The Practical Islamic Finance Podcast

A Clear Signal

Rakaan Kayali

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A Clear Signal
In this episode we will cover:

  • Market Update: Bitcoin Price & Ceiling
  •  Price Projections & Monetary Policy
  • Stock Market Performance Overview
  • Upcoming Event & Market Anticipation
  • Market Volatility & Bullish Outlook
  • Key Investment Themes: AI & Data
  • Investment Opportunities in Tech Infrastructure
  • Power Generation Trends & Infrastructure Needs
  • Mining Industry & Emerging Opportunities
  • Correlation Between Assets & Global Economic Trends
  • Market Indicators: Overbought Signals
  • Investment Strategy & Price Breakout Potential
  • Political Influence on Markets
  • Audience Q&A & Market Strategy Discussion

CONTACT US
salam@practicalislamicfinance.com

ABOUT OUR PODCAST
Our podcast is about helping people ethically build wealth. We cover a broad range of topics including stock and crypto investing, product reviews, and general financial well-being.

DISCLAIMER
Anything you hear in this video is an opinion. It is not personalized financial advice. Make sure you do your due diligence before making any investment decisions.

As-salamu alaykum everyone. I hope you are doing well. Today is Wednesday, September 25th, and Bitcoin is at $63,000. We still haven't broken out of the option contracts are telling us the ceiling here for the price at $65,000. I think once we break out of $65,000, there will be more flexibility in the price of Bitcoin. But inshallah, with the monetary easing that is happening and the expectations for Q4, that this happens sooner rather than later. As it relates to the S&P, if we look on a week basis, or rather as it relates to stocks, if we look at their performance over the last week, you can see that the green is outweighing the red here with Tesla and Nvidia being the brightest colors. And I suspect that this will be a not uncommon theme moving forward, especially now as Tesla approaches the October 10th event related to its RoboTaxi unveiling. Today, as it relates to the performance of equities, major indexes were down a bit. We will get volatility, of course, nothing's going to go straight up. But I do think we're in the same general regime of a bullish market as liquidity and monetary policy eases. If we look at crypto and what is working in the crypto world, the theme that has gained the most in the last month is AI. And so if you are trying to enhance your chances of choosing the right asset to hold, having something that is in the AI space, I think will enhance your chances. Second most popular theme is data availability. Third is real world assets. Now these themes do change a lot month to month and quarter to quarter. They're not set in stone, but it does seem like the outperformance of AI is to an extent that makes it, I think, a pretty solid bet moving into this upcoming period. Now, speaking of AI, OpenAI pitched the White House on the economic benefits of five gigawatt data centers. And the reason why I'm mentioning this, we are a channel that is focused on investing and inshallah earning money in a halal conscious way. Seems like data centers is going to be a very good place to put your investment dollars in the upcoming period. So companies that are investing in data centers, developing data centers, part of that supply chain, I think will have no problems with demand. Now to put a five gigawatt data center in context, that's enough to power the consumption of nearly 3 million homes. And Goldman Sachs recently came out with a study which said that 47 gigawatts of incremental power generation capacity will be required to support US data center power demand growth commutatively through 2030. So this is a secular trend. I don't think it's going away anytime soon. I think Bitcoin miners may benefit a lot from this secular trend in a way that is perhaps even after the appreciation that many have experienced in a way that's still not priced into many of these miners, especially the ones that have ample access to power. Now we've been focusing on investing in Bitcoin miners and other Bitcoin exposures in our PIF portfolios. And I think a lot of these Bitcoin miners that I mentioned were trades may evolve to become longer term investments in the event we see them intelligently investing resources in data centers and high performance compute. The main idea I wanted to communicate to you in this live, and I always have a goal of communicating at least one new idea I've never mentioned that can help you in every live. And by the way, if you are enjoying this live, do leave. I'd really appreciate it. Lynn Alden, who is a noteworthy analyst commentator in the space, commissioned a research report to quantify Bitcoin's correlation to measures of global money creation relative to other asset classes. And they found that Bitcoin moves in the direction of global monetary creation 83% of the time, more than any other asset. Now, this is very important, especially in the period that we are considering that we are in a period of global money creation. We saw yesterday the news about China's monetary easing before that, the Fed in the United States and its beginning of its easing cycle. This is very important as it gives us a strong probability for Bitcoin and the direction that it is going to. It is expected to move and that is upwards. So this is the correlation in chart form, if you like to see charts and or a graph form rather. And you can see that just eyeballing this, Bitcoin's price and global tend to be highly correlated. Now, there is one instance in the report that mentions where the correlation actually dips. And that is when the MVRVZ score, which is what looks at the amount of profit that investors have relative to the price they paid. And it tends to spike when we're at a local high for Bitcoin. So in other words, it signals that Bitcoin is overbought for that period of time. When the MVRVZ score spikes, this tends to be correlated or associated with dips in correlation between Bitcoin and the monetary supply. So for us, if we're saying, OK, we're entering a period where money creation is expected, Bitcoin tends to move in the same direction as money creation. 83% of the time, there's the exception of cases where the MVRV score is spiking. Are we in an instance where the MVRV score is spiking? Is Bitcoin overbought? And if we look at the MVRVZ score, the answer to that is plainly no. We are actually far removed from even the high that we experienced this year. And certainly very removed from the highs that we typically experience in each cycle, which tend to be north of 6 or 7 for the MVRVZ score. We're currently between 1 and 2. The expectation is that this relation is going to hold, inshallah. Aside from all the other indicators that we'd like to look at and give us increased confidence that, inshallah, we will break out of this sort of range-bound price action that we've been experiencing with Bitcoin, you have yet another study with data to support it that suggests that, inshallah, this is the period that we are approaching, a period where it reaches new highs. And perhaps this happens in a very fast way. Now, I don't like to speak about politics too much during these lives, but I think it's noteworthy here, especially considering the outcome of the election will affect assets in the near term. One thing that was quite unsettling that has happened recently is that the FTC actually fast-tracked the approval of Soros, buying over 200 radio stations weeks before the U.S. election. George Soros is a proponent of many policies that I think are actually detrimental to society and tends to be very liberal in the candidates that he supports. The 200 radio stations that he bought reach 165 million listeners, and I just hope that people have enough sense to not let the propaganda that these stations are likely to propagate lead them down a path that is not beneficial for society, for the country. So, yeah, something to, I think, it's quite sad that this country has been basically taken over by a small group of people that are trying to push agendas that are not in the favor of the majority of the citizenry. And it's something that people need to be aware of. All right, very quickly, I'm going to go to questions. Give likes, guys. Yeah, please do. The last couple of lives, we didn't really get much likes. I hope this isn't a function of the lives not being useful. If they aren't useful, if you're not finding value in them, then do let me know in the comments. Otherwise, if you would leave a like, that would be really appreciated. Thanks, Eunice. Asghar says, Assalamu'alaikum, wa'alaikumussalam. Abdel says, as a PIF member, I was curious, what is the strategy with Doge? And it is very volatile. How do you handle that spike? We'll deal with that, Inshallah. Abed, you know, in our community, in terms of like when we sell and when we buy. Taskeen says, Assalamu'alaikum, I was reviewing the site and saw that LMT is rated as comfortable. I was surprised and was looking for your reasoning. I'll take a look at that, Taskeen. Thanks for letting me know. All right. And guys, thank you for coming. I really appreciate your attendance. As I mentioned, leave a hit the notification bell when we go live next. Assalamu'alaikum and peace be upon you all.