The Next Bitcoin Catalyst?

As-salamu alaykum everyone, I hope you are doing well. Today is Tuesday, June 25th, Bitcoin is at 61,000 and today we're going to go over a potential huge catalyst for Bitcoin. We're also going to cover the crypto markets in general and Bitcoin in particular, engage their health levels. So without further ado, let's get started. As always, this is not financial advice, so be sure to do your own due diligence before making any investing decisions. And thank you all, as always, for the likes on my previous lives. We got to our target of 100 likes on each of the last four lives, I believe. So thank you very much and let's keep that streak going. So do leave a like if you appreciate these lives. So the crypto market cap has pulled back recently, but not too much. I mean, if you zoom out, we're still way above the levels that we were in January. We're way above the levels that we were a year from now, which we're closer to 1 trillion. We're currently above 1 trillion just for Bitcoin. And the total crypto market cap is at 2.3 trillion. So still, despite the recent pullback and has been painful, especially on many altcoins, we're still at elevated levels, historically speaking. The stablecoin market, which is a good indicator with regards to the state that we're in, a state that the market is in. So typically, stablecoins will increase in market cap when interest in crypto is increasing and they'll decrease when interest is decreasing. We've kind of been at a level or a plateau for a while now. I think investors are waiting on the sidelines with their stablecoins, waiting for the right opportunity, waiting for conviction that we're at a local trough in prices to go back into crypto and do some buying. So the market is in neutral territory, and this is what the fear and greed index confirms. So market sentiment is in neutral territory, which means that objectively speaking, if history is any guide, now is a better time to be a buyer than when prices were higher. We all know the famous saying, be greedy when others are fearful, fearful when others are greedy. Well, we've been in greed territory this year. We've been in extreme greed territory this year. And interest in crypto was a lot higher, even though objectively speaking, that was a less advantageous time to be buying than today when interest has gone down in a big way compared to those highs. Now, if we look at the top altcoin performance from a year, so for the last year, we can see what I mentioned earlier with regards to we're still at relatively elevated levels with regards to the best assets in crypto. So obviously you have meme coins that have performed very well in the last year. So Bonk and Pepe stand out. There are some alts and even Floki, a meme coin, had outsized returns. There are some other more technical altcoins such as Render that have performed well. So Render had an upside of close to 300% in the last year. Bitcoin had a 100% return even after this pullback from 70,000. So still up on Bitcoin, close to double in the last year. Dogecoin a little less than that. Ethereum a little less than that. But this should tell you that, yes, there is a pullback, but still a lot of altcoins have performed extremely well despite the recent pullback. And also Bitcoin with its 100% return still offers outperformance compared to most other altcoins. So there's maybe 10,000 altcoins, probably more than that at this point. And very few of them are in this graph in terms of, and very few of them can boast a 100% return like Bitcoin can. So Bitcoin is obviously a high value asset in the crypto space that offers decent returns, well, more than decent returns. It may not offer the highest returns and therefore there is some merit to looking at altcoins. But if you want the lowest effort per or the highest return per unit of effort, then I think Bitcoin in terms of crypto assets perhaps provides the most compelling opportunity in that regard. So it's it's very hard to achieve returns greater than Bitcoin's returns investing in crypto. Very few cryptos or altcoins actually outperform Bitcoin. Some of them do in a big way. Again, so there is maybe some merit in looking at altcoins, but if you want the most returns for the lowest amount of effort, I think go with Bitcoin. And if first of all, none of this would be possible without our PIF members. So thank you if you are a PIF member. And if you'd like to become a PIF member and see what we invest in, whether it's stocks or cryptos, then consider doing that. The link to do so is in the description. The Bitcoin ETFs have seen a consistent, perhaps tied with the longest consistent outflow streak since their inception. And despite that, I mean, we've only gone from 70 to 60,000. It's not that big of a pullback. So I think we're in times that are not necessarily going to be common with regards to Bitcoin ETFs and their outflows. I think this is probably not going to repeat that many times. But I think on the upside, Bitcoin has has shown a lot of resilience in the face of these outflows and additional selling pressures, which we'll talk about soon. So the Bitcoin price is very much a function or very much correlated with the relationship of inflows to outflows, whether inflows are more than outflows from these Bitcoin ETFs. You can see that by comparing the green bars to the movement of that orange line, which is Bitcoin's price. When there are green bars, then you can see that orange line headed upwards. When there are red bars, that orange line is headed downwards. And so at least historically speaking, what we've just gone through is very unlike or uncommon for these Bitcoin ETFs. And I don't think that we'll see this repeating too often. It just it just so happens that there's been a confluence of news that is adverse for Bitcoin. And we'll talk about some of that in a second. The Bitcoin MVRV Z-score is still at very healthy levels. We're less than two at this point. And as I mentioned in previous lives, typically we peak, the cycle peak happens when this Z-score is closer to six or seven. That's a good signal that you should be trimming your position substantially. Bitcoin's hash rate has remained relatively resilient. And again, this is basically the compute power that's going into securing the network. This has remained relatively resilient. We haven't seen any real dips in the Bitcoin hash rate despite the Bitcoin halving. So the miners are holding their own. They're not going offline as many predicted prior to the halving. And the Bitcoin hash rate, the difficulty level has remained pretty stable, which makes it tough for Bitcoin miners. But they're managing thus far. Perhaps some capitulate in the near future, but so far so good for the Bitcoin miners. The Bitcoin daily active addresses has fallen substantially to around half of its peak, which means that a lot of Bitcoin holders are basically waiting. They understand that now is not a good time to be selling. But also, I think there are a lot of people with cash on the sidelines that are waiting for an established trough, an established plateau that holds before going in and buying Bitcoin. If we look at the stock to flow model, which has been a relatively good way of predicting the general level of Bitcoin's price at every given point since Bitcoin's inception, the stock to flow model is suggesting extreme undervaluation. If you look at where the stock to flow model suggests we should be, we should be north of 100,000 in terms of price right now, but we're closer to 60,000. So this suggests that when Bitcoin resumes its upward price movement, that upward movement may be very strong in both momentum and magnitude. Bitcoin miner total revenue has fallen in half. This is not surprising considering we have had the halving not too long ago and Bitcoin's price hasn't really appreciated since that halving. So we had a lower Bitcoin rewards, but the same Bitcoin price since the halving. So this is the tough spot of the Bitcoin cycle for miners, but if they're able to make it through as they seem to be able to so far, and we've seen Bitcoin miners actually, and this perhaps added to the selling pressure for Bitcoin and downward pressure on its price, we've seen them selling a lot of their Bitcoin reserves. So their huddle reserves of Bitcoin they've been selling recently in order to generate cash to make it through this period. Which has a depressing impact on Bitcoin's price. Additionally, as it relates to the string of bad news for Bitcoin's price, there's $9 billion at least in potential BTC selling pressure that is coming in, coming online in July. This is related to the Mt. Gox trustee starting to transfer Bitcoin back to its rightful owners. For those who don't know, Mt. Gox was an exchange in 2014. It got hacked. A lot of Bitcoin was stolen. Some of that Bitcoin was recovered and now 10 years later it's being returned to its rightful owners, which is good news. Obviously you don't want to see anyone lose money. So that's good as it relates to Bitcoin's price. However, a lot of those people who will be credited their Bitcoin will be tempted to sell that Bitcoin. Now how many people, how much of the Bitcoin returned to the Mt. Gox creditors will be sold is anyone's guess. When it will be sold is anyone's guess. I will say that as Bitcoin's price moves downward and pulls back, it will be less tempting for these creditors to sell their Bitcoin. And especially considering these creditors were holders of Bitcoin in 2014, which was early in relation to most of humanity. They understand Bitcoin. They understand the potential of Bitcoin. They understand the cycles of Bitcoin. And so unless they're pressed on cash, they need cash. Probably they'll have a bias to holding the Bitcoin considering we are in the midst, I think, of a bull run that will play out for the rest of 2024 and at least the first half of 2025. There is some added pressure, but it's not that much really from the German government, which has seized a lot of Bitcoin. I think their stash is close to 45,000 Bitcoin. And they've sold recently now 400 BTC. Another 500 was transferred to a wallet, perhaps in preparation of selling. So there's always these things, right? There's always, you know, a few weeks ago it was FTX and the selling that came from that. We had GBTC and the selling from that. And that's what makes really the ups and downs in the price graph. But if you zoom out and you look at the overall story, the general story for Bitcoin, and if you understand the thesis for it, that graph is upwards, inshallah. All right. Now, as it relates to Bitcoin miners, we got some news of 150 million investment in Hut8, which is one of the Bitcoin miners that has compute that can be used by data centers for AI. And we mentioned this in previous lives. There's an added wrinkle now with the valuation of Bitcoin miners. This is why I adjusted my valuation for Bitcoin miners, including Iris Energy. And this added wrinkle relates to the energy supply that the Bitcoin miners have and the hardware that they have that perhaps could be used by data centers to provide compute for AI, which data centers and companies behind them are desperately in search of. So it turns out that Bitcoin miners were building this basically treasure trove of assets that have come into high demand. Previously, these assets were only viewed with respect to their enabling Bitcoin mining, but now they're viewed in a different light with a dual purpose. And so this has impacted how investors see Bitcoin miners, and this has had a extremely positive impact on Bitcoin miner prices. So you can see here, this is just today, by the way. So you see BitDigital, other smaller miners have done extremely well. And across the board, basically, Bitcoin miners have been doing extremely well. I think only CleanSpark was down today. I did a live on why I sold CleanSpark a while ago after booking a lot of profits. So I have to say, I'm not that sad about that move. I think it was probably the right one. There's, I think, a lot more alpha and other names right now. Now, coming to the title of this live, which was, is this the next Bitcoin catalyst? Michael Dell, for those who are of Dell computers, for those who are unfamiliar, he's worth, I think, a hundred billion dollars, has been teasing his interest in Bitcoin. Sorry, he's recently tweeted out, scarcity creates value. Retweeted Michael Saylor's tweet, Bitcoin is digital scarcity. And this has led to speculation that Michael Dell, by the way, owns 58% of Dell computers, which sits on a seven billion pile of cash. And he himself has cashed out north of$2 billion in Dell computer shares. So if you're sitting on $2 billion in cash, you're probably not going to keep it in cash. You probably know better. That's how you became a billionaire. So you want to park it in an asset. And Bitcoin is a compelling asset. And when you say scarcity creates value, there's few assets out there that are as scarce as Bitcoin. And actually Dell computers and Michael Dell specifically have a history with Bitcoin. They're one of the few companies to open the doors for payment to their company using Bitcoin. And they started this in 2014. So they were very early with their adoption of Bitcoin. And so Michael Dell is definitely, I think, considering Bitcoin for investment, perhaps personal investment, or for Dell computers and as a place to park their substantial cash pile, or at least part of it. And when CEOs look at what Michael Saylor has done with MicroStrategy, and what has become of the share price of MicroStrategy, this may become a very compelling proposition. And if you recall, last Bitcoin cycle, one of the catalysts for that cycle was Tesla buying Bitcoin and adding it to its balance sheet. So perhaps we see other companies like Dell, like companies of similar size, parking some of their cash reserves into Bitcoin. So I would not be surprised to read a headline soon about a major company buying Bitcoin, adding it to its balance sheet. I think it makes all the sense in the world. You obviously don't want to keep your money in cash. And there are a few other options that are as straightforward as Bitcoin, if you're looking to store your value over time. So my takeaways here to summarize, despite the pullback, I don't see anything abnormal in the data. This thesis is still active, alive and well for Bitcoin and high-grade altcoins. You have to be really careful with altcoins, as their recent pullback has demonstrated. Now is objectively a better time to be investing than when prices were higher. This is my assessment, at least. Not financial advice, but this is my assessment. This is what I'll be doing. And Bitcoin miners currently offer a compelling opportunity for real alpha, given their resilience, despite Bitcoin's troubles. Now, you recall the column of Bitcoin miner tickers and the green next to them. This is in an environment of Bitcoin pulling back. So imagine if Bitcoin is now above 100,000. These miners, at least the best ones of them, the ones that survive, stand to do considerably better. So if you're not a PIF member, do become a PIF member to follow our portfolios. And with that being said, let's take some questions very quick. Salam Hassan, is Visa share Halal? I wouldn't buy Visa. I mean, they're very closely associated with enabling interest paying loans. So no, I wouldn't. I feel uncomfortable with it. I try to not say Halal and Haram because I don't know. I make an assessment based on, you know, my best faith effort to find the truth. And so I'll say I'm definitely uncomfortable with investing in Visa. Salam Arkan. Hey, Salam Rashad. It's been hard and shaky to keep holding crypto and others for that matter. Lots of heavy turbulence. I just want to thank you for keeping reminding me of what and how to play the game. Oh, thanks Rashad. I always appreciate your comments. It's my pleasure really. And, you know, as I mentioned, these lives, the PIF can't exist without PIF members like yourself. I really appreciate that. You have a very long name. Not to be confused with anyone else with the same name. What are your thoughts on Halal ETFs? I want to start investing and I fear about the bid offer spread and low trading volume as compared to popular ETFs. Is it good? That's actually a pretty advanced question to be asking for someone who's just starting investing. So I am not aware of problems with liquidity for these Halal ETFs. I've never heard of problems with liquidity for these Halal ETFs. So I think most of them are traded on, you know, major exchanges that, you know, where there are market makers that offer pretty tight, you know, bid ask spreads. So I wouldn't, and especially with ETFs, shouldn't be trading a lot, you know, just like dollar cost averaging into them if you have a plan. So I don't think that should be an issue really. I would be much more attentive to the fees that they charge. That's going to be, play a more, a bigger part in your returns than the bid ask spreads. You're not, when you're dealing with ETFs, I'm assuming you're not a day trader. So these bid ask spreads won't be a major part of your return. Will the potential war between Israel and Lebanon cause another huge downturn in price of BTC? I don't think so. I don't see why. I mean, Israel has been at war since August, so that's nothing new. I don't think Lebanon is a major player in the global economy, so it's not, it's not really a big deal. Now, Taiwan, that's different. China and Taiwan, that's different. But Israel, Lebanon, I don't think so. Thanks, Dr. Khaled. I really appreciate it. Dr. Khaled says PIF is the best investment. I really appreciate that. I am a human. I believe you. Says, is there a reason why today a lot of cryptos went up? So, you know, day-to-day market volatility is anyone's guess. I mean, you see talking heads on TV saying with surety, you know, what caused day-to-day fluctuations, but they don't know. So what I will, there are an infinite number of factors that impact market performance from day-to-day. So I wouldn't pay too much mind to what's happening day-to-day. A lot of it is just, you know, investor sentiment day-to-day. So investor sentiment is human sentiment, and that can change, you know, on a headline or on something, you know, not fundamental to the asset itself. So I wouldn't pay too much mind to that. But I wanted to find out, I know you're bullish on Bitcoin, but what do you see with the 2-year versus 10-year treasury and 3-month treasury yield when it un-inverts in relation to Bitcoin? Well, as I mentioned in yesterday's live, ultimately, I think we're at the peak in terms of the interest rates. I don't think they'll go any further. I don't think there's a hike in the cards. So it's just a matter of when the next cut will happen. I do believe that the cut, we'll probably get one cut this year. And that's obviously good for assets because well, capital becomes less expensive. So there's more capital to be invested. And yeah, so I think ultimately the interest rates in the near term, near to midterm will be positive for Bitcoin. Do you think CleanSpark would be attractive if they were to use their sites for AI? Yeah, obviously that would increase their attractiveness. They haven't really signaled any openness to AI, although their management is open to anything that makes money. One of my main beefs with CleanSpark, and just a bad impression about management, was the way that they had structured their incentives and the way that their dilution works wherein the management is protected from dilution, but the investors aren't. And even if the stock does well, I just don't. When I invest in a company, I consider myself an owner of the company and a partner to other owners. And I don't like to be a partner with management. And I don't like to partner with people that are giving me unfair terms. What are your thoughts on PLL recent pullback? Well, as PIF members know, I'm still very bullish on PLL. I don't know when it's going to turn. I think we're close. But keep in mind for Piedmont Lithium, 20% of the float is shorted. So it's going to overshoot on the way down. It's going to overshoot on the way up. And so when you have movements like you had yesterday with no actual cause for that movement, I think they're buying opportunities. And that's exactly what I did today, right? So, yeah, I mean, I think Piedmont is going to do rather well. If you ask me in a year where Piedmont is, I'd be surprised if we haven't made a good chunk of cash on it by then. It's my pleasure, Mohamed. Assalamualaikum. Thank you very much. It's my pleasure, Hamid. My question is crypto staking halal? And if it's halal, what is the best way to do it? So as a concept, if you want to learn more, I would just watch my video on crypto staking. As a concept, I'm not against crypto staking. It just differs in terms of my comfort level based on which crypto we're talking about. It's my pleasure. Thank you all. Leave a like. And until next time, be sure to take care of yourself. Assalamualaikum and peace be upon you all.