Transcription
These are my comments on the United States Strategic Bitcoin Reserve. The Strategic Bitcoin Reserve was introduced by Senator Lummis at Bitcoin Nashville. At that point, the outcome of the election was uncertain. If it had been a split Congress, if it had not been a red wave, it would have been a challenge. This was unclear ten days ago, but today, you have a pro-Bitcoin White House, a pro-Bitcoin House of Representatives, and a pro-Bitcoin senator who has made it her mission to accomplish this. Her bill calls for a million Bitcoin to be purchased by the United States government over five years.
And there you have it from Michael Saylor; he's talking about Cindy Lummis and the work she's put in to get that bill. She did this before Trump was elected, and now the stars seem to be aligning. Could we see this Bitcoin Strategic Reserve sooner rather than later?
With that, what's happened to cryptocurrency? I'm Sean, coming back at you with another cryptocurrency video. Hey guys, sorry for the quick interruption, but if you're interested in trading MicroStrategy options or any other stock out there—Bitcoin, Solana, or any other crypto—you can now do that on Moomoo. If you sign up with our affiliate link, which we’ve pinned in the comment section and also in the description below, when you sign up and deposit any amount, you're going to receive up to 20 free stocks, and each one of these stocks could be valued at up to $22,000. So make sure to sign up with Moomoo and go get that free money!
Now, let's go ahead and get back to the video. To piggyback on that, if you guys are interested in getting free stuff—who doesn't like free stuff?—use this link right here to get your 20 free stocks, each valued at up to $2,000. Also, if you want to be part of the Bitcoin Bros club, we appreciate each and every one of you for your support. Join our community in the link below.
Getting straight into it today, our first update: the ECB interest rate cut to 3%. The European Central Bank has lowered its key interest rates by 25 basis points, making this its fourth rate cut of the year. This adjustment sets the deposit facility rate at 3%, the main refinancing rate at 3.15%, and the marginal lending facility at 3.4%. This decision reflects the ECB's response to inflation nearing the 2% target. So, the ECB is pre-cutting right before the Fed. Will the Fed have another cut?
Right here, PPI came in slightly above expectations. Pre-market barely moved, actually increasing the odds for a 25 basis point rate cut next week to 94%, which means it's a done deal. Look at the chart right here; you see there's a 90%—almost 95%—chance that we're going to get a 0.25 basis point cut, which is in line with what the ECB did. This is bullish for markets.
In other news, BlackRock is telling you that up to a 2% Bitcoin allocation is reasonable. Now, you're not worth $1 trillion like BlackRock; you don't have that many assets under management. So reassess your 2%. Your 2% might be 50%, 75%, or even 100%. Are you orange-pilled yet?
At the current time of this recording, Bitcoin is coming in at $101. What do we see? What do we anticipate? The $101 level is where we need to get above. As you see right here, we have previous supports and resistances at these levels. We haven't had a candle close above this level, so once we get a candle close, we're probably going to see the price go up to at least $107. If it happens over the next week, it could go up to almost $110. So that's going to be definitely bullish for Bitcoin and the rest of the crypto market. But the $101 level is a level to pay attention to, and we're sort of in this broadening channel here. As time progresses, this channel will keep going up to the right, but we want to get through this $101 level first.
Right now, you see we've tested this level once, twice, three, four, five times, and now this is the sixth time since December 5th. So over the past week, we've had six tests of this level. We need to get above this and hold. This is the daily chart, so once we get a daily close above this, we could actually come back down, retest, and then the fun starts again.
MicroStrategy, at the current time of this recording, is coming in over $400 at $402. You see we actually were up to $415 but had a little bit of a sell-off. So around the $400 range, we have a QQQ announcement happening tomorrow, which may cause some bullish momentum for the price action. But it got sort of pre-announced, so it's a pre-announcement to an announcement. The official announcement will be tomorrow, so pay attention there.
Looking at the price chart, what do we see? Check this out; this is the 12-hour chart. We showed you this downward channel. We hit our head once on this channel, and look what happened. We came up, and look, we came down. It's almost textbook; we came back from resistance to support, and this could just be a bump-and-run continuation going into that QQQ event. You want to be ready for what's coming.
Right now, these dips are for buying because you want to see what this target is for Bitcoin. Don't miss this. How much of what we're seeing today is due to the regulatory overhang on a lot of these names under the current administration? Now you have a new FTC chairperson. Is that playing a role in any respect? Dan Ives put out a note today saying Christmas comes early with the new head of the FTC for tech.
It's probably the best way to measure this is by watching what Bitcoin is doing because Bitcoin faced enormous regulatory burdens over the last few years. Now we have a White House that's embracing digital assets, a new SEC chairman, a new FTC chairman, and a new Commerce Secretary. I think these are actually being viewed as pro-business, reviving animal spirits.
But I think a good proxy is watching Bitcoin. Now, I'm going to have to pin you to a target again on Bitcoin because you've been among the most optimistic and outspoken about it for years, to be quite honest. So here we are above $100,000. What’s a legitimate target for 2025 for Bitcoin?
We think it's going to follow a similar halving cycle that we've seen in the past, which would imply something around $250,000 for Bitcoin in 2025. On top of that, we have a Trump put because Bitcoin is potentially a strategic reserve asset for the U.S. government.
And there we have Tom Lee. You heard it again: we could be getting a U.S. reserve for Bitcoin, but also a $250,000 Bitcoin price. So we mentioned MicroStrategy; we showed you this bump-and-run pattern, and we've talked about the MNAV and the premium and all that stuff in previous videos.
Ben Workman—if you don't know who this guy is, definitely follow him on Twitter. His followers have been blowing up. This guy drops alpha, and he's talking about where he sees the premium of MicroStrategy going for the rest of this cycle.
Let's hear from Ben: "I guess when I look at how I'm going to value MicroStrategy and the premium, the premium has been a moving target all the time. Quite frankly, one of the limiting factors to the premium is Saylor himself, right? Because they're using these products like the ATM and issuing the convertible bonds out there. They actually have an impact on how high that multiple goes.
I kind of look at it as you've got the camp that looks at the one times MNAV, right? Those are the people that are only looking at the value of the Bitcoin, but they're excluding the value of the capital markets activity. Right here, he's essentially creating a product playground for Wall Street capital, which is a huge amount of capital. That volatility is what those firms need to generate their returns.
So what you're trying to do mentally is value what is that worth? What is it worth to generate returns through a product like your equity or your bonds to billions of dollars of capital that's starved for returns these days? Right? There are very few companies that are providing a lot of returns in the markets these days. When you look through the S&P 500, most of the returns are coming from like seven of them.
So there's a starved for returns in their products. Now you've got someone offering them volatility through Bitcoin securitization into these bonds. What you're trying to do is value that customer's view on this, right? You've got to get yourself out of the consumer mindset or the retail mindset where we're all hyper-focused on the value of Bitcoin itself.
That's why one piece of this, what we're trying to value, is what is institutional capital returns worth to Wall Street? What's going to keep them coming back to the product that's going to keep giving MicroStrategy these favorable terms? That's going to allow them to continue to grow the scale of their operations, and that's a very hard thing to do.
I don't think there's a formula yet for that, and we're going to find out. We find out often when it comes to the blackout periods where MicroStrategy is not going to use the ATM leading into things like earnings. You might have a couple of weeks before earnings where they're not going to use the ATM at all, and they're not going to issue a new convertible bond during that period.
So what you have is essentially all the inorganic sale pressure come out of the market because they are the inorganic sales pressure. Once that selling pressure is out of the market, you start to get a sense of how the market actually values this company because now the price starts moving in that direction.
So if you look right before their last earnings, it started going straight up on a 45-degree angle. Then they did more convertible bond offerings; they went heavy on the ATM, right? He's running through the $21 billion he's got there, and so that becomes a limiting factor on how far that can expand.
I think that premium is going to stair-step for a while. I think that you might see it; it was in the threes. I think eventually he might lay off, and it might expand into the fours, and that'll kind of reset a floor where it'll bounce between four and three.
Now, there are a lot of people out there that think it's going to be 10, 20, or 30, and I'm not going to say that that's not going to happen. I don't know, but I do think that there's going to be a range that this is going to end up settling into eventually as people digest this strategy and these products that they're offering. So I'm kind of viewing it as falling somewhere between a two and a five and oscillating through there, depending on what Bitcoin's doing."