YouSaid · the spoken record

Adam Back

lines on the record: 68
first: 2021-05-05
most recent: 2021-05-05
sittings or episodes: 1
sources: podcast

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“That still could be a Bitcoin on Bitcoin trade or a way to acquire Bitcoin with less volatility to gain an entry point because you do get people who will, newcomers who get stuck in a decision. They don't know whether the price is going up or down. And then they'll just sit on the sidelines. So you're much less sensitive to entry price with mining. And yeah, there are also people who are very far into Bitcoin who even do it as a kind of an alternative to selling Bitcoin to reduce the volatility on some of their Bitcoin and see where that goes. So it has that potential use too. So great talking with you, Booth.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I'm also a sort of value investor kind of by sort of trading pattern historically. And that's the way I look at Bitcoin today. If it goes down a bit, I feel that it's cheap and I buy some more. And we'll see how it plays out and maybe have a play with some of the sort of long-term call options as well. I haven't done that much with those yet. They'll be interesting to play with. And on a blockstream side, obviously we're busy with these blockstream notes at the moment. And so if people are interested in that, they should go to stocker.io stokr.io and have a look at the notes for non-US investors, I think. Our view it's very attractively priced and an interesting kind of risk sort of diversification of volatility.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Thank you, Adam Preston, who was a great chat, and I'm so excited about the next phase of this bull market. And I'll be watching all the things we talk about.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“From that point of view. So it could be an interesting discussion to have, and maybe we'll get to see that in the following years at some point.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“See a more space optimized version of that and make its way into Bitcoin. I'll be an interesting discussion to have because scale gets people who prefer retail payment use cases for Bitcoin arguing their case as opposed to the store of value, censorship resistant payment use case. But I think there's different sets of people agreeing and disagreeing. If you would say let's have an initiative to add confidential transactions to Bitcoin. And I think it's an interesting thing to consider because it doesn't in one go remove the transaction graph. So people can't say Bitcoin has become zero cash or something like that. But on the other hand, it does incrementally improve things and in a way that's beneficial. If you do a bank transfer, you don't reveal to the public at large your bank balance or the size of the transaction. So in some ways, Bitcoin is less private than a bank.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That makes another improvement because you won't be able to tell sometimes you can tell what's changed by the amount. It's an even amount or it's an odd amount that looks like that would have been changed. And it takes that away. Plus, I'd say there is an advantage to not broadcasting the size of a transfer for a security basis. If you were operating a business and you sent a large transaction, Some of these transactions are, there's a peer-to-peer network which could reveal your IP address and therefore your location and you don't want to advertise to the world the location of larger wallets could be a security risk. So you get some kind of security advantage. So we went on to form blockstream and implemented that extension in Liquid. And it's a Bitcoin compatible kind of technology. So maybe one day we'll.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Unilateral closet rather than collaborate with the other party closet. And that's not so infrequent. So if you don't need to do that, then also people won't be able to tell. So it provides that sort of anti-fingerprinting, which is an incremental improvement. Now there's less data to analyze to more ambiguity about which is changing, which is not. But I mean, there are more things that could be done. And that was actually how the With Blockstream before Blockstream, I was interested in trying to improve Bitcoin's fungibility and privacy. So I proposed the confidential transactions as a way to do that. And it encrypts or hides the value of the transaction. So the transaction is still there. You can still look at addresses of what's going where, but you can't tell whether it's a tenth of a Bitcoin or 10 Bitcoin from the outside.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“The normal case, and there will be an exception like, oh, I need to use the time lock clause, and then you'll reveal it if you need to use it. But typically you don't. 99.9% of these never exercise the time lock. So you get more privacy in the default case. And the schnorr signature can also disguise or not use up block space with multi-signatures. With Schnorr, a two of two signature looks indistinguishable from a single signature to the blockchain, which improves scalability. And it means that you can't tell single sig from multisig and you probably can't even tell single sig from multisig from a lightning channel setup or close in the normal case because a lightning channel is also kind of infrequently used branches in its logic that the other the other party's wallet stop responding. I need to close the channel. So I'm going to use this escape clause to”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Channel establishment, you'll see it because it's a different contract when it's closed. And the contract is revealed when a channel is closed. And the green wallet has a multisig, which is two of two multisig and a time lock, and that's visible too. So if you were using that wallet and I paid somebody who is a single SIG wallet, it will be obvious, so there's change. And the person looking at it from the outside wants to know which of these coins are changed and which is the payment. And maybe you can tell because all the multi-sig ones are the green wallet and all of the single sig is the other wallet. So you can tell which is the change or which is the payment because they have a different discernible type. And so with taproot, you don't see that anymore for two reasons. One is you don't have to reveal the full script when you spend it. You only reveal the”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Think there have been typically some form of privacy or fungibility improvement in new versions of Bitcoin as they come out, either at network level or in a pro col. And Taproot and additional signatures that come with it both help in that way. And it's not a silver bullet, but it does incrementally improve fungibility because it reduces some wallet or use case fingerprinting. So part of what the open source intelligence is doing is it's trying to correlate coins as blind to the same wallets or belong to the same user like that. And with Bitcoins generally, there's a tiny smart contract attached to them and the contract will be different depending on the type of wallet or type of use case. So if it's a like”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But you have a small downside risk. You keep that small downside risk. And of course, you cap your upside risk to the premium that you receive. So there's some non-linearity. It's not a future. So some of the losses are for you. And that's how you do it. But you basically get the futures premium plus the volatility for you. So the volatility premium. You should see the trade and every option trade as a volatility trade. So you should write an option. Should you do the covered call writing? When the implied volatility spikes at the moment of the spike, you should deploy that strategy and then write all the volatility down and then buy it back or write it out. It's a very nice strategy, especially since the implied volatilities are 80, 90, 100%, which is crazy.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I heard some people talking about other forms of the yield extraction using options as I was curious how that works if it's not a kind of proprietary thing that you not explain.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But the supply inflation rate is interesting because it could have been different and worse. And it seems to be very nice. I don't know how Shia picked that curve, but it seems to work great, right?”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You know, a lot of the numbers in Bitcoin are sort of round numbers or whole numbers for, it looks like for tidiness, you know, so, and even the 21 million coins is suspected to be to do with the size of the maximum sized integer that fits in a unsigned 32-bit CPU instruction, sort of programming formatting derived number. And then like half versus three will probably because it's easier and tidier to program a power of two. So it would be like two or four or eight, but why that and not continuous? I don't know. I mean, I think some of the parameters probably wouldn't matter, you know. If there had been exactly half as many coins, they would just be worth twice as much. And so a lot of numbers could be different and have the same effect.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I don't know. I mean, it certainly could have been continuous, right? And some people were even arguing that it should be changed to be continuous. And it appears that you could even design such a change as a softwalk if you really wanted to. But I think that obviously there would be resistance to that because people don't want to see any fundamentals about Bitcoin changed. there's that but I mean I also find that the halving is quite an interesting economic effect and maybe positive in the sort of being a heartbeat for market cycles or something so it seems to have a market effect if it was continuous you wouldn't have this this effect so I'm thinking it's nice but it's not clear you know like it seems like as you say it could have as easily been continuous or a different period I mean I presume it”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Is a layer two, a different kind of layer two that can hold not just Bitcoin, but also stable coins like Tether and other instruments like the BMN, the Blockstream Mining Note, we were talking about, that's a liquid asset. And so users can use it as a wallet, as a way to transact peer-to-peer, even doc swaps, peer-to-peer, store the assets in a hardware wallet. So it has a Bitcoin-like experience, but it also is faster for exchange to go from Cold Wallet to exchange and be ready to trade within a couple of minutes. And that can be important with volatility that you need to add more collateral if you have a margin position to avoid liquidation. By the way, the price is back at 50,000, I see. So that's, and you also get confidentiality because Liquid has confidentiality.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You've had a big credit line, so you don't even need a credit line. Some people had credit lines between exchanges and things like that. So if you have a lightning channel, you don't even need the credit, right? You can just net it out as the balance moves during the day of users net paying wallet users on one platform or the other. So I think people from the technology sector will tend to, not your keys, not your coins. And obviously, I think that's a very good advice because there is custody risk in this space and it has been people and it's not all in the past. There's the Mt. Gox, but it was news in Turkey just this week that was the exchange seems to have gone offline and funds are not withdrawable. So it happens. So yeah, I think that it would be good to see more lightning. It's the same kind of thing with Liquid as well because that is a technology that”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“They also give updates less prominently about delistings because they fall out of favor after a bit and they don't want thousands of them there being something like 9,000 coins at the moment. So I think it's like technology inertia is the problem. But you mentioned another one, which was the cash app. So basically retail wallet-like experience where the coins are in custody typically, but you can take them out and they are able then to pay a user-to-user in-platform. And some of the exchanges do that too, or withdraw the coins. So obviously it would be nice if more platforms like that use lightning. And in a way that's kind of what Lightning can do very well is it can give you the same kind of scalability almost as a platform like that while having less trust. So you can net people out in fairly real time or net between platforms too.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“They're focused on scaling the trading engine, adding more support staff to bring in more users, or adding altcoins and DeFi products and things like that, right? So if you log onto many of these exchanges or you get an email update every week or so, and there'll be half a dozen new coins. So that is consuming engineering resources. And regardless of your views about the investability of non-Bitcoin coins, they are for the exchanges it's actually, you know, they make money, but it's a competitive ecosystem. If you don't stay at the top of your game, you'll start to lose liquidity to other exchanges. And that's not good. If you're an exchange, so chasing new coins is a way to get a little increment of extra liquidity. Most of liquidity is in Bitcoin, most of volumes in Bitcoin. So it's only an increment.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Now, which is cool. I was actually more excited about exchange lightning integration for sort of retail broker exchanges where just buy Bitcoin now user experience because it would give you a way to top up a lightning wallet, which would make it into a more of a circular economy. So when the merchant, I mean, generally speaking, the users are buying things, right? So they're either paying each other, which will work fine, or they're buying things from merchants. And if the merchants, so all the money is going to pile up on the merchant end of the channel, and then they're going to close it. And so if the merchant goes to the exchange and sells, the exchange can basically pay them to send the money back to the user on average. And then you get a nice circular economy. So it's been a bit of an uptick in exchanges doing that. But they're busy with other stuff, you know, so when the market gets crazy.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And secondly, at least for the exchange trading part of it, and I know you were talking about retail payments there, come back to that, but for the exchange trading part, the exchanges make most of their money from the bigger traders. And so if they have to pay a 10 cent transaction fee or a $1 or $10, that doesn't really change their trade because they're maybe paying 10 or 20 basis points on the trade, and that's far more money than the deposit. And the traders are also impatient. So when they want to take a trade, they want to take a trade. So they'll look at what their current fee rates are and they'll double it just to be sure. So they'll tend to push the fees up. So I think most of the high fees are due to traders. And there are multiple things the platforms could do about it, but they tend to be a year or two behind a curve in upgrading it. Eventually they get there and you start to see more exchanges integrate lightning as well.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Claims and does appear to have a quite hyper signature transactions, you could tell because their site went down and then the SegWit ratio shot up for a while and then they came back online. So we believe it. And they've recently announced that they're finally in 2021 about to start rolling that out across their different wallet architectures. And they're not alone, right? There were many, many platforms that took a year or two to integrate SegWit. And it's extremely simple thing to do. I think that a developer with the right skill set could get it done presumably in a maximum of a week or something. So you might wonder why are they not incentivized to reduce the transaction fees? And the answer is typically there's two incentive problems. One is that the customer pays the fees. They don't, so not their problem.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so we have some And I think that there is generally a bit of a lag in technology adoption in this space, not just with Lightning, but with, for example, the network upgrade. So Plan B mentioned a fork drama a few years ago. And that was about a network upgrade. Well, it probably wasn't really about the SegWit feature, but some other kind of scale discussion, in fact. In any case, the SegWit technology effectively increased the network capacity by two to three times, but only if you used it. So for each person that opted in, it would increase capacity. But even today, the SegWit adoption rates are not 100%. They're, you know, maybe 60 plus percent. And that is because there are popular wallets like blockchain info is...”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Higher yield on the constructions we were just talking about. So if you're interested in the yield but you're worried about the platform risk, go to hoddle hoddle and then it's market set. So you set your own interest rates and durations and see what rate will get bought. And there seems to be an excess of borrowers. The rates are fairly high as it is. But it's a way to insulate a risk because there's no platform default risk basically, right? So there are people probably arbitrage in that who are borrowing on there and then relending or using it as leverage, conventional leverage, but cheaper than the exchange leverage or on exchanges that don't have in on platform leverage.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Your funds could be at risk, even though you're not Bitcoin exposed, your dollar exposed to the platform, right? And so there are other ways to kind of reduce that risk and maybe give up some of the, reduce the default risk and give up potentially a little bit of the interest rate upside. And the main one I see for that is hoddle, hoddle, which is a way to lend dollars. And it uses Bitcoin as collateral, but in a direct way so as the lender, the coins are held in a multisig and you have one of the keys and you can see that the collateral's not moving, basically. And so there's no unsecured relending behind it. You're getting a matched interest rate that's coming from the borrower. And my impression is probably a lot of these borrowers are actually using it as margin to trade or turning around and collecting this like.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Well, I mean, I'm supposing they won't have visibility into that because they'll be lending to a fund and the fund will, you know, maybe to get an idea of the risk profile before they lend to the fund, they'll ask them if the track record of their traders and they'll say, no, this person was on the trading desk here or something like that. And approximately what the strategy is. Now, they may not want to describe their strategy because it's proprietary information, right? So that may be somewhat uncontrolled, but diversified risk. But there are other lending platforms. And this kind of risk applies to some of the ways to generate US dollar return too, which is if you are providing margin lending, you're exposed to a platform risk. If you are using the long short strategy, which is a variant of the future buy spot, sell future. So it's a variant of that. If that platform has an impairment, you”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Term options, for example, right? And if they have a 24x7 trading shop and they've got experienced traders, they can probably make a yield above what they can borrow Bitcoin for. But everything has risk”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That with a smaller allocation, but I know there are people who are looking at the interest rates. Of course, there's a bit of a race to the bottom phenomena where you can achieve as a lending platform like this, you can achieve a higher rate behind it by being more aggressive, lending to people with lower credit risk and worse credit risk. And so then you offer a higher rate and attract the users. So if they're sitting there kind of one-upping each other, the actual risk is creeping up. And we might eventually see a Mt. Gox-like incident where one of the lending platforms becomes insolvent because the hedge funds being probably small startups themselves that are prop trading shops effectively gets to a aggressive with their strategies. Of course, there are perfectly valid ways for these funds to create a yield. For example, trading a short”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“ONEP is going to borrow off them. And who are they lending to? If you listen to their pitches and there are a number of podcasts out there where they've explained approximately how they do it, they are trying to manage the risk by diversifying. In some cases, they claim to stand between so that they will absorb the first loss if they've got 20 different people they're lending to and one of them becomes insolvent, they'll cover that until they can't. And of course, they try to analyze, like know who they're lending to. Is the credit rating good? Maybe they don't have a credit rating ask around. There's a word on the street that these guys have got experienced traders and they're trustworthy. But, you know, of course, the diversification is better than not diversification. And standing between is good until the lending platform becomes insolvent. So I tend to not do that or to be careful about doing that or to”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“What do the three of us think about Bitcoin interest products? And I think that they typically involve custody risk and to generate a Bitcoin yield. I mean, if you look on platforms that have trading margin lending market for traders to use collateral, like Bitfinix, the lending rates on Bitcoin are extremely low, like below half a percent. And so when people are there are a number of companies that are offering five and higher percent points on Bitcoin, maybe with teaser rates. But, you know, there are people offering relatively high rates on Bitcoin. And certainly for people who are, most of their portfolio or net worth is in Bitcoin, then getting any kind of interest rate on Bitcoin is attractive to them. So I think really what's going on though is behind all these products that are generating interest, they have to do unsecured lending.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And certainly some of the exchanges that infamously crash underload, which is very annoying. That's a reason to switch exchanges, I would say. If you can't trade when it's a key point, what's the point of trading on that platform? Because it could burn you at the one time you want to trade. So another question that some people asked, talking about”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think people would also look at high yields and ask, is that too good to be true question? What's going on for that to be the case? And one thing that would deter them is exchange custody risk because a lot of the exchanges are effectively startups. What's their solvency like? Will they become insolvent due to a mess up or a rapid price movement, which can happen with derivatives, right? Something like they're all side bets. and they have an insurance fund. Sometimes the price moves too quickly for them to calculate things properly. And do you have to socialize it? And so they got a fund, an insurance fund that takes it first. So there is platform risk in some of these things. And their startups, they're immature platforms, so they're not necessarily the same grid as the New York Stock Exchange or CME or something like that that has a lot of rock solid trading platforms.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Saying we don't know what's going to happen, obviously, but the way the market's pricing it, you could argue that it's underpriced. So anyway, it's interesting. And of course, then they've got the $400,000 at the end of December 2022 priced between, spread between $4,400 bid and $6,000. So it's not that much more expensive, but it's a loftier target.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Selling these, but when I was looking at them and comparing it to Bitcoin and Bitcoin yield strategies, I started to think it's mispriced because, and that you should possibly be buying them, which is a curious phenomenon, just because if the cost of the call option, so let's say it's going to cost you $4,000 to buy it, and that's less than as a percentage of the current Bitcoin price when Bitcoin is $60,000 or something, it's six or something percent. And if you can achieve that return on Bitcoin yield, then interest is better. You've still got the coins at the end, right? So that means this option is cheap and you should buy it. And so if that's correct, that arguably is saying that $200,000 is what the market”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Of this year Can collect Thousand doors And it's kind of like writing a limit order and putting it on the exchange and not being able to cancel it. And somebody's going to pay you for that You get the 4000 now. Bitcoin never reaches 200,000 this year keep the It reaches 200,000, you're forced to sell it and pay the upside above 200,000 to the person who bought the call option, but you've still got the 200,000.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Of other thing you can look at. Market direction. Engage people's future. Expectations is the option market. So for example, Ledger X. I just pulled it up and They introduced a $200,000 call option for the end of this year a little bit ago. It used to top out $100,000, but since the price of Bitcoin is up, they've $200,000, and there looks to be quite a lot of open interest for a 200,000 cool option interview. Ask spread between 3200 and 4000. I think a big part of that spread is actually the Commission structure on the exchange, it's like a 15% or something. It's basically saying”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I'm just curious because people have looked at different metrics like M2 money supply inflation, how much of the US dollars in existence were printed in the last 12 months, and actually even the headline consumer price indexes are under control, people are just empirically, I think Michael Saylor posted rates of prices increases on 20 top commodities, lumber and different things, and they're all up double digit percentages. So maybe people who are putting assets to work at 2% are actually losing 10 or 15%. And the people getting 20 to 30 percent on these yield strategies are making a real return above the actual inflation rate. So you never know the actual inflation rate until the dust is settled afterwards, really.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Think it's like the free market interest rate, because people have been talking about real asset price inflation with all the money printing and the market rates are set by monetary targeted by monetary policy commissions are setting the prime rate or the base rate. Free market, right? Because just people pay what they want to pay.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Demand is coming from some of the demand is coming from people that want to buy bitcoin. Mostly Bit Obviously, it's risky Wouldn't necessarily recommend”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Cheaper leverage, and you can deposit the collateral into the platform itself. So, of course, they can. Safely do it. I mean, I think what CMA is doing is They will liquidate you if you go too close to that 50 line. The other platforms can let you get within half a percent of a line because as long as you can... It doesn't impact the exchange. And of course, people doing these High leveraged things They're taking Typically, they are Stop losses really close above and below, right? Particularly below Know if they are. A 20x long, then they probably got to stop. Far below They put a small position size on that will liquidate in isolation. So 20 times. an implied 5% drop liquidation minus a bit of wiggle room because there's a buffer between you know there's another half percent on top so something in that order so maybe 19.5 percent”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And I think that may be what's complicating the CME situation because I think you have to put up quite a lot of collateral, maybe 50%, if I recall. And that collateral can't be the Bitcoin that you bought to the cash and carry because they don't have a way to deposit Bitcoin on there. So you need to use some other collateral. Let's say you've got a share portfolio and you can access CME through, let's say interactive brokers. I'm not sure if they have it, but say you have that and you have some stocks. You can use them or cash, presumably as a collateral, but that's going to limit what you can do because the Bitcoin Is actually collateralizing the trade. Off balance sheet, right? It's unrecognized. Limits the Access to that cache and paratrade where the other platforms have effectively”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I guess the US is a more complicated, on a personal basis I'm looking at it from a European point of view, so the same outlook as Plan B, but Blockstream is Canadian parent company. But we do have a subsidiary in the US. So it is something that you see that basically I think the exchanges defensively would sooner not have jurisdictions that have a complicated financial regulations. and they don't want to trip over the fine print of some rules. And so the defensive thing is to just say it where some will are, I mean, there are some which are US but not New York because New York introduced a bit license which was more ERS than the general US rules. I think the rates are higher as well on venues that let you use Bitcoin as collateral.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And can get silly at times in a very short period where there's a rapid price movement, basically all the liquidity on the platform will get used up right down to kind of half a percent a day kind of rates or crazy rate, not sustainable, but it averages out. So it will be lower.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You know, a one trillion market cap to a two trillion, it can absorb more money because somebody who is 50% long or two times long is going to tie up more capital doing that. They still have the same number of coins they're doing it with. And so that can absorb more US dollars and euros. And then it just keeps going and absorbs more and more money. So I'm interested to see how long that lasts. Of course, of course, these rates are basically calculated typically every eight hours or well, it depends on the type of platform. I think the CME thing is you're buying a future so you know the price, you know, the premium. And it's like a three month or whatever the term is. So you've got your trade locked in and you just wait for maturity. But some of the crypto exchange leverage platforms are calculating perpetual future funding rates and charging them every eight hours, paying them out every day. It varies a bit per platform. And those rates are highly variable.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“To people that want to either short term trade or hold a long position, a lower leverage long position for three or six months or something like that. So it's just providing liquidity to them. And the combined things are both positive for price. And so if the price is going up, because one worry is like, what's the feedback loop? Eventually, I'll worry, but if you're collecting yield, this would be a worry, is that eventually more players bring they're currently collecting 1%, 2% or zero or negative, depending on the term, in the regular market, and they will come into the system and there'll be so much liquidity that the premium will drop a lot. But I think the thing that makes it potentially sort of perpetuating is that because both of those factors locking up Bitcoins and people buying, taking Bitcoins of exchanges are pushing up the price, at higher price, the Bitcoin ecosystem goes from”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Are more long term, like they'll hold that position. I mean, the people have been holding those positions since December, right? For example, obviously they're giving away a fairly high premium to people that are lending the dollars in effect, but they're on the winning side of that balance of profit at the moment until it changes. So I think the other thing that's interesting is the feedback loop, because as Plan B said, the fact that people are having to lock up Bitcoins to do this cash and carry trade so they're going to buy physical Bitcoin and sell the future, they are having to hold Bitcoin and they are potentially completely Bitcoin neutral. So we'll bring in people who are not yet in a Bitcoin ecosystem, don't have a convicted buyer of Bitcoin. But this is a way to earn an attractive return. And they're providing liquidity.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I'm fascinated by the fact that there's some kind of positive feedback loop between these different activities. So I would say also, though, as well as the sort of degenerate traders, the 10 times people who are often taking very short-term positions, minutes, hours, days, but not very long, they're also kind of longer-term holders or people who will take a much lower leverage like 50% leverage or two times leverage. So the liquidation level is maybe $2,500, $30,000. They feel comfortable with that. They put an allocation in. They end up paying a rate, but in a bull market, that can pay off for them. So I wouldn't encourage people to do it because if it makes you nervous, then you're going to make bad decisions and it has risk if you don't manage it properly. But there are people that will do that who”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Going to be more confident because I have the impression that institutional buyers and high net worth individuals are taking opportunities of temporary pullbacks and buying and taking them off exchange. So then I'll buy it going down, assuming that they will too. And so it's kind of a neutral cycle of people trading for a variety of compatible reasons.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I just tend to look at it that, you know, in terms of people looking at the current market, I mean, I'm not remotely phased, just, you know, buying some more and evening out the volatility so people say, hey, Adam, how come you're not all in? Where are you getting the money to buy coins from? Well, I have a dollar allocation and I'm just profiting from people's lack of confidence, lack of conviction. So if they panic self-serve, I'll buy them. And then when it's, you know, when it's back to around where it was before, I'll sell what I bought and keep the profit in Bitcoin and do it again. So I think if enough people do that, it provides a bit of price support and distributed market making or something. And of course, there's kind of mutual reflexivity, right? That different people having confidence for varied reasons kind of support each other, right?”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“The price during the previous two foot halving periods and then drew a kind of average through the middle of it. So you've got a nice orange. So anyway, it shows us being about in the middle. So we're about halfway between the price increase this far into post halving period. We're sort of right in the middle of it having been higher in one of those previous periods and lower in the other period. So we're sort of tracking in the middle of it to the extent that you could infer anything from that. So I think that's kind of interesting.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT