What’s Causing the Bitcoin Bullrun

Transcript:

Hello everyone, welcome to the Roger Report public edition for April 2019. We are in the midst of a Bitcoin bull run. It’s been a long time coming.

Now, we have to look at what is causing this. Remember, we have four triggers that we’re looking for, which we’ll talk about here in a second. But we haven’t seen any of those four triggers trip as of yet. So we have to ask ourselves, what is causing this? Now, it started around the beginning of April.

And for a little bit, there were rumors that it may have been triggered by either an April fool’s joke that the Bitcoin ETFs had been approved, or that a whale had came in and bought about a hundred million dollars in Bitcoin in one day spread across multiple markets.

Now, psychologically you can see that that spoof piece of content was shared quite a bit across social media, and a lot of people interpreted it as real. Investors knew that it wasn’t. And then there was never really any documentation to validity of that whale coming in and making a huge purchase.

So, let’s look at our four triggers to see if Bitcoin still continues to have forward momentum in the near to short term future. The four triggers that we’re always looking at are launch of ETFs, the launch of futures, the launch of new regulation, or the launch of publicly available STO or securitized token offering platforms. Now, we are seeing some movement in each of these, but we’re not seeing the big triggers that we are hoping to see sometime in the future.

We look at Polymath and some of the partnerships that they’re establishing in order to create greater liquidity and access to securitized token offerings. The blockchain ETF made its debut on the London Stock Exchange. The SEC released its first new guidance on cryptocurrencies in about 18 months, trying to set a foundation for forward-looking in this industry.

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And then Bakkt, which is the platform that we’re looking at for futures contracts in Bitcoin is waiting a 30-day public review right now with the SCC. Now those are the owners of the New York Stock Exchange. So, we see a lot of potential there. But none of those four have actually triggered in order to create the forward momentum in Bitcoin that we’re looking for.

So, the question becomes, where are we at with Bitcoin and where are we going? We see a 25-percent probability in Q2 of one of those four triggers hitting going up to about 35 percent in Q3. We do expect one or two of them to hit in 2019.

Now, when we look outside of those things, and we look at what is going on in the macroeconomic environment in order to facilitate forward momentum in cryptocurrencies, we see two things going on right now.

Facebook has made the news because they’re hiring all of the top blockchain developers that they can get their hands on and still say that they have 25 vacancies on their blockchain or cryptocurrency team.

This team is under lock and key. They don’t communicate with the other Facebook employees. They’re operating out of a separate space at the Facebook headquarters.

And there is a rumor that Facebook is raising a billion-dollar launch their stable coin. Now, when you look at the Facebook Marketplace, and the ability to do transactions both cross-border and in-person in a more secure manner, you can see how this is a really big deal for cryptocurrency.

Now, it’s a stable coin, so it’s not necessarily going to create impact in the pricing of other assets. But it is going to create an entry point that over time will be interconnected into the ecosystem of cryptocurrency, giving it greater forward momentum.

We’re also looking at from a macroeconomic perspective, what’s going on? There are rumors that the real estate market is starting to flatten. Well, not rumors. Rumors would be the wrong word.

There is data that suggests in some of the larger markets that overall real estate prices have stabilized, and in some cases are going to start to decline over the next 18 months.

The exception to that is high-end real estate outside of New York, which seems to be keeping its legs under it. There was a lot of pressure on the different types of debt between consumer credit card debt, mortgage debt, and student loan debt, and government debt, all of which create a scenario for forward momentum.

And Bitcoin specifically as a safe haven towards the failure of any of those macroeconomic environments. Now, we’ve got to continue to watch these. And each and every month we come up with new stories and concepts that help support those four foundational elements as they relate to the macroeconomy.

Now as we expand out on what we’re seeing in overall markets, we have to look beyond Bitcoin.

When we look beyond Bitcoin, we’ve seen a nice bull run in some of the secondary assets, and some of the alt assets over the last two weeks. We are seeing a little bit of a pullback, but that’s just a correction from a major bull run. And the correction has not outweighed the gains that had been seen by a lot of these assets. So you’re still in positive territory if you’re measuring the movement of these prices at the beginning of Q1. Will that continue through the rest of the year?

It’s hard to say. We’re looking for those triggers in order to push forward momentum. We’ve seen a lot of forward momentum in the STO space or the securitized token offering space. Mostly from those infrastructure plays that are related to the blockchains being used to securitize tokens.

We’re also seeing the first release of our approval of Reg-A raises that are directly correlated to cryptocurrency and public blockchain asset classes.

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Now you’ve seen some Reg-As come to market, but they’ve usually been sidebar infrastructure style projects, so they’re not an actual currency or token, utility token. There’s typically technology infrastructure. But we’re starting to see them for more direct offerings as they relate to blockchain and cryptocurrency.

This is going to be a really big deal. The Reg-A is a path to public markets for STOs on securitized token exchanges that have a much lower cost base it’s kind of in that 50 to $100,000 range in order to properly implement.

Versus the millions of dollars, and months or years of work that it takes in order to do this in the traditional public markets. These are all great momentum swings, and we expect between August and October of this year we’re going to start to see a lot of those plays become publicly available, IE traded after their fundraising and their documentation is done.

The last thing that we’re looking at as it relates to this market, from a security token perspective is the T zero platform.

We’re continuing to watch the announcement that they are going to be offering Bitcoin trading either inside their platform or on another platform. That will allow people to bring net new capital into their marketplace, hopefully creating forward momentum for the T zero asset. The other things that we’re looking at this market: there are some interesting news is we’re looking at Coinbase starting to offer more assets available on their platform.

Typically, Coinbase leads in those asset offerings, and then you see other platforms like the Equity Trust, Digital Asset Platform fall in line with them in some of those offerings as the cold storage and security options become available.

Recently, the SCC has announced that it wants to hire a blockchain or cryptocurrency expert to help head up a new department in order to regulate this part of the industry. We’ve watched as Fidelity, as a major financial institution has poached one of the top team members from Coinbase in order to start building up their cryptocurrency trading desk and applications.

The last thing that we’re looking at from a macroeconomic perspective is really the IPO public markets outside of cryptocurrency. We’re seeing things like Lyft, Pinterest, Uber, Zoom, a lot of these different companies coming to the public markets, mostly on the New York Stock Exchange, a few through Nasdaq.

And we’re watching just as Lyft priced at the top end of their spectrum, and it’s fallen down pretty substantially since then. And looking at that, how that affects where fundraising has been done for the better part of the last decade.

When I look at the pre-market IPO investments that we make, I look at the opportunities that we passed up to be involved in cryptocurrency and the return on that investment relative to the returns on other investments. And still, even after steep declines at the end of 2017 beginning of 2018 we still see cryptocurrency assets outperforming other investment opportunities in these public unicorns that are coming to market, relative to their fallback from their pricing.

Now, we may see as some of these other projects come to market, Uber is looking to raise $10 billion with its IPO, that they might price a little lower, and we might start to see market saturation. It’s something that we have to watch if we’re looking at net inflows of capital into the STO space, which would be an underlying push from the private markets to the public markets for securitized tokens.

And whether or not the capital is going to be available as an outflow from these public unicorns and venture capital funds into those asset classes. Whew. That was a mouthful.