the futures ETF which launched during peak bull run hype with the spot ETF which launched recently during a recovering market is not a valid comparison.
Also, saying that the spot ETF volumes were large compared to other ETF launches but still did not meet people's expectations is a bit pointless imo. Why does it matter what people's expectations are? What matters is how this spot ETF compares with other traditional asset ETFs. That's what determines if it's a flop or not.
Bitcoin is still seen as a very risky and speculative asset in the eyes of most (which it is). It will take some time for fund managers to legitimise it. But if it can be done, you're looking at billions funneled into crypto given it's the only large asset class that hasn't achieved full mainstream adoption in the same way that stocks and real estate has.
I hope if this happens you will reconsider your thoughts on crypto.
Welcome back, Half Donut!!!
Literally the most successful ETF launch in the history of ETFs.
I'll like and subscribe just because you have the spoons to leave these videos up.
Yeah not many people would still have this up and he actually mentions the times he's been wrong. Thing is he is wrong a lot, especially when it comes to crypto. Don't take crypto advice from him, otherwise this channel is top notch of course.
(You probably shouldnt take crypto advice from randoms on the internet either lol)
Bout time you came back!
Love it when this guy posts
I always get so excited when a new bagel video comes along
The entire theory of bitcoin: Why is the price of bitcoin going to increase? Because more people will want to buy it. Why will more people want to buy it? Because the price is going to increase.
Same as any asset. Welcome to investing
@@gregfields011 most assets create cash flow though. Gold didnt perform that well for the most part because of this as well. People investing because the price goes up leads to bubbles, for which bitcoin is a nice case study.
Welcome back from vacation! TH-cam felt a bit plain lately, without the bagel.
Welcome back Richard - we've missed you!
Great episode Man! Even the segues to the sponsor spot was as smooth as silk!
Glad you enjoyed the water - the books, will wait... (for Blinkist).
I understood nothing from listening to any of this aside from passive knowledge, I don’t have the capabilities to invest. i just like listening to the man’s voice
The price didnt go up, because bitcoin sellers were expecting a huge increase in prices, if the ETF for bitcoin launches, so they adjusted their selling price accordingly and big investors and institutions like the SEC still do not like bitcoin, so investors have less reason to buy it
Just keep listening... Pieces will start coming together eventually
Agree that the whole point is to not have regulated middlemen. I imagine the inclusion of bitcoin deeper into the financial system could help to create an array financial product that companies can use to manage risk associated with bitcoin.
Thank you for this explanation. But BTC is sitting at 45k right now.
68k rn
Hey!! Well deserved break ;)
Historically and generally speaking, the launch of a themetic ETFs often represents the high water mark of the theme in question.
The Plain Bitcoin
Up again
But honestly I respect his consistency in his opinion over time
I am gonna call it a cult until there is an actual meaningful use case for cryptos
1. Buying illegal goods and services on the dark web
2. Money laundering
3. Gambling
4. Making payments to extortionists
5. Pyramid schemes
6. Pump and dump scams
Go and live in El Salvador or the Central African Republic, so you can use bitcoin as a currency if you want an actual meaningful use
Cults require leaders and doctrine. Bitcoin is decentralized and has no such examples of either. There are outspoken people in the space and many people in the space do share similar ideas, but cult doesn't seem appropriate to me.
@@tasadem20 its not meaninful use if I have a more reliable currency in my pocket
It transfers billions in value every single day. And please don't say something like "it's all ransomware". No, bitcoin does not transfer trillions of scam money every year.
This video didn’t age well
The Cope is hard, everyone buys bitcoin at the price they deserve, this guy hasn't understood this for 3 years
Appreciate your “plain bagel” approach to investment. Hope you enjoyed your vacation!
Sure the increase was impacted by the etf. But more imporantly, the stock market is doing well.
@13:10 It's only a matter of time....
...before governments realize that banning crypto would seriously cripple criminal economies. Imagine how hard it would be to move BitCoin if it showing up in your paper trail raised serious questions.
Ah yes, like how the government banning alcohol or drugs somehow prevented those from being widely produced/consumed. Pls explain how the gov can realistically ban btc
Always just the facts with no hype or bs. 👊
Question for you Richard: over any 4-year period you choose, a portfolio with only 2% BTC/98% cash far outperformed the S&P500, so would you consider risking only 2% of any portfolio in Bitcoin high risk? To me, that is the greatest low risk/high reward play of our generation, worse case scenario being you only lose 2%
I don't believe that's true.
S&P 500 from Feb 7, 2020 to today: 48.9%
BTC from Feb 7, 2020 to today: 334.9%
A portfolio with 2% BTC and 98% cash would have a cumulative return of 8.7% over that time period (assuming cash return was 0%) vs the S&P 500 of 48.9%.
@@ThePlainBagel Thanks for the answer. That lie has been spread around in the cryptoverse and people are swallowing it. Funny because a strong motto in crypto is ''don't trust, verify''. That being said I still believe it to be relevant, as in exceptions are rare. In the end, it's all about learning when to sell to realize those gains.
The YOLO FOMO HODL'rs won't like that you're back!
Bitcoin: the monetary equivalent of the hyperloop.
Except it actually works and has been functioning since 2009 without a centralized entity to operate it. Other than that yeah it's the same
Don't forget FUD.
I don't own any bitcoin, does that make me the Elmer of FUD?
The price fell because the FTX estate (they didn’t t really get away with it) was selling the units of Greyscale into the strength.
Great summary, thank you!
He is back !
Could it be that the Bitcoin ETF managers knew ahead of time that the approval is coming, and purchased a bunch of Bitcoin in advance of the launch? They could use those bags of Bitcoin to issue new ETF shares, so there would be not so much buying pressure resulting from the launch of the ETFs.
Could be, although it's not the asset managers themselves who create the baskets, it's the authorized participants (liquidity providers).
There have been Bitcoin ETNs for some time and I wonder a bit about the differences. An ETN is only a certificate, of course, so you don’t actually own the assets but are only promised their worth on this paper. In case of bankruptcy, you’re SOL. But the company buys actual Bitcoin and stores it in cold storage, so this part seems identical to the spot ETF. Why would ETNs be allowed, but secure ETFs take so long?
Lovely work, thanks Richard.
Sounds like some financial companies are trying to make a buck. It was overhyped....or it was market manipulation.
Personal curiosity: ETFs are asset backed securities?
GBTC shares traded below 'peg' of BTC for long time. Clever speculators could have bought lot of shares at 40% discount, and on the rally their profit would be just shy of astronomical. this both with the most established sell the news behaviour
You missed another reason why investing into Bitcoin through ETFs isn't the smartest thing to do. Investing into Bitcoin through an ETF means you have to pay taxes on your investment even when holding it longer than the one year period to receive it tax free. Thou as always it was a great video!
I pay very little in taxes on my investments.
I’m a big pro-crypto person and I really enjoyed how this was broken down
It's my (possibly faulty) understanding that certain technical characteristics inherent to the blockchain prevent Bitcoin from suffering a conventional panic. The cost of transacting Bitcoin is a multiplicative function of the value of the transaction and the number of concurrent transactions taking place on the chain. In a panic (when many holders of the asset attempt to sell it off) the price of selling goes up. At some point the falling returns on sale should always meet the rising costs of sale, at which points transactions cease and a conventional panic is prevented.
Not so Bitcoin ETF's! ETF fund prices now allow investors to express their lack of confidence in Bitcoin's value without actually transacting the asset. Could it be that ETF activity is what finally KILLS Bitcoin, because a free expression of its value (or lack of same) is now possible?
(EDITed because en-dash is hard on TH-cam comments)
No, because the ETFs have to buy and sell the underlying asset. As stated in the video, the ETFs are a small part of the market. If an ETF is sold entirely it just shuts down, and Bitcoin goes on
@@gragnaktube My theory is that, unlike actual blockchain transactions involving Bitcoin, declining price of ETFs could allow for continued expression of (lack of) valuation of that asset. Bitcoin's value as a traded asset can never drop below the cost of trading it, which rises rapidly based on the number of concurrent transactions pending on the blockchain. But the EFT share valuation could continue to impact the perceived value of the asset, particularly when the asset has no "inherent" value or associated revenue stream; even if actual Bitcoin transactions are halted by rising transaction costs, the EFT shares can continue to be traded. It is true (at least for now) that the EFT's are a small part of the overall market, but if EFT valuation becomes the ONLY persistent means of valuation (as would happen in a transaction price-limited panic) their share prices might continue to drive down the asset value, even though trading of the asset has halted completely.
Thanks for the interesting video
It is just pathetic that Gensler approves these gryft instruments then goes on every finance c
channel and says stay away from these insanely volatile and highly speculative products. He should have held his ground and frought whatever legal challenges arose. This gryfto shite should not be nowhere any avenue on mainstreet or availabe for retail access.
I swear this same hype happened in 2021 with BTCC and BTCQ on the Canadian exchange, that ETFs would lead to widespread adoption, and it's been crickets. So give it another, another few years
You’re wrong to say that historically anybody could buy Bitcoin. Institutions in many jurisdictions had limited or no access to holding BTC - the spot Bitcoin ETF changed that
No BTC speculator was really expecting the recent steep price increases to have anything to do with the pending halving. That is a few months away, but the price doesn't ever actually take off right at that point. Historically, the 4-year cyclic peak is 12-18 months after the halving, so probably in late 2025. And the steep run-up starts many months prior to the peak, so possibly this fall at the earliest. There is likely lots of time for up, down, and sideways market action before then.
I love your videos, so refreshing! Stay awesome!
I am assuming that a lot of people went short on those ETFs. While people were buying the „hype“ others (institutions) were shortselling. The short interest is not yet available.
What I haven’t seen is a video on how to smartly invest in a new and speculative asset like bitcoin. Something simple like building the position over time and buying dips and only a small portion of your overall portfolio. A few percent ish.
Welcome back.
If the the debasing of the US dollar continues, I expect Bitcoin to go up in USD value (along with equities and real estate).
Remember when weed stocks went mainstream and got etf’s or their own? Party ended, lights came on, and the valuations utterly cratered. When real money shows up, it expects real results. Bitcoin can’t ride the hype wave anymore, there are questions and expectations that the bros can’t bs their way through. The lights are on, the party is over, the crater is on its way.
You mean the market manipulations will be investigated and revealed? .... Why exactly do you think ETFs will stop the speculation and hype?
Weed was overinvested and overcompeted. Ask your Bitcoin questions. A bitcoiner will answer
The whole point of Bitcoin is to sell it to someone for more than you bought it for.
Not really. The whole point is to, "change the world!" as as true believer might say. But for the more cynical or savvy (or both), as you've stated, the point is to sell it to someone for more than you bought it for.
That's literally how equities in retirement accounts work lol but go ahead and pretend that it's unique to bitcoin
@@XxChuyoxX but equites are backed by real things that produce stuff. like apple, with Iphones and Profits. what does bitcoin produce. heck what do you use it for besides ransom demands. LOL.
BTC doesn’t yield, unlike equities… the whole point of equities in retirement accounts is they grow in value while their dividend yield % remains consistent; thus improving the absolute returns to the investor to keep up with inflation over time. If you’re selling the underlying equities to wholly fund retirement, and not using their dividend returns to slow that bleed while you draw down the value of your portfolio, you’re doing it wrong. Lol 😂
BTC is more like ‘digital gold’, with an emphasis on capital preservation rather than yield… Both provide alternate mechanisms for exchange to sovereign ‘currencies’… except BTC doesn’t have the benefits of being actual gold, or its utility.
Both can be traded in exactly the same ways electronically. I.e. gold backed tokens on blockchain with the gold held in secure custody. Gold can be traded physically also, and in digital exchange is superior to BTC because the gold backing has intrinsic value where the BTC itself does not… BTC is really just a community developed digital fiat currency, no different to dollars.
It’s also deflationary by nature. If you expect it to go up in value, why would you exchange it for groceries? The answer is the same thing as for gold: you don’t. You trade dollars instead, which diminishes the value of BTC as a medium of exchange (its primary use case). Gold bugs call that greshams law, where bad money chases out good.
So yeah… Bitcoin is inferior digital gold to gold backed tokens. Equities are a yielding asset, not intended to be sold for funding retirement. And gold preserves capital with no counterparty risk, and can be exchanged physically or electronically using the same technology as bitcoin.
@@MrPaulervin78744 Bitcoin produces plenty of things like carbon emissions, burnt out computer hardware, and wealth for a minority of market manipulators at the expense of greater fools like @XxChuyoxX
Thanks for another great video.
Thank you Richard!
And happy you got your first video in of 2024 almost towards the end of January!😂
The combined money of all the traders that is input to an exchange decreases. Only some people make the profit. But the exchange.....it is always in profit as long as trades are happening.
Just curious, could you share that full reading list? Fellow Investment Advisor here, much earlier in my career, just looking for any additional reads
Sure! I'll also share a link to a past video of mine on some of my favourite investing books: th-cam.com/video/3Ei2DHqOO8g/w-d-xo.html.
- The Dhandho Investor (I've read this one, but it's not part of the above video and its a good beginner one)
- The Deficit Myth (this is based on a somewhat-debunked economic theory, but I'm still interested in reading it)
- The Essays of Warren Buffett
- Flash Boys (This has nothing to do with investment analysis, just a book I want to read about the markets)
- The Elements of Investing
- The Little Book That Beats the Market (I'd be skeptical of the strategy they share, but I've been meaning to go over this one)
- The 5 Mistakes Every Investor Makes and How to Avoid Them
I also have a Reddit post saved somewhere of someone sharing more that I want to go through - I don't have it handy but a search would probably find it. Hope this helps!
From its inception to present day, what’s the short list of more benefitial investments?
I'm pretty confident the wash trade rule wouldn't even prevent you from realizing a loss in a bitcoin ETF while buying another. Selling VOO to buy SPY is not a wash sale.
This is going to be a gray area... The rule applies to "substantially identical" securities; what that means is actually up to the IRS. You can get away with it with VOO and SPY because technically they are not substantially identical since, at any given point in time, they will actually hold different securities (index funds use sampling to replicate the index, they don't buy every stock). Bitcoin ETFs only have one holding, so the IRS could make a case that they are "substantially identical." I'm not sure there is any precedent, but it's the IRS we are dealing with here...
Great vid, the only thing I object to in this whole video is Edward Jones being on that list.
Your view on btc has aged like shit in a fridge
More like shit in the sun
@pbnsmf you are also right. But in my view it was a shitty take but trying to keep it cool. Still when taken out… yep still shit
Bitcoin is zig zagging bud.
@@SpiritVector zoom out bud
@@pbnsmf this video didn't drop all the way back.
Thanks🎉
I truly appreciate Richard's point of view; it gives us a good idea of what dumb money (technical term here, not an insult) thinks of Bitcoin, which is good because it means we are still very early. Bitcoin is following its usual cycle; not even the ETF vibe changed the regular course. Sideways and up from here until mid-late 2026 and then the usual crash, coinciding with a major financial crisis in all major markets, should 200 years of historical data be any indication and should this time not be different (hint: it never is).
I definitely appreciate the party pooper approach to investing.
I LOVE YOUR LAYOUT WITH YOU AND A MIC IN FRONT OF A BACK DROP WITH TONS OF RESEARCH SOURCES ON SCREEN
Institutions (pensions, sovereign funds etc) have lengthy vetting processes, you should know that. HFSP
How does the IRS monitor a wash sale exactly? If I sell VONG for a loss and then buy SCHG later that day, who gets to judge if those are “substantially identical”
Thanks as always Mr. Bagel.
The rules are pretty vague since situations differ and investors love to exploit loopholes. The main thing they mention is rebuying the same security or another security from the same company (e.g., BRK/A and BRK/B or GOOG and GOOGL).
In my experience with the IRS, as long as your argument isn’t total nonsense or clearly bad faith, they’ll allow it. In this case if they’re held by different companies or based on different indices (say one’s the S&P 500 Growth and another is the Russell 1000 Growth) it’s much easier to argue they’re different. And of course you could always park the money somewhere for a month and come back.
How much retail money is still waiting to get into bitcoin? Or is it all corporate now?