Okay folks, so as Bitcoin breaks out into new all-time highs, as Bitcoin miners, Mara, Lovely, Mara and Riot continue their rallies and as coinbase readies for its ipo. Which by the way, if you were in both Mara and Riot today, you see what I meant by diversification. But anyways, I want to take a step back and talk about Bitcoin. Talk about what Kathy Wood just said yesterday about the value of Bitcoin and why she is bullish on it.

She went on an interview and made the case for Bitcoin to 10x. Uh, that would add 500 000 to Bitcoin's price. So right there. Uh, that's a nearly a ten-fold increase.

And we're also going to be covering Ark's take on regulatory issues because one of the biggest concerns for Bitcoin right now as well. What happens if the government comes in and stomps it? Obviously a legitimate threat and something that we want to talk about. Not that I want to make a suggestion, but Palantir can solve all these issues. Now look folks, I know you already know my outlook on the crypto market, but you're going to appreciate her perspective as well on this channel.

My goal is not just to give you my opinions, but also to get you to think for yourself and build out your own conviction. And before we get into it, the only thing I ask in return for this video is that you hit that ravishing like button and also don't forget to subscribe. Okay, first, here's the deal for context. So if you're bullish on Bitcoin or any cryptocurrency, you probably have one or two main reasons.

Number one, you like it as a store of value similar to gold or real estate or artwork, anything that has a limited supply. You see Bitcoin as a store of value like that that appreciates over time. Or the second reason you like it perhaps is, hey, you see it as a legitimate form of currency to exchange value. So not just store value, but exchange value similar to Cash or Charlie Books.

Now, with Arc, they see it as both of these things. In the present, they see it as more of a store of value and an investment asset. In the future, they also see it as a exchange asset. Arc sees Bitcoin as a legitimate contender for a new currency that acts as a standard of exchange and value holding across the globe.

And as Bitcoin gets more mature, the idea is that it will also get less volatile and it will be more of a reliable exchange of value as well. Okay, but anyways, that's the context. Let's go ahead and let her talk. So, what's your kind of vision going at? Five years and ten years for Bitcoin as an asset class and a value? We don't have to go out five or ten years.

It's here. Um, we believe. Uh, we. We wrote a white paper in 2016 called Bitcoin Ringing the bell for a new asset class.

Uh, and so yes, we believe it's here. We believe that Bitcoin is the reserve currency of the crypto asset ecosystem. Okay, so when she says that Bitcoin is a reserve currency, what she's saying is that this is a cryptocurrency that is used as a benchmark for other cryptocurrencies, similar with the Usd. If that starts tanking.

that's also implying problems across the world as well. If it's doing well, that's also implying some strength around the world. Whole reserve currency talk is important because this makes Bitcoin to be more likely to be the de facto leader and a benefactor of a crypto craze. Bitcoin is the reserve currency of the crypto asset ecosystem.

We also believe that, uh, there will be very few huge winners in the crypto space. We think the crypto currencies are going to be the huge winners. So okay, so something that I want to add about this is that Kathy Wood likes to invest in companies and asset classes that she sees as being in a winner-take-all industry. What's she saying here is that she sees the crypto market as being a winner-take-all industry.

To make an analogy, back like 10-15 years ago, there were a ton of social media companies: Facebook, Myspace, uh, Twitter, Skype, Yahoo Messenger, Aim, which was Aol's messenger. I don't know if any of you guys remember that. I was a little young, but I used that and a lot of people were making the hypothesis that hey, social media companies are stupid to invest in. Because guess what, Because there's going to be so many of them that none of them are going to win.

They're just going to all divide and conquer the market and none of them are going to be huge winners. Of course, that didn't make any sense because Social media companies entire value proposition comes from how many people are on the platform. So the more people are on the platform, the more people are going to be drawn to those platforms, and the more valuable it's going to be for each person creating demand for more people to come on the platform. And so we saw a handful of social media companies pretty much dominate the entire market, and all the other ones pretty much lose all the market share and in a similar way.

It's the same thing with cryptocurrencies and Bitcoin. Bitcoin's value is based on how many people are using it, and the more people and institutions that use it, the more valuable it is. And the more valuable it is, the more people want to use it. And that's pretty much the making of a winner take all industry, but this is where it gets interesting.

She starts talking about how institutional adoption from a portfolio standpoint is a big deal for strengthening and creating a hugely bullish case for Bitcoin's valuation. We think institutional could be, um, could institutional Going to say five or six percent of institutional portfolios? Again, very low correlation. Um, and that's sort of where real estate and emerging markets went. Uh, that would add 500, 000, uh to Bitcoin's price.

So right there. Uh, that's a nearly a ten-fold increase. So she's talking about how more and more large institutions and institutional investors are using Bitcoin as a part of their growth exposure and hedge against the other asset classes. So this is going back to that store of value usage for Bitcoin.

But remember, there's also the cash usage of Bitcoin, the exchange usage. And she uses Tesla and Square as an example of that. If you look at playing the role of cash on the balance sheet, which is, we did not incorporate this into our institutional white paper because we didn't expect it to be honest. Uh, but now we see Square and Tesla and Microstrategy.

They have diversified some. In the case of Square, and uh, Tesla, it's five and eight percent, respectively. Uh, microstrategy. It's a hundred percent of their cash in Bitcoin.

Basically, what she's saying is that Ark wasn't really factoring in a lot of bullishness. From the exchange actual currency usage of Bitcoin, they're factoring most of it in as a asset class and a store of value and less as an exchange of value. Again, I think that because of the volatility, Arc is looking at crypto as a legitimate form of currency years down the road instead of right now. Right now, it's an investment class and a store of value.

Later, it's going to be an exchange method exchange currency. But she's saying that basically there's been some companies that are taking the leap of faith way ahead of the game, and that's very bullish for, uh, for Bitcoin. So then she makes the case for what would happen if more and more institutions did this. So if you, if you, if you were to expect uh, uh, one percent, uh, if corporations did that, I think this is just a U.s calculation too.

that would be a 40 000 increase, uh, in Bitcoin. Uh, if it's 10 percent closer to where Tesla is, uh, that would be a 400 000 dollar increase in the price. So again, another eight-fold increase. So, and those are just two use cases.

Okay, so again, she just made two different cases. one for Bitcoin's adoption as a standard for storing value, and the other for Bitcoin's adoption as a standard for exchanging value. Both of these separately have huge implications for Bitcoin's price. And I know that when you hear numbers like this will 5x or 10x or 500x, it's like, how do you wrap your mind around that.

And how do you come up with a formula to actually predict that I think Arc is taking numbers from institutional balance sheets and then projecting that on the valuation of Bitcoin and how many Bitcoins are in circulation in terms of value storage. She goes on to talk about Bitcoin as an insurance policy against inflation and other forms of wealth confiscation. Let's go ahead and put that on. Uh, you know, to protect against confiscation of wealth, and part of that, it could be inflation with unhinged monetary policies.

I think that's a much more of a risk in emerging markets. And so I think we'll see a lot of insurance policies being taken out in the form of uh, Bitcoin. Uh I. I often reflect that, Uh, the Saudi princes, uh, probably wished that they had, uh, uh, allocated some of their wealth to Bitcoin because they certainly didn't expect their own cousin to confiscate it.

But that happens all over the world in ways that we don't even understand. We have. We have. And so I think that insurance policy could be the biggest use case.

So I think she's referring to Crown Prince Mohammed Bid Solomon and his decision to direct the Saudi government to confiscate 800 billion dollars from individuals that they claimed were corrupt, many of which were members of his royal family. This cash was reportedly taken in order to fund the government's investment plans as a result of declining oil prices, and he went ahead and detained his family and some wealthy Saudi business people in the Ritz Carlton hotel while he froze their bank accounts and took a lot of their money. Pretty damn crazy world over there. But I mean, think about it if you're a billionaire, or a prince, or just anybody that has some wealth, the biggest threat to your wealth is the government.

Whether that government is corrupt or not. there's many different reasons that somebody from any country would want to get the money out of the reach of the government. And sure, you could put money in foreign banks, but if you're from a country like the Us, guess what? Well, the Us has some pretty damn strong arms, pretty much strong armed banks in pretty much every country that you'd want to put your money in. anyways.

Maybe you could buy gold bars or some other asset class, but still. that comes with a cost. And it comes with a huge risk. There's a cost to keep it safe.

There's a cost to store it with Bitcoin. You buy it and you hold it digitally. Okay, the last thing I want to touch on is two big concerns with Bitcoin. So the main concern is regulatory.

We've seen some countries ban Bitcoin what happens if countries like the Us or Europe goes and cracks down massively on Bitcoin, but I was able to find a really nice research piece put out in 2020, declaring Ark's stances on the issues. In terms of regulatory concerns due to criminal activity, I argue that despite regulators always bad mouthing the currency because of criminal activity, a very small percentage of Bitcoin transactions are used for illicit purchases below one percent. Talked about this before, but cryptocurrency as a whole is a very small player in illicit activity. Yeah, that's the main reason that governments say they don't like it.

Now, I could go into the technicals and talk about how Bitcoin uses cryptographic keys and digital addresses to sort of track where each transaction has taken place. And that could be a little bit of an issue for criminals because they have to be really careful on that, whereas with cash, there's literally no trace at all. But again, that's a topic for another video. The point is that despite the headlines that crypto is used mainly for criminal activity, that is just not what the data shows.

and there's other asset classes that are used way more for criminal activity like cash. In terms of the environment, that's another big fear. Well, according to Arc, Bitcoin mining is much more sustainable than the alternatives. In fact, the yearly energy expenditure of Bitcoin mining is far below that of obviously gold, but just a mere fraction of what the current banking system takes.

But wait, Charlie, are you trying to pull a fast one? Obviously, Bitcoin mining is a much smaller market than the banking system. What about per unit? Charlie? That's what we want to know. Good point. I'm glad you're paying attention.

So, according to Arc, Bitcoin Mining's estimated dollar cost per gigajoule unit of energy expenditure is 40 times 40 times more efficient than that of traditional banking. And again, they might have put some bold assumptions into the banking. category in terms of calculating that side. But still, 40 times is a decent margin for error.

and I've definitely seen some companies taking steps to reduce their impact and use more renewables. So again, I think this can also be improved on the bitcoin mining side. So anyways, I hope that addresses some of your concerns, gives you a new perspective on Bitcoin and Bitcoin miners and whatnot. For me, I know that this Bitcoin rally that we're in right now it's going to end in tears.

Why? Because historically, Bitcoin always has periods where it goes up and then it goes down massively. My goal is to make sure that people understand what they're buying and what they're holding. My outlook is that Bitcoin is going to be a long-term winner, But if you don't have that long-term outlook on it, or if you're just trying to short-term trade it which is fine too, you have to make sure that you're locking in profits on Bitcoin or Bitcoin exposure place. That means not just the currency, but also Mara Riot.

Pretty much anything that you're playing that's related to Bitcoin, it's going to be very attached to that Bitcoin valuation. So next time that there's a crypto crash, you want to make sure that you feel confident in your position so that you can average down or just hold through the volatility if not, cut your damn profits before that happens. Anyways, folks that caps off the video. If you have any questions, feel free to reach out to us below or join us in Zip Trader Circle.

Also, quick plug if you'd like to learn how to trade. With our step-by-step lessons, our private chat, and our daily morning briefings where we brief on all the latest catalysts in the market, well I'll go ahead and put a link to Zip Trader you below. If you're wondering what broker to trade these stocks on, Well, Weeble will give you some free stocks if you sign up and deposit with our link below as well. They are a fantastico broker for new and intermediate to advanced traders alike.

There's tons of great scanning tools, great resources for doing your due diligence, and of course they are commission free, so lots of things to consider if you're looking to join a new broker. Anyways, folks, have a great day and I'll see you in the next. Video commentators out there actually call me crazykathy Kathy.