Nothing Burger

Salaamu alaikum everyone. I hope you are doing well. Today is July 23rd, Tuesday. Bitcoin is actually hit exactly 66,000 when I was reading that. Tesla is at 247, have bigger earnings coming up today. We saw a pullback in the miners, made by some miners right after I finished this live. And hems is up more than 11%. Keep wanting to buy that. Sorry about that. Never eat at your desk. Keep wanting to buy hems on a pullback, but we really haven't gotten a significant pullback. We've gotten smaller pullbacks, but not to the extent that I'm looking for. I like buying things that are distressed. So I'm hoping shorts do their thing and create an opportunity here. Today we're going to talk about the crypto. markets. We're going to focus on that. Waleikum Salaam, everyone in the chat. And we'll talk about the Ethereum ETFs and what's upcoming for this week in Shawla. If you enjoy these lives, do they like? I really do appreciate them. And sooner rather than later in Shawla, we'll set a new goal for ourselves, maybe 200 likes instead of the 100 likes that we've seemed to be very good at reaching every live. So thank you for that. Not financial advice, whatever I say, is just my thoughts on the matter. So be sure to do your own due diligence before making any investing decisions. All right. So crypto market cap is at 2.4 trillion. The reason I watch this, the reason I tell you guys about this, it's not just a nice to know, but it does the historical pattern has been that the crypto market cap has peaked at higher and higher numbers every cycle. If we look at the last cycle at peaked right around 3 trillion, I do think it will peak above 3 trillion this time around. So when I'm observing that crypto market cap currently is 2.4 trillion. I'm at the same time saying, I think that the bull run is not yet over. Obviously, there are other metrics that we look at, but this is one piece to the puzzle. Greed is still the state of the crypto market cap. I'm sorry, the crypto markets after having been in neutral territory for just a blink of an eye. Basically, we went from fear directly to greed, it seems. The Bitcoin ETFs are now performing quite positively. We saw a stretch there where we had net outflows for many days in sequence. Now we had the opposite. So we had 12 days of positive net inflows. And yesterday was actually the strongest day yet. So this is very bullish for Bitcoin as an asset. The NVR VZ score. So that looks at the market value and the realized value. Basically, it is a gauge of how much holders are in profit, how much profit there is on the table that could possibly be taken. The Z score, the deviation from the average, has typically peaked at 6 or 7. At least it did last cycle. You can see that the Z score is peaking at lower levels from cycle to cycle. And so I think this time around, we can expect a Z score around 4 or 5 to peak at around that level. Right now, we're still out of 2. So I still think there is room to run here. Again, another piece to the puzzle. There was a new model that was introduced by Bitbo. Actually, I believe today. And it looks at, it's called the stock income model. And this is basically the same as the stock to flow model, except it takes into account the rewards that the Bitcoin miners get. So it's a more accurate picture. And I have to say, I found the numbers that this model was suggesting, quite similar to my expectations for the price of Bitcoin. So currently they're actually saying, so right now we're at 66,000, as I mentioned, according to this model, the projected price for Bitcoin is around 57,000. So we're ahead of what the model suggests, but not by a lot. And it's suggesting the upper band for the price of Bitcoin currently at 115,000, lower band at 28,000. Now, if you fast forward to what this model suggests, the price of Bitcoin should be at the end of this year, so December 31st, 2024. It's suggesting the price of Bitcoin should be around 138,000. And I actually think if you look at the averages of price targets out there, this is right in line with that average. And if you look at the upper band, 277,000 lower band of 69,000. So what this means is that if you have at least five, six month holding period for Bitcoin, and you believe this model to be true, then buying today, there's basically nothing but upside for you, because the lower band here is 69,000. We're currently at 6,000, even though, as I mentioned, as per this model, perhaps we're a bit ahead of schedule on price, but again, within investment horizon of five, six months, there's nothing but upside, according to this model, at least. We still have not gotten the post having bump. So this has yet to materialize this sort of adds support to the notion that there is still a lot of upside to be had here with Bitcoin, even though we are currently near all time highs. But if you compare the price action post, the most recent having with the price action post the having before that, you can see that we're basically been chopping away at the same sort of horizontal level for the price of Bitcoin, haven't really done much. Whereas when you zoom out, you can see that in previous having, we've had a pretty strong upward movement in BTC's price. So we're still expecting that. The RSI right now is in neutral territory. So we're not overbought. We're not oversold. And this corresponds with what I mentioned on the stock to income model. We're basically hovering around the fair price of Bitcoin for this period in its cycle. And minor revenue is still challenging for minors. So we can see the blue line. You can see the coin production and the having that occurred earlier in this year. And then the gold or yellow line is the revenue of Bitcoin miners. And you can see the drop that we saw here. I'm referring to the top right of the chart. We can see the drop that happened post having. And really, we haven't seen a recovery there. However, as I mentioned in a live I did last week, the stock prices for these miners. While there is a correlation with the price of Bitcoin and therefore there is a correlation with minor revenue, it's not a necessarily strong correlation or perhaps not as strong as many people think. Has a lot to do with the level of excitement around Bitcoin and investors search for alternative ways to expose themselves to this asset in a leveraged way. Because of the operating leverage that Bitcoin miners provide and also has to do with the data center play, which was not in play in previous cycles. So I think that if we get the upside in Bitcoin that we are expecting, then miners should perform quite well. Moving on to altcoins. The top performing altcoin in the last week was Helium. And I'm not an expert on this. But I do find its valuation to be tough. So the recent upward movement was a partly a product of them reaching a hundred thousand subscribers. Subscribers pay twenty dollars a month. So a hundred thousand times twenty. We're talking about two million per month. If you multiply that by twelve months, that's twenty four months. That's revenue for this entire project. That's twenty four million. Sorry. That's revenue for this entire project. The current market cap is eight hundred and forty nine million. So you know, you're trading at thirty five times sales. And for what? I mean, the idea of this project is that it's just a decentralized basically mobile network. But, you know, wireless networks are already pretty good. I mean, I, and actually wireless networks have become rather cheap. I mean, visible as a wireless network provider in the United States has plans as low as twenty five dollars a month for unlimited data. And they have really good coverage. So, you know, why is why would people necessarily switch to a network where, you know, I don't know if they have customer service. It's all they at least claim it's decentralized. You know, if something happens, who do you necessarily go to? You know, if there's a spot that doesn't have coverage. I mean, if it is, in fact, decentralized, how do you actually, you know, force that area to actually provide coverage? Unless, of course, it is centralized, in which case, what's the point of having it in the first place? And what's the point of having a decentralized mobile network in the first place? If the current centralized ones work quite well. So, this is my thinking on this particular crypto project. Again, with crypto, you have to be really careful. I mean, I always say, keep an open mind, but not so open that your brain falls out. Maybe there is some merit to this. Again, I'm not an expert in this particular project. I looked it up just because of the fact that it was up so much. But, you know, maybe there's something I'm not seeing here, but since I'm not seeing it, I'm not going to touch it. As it relates to Ethereum ETFs, the fees that they are, they've announced that they will have, are basically similar to the fees that the Bitcoin ETFs will have, with exception to GBTC, Grayscale Bitcoin Trust, which is out there in banana land with 1.5%. But the average fee for BTC will be the same as it is for Ethereum, which is around one quarter of one percent. You're the same 23 base points. So, right around one quarter of one percent, which brings up the very important question. And that is, how do you even make an argument for investing in these Ethereum ETFs? Considering that Bitcoin has outperformed Ethereum, this cycle, and the fact that with the Ethereum ETFs, you can't actually stake Ethereum in these ETFs. So, you can't earn yield on Ethereum like you could earn if you were just holding your Ethereum in a brokerage account. So, what's the point of buying the Ethereum ETF? This analysis kind of leads me to believe that the price impact that the Ethereum ETFs will have on Ethereum will be relatively muted, may end up being a nothing burger in the grand scheme of things. So, in fact, we may get a drop in the price of Ethereum, but once these Ethereum ETFs start trading, considering the price has been supported by the prospects of these ETFs launching. So, just something to keep in mind. Obviously, not financial advice. I'm not clairvoyant. I don't know what will happen, but this may be a buy the rumor, sell the news type situation. Now, for this week, all eyes will be on the Bitcoin Conference. As you can see here in the Google Trends, how the search term win is Bitcoin Conference has performed in the last 30 days. Bitcoin Conference Trump, this is an anticipation of any sort of hint at using Bitcoin as a reserve asset in the United States. So, we'll be following that closely, and we'll let you know what we think about it. If you are not a PIF member and you're not following our portfolios, you're not part of our community. You're not following our watch list. I highly recommend becoming a PIF member. Link to do so is in the description of this video. And with that, let's go to questions. We have quite a few here. So, I'll try and go through them as quickly as possible. While I come to everyone, Abdullah says, how do you measure a BTC cycle? Well, it often corresponds with the liquidity cycle. I mentioned the liquidity cycle will probably peak out in the second half of 2025, maybe even into 2026, but we'll have to keep a close eye on that. I don't think that's necessarily the case. I mean, I would be, I mean, because it currently has a job and it's a pretty important job as the CEO of JP Morgan Chase. So, I don't think he would accept a hypothetical position before actually being offered something. And he can't be offered something in the Trump administration if there still is not a Trump administration. So, I think that this is probably early to think about that. Also, I don't necessarily think it's that consequential on anything. Speaking of BTC, you said in one of the previous lives that BTC is a practical decentralized value, but is this really true with government controls and regulations? Well, I actually don't think of BTC as being attractive necessarily for it. I mean, decentralization is one aspect of its attractiveness, for sure. But I actually think that its attractiveness is in its utility will be a function as a store of value. Its decentralization provides strength in terms of the network's robustness and the uptime that the network experiences. Government controls and regulations, I think, are actually good in terms of legitimizing it as an asset and not having it as an asset. That's sort of outside of any type of regulations. And so I actually think that it being regulated is a positive for it as an asset to be accepted as sort of a legitimate place for serious investors to put their money. So I read that Binance will use their funds to buy U.S. bonds. Would that make using Binance Huron? No, I mean, it seems like this is a hypothetical and also you have to make a link between, first of all, I don't think using Binance would be Huron because you're not actually necessarily profiting off of, you're not an investor in the company. But if you're just holding Binance longer term and, you know, intent on profiting off of the appreciation of Binance tokens, then you have to make a link between whatever interests it's receiving and the value of the Binance tokens that you're holding. That would require a whole separate sort of deep dive and look into it. Should we buy BTC now or wait for an upcoming dip? I think BTC is fairly valued. I would dollar cost average. It's timely predictions on BTC to be 150k by end of year legitimate or fantasy. I actually showed the models of the stock to income and how I think that these models are pretty reasonable and the predicted price was 138k for that model. So I think it's not outlandish. What is good platform to buy crypto? I use Coinbase. There's also wallets that you can use like Phantom and decentralized exchanges that you can use like Radium or Jupiter. So Malekom, what do you think? What do you think of moving to a country with no taxes, Gulf countries, cashing out your crypto on peak bull cycle, moving back to previous country, waiting next fall. So in the United States, if you're a US citizen, it doesn't matter. If you move to another country with no taxes, you still owe US taxes. So that's something to keep in mind as it relates to other countries, maybe to the extent that you can avoid taxes, it may make sense. Bit off topic, but what do you think about China investments due to their weaker situation, comfortable, uncomfortable? So yeah, I've made my position on this quite clear in previous lives and videos. Any sort of association with slave labor needs to be looked at for all companies specifically. Uyghur, Muslim slave labor, but really any slave labor, and to the extent that that is true for any company, I would deem it uncomfortable to invest in. ETFs can be bought in retirement accounts, unlike self-cost the ETH. Yeah, that's true, Wilson. And perhaps that's the only use case for it. But you would have to then think that Ethereum is going to appreciate more than Bitcoin. So I think that it may be useful if you're going... So I think longer term, not many people think that, but there may be specific periods wherein Ethereum is really hot. And if you can control your retirement account, you may want to do a swing trade, move from BTC to Ethereum, and then maybe move back to BTC. So I can see it as sort of a way to swing trade Ethereum. But as a long-term hold, considering Bitcoin's fixed supply, I would think Bitcoin is more attractive for people who have longer time horizons. Are you familiar with Substack, a newsletter with a lot of investment ideas, kind of like fin tweet? Yeah, I'm familiar with Substack, when there's a lot of different newsletters on Substack. I am assuming you're suggesting I do something similar, and perhaps very well. If you're not part of our newsletter, then make sure to become part of our newsletter. It's free. For the mind, got spooked by some BTC news of large ETF inflows dropping the value of BTC. Is this something only temporary or is his concern warranted? Yeah, typically sharp emotions like spooked and nervous and whatever, they typically end up... They typically precede bad investment decisions. So I remember when Tesla was, I think it was like 160, 150, and it seemed like it was nose-diving downwards. This guy who was a Tesla bull for a long time on X, he posts this long post on how he's selling Tesla because all the Tesla shareholder vote is upcoming. And what happens if robots or artificial intelligence are no longer part of Tesla? And he has this really long justification for selling at historically deflated prices. And I just made a note on that, which is basically this is the type of analysis that you want to avoid. The nervous, fearful, knee-jerk reactions to something in the news, that's exactly what you want to avoid. Typically, these sharp emotions are precede a really bad investment decision. So the moment you said spooked, I was like, this is probably not going to be the best or the optimal decision. So specifically, you mentioned spooked by some BTC news of large ETF inflows dropping the value of BTC. I'm assuming you mean outflows. As we saw in this live, the actual inflows have been increasing last, or yesterday we had one of the largest net inflows, which is positive for BTC's price. So the trend suggests that BTC has been, and BTC ETFs have been rather resilient. Abdullah asks, Salaam, thank you so much for your efforts, it's my pleasure, thank you for coming. I just wanted to point out the need of having trial accounts for PIF membership, or at least offer one to three month account instead of 12 months. It's kind of tough because, you know, there's a lot of information that you get when you sign up as a member. But yeah, I think that I would eventually like to offer a trial account, I would just have to see how that works. So here, I agree, I do think decentralized social media will be a bigger need for the future. Okay. What do you think? Well, I can sometimes do here, and I see you. Unis asks, what do you think about investing is just proof of work style crypto's long term, such as George coin Casper and not proof of stake coins and then sell and move to BTC. Yeah, so as I always say, and I try to practice what I preach, if something I don't, if it's something that I don't understand, I don't invest in it. As it relates to crypto, it seems like the number one value that it can provide is artificial scarcity and transfer value. So the artificial scarcity comes from the Bitcoin network and that can be used as a vehicle for storing value over time, storing purchasing power over time, especially in light of traditional media. It means of value storage, no longer working. So specifically fiat currencies where the inflation rate seems to be increasing all the time and is set to only accelerate in its inflation. So that's one use case. I see Bitcoin as perhaps the way to go if you want that utility. As it relates to transactions and actually transferring value, I see something like Deutsche coin as more practical. Certainly the transaction fees are much lower. The bandwidth of the network is better. You can do more transactions per unit of time. And I do think that to incentivize trade, you do want to have an increasing supply. You don't want to have a limited supply or else people won't want to part with what they are holding. So Deutsche coin checks that box off as well. Again, there may be alternatives to Deutsche coin. I just went with Deutsche coin because it has a brand. It has name recognition. There are potential catalysts in the future, including integration with major social media platforms and because it's a fork of Bitcoin. So it has the same code as Bitcoin, which is now the most tried code in the crypto world. And there's some proof of the quality of that code that we can build some confidence on. So that's why I focus my investing on these two use cases. I also have Solana in our crypto portfolio because I think there's a possibility that an app eventually emerges, an application eventually emerges where smart contracts make sense. I haven't seen that yet. But I think that there is a possibility of that. I can see the possibility of an app like that emerging, in which case you want exposure to I think the superior smart contract platform and that is Solana. So that's in a nutshell, my view of crypto. I have trace amounts of exposure to smaller projects, but nothing really that large. So with that being said, thank you all for coming. Leave a like if you haven't already. Until next time, make sure to take care of yourself. Salaamu Alaikum and peace be upon you all.