The Halving Report

LAST CHANCE to 1 BTC: Lump Sum Over DCA

January 06, 2024 Brad Mines Season 1 Episode 110
The Halving Report
LAST CHANCE to 1 BTC: Lump Sum Over DCA
Show Notes Transcript Chapter Markers

In this insightful episode of Halving Report, host Brad Mines engages in a captivating conversation with an anonymous Bitcoin enthusiast in El Salvador. This episode offers a deep exploration into Bitcoin market dynamics, the role of energy in cryptocurrency, and the vibrant Bitcoin community in El Salvador.

Our anonymous guest shares a comprehensive understanding of Bitcoin, honed through a background in engineering and economics. The discussion delves into the challenges of Bitcoin mining in Europe and presents innovative approaches to overcome these obstacles.

This episode is a treasure trove of knowledge, covering detailed market analysis of the cultural nuances of the Bitcoin community worldwide.

✨ Chapters/Timestamps:

0:00 πŸ“ˆ Insights on Bull Market Dynamics
0:11 πŸŽ™οΈ Brad Mines Introduces the Episode
0:24 🀝 Introduction of the Anonymous Guest
0:35 🌍 Bitcoin Conversations in El Salvador
0:43 πŸ” Guest's Bitcoin Journey
1:43 πŸš€ Bitcoin Strategy and Energy Sector Insights
2:45 πŸ’Ό Challenges in European Bitcoin Mining
3:49 πŸ‡ΈπŸ‡» Impressions of El Salvador's Bitcoin Community
5:05 🌐 Bitcoin Community in Germany
5:48 πŸ“Š Bitcoin Price Prediction Methods
8:47 πŸ“š Discussion on 'Softwar: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin' - [Amazon.ca Link]
10:01 πŸ–οΈ Future Plans and Bitcoin Beach
10:58 πŸ€” Misconceptions about Bitcoin
11:44 🌟 Predictions for 2024 and Beyond in Bitcoin and Energy
12:29 🧠 Final Insights from the Guest
13:06 🀝 Closing Remarks and El Salvadorian Handshake

Connect with British HODL for more Bitcoin insights:
- Twitter: [https://twitter.com/BritishHodl?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor](https://twitter.com/BritishHodl?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor)

**Related Video:** Bitcoin Beach's Newest Attraction: Bitcoin Hardware Store Launch - [YouTube Link](https://www.youtube.com/watch?v=EeijPVNFqIE)

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Speaker 1:

I found a bull market multiple in the last cycle of one to 118. For each dollar that goes in, the market cap rises by $118.

Speaker 2:

Welcome back to the having report podcast. I'm your host, brad minds. Today we have a new friend, jacob, who's staying at the same hotel that I am here in El Salvador. So, jacob, thanks for doing this tonight.

Speaker 1:

Yeah, sure Thanks for the invitation.

Speaker 2:

Absolutely, man. I'm glad we could make this happen again my last night. Getting the good content from Bitcoin is all over the world. It's quite the international community that's happening, coming here.

Speaker 1:

So so much interesting conversations the last few days and yeah, yeah, just thought we share it like mm-hmm, bigger audience Right.

Speaker 2:

Yeah, for sure, man. So what? What was your introduction into this space?

Speaker 1:

Well, my introduction happened a few years ago and it was with my friend, chris, who is also here in Alcante with me, and we were just curious about the technology and looking into things. And then we had, I Guess, the kind of obligatory shit going journey where we discovered, okay, what's going on there? And then it came to a realization to me because it was studying engineering, you know part in Germany and I had first this very engineering approach and I understood Bitcoin more from the energy side and engineering side, and then I continued to study Economics and also got the other perspective from the economic side. So this really opened my eyes because it's quite a complex topic and having the opportunity to study in different fields really helped me a lot to understand what I was dealing with, or at least Rest the part that I'm grasping right now.

Speaker 2:

Now, are you working on anything particular in this space or are you just kind of a buyer? Hodler, dollar cost averaging, or well, your strategy right now.

Speaker 1:

Yeah, privately, I'm modeling and stacking. So I was researching DCA and came to the conclusion that lump sum is the correct term and the correct thing you should do, also for UTXO management and also because it's the most Economic valuable thing to do. Right to DCA, you miss out because Bitcoin goes more up than it goes down. It's better to put up all the money you have acquired as soon as possible. So I'm doing some of the private thing and hot link and cold storage, of course, and then I'm working in the energy sector. I'm looking into how we could make Bitcoin mining more profitable in Europe, which is quite challenging because the normal energy prices are quite high, but before an exploit where you use energy markets and trade the energy to make it profitable.

Speaker 2:

So it's more of like a regulatory hurdle over there.

Speaker 1:

The hurdle currently is that you have it's like different puzzle pieces of knowledge that just need to be put together, like the knowledge is already there. For example, like a brief overview would be, you have your revenue of mining. Let's say, one megawatt per hour gives you like $60 worth of Bitcoin, and if you can acquire the energy cheaper on the energy exchange let's say for $50, you would do so right, and then the chart of the energy can like go up and down until you get to delivery and if it goes above $60, you can sell the electricity for more money than you would have made with Bitcoin mining and using this arbitrage opportunity between you know the different spots of the prices you can make Bitcoin mining more profitable in, let's say, generally every European country that uses energy exchanges.

Speaker 2:

This is what your fourth day in El Salvador.

Speaker 1:

Yeah.

Speaker 2:

Okay, and what's been your experience with the Bitcoin community? Is what you expected? Is it less? Is it more?

Speaker 1:

I didn't have much expectations because I wanted to see for myself. I tried to put away all the things I read in the news or on Twitter or everywhere and just have like a blank slate impression. And when I approached, it really was like quite similar to when I was in Africa and Tokyo which is also like a developing country, let's say. But then when I arrived here, I noticed the people really have such an energetic way of living. It's really addictive, right. And also, yeah, this is for the general population that lives here. And then when I was meeting Bitcoiners, it instantly clicked like you just say hello and yeah, what's, what were you thinking about? And you just started to talk. And you don't have to do all the pre-work you do with people that never were introduced to the topic. You just started a point and you get something back from it. You're just not putting all the work, you're exchanging ideas. Let's say, if people two people meet and each one has one idea, both leave with two ideas, right. And if four people meet, right, and it's insane. I really enjoyed this.

Speaker 2:

So where are you from and is there much of a community back home for you?

Speaker 1:

Well, I'm from Germany and I moved a lot in Germany because I was studying at different universities. Right Right now, I'm living in the eastern part of Germany, which is a former socialist part, and for me, very interesting to see what effect socialism can have on a country and on the people short and long term. There in Germany, we have a pretty developed Bitcoin community that meets. There is a map I don't have the address in my mind right now, but there's an internet page where it can look up all the meetups in Germany. Basically, every main city has a Bitcoin meetup and you just can go there, meet people, exchange ideas, and this is also where I found the people that I'm working with on the current project I just talked about.

Speaker 2:

Now, the other night you and I had an interesting conversation up at the restaurant here and you have a formula that you follow and that gives you a range of where your price prediction for the coming bull, for the coming cycle after 2024, having, if you don't mind, explaining kind of how that dollar example you gave me equates to the dollar amount into the market cap and then your bottom and top price predictions, if you don't mind Not financial advice, by the way- it never is.

Speaker 1:

Yeah, first disclaimer, I have to give full credit for this price prediction to British HODL, which is a really nice YouTube account I follow and I try to watch all the videos. Here's a quite increasing following on Twitter and YouTube. Yeah, and here I made a video about a price prediction which I agree on, on which I will just like try to remember and what I told you. There are multiple different factors that go into my personal price prediction which I got from British HODL. The first one is the bull market multiple. Bull market multiple means for each dollar of buying power that goes into Bitcoin, the market cap rises a certain amount. The Bank of America did research on it and they found a bull market multiple in the last cycle of 1 to 118. So that means for each dollar that goes in the market cap rises by 118 dollars. So market cap is to take the price of Bitcoin and multiply it by the amount of existing Bitcoin, right? So last cycle, 50 billion went into, like the crypto space, and this led to yeah, I'm not sure if it was Bitcoin or the crypto space in general, but yeah, let's say the crypto space, because I'm not sure so this led to a price increase of 1 to 118 of the market cap, right the bull market multiple, and if you assume this will be true in the next bull market and you have like a similar amount, you just say, let's say, okay, another 50 billion go in. You take the current amount, multiply it with the bull market multiple and then you get to a price which will be between 280,000 to 450,000 per Bitcoin and also, interestingly enough, it also matches the first original stock to flow model, the first one that was put out. I know there's a debate about if the stock to flow model is dead or not, but those two things combine together. Some all made sense for me. So my range for the next price top would be 230 to 480,000 or 450,000 per Bitcoin. But there's a big but, which also British model mentions the moment an ETF gets approved, this price prediction is negated because it could be even more unpredictable.

Speaker 2:

I think it coincides with the bullish sentiment that I've seen here so far. Now we also spoke about an interesting book that I, admittedly, have not gotten my way through yet, but that is soft war, and you had some interesting thoughts on that. You've read through the front to back on that. So what are your thoughts around it?

Speaker 1:

Yeah, I was also texting with Jason, who wrote the book, about some issues I have with the book, right, ok, I think his overall thesis is correct and it's brilliant, to be honest, because he really put in new concepts that weren't in the space before the big issue I have with it. He is trying to push it more like in the second amendment direction. It's national security, it's like a weapon, it's like war technology and stuff and that could work in the US if you classify it in the national security field. But there are many different countries, like Germany, where you don't have the second amendment. So the moment you start to classify it like this in the US, it could have a pretext so it can be banned in other countries, or at least try to ban it, because we know it's not really possible to ban it, right.

Speaker 2:

So that's my issue with it. Ok, very interesting. All that being said, would you come back to Bitcoin Beach? You got some travels coming up, but is this something you return in the near future, right or in El Salvador in general?

Speaker 1:

For this holiday. We will go to Costa Rica afterwards and compare the tourism scale, like, because Costa Rica has, like, pretty much plenty of tourism right now and I want to have a direct comparison there and also I plan to surely come back in, let's say, two or three years to not. Yeah, right now I only have the one impression, like the status quo, and if I come back I can see what changed and how did it change, and I can map a trajectory. And once I have done that, I feel confident enough that I can make good decisions based on the trajectory. So that's my plan for now.

Speaker 2:

What would you say?

Speaker 1:

the biggest misconception about Bitcoin is that it is too hard to understand for most people to take self-custody Because, in the end, all you have to do is write down 12 words and many people are able to drive cars and take driving classes and pass it somehow. Most people work jobs where they have to write down things. So I think this is one misconception, that it will be too hard. And also you have to imagine if we have to use Bitcoin as freedom technology and we are forced to use it as freedom technology in some countries, what will be harder? Writing down 12 words or dealing with all the other negative things that will, because by all the restrictives, things that might go on.

Speaker 2:

So what do you think the biggest catalyst will be going into 2024 and after the next having.

Speaker 1:

I personally, but it could be biased because the work in the energy field would be biggest catalyst will be also, short and long term, that energy companies will, in a more decentralized way, become the new banks, because you will need energy with proof of work to settle transactions, what banks do right now. So this could be a huge catalyst that does not only benefit the grid but it also benefits like the overall buying power efficiency of our financial system. So not so much buying power will get lost on the way between the customer and the business.

Speaker 2:

Awesome man. Okay, I think you've given me a lot to digest here. You're very technical in this space and I appreciate you enlightening myself and my listeners and my friends here. So your uses your last day in El Salvador. Tomorrow you're off to Costa Rica. Is there any final words of wisdom you want to give? Or, if not, I know you're not like too much of an online guy, but maybe a resource for us to go and follow or something like that.

Speaker 1:

I really recommend going to British HODL. Okay, he has the right urgency in his videos and my biggest advice would be to people you most likely underestimate the urgency to get to at least one bit point.

Speaker 2:

And you're well in the 1%, if that's the case, right Globally, for sure, man, yeah, yeah, okay, man, I'm gonna, we're gonna do the El Salvadorian handshake.

Speaker 1:

I'm not sure if you've been taught this yet no, but you can show me right now. Okay so, ronnie. Well, now it's you.

Speaker 2:

Ronnie. Just show me, because I recorded with Ronnie. People are gonna know who he is. So we're gonna smack and we're gonna follow up with the fist. All right, that's easy, man. Thanks for doing this, jacob. Sure, thanks for entertaining Cheers, cheers.

Bitcoin in El Salvador
Book Discussion and Future Travel Plans