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Billionaire Investor Chamath Makes His Wild Bitcoin Price Prediction

VIDEO TRANSCRIPT

I’ve always thought of Bitcoin as a very binary investment, whether it goes from eighty to eight thousand to six thousand to three thousand to thirty thousand. It just it doesn’t matter. This is either zero or it’s millions. Hey, what’s going on, guys? In the early days of Bitcoin, it has been labelled as schmuck insurance. But today, it’s something way more valuable. In this video, billionaire childbirth will make his bitcoin price call. And then I will explain the probability behind it. On February 2nd, 2008, once. This is where a downturn in the market began. Look at the date to twenty, twenty, twenty. Could this be a sign of another conspiracy? Well, that would be another video. Video says that the date stock market dropped by 35 percent from top to bottom within just four weeks. It’s slightly rebounded. But I think there is more downside to go. Crude oil dropped from $55 a barrel all the way under $20 a barrel. That’s a 63 percent plunge actually for the last few days. Crude oil had a nice rebound, but now is trading slightly under three dollars. That’s assault, 50 percent bounceback. As I mentioned in my previous video, I got some exposure to crude oil volatility when it was under $20 a barrel. And now I did not buy any future contracts, because if you expose yourself to future contracts, there are two things that you have to get correct. First is a track price of the underlying asset. And second is time, those two unknown variables decreasing my probabilities of making the profit. If you just expose yourself to the price, some factor is out of the picture. And it’s just a matter of time for this commodity to wear to its mean. Even precious metals such as silver took a big dive during this deflationary period. Silver dropped from its intolerance to below $12 per ounce. That’s a 33 percent drop. That’s quite what so-called a safe haven asset gold. On the other hand, didn’t drop that much. Now let’s take a look at Bitcoin. Bitcoin dropped from nine thousand six hundred dollars all the way under five thousand bucks. That’s around 50 percent decline. But then it also had a nice bounce-back of around 40 percent to the current price of six thousand eight hundred dollars. To be honest, guys, I do not know where bitcoin is going to be tomorrow and after that, nobody knows. But we can say with some precise probability where bitcoin might be in a few years from today. Therefore, they can prepare accordingly and restrict our portfolios. Currently, my two favourite YouTube channels on YouTube are The Real Vision and anti-New promptly on the podcast. They provide great quality content to the public. A few days ago Pompe Lianna made it through with billionaire Chan Math Blippy Tire. Sorry guys, I do not know how to pronounce his last name. And Pamplin? Ask him a nice question about the outlook on the bitcoin. Let’s take a look what exactly he had to say. This leads to bitcoin, right? You’re famous for calling it the schmuck insurance. I’m not going to say that we’re in this situation where the insurances are needed yet, but we’ve definitely headed that direction over a long period of time. How is your views on Bitcoin kind of changed over time? Have you bet your bitcoin so bitcoin or change and kind of portfolio allocation standpoint? So first of all, I think you said it exactly right. Which is that I think that this is the setup. Meaning? I think Bitcoin needed a moment like this for it to be relevant in 2003. Sorry, 2013. I bought a lot and at one point I think I had almost 5 percent of all bitcoins. My basis is about 80 bucks a coin. I’ve never bought more. Most of my bitcoin now sit with a company. And you know, they use it for trading purposes. They use it to run a bunch of other strategies. And I did that mostly for safety and security and peace of mind. I didn’t want to deal with it. I wanted to own equity in a business. That equity could be hedged, that equity could be taxed, structured advantageously. And then it allows them to run a big business which generates cash. And I can get a cash dividend stream. So I have not bought since I initially basically wrote that article for Bloomberg in 2013. My thoughts are the following right now. I think what you’re seeing is that it’s still a speculative instrument and it’s too speculative for it to be reliable. So if you’re going to make the case that you know it should replace fiat currency, well, one thing you have to look at is the volatility of the U.S. dollar. And you can’t replace it with something that’s 9 sigmas more volatile. It doesn’t work. And the reason it doesn’t work is that it’s too, again, going back to what markets are important. The only market that’s even more important than the debt markets are the currency markets. And what you see is enormous amounts of liquidity where 5 percent moves. So 500 basis point moves are newsworthy. Well, those 500 basis point moves in the absence of some massive exhaustion is that that take years to play up. And in that, there is a value because it allows more market participants to be active in that market so that they can use it as a critical pillar of how they run their business. But now all of a sudden, if you have 2000 basis point moves a half hour. You can’t effectively use it. And so what it does is it pushes it into this ghetto of day traders and speculators. And right now, that’s where we are, we’re in that ghetto and you need to get out. And the way that it gets out is that you need to flush the speculators and day traders out and you need to have still some basis of interest from long term holders and then you need to have it slowly look like the traditional infrastructure could really implode. So, again, I go back to we are driving slowly, but we are driving. Towards a top of a cliff. And then we’re going to drive much, much faster down that cliff or down that hill. And at the end of it is a huge brick wall. The way we avoid it is by pivoting to a resilient economy where we introduced inefficiency and cost and inflate our way out of it or debasement. The path dependence for Bitcoin is if it looks like the path to is likely, it will really emerge as a flight to safety. And over the next 10 years where this trajectory is going to take shape and it is a 10-year trajectory, you’ll have a lot of time to vector into it, to protect yourself and to hedge yourself. And I’ve always thought of Bitcoin as a very binary investment, whether it goes from eighty to eight thousand to six thousand to three thousand to thirteen thousand. It just it doesn’t matter. This is either zero or it’s millions. Because what it will do is it will create a quasi gold standard. It’ll create an index. Except instead of having to own gold where gold is owned by central banks, it is an instrument that has a value that’s determined by in between its participants and it’s owned by everybody. So maybe the correct way to say this is that it’s not gold, but in gold being Gold 2.0, which some people have used about the coin. What it does is it replaces the method of value transfer that you need for fiat money to be valuable. But that only happens if the U.S. dollar looks like it’s going to careen into this wall. So I think that’s the best. So the setup is here. So before there was no path dependence, meaning you’re speculating and not really hoping because, you know, if you were if you’re using schmuck insurance, as I was, you were kind of hoping it would never come in. But now, if the probability, you know, it was 1 percent, that that it would be valuable. Unfortunately, the probability is now probably like 5 or 10 percent. And there is a real chance by 2030. We don’t find a way to inflate our way out of this. And that the only way to break the back of deflation is essentially to create some quasi form of a gold standard. But it will be almost impossible to do that between governments and central banks. They’ll never agree on an instrument and will never agree on an exchange. But that bottoms up, people could decide to do it. And the minute that that happens, individuals and people, then it’s a done deal in one point. The math said that he owns around 5 percent of the entire bitcoin supply in circulation. Current bitcoin market cap is one hundred twenty-five billion dollars. Five percent of the total supply would be six-point to five billion dollars. That’s quite large an evaluation in terms of U.S. dollar and in terms of bitcoin, it will be slightly less than 1 million BTC outstanding. Wow, that’s a lot. And the other thing that I wanted to mention to you guys that you should stop measuring bitcoin in dollars. It’s way better to measure bitcoin in bitcoins or in Satoshi is because over time the dollar will lose its purchasing power because of inflation. Another very interesting point that was made by Shei Math that it does not matter if Bitcoin is these three thousand dollars, four thousand, seven thousand or even ten thousand bucks, it is zero or millions here. I can tell you for sure that this billionaire has a long term vision and it’s very important. Short term fluctuation doesn’t faze him. Let’s move on. Specifically, what I wanted to talk about today is probabilities and the risk-adjusted return. Let me give you a quick introduction to run the work, to put it simply. And the work is a random process that describes a path of successive failures or front steps. Markets are completely binary. Price can only move up or down. It does not move sideways. If you think it does move sideways, what it means that it just has low volatility but is still responsive to fluctuations. The current price of Bitcoin led just rounded up to seven thousand dollars for easier calculation. We have two directions up or down. Suppose it can go up and reach a thousand dollars in one period of time. We can define one period of time however we want. It can either be one day, one week or one month. It can also go down and drop to six thousand dollars in this same timeframe. Since it’s around the work and the probability of success is the same as the probability of failure, which is 50 50 does go to the next step. Let’s assume that next week we reach eight thousand dollars. And now it can go up and reach nine thousand dollars with a probability of 50 percent. And it also can’t go back down and reach seven thousand dollars with the same probability respectively. If the probability of success is the same as the probability of failure, it calls unbiased round the work. But if probabilities are different, it calls by strand the work. Let’s assume the probabilities are the same. And what are the chances that Bitcoin can reach from the current price of seven thousand dollars to nine thousand dollars in just two steps? It’s simple. One has multiplied by one half equals one over four. So a house once a 5 percent chance is that bitcoin can reach nine thousand dollars into steps. We also have twenty-five percent chances that bitcoin can drop to five thousand dollars in two steps respectively. But what if you change the odds of success? Suppose if if followed by a strand, the walk and the odds of the success is 80 percent and odds of failure is 20 percent. Those of you, when there are talks that this less the sum of probabilities is always at up to one or 100 percent. So now let’s ask the same question. What are the chances that bitcoin can reach from the current price of seven thousand dollars to nine thousand dollars in two steps? It’s simply zero points eight times zero point eight equals sixty-four percent. Our odds are now way better. It’s way better than 25 percent. But what are the chances that Bitcoin can reach that, say, twenty thousand dollars in 13 steps? That’s going to be zero points eight to the power. 13 equals 5.4 percent, which means we have only 5 percent chance. So Bitcoin reaches twenty thousand dollars in 13 steps. This is that very appealing, is it? At least that for me. So what can we do? We can make it more appealing. If we ignore short term fluctuations and focus on the long term vision, this is what basically chime method subconsciously without doing any math. He said that Bitcoin Kitty, there’d be zero or millions just for the same argument. Let’s say that bitcoin in two years can easily be zero or one hundred thousand. Suppose that two years is just one step. So from here, we can go from zero or one hundred thousand. That’s a good thing that bitcoin cannot go minus one hundred thousand unless if you’re a big risk taker and using ten times leverage. But even then you’d be the guy would go below zero, you would get a margin call and your position would be closed. If the chances are 50 50 and suppose that I invested $10000 for two years and I can make 100k or I can lose everything within 50 percent of success, I would take this bet every day. The risk-adjusted return is very appealing. The problem is that it’s no so many opportunities in the current financial market with such a blink rate of returns. What is your take away from here is to have a long term vision. Let me know what you guys think about Che met bitcoin price prediction. Personally, I really like it. Libya thoughts Nakama section below hit the thug button a subscribe.

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