October 2, 2024 • 1hr 20min

BTC202: Bitcoin Mastermind 3rd Quarter 2024 w Joe Carlasare, Jeff Ross, and America Hodl (Bitcoin Podcast)

We Study Billionaires - The Investor’s Podcast Network

In this episode of We Study Billionaires, host Preston Pysh is joined by a panel of Bitcoin experts including Joe Carlasare, Jeff Ross, and American Hodl. They discuss recent developments in Bitcoin regulation, institutional adoption, and market dynamics. The conversation covers a wide range of topics from new custody approvals to options trading on Bitcoin ETFs to monetary policy impacts on the crypto markets.

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Key Takeaways

BNY Mellon's approval for crypto custody services is seen as a significant development, potentially opening the door for more institutional involvement in crypto
Options trading for Bitcoin ETFs is expected to launch soon, which could dramatically increase liquidity and institutional participation in the Bitcoin market
The SEC's Staff Accounting Bulletin 121 (SAB 121) requires banks to treat Bitcoin deposits as liabilities, making it difficult for banks to offer crypto services
Basel III regulations impose a 1,250% risk weight requirement for Bitcoin holdings by banks, further complicating institutional crypto adoption
Global M2 money supply is expanding again after a period of tightening, which historically has been bullish for Bitcoin and other risk assets
Most panelists are extremely bullish on Bitcoin's price for Q4 2025, with predictions ranging from $100k to $475k
There is debate over whether Bitcoin will follow its historical 4-year cycle with a major crash after the next peak, or if increased institutional involvement could lead to a more sustained bull market

Introduction

In this episode of We Study Billionaires, host Preston Pysh is joined by a panel of Bitcoin experts including Joe Carlasare, Jeff Ross, and American Hodl. They discuss recent developments in Bitcoin regulation, institutional adoption, and market dynamics. The conversation covers a wide range of topics from new custody approvals to options trading on Bitcoin ETFs to monetary policy impacts on the crypto markets.

Topics Discussed

BNY Mellon's Crypto Custody Approval (1:32)

The panel discusses the recent approval for BNY Mellon to offer crypto custody services:

This is seen as a major milestone for institutional crypto adoption
It could pave the way for more banks to enter the crypto custody space
There are questions about how BNY Mellon was able to get an exemption from certain regulatory requirements

Joe Carlasare notes: "BNY Mellon was able to successfully navigate the SEC's requirements to get this exemption, which is not really fair. And people are crying. Well, wait a second. You're again picking and choosing favor."

Options Trading for Bitcoin ETFs (2:01)

The panel discusses the upcoming launch of options trading for Bitcoin ETFs:

Expected to launch within 6 weeks to 2 months
Will likely be available for multiple Bitcoin ETFs, not just IBIT
Could dramatically increase liquidity and institutional participation
Allows for more sophisticated trading and hedging strategies

Jeff Ross comments: "This options market is just this big amplifier for the bitcoin price. I mean, it's like this massive capital unlock for the smart money."

SAB 121 and Bank Regulation (24:36)

The panel discusses the SEC's Staff Accounting Bulletin 121 (SAB 121) and its impact on banks holding crypto:

Requires banks to treat crypto deposits as liabilities on their balance sheet
Makes it very difficult for banks to offer crypto services
BNY Mellon received an exemption, raising questions of fairness
There is bipartisan support in Congress to repeal SAB 121

Joe Carlasare explains: "The long and the short of it is they're already pivoting away from the requirements of SAB 121, which is extraordinarily unpopular, so much so that had bipartisan support to repeal."

Basel III Risk Weighting for Crypto (25:26)

The panel discusses the Basel III capital requirements for banks holding crypto assets:

Imposes a 1,250% risk weight on crypto holdings
Means banks need to hold $1.25 in capital for every $1 of crypto
Makes it extremely capital intensive for banks to hold crypto

Preston Pysh explains: "If you're squatting on $100 million worth of bitcoin. You basically have to have 1.25 billion of assets on your balance sheet to offset the custody of that $100 million worth of bitcoin."

Silvergate Bank Collapse (30:37)

The panel discusses new evidence suggesting Silvergate Bank was intentionally shut down by regulators:

Silvergate was a major banking partner for crypto companies
New evidence suggests they were solvent when shut down
Seen as part of a broader crackdown on crypto-friendly banks

Joe Carlasare notes: "We learned these things after the fact. And I'm sure there was a story here that has yet to be reported that we will learn after the fact."

Stablecoins and Banking (34:38)

The panel discusses the role of stablecoins in the crypto ecosystem:

Stablecoins like Tether have become extremely profitable
They effectively operate as fully-reserved banks
Traditional banks may want to enter this market
Regulatory uncertainty remains a major obstacle

American Hodl comments: "Tether has 50 employees. They have 119 billion AUM, which is 0.1% of world GDP. And they make 6.2 billion in profit and $700 million more than Blackrock does annually."

Ethereum's Declining Market Share (46:29)

The panel discusses Ethereum's recent price underperformance:

Ethereum is losing market share to chains like Solana
Other chains are more centralized but offer lower fees
Ethereum tried to maintain decentralization which may have hurt adoption

American Hodl argues: "The main difference between Ethereum and Solana is that Ethereum enforces a lot of the cost of running the system on the users and Solana enforces a lot of the cost of running the systems on the developers."

Global M2 Expansion and Fed Policy (49:30)

The panel discusses recent changes in monetary policy:

Global M2 money supply is expanding again after a period of tightening
The Federal Reserve has started cutting interest rates
Historically bullish for Bitcoin and risk assets
Could fuel the next leg up in the Bitcoin bull market

Jeff Ross predicts: "I think that the next 13 to 14 months are just going to be lit and we're going to start slowly at first, and then I think we're going to get that exponential move higher as people start getting confidence."

Bitcoin Price Predictions (1:05:58)

The panelists share their Bitcoin price predictions:

Jeff Ross: $475k by Halloween 2025
Joe Carlasare: Hopes to see $100k in 2025
American Hodl: Expects $100k by Thanksgiving 2024
Debate over whether Bitcoin will follow historical 4-year cycle with major crash after peak

American Hodl argues: "I think if we do take out the diminished returns narrative, we could legitimately take a run at a million dollars. And it's either going to be one or the other. We're either going to stick low at like 200 or we're going to a million."

Conclusion

The panel is generally very bullish on Bitcoin's prospects over the next 1-2 years, citing increasing institutional adoption, expanding money supply, and new financial products like ETF options as key catalysts. However, there is debate over whether Bitcoin will follow its historical boom-bust cycle or if increased mainstream adoption could lead to a more sustained bull market. Regulatory uncertainty remains a key risk, but the panelists see positive developments like BNY Mellon's custody approval as signs of progress. Overall, the next 12-18 months are expected to see significant price appreciation for Bitcoin, potentially reaching new all-time highs well into six-figure territory.