What They’re Not Telling You About BlackRock And Bitcoin – Lyn Alden

In this insightful video, we delve into the complexities of Bitcoin’s market dynamics, as explained by financial expert Lyn Alden. Covering key aspects such as the effects of Bitcoin halving, the role of liquidity, and the potential impact of ETFs on the crypto market, Alden offers a nuanced perspective on these critical factors. She also discusses the broader economic conditions surrounding Bitcoin’s halving events and the variability of their impacts. Additionally, Alden touches on the institutional investment behavior in the crypto space and the importance of understanding the slower decision-making process in traditional investment sectors. The video concludes with an exploration of the concentration of Bitcoin custody, the challenges of regulatory adaptation, and the ongoing issues surrounding privacy and self-custody in the evolving landscape of Bitcoin. This comprehensive analysis provides viewers with a deeper understanding of the current and future state of Bitcoin and its place in the global financial ecosystem.

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Everyone’s kind of focused on the having and things like that and of course that all matters the ETFs matter the having matters um the having doesn’t necessarily matter in the several months around the having you know bitcoin’s ongoing hardening is really important but if you look at prior bull runs um

There’s a lot of variability around the having and I would say in large part that’s because it’s actually liquidity that affected the timing more than just the having the having helps set up higher highs and higher lows because it’s you know how much Bitcoin is coming

To the market that has to be absorbed especially in a bare Market uh really matters but the actual timing uh you know three 3 months 6 months 12 months uh is in my opinion far more liquidity Driven Lynn Alden provides a nuanced view on bitcoin’s having emphasizing its significance beyond the immediate event as we approach the 2024 having industry experts argue that while it might challenge some miners the Bitcoin Network’s resilience is likely to Prevail this Viewpoint aligns with current reports indicating a bullish

Outlook for Bitcoin following the having historically coins enter circulation this scarcity mechanism has historically led to significant price movements but what’s equally important is the role of liquidity in shaping these outcomes as Alden points out the timing and impact of these market dynamics are nuanced and influenced by broader economic

Conditions if you’re passionate about understanding the intricacies of the cryptocurrency market be sure to subscribe and give us a thumbs up I I think the ETFs are going to be helpful you know people are debating whether or not they a sell the news event like you

Know a lot of people priced in the ETFs and is is the first quarter underwhelming certainly possible you know that that money doesn’t just pour in as quickly as people think one thing I would take the under on is people keep saying well what if you know uh you know

These tens of trillions dollars of pools of capital have a 5% allocation for example or 3% allocation and it’s like that’s not going to happen anytime soon most likely you know one one kind of description I’ve given is that it’s been known for a while that if you have a

Gold SL in your otherwise 6040 stock Bond portfolio it improves your risk adjusted returns because there are periods of time where both stocks and bonds don’t do well but gold does well so for example the 2000s decade or the 1970s decade um there are decades where

Just that that slice helps a lot and yet it’s a it’s still underallocation compared to what you’d expect from looking at those numbers now Bitcoin is like a rocket fuel version I mean if you look at that you know you know Nakamoto portfolio or other types of resources

That show what is adding a small slice of Bitcoin to your portfolio doe and it’s like astounding for risk adjusted returns so it should you know you’d think it would catch on quicker but some traditional pools of capital just take a long time to make investment decisions

Generally when someone you know a small business where the owner just has majority stake they can make very Swift decisions um there’s some publicly traded companies that are still a lot of the decisions still held by by the founder for example micro Strat stry they’re able to make quicker more decis

Type of decisions because they have that capability uh whereas you know firms that have a lot more spread out decision-making it can be a very long time to actually meaningfully adjust a portfolio strategy so I do think that the ETFs are going to be helpful maybe less so than people expect right away

But I’m I’m hopeful um I think the other thing that that could potentially derail it is a liquidity problem in 2024 or a a stagnation in liquidity it doesn’t have to be a liquidity crisis but it could be that you know you have just another stagnant liquidity situation so you have

Like six months of choppy liquidity choppy Bitcoin and it kind of lets out some of that consensus Steam and then then maybe you run in 2025 right so I I’m not trying to predict any of those scenarios like literally if if you if we look back at the end of the year if

Bitcoin has dipped into like you know the upper 30s or if it’s over if it’s already six figures neither of those scenarios would surprise me because it’s such a volatile asset and there’s so much marginal difference that can happen but that’s why instead I’ve been far more comfortable making two-year

Outlooks which is that I really don’t know what’s going to happen in 2024 but at least I feel like I have a higher conviction what’s going to happen with the combination of 2024 2025 so you absolutely could have a case where all these people are super bold up for 2024

And maybe what they expect to happen doesn’t gets all shifted back six to 12 months for example um I I think there’s a lot of scenarios like that so far we’ve not really seen any sign of distribution so you know when Bitcoin goes through you know kind

Of major bull runs normally some of those um older holders start to sell into that market strength you know maybe they want to rebalance maybe they want to consume you know now that now they can finally afford the house they wanted that they couldn’t afford before and so

You see some of that distribution as new buyers come in and that that process hasn’t even started yet uh based on any sort of chain analysis you look at so I I still think we’re very early in this structural bull run but I do think it’s

Important not to take a bull run for granted it’s not necessarily like owed to you uh just because the having’s happening uh or just because it’s it’s on that cycle now I think it it’s probably still likely over the next two years but it’s it is important to kind

Of manage your expectations and risk uh accordingly alden’s insights into ETFs highlight the gradual nature of institutional adoption in the CP crypto space the recent approval of Bitcoin spot ETFs marks a significant Milestone potentially ushering in a new era of liquidity and Market maturity this development is expected to attract both

Institutional and Retail investors bringing more stability to the market the introduction of ETFs is more than just a new investment vehicle it represents a shift in the perception and legitimacy of Bitcoin within the broader Financial ecosystem experts suggest that while ETFs will likely have an immediate impact on demand their long-term

Influence particularly in conjunction with the having could lead to profound Market changes as we monitor these developments it’s crucial to consider the broader implications for the market and individual investors I point out that the grayscale Bitcoin trust already has like half a million Bitcoin um and and so some of the concentration of

Custody risk that could happen from ETFs I would say have largely already been in place to some extent now the majority of Bitcoin are not held uh like that um they’re they’re more distributed which is a good thing but there are some of these big pools um that that could be

Kind of either price issues or confiscation issues at some point and that’s not something that’s going to going to form that’s something that’s already there um they’re already the kind of these big pools that are te technically capturable another thing I would say is that there’s a degree of

Inevitability to it which is to say that any large and liquid asset is likely to get an ETF for it and is likely to get Banks wanting to hold it uh either for themselves or for their customers so to the extent that Bitcoin was successful

It was always going to face this at one point it’s not like something that that can’t not be faced so the question is uh you know is Bitcoin itself designed in such a way that it’s ready for it I I think it is uh but that’s still another

Test it has to go through you know it had to get through like the block size War it had to get through some early bugs in the network it had to get through there are some countries that banned it and then like flip-flopped on the ban and there’s challenges along the

Way and I think this is another challenge that’s going to materialize so institutional liquidity has both a pro and a con one is the con is the obvious one which is you don’t really want a lot of Bitcoin in ETFs or in highly regulated silos that are capturable that

That’s the that’s the downside the upside is that more liquidity and more kind of automatic rebalancing of large pools of capital can help reduce the volatility to some extent which then can make it a better uh money for people that are using it non-custodial especially in developing countries uh

Because the if you ask people why don’t use Bitcoin you the number one is usually volatility they don’t understand it and it’s volatile uh and so to the extent that it becomes larger and more liquid and more kind of widely held uh that can actually then then incourage

More of those small self- custodial type of of buyers entry so I think that’s that’s number one you know the other one I think the biggest challenge is kind of that privacy aspect yeah where in order the government doesn’t REM if you have Bitcoin as long as it’s in a it’s in a

Silo uh the second one is okay you’re can custody it but they want to know you custody it and how much yeah and then the third one is they really don’t want private Bitcoin self- extoy to move around because that threatens their income tax model that threatens their

Control over kind of sanctions that that that kind of goes against the coure of the current system so they really don’t want that I think that’s kind of the the bigger the bigger fight that’s going to be had this decade is is basically that that you know price might be doing

Well um but that it’s not really kind of changing things as much as you think because it’s held back by some of those frictions um the good news there is that um so far it’s been very hard to enforce that right so for example you know Nigeria cut off Bitcoin from its banking

System and and uh they remained having one of the highest adoption rates in the world and specifically uh according to chainalysis had the highest peer-to-peer trading volume in the world because that’s that’s how they got around the the bank blockage and then we just saw uh in recent weeks Nigeria Central Bank

Is like reversing their decision to some extent they basically realizing that that their blanket ban is not working and instead they want to try to bring it back in and regulate a little bit which is basically way of saying we we kind of messed up we also saw India flip-flop on

This uh we might be seeing the process of Argentina uh you know because they they had you know done the similar thing where they didn’t make it illegal to own but they said okay Banks can’t uh you know get into involved in the space as much as they want even uh fintech

Companies that are not Banks still can’t get into it they did this kind of series of restrictions to try to slow the outflow from the peso but that’s obviously probably going to be somewhat different under the current Administration uh and so we’ve seen a number of countries kind of bounce

Around on trying to do that which is actually bullish because it shows how hard it is to do in the United States I do think that there’s going to be a lot of push back on privacy a lot of push back to maybe a lesser extent on self-

Custody and that’s where those legal challenges become important because you know kind of the the strength and weakness uh of countries like the US they have rule of law and so it’s not just they can just decide something and it just happens uh we’ve seen for example the SEC keeps losing court cases

Uh which is which is you know including you know kind of um blocking a spot Bitcoin ETF for longer than they normally would be able to do um but court cases have challenged that and so to the extent that the US government tries to Outlaw you know open-source non-custodial privacy techniques or

Tries to Outlaw self- custody um they open themselves to a plethora of lawsuits um that are pretty hard to defend against because basically saying it’s it’s a legal to you know keep a large number Hidden Lyn alden’s commentary on the concentration of Bitcoin custody and its potential risks is an essential consideration for

Investors as we see increasing institutional involvement it’s important to balance the benefits of this adoption with the core principles of decentralization and privacy that Bitcoin Advocates the crypto landscape is at a pivotal juncture the interplay between institutional adoption regulatory developments and technological advancements will shape the Market’s future as Alden suggests

This decade is crucial for cryptocurrencies not just in terms of price movements but for the foundational values of the blockchain technology thank you for joining us today on unscripted crypto remember to subscribe and like if you found this video informative stay tuned for more indepth analysis and insights into the world of cryptocurrencies