A CEO invested $375,000,000 into Bitcoin to offset inflation, and now there are talks of banks becoming holders of cryptos for their customers. In this episode, Paul Lizell gives us the lowdown on the latest happenings and an update on what is going on in the world of Bitcoin and Cryptocurrencies. Big movements are coming in the near future for this asset class, so tune in to this show to find out!
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Bitcoin & Cryptocurrency Updates
Welcome to another episode. We’re going to get into one of my favorite topics, cryptocurrency and especially Bitcoin. The market has had a serious uptick over the past couple of months, going flat through the middle of September 2020. We’re at September 25th, quickly flying through, and Bitcoin is sitting right around 10,700 at this point. What I’m seeing in the market is some mainstream use of cryptos and in particular Bitcoin. The MicroStrategy CEO revealing that he purchased two different major investments in Bitcoin. He’s dealing with a company’s cash. He’s sitting on cash and he realizes that the dollar is degrading or has been devalued. It’s gone down quite a bit over the past few months.
It’s starting an uptake. It probably will have a little bit of an uptick. It has been particularly pounded on the last couple of months, but he sees inflation coming and he’s trying to offset that with Bitcoin. Bitcoin is digital gold. People see it as digital gold. It’s not easy to carry around gold bars when you want to go from place to place, but it’s easy to carry around cryptos. I can carry it around on this phone. I can have it on my laptop. It’s easy to transfer and easy to turn into cash. I don’t have to take my gold bars to a shop to sell them or find somebody on Craigslist to sell them.
It is much more liquid. You’ve got to remember that when looking at cryptocurrencies. He originally invested $250 million in Bitcoin. This was done in the middle of August that he did. He’s dollar cost average and buying it a couple of times. He bought an additional $175 million in the middle of September 2020, it was September 15th, but he had an August 11th announcement, 21,454 Bitcoin purchase with $250 million, then an additional 16,796 purchased in September. It’s substantial purchases and becomes a Bitcoin whale at this point. He’s looking to leverage the cash and hopefully gain value. Bitcoin’s up to either 47% or 49% on a year, right in that range. He feels that it’s got more upside to it. He doesn’t want to be sitting in cash earning quarter percent, 1%, 2%, or whatever you would earn with that.Bitcoin is digital gold. Click To Tweet
I love cryptos, but there are other investments that can be until he likes it because it can be liquid. If he decides he wants to move it into bonds, he can cash some out or all of it and move in a bond. If this gentleman has success with this, there’s going to be a lot of other CEOs looking to do this. A lot of other owners of companies to be doing the same thing he’s doing. Another positive thing news-wise that has come out in favor of Bitcoin is Jack Dorsey. You see the price from September 25th, $10,716.32. It’s been fairly stable.
Square CEO, Jack Dorsey says, “Bitcoin called the keys to security.” He likes what the future of Bitcoin is. This is important when you had enough of these CEOs start talking about it and enough people start talking favorably about it. It’s going to force the banks and people in this direction. One of the things they need to do is they need to make wallets simpler. It’s not easy for us to remember twenty keywords to have all these different things stored in all these different devices and hidden. It’s got to be simpler. If it can’t be as simple as my face recognition, then I’m going to be worried about it. It’s not going to feel secure because these things become bearer bonds and there’s a reason.
There are only $21 million Bitcoins that will be in existence. It’s an algorithm based which what makes digital gold, but $5 million have been permanently lost. You’re down to $16 million, it makes it even more desirable. This is something that’s important to look at with these things. The easier they make it, the more mainstream it will become. I could tell you, my parents and grandparents wouldn’t feel comfortable having twenty C words written down and have to put it in three different spots, a safety deposit box, know where everything is, and feel comfortable using it. It’s not going to happen. It’s got to be easier. Another big positive quality about Bitcoin and cryptocurrencies is they are decentralized.
Dorsey gets into it, talking about decentralization. You’re trying to sell me a car, I’m going to buy it, if I want to pay you in Bitcoin, I’ll send it over to you, and it comes to yours. If you want to turn that Bitcoin into cash, sell it on an exchange, converted to cash, the US dollar coin, it’s over to your checking account, and you got the cash. It’s quick, easy, and no cost for the transaction like wire fees and any Western Union fees.
There are many benefits that come with this blockchain technology. It’s going to be staggering. It’s going to be great benefits for it in the real estate world as well. Another big benefit of the cryptos is when you and I do that transaction. When we do that deal on our phone, it goes from my phone to your phone, my virtual wallet to your virtual wallet, it can be done anytime a day. There’s no wire cutoff at 3:00 PM or 5:00 PM. It’s going to go through in seconds, worst case is a couple of minutes. You got your deal, peer-to-peer without having to cost you a penny in any transaction fees.
I got another article that talks about the big banks that are starting to enter their cryptocurrency world, the investment in here. Over the years, Goldman Sachs and JP Morgan have poo-pooed Bitcoin and cryptocurrencies saying there were scams. Whenever you see that they’re trying to push people into another direction, but you have Deutsche Bank, HSBC, some UK, and Hong Kong banks as well that are getting involved with it especially with IBM, because IBM has gone all into blockchain technology. They’re transforming a company. They understand the future where blockchain is. They give you an idea of where blockchain is heading to. If you think about it for the real estate side, for us investing and for the counties, when they record the deeds, if how much deep fraud is going on. Have a blockchain built out for your county or the state and 10,000 computers are on it.
John and Jane DOE have a mortgage with Wells Fargo, somebody comes in there and tries to refi seal their equity and do deed fraud. The blockchain is not going to allow them to do that. They’re not going to be able to hack in and get that information and do that. It’s going to be so much more secure. Security of what blockchain gives you is going to be great. It’s going to help the real estate industry. It’s going to help consumers overall because it’s much more impenetrable than it is to go in, hack, and get our stuff off of our credit cards, debit cards, or our bank accounts. It’s going to help with that stuff as well which is why you see the big banks moving in this direction.Bitcoin holds the keys to security. Click To Tweet
It’s beneficial for us in some ways, they will make it easier for us to hold and facilitate the purchase and resale of cryptocurrencies. If you have to have twenty seed words when you store these on your cold storage wallet, you have to have all these passwords and all of this info, it is going to push so many people out of it because it’s too much of a pain in the ass to deal with. If you don’t make it easy, people won’t do it. Follow the KISS theory in life, Keep It Simple Stupid, and you’ll do better. If the big banks decide to be the holding companies for you and they hold it on their platform, which is secure but not necessarily. It’ll become more mainstream and more people will do it.
The reason that they have to do it is because they’re going to become irrelevant. People start being their own bank and doing things this way, cutting all their costs and all their fees out of there. That’s simple to go on your phone, which people are comfortable with. You have an app called Venmo. I use Venmo all the time. I collect rent on Venmo. I pay contractors on Venmo. Other people use Zelle, it’s a similar thing, not quite as user-friendly as Venmo. Venmo is setting you up for the use of crypto digital currencies. We’re quickly becoming a cashless society. It’s going in that direction. It’s going to do away with a large part of that underground market. That underground market may become gold and silver coins. That’s true money.
Cryptos are currency. Some of them are not. I look at Bitcoin as storage of wealth digital gold, I look at the light coin as digital silver and other storage of wealth as well. There’s a theory on the DFI Network, Google the DFI network and see how many cryptos are involved with that chain link. Another big one that’s starting to grow is DigiByte, which you can get for about $2.5. There are some good ones out there that you can look at, it’s not financial advice, I’m giving you the information I know out there. Do a lot of your own research. They’re the future. It will be used by our children and our grandchildren. They might not know what banking is down the road.
It’s something to look at. It’s something to potentially invest in and throw some money and put play money in that if you’re going to do it. The money would take to Las Vegas or Atlantic City that you don’t mind losing. It dives a little bit deeper into this article here, why did banks like BB, VA, and USAA have started investing in Bitcoin? They see the growth and as they see the growth they starting to take it seriously because it’s becoming more and more mainstream. They understand blockchain, ledger technology, and smart contracts. They are becoming mainstream for the bank.
The banks are starting to get into them. A bank that gets into them early will be the banks that are successful, for those that wait, like a lot of community banks are going to be hit and they’re going to be hurting if they don’t get in there quick enough and a lot of them may not survive. If you see some of these banks stagnating, stay away from those banks. The ones that go to it a little bit quicker, Deutsche Bank has to because they’re in financial ruins. That bank is a shit show. They’ve got issues, but Wells Fargo, Bank of America, they better start because if they don’t, there’s going to be some issues.
That’s how banks can integrate Bitcoin, not only Bitcoin, but any of the cryptos. They can use this to replace the ACH, replace wire transfers which are ripe with fraud. I was hit for fraud of over $27,000 with wire fraud. It was an unbelievable scheme and they did an unbelievable job. This blockchain, its rules base is simple and it would eliminate this. It’s something that banks are looking to move in this direction and it will help them but it will cut on their costs. They can charge a lot for these wires. ACH is they’re not going to be able to charge you as an ordinance fee for doing blockchain transactions because people do it for free peer to peer.
In order to get the other population, this is going to be a way to do it and they don’t know how wire works anyway, they don’t know how an ACH works so this is no different. As long as they feel it’s safe and secure, they’re going to run with it. One of the disadvantages of Bitcoin, disadvantage for some people, it’s a positive for the most part but everything is on the ledger. There’s a history on it, which means it’s going to be much better to use for an accounting practice. There’s going to be a ledger that shows money going in and money going out. It’s plain and simple. You can’t hide it, you can’t change it, and you can’t do anything because all 50 million computers have to agree on this, which is what makes this technology powerful.
The fact that it took long to come around is amazing, but it’s probably something to do with our computer capability and graphics cards. This is our future. Get used to it. Learn it. Learn as much as you can about blockchain technology, about different wallets, cold storage wallets. I own cold storage wallets because I want everything offline, but understand that they are much like a bearer bond. You lose it, you lose them, and the money. That’s why $5 million Bitcoin had been permanently lost. Those people probably still crying all over for that. Understand it’s a new technology, there’s going to be all kinds of things you have to worry about, figure out, and learn as with anything else but it is a leap up from the system we have. Looking forward to the new financial system to get rid of this old prehistoric financial system. Hope you got a lot out of this episode. I appreciate it. I’m going to do more and add more. I’m going to try to interview some people in a crypto world so I can keep you updated and hopefully the education level increases for both myself and all my readers out there. Thanks.
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