Ep 566: Predictions About Bitcoin

by Natalie Pyles on October 19, 2017

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Most people go through life making the same mistakes at age 60 that they made at age 20. It’s astounding and even discouraging, but unfortunately, it’s true. And some people structure their lives so they can succeed in one area while acting out internal conflicts in another area.

In Episode 565 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles explore the pitfall of self-destruction and how many traders get caught in this downward spiral. Rob says that 75 percent of experienced traders are struggling with self-destructiveness. Join us to learn how to escape the self-destruction cycle!

Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes, and please leave us a review!

Links for this episode:

Subscribe to Rob’s YouTube channel here: https://youtube.com/robbooker

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

Trader Interviews.com

Jason’s movie podcasts:
http://moviepodcast.network/ – A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.


Full Episode Transcript:

Rob Booker: Mr. Pyles.
Jason Pyles: Hey, Rob.
Rob Booker: Did you know that four years ago this Christmas it was a very Bitcoin Christmas?
Jason Pyles: I remember that Christmas.
Rob Booker: Episode 214 of The Traders Podcast featured a conversation about Bitcoin, and then episode 224 featured a conversation about Bitcoin and Tesla Motors and some other stuff. Four years ago in one or the other of those episodes, I think we talked about Bitcoin at some point in time, at some day, would travel all the way to $10,000 or even $20,000.
Jason Pyles: I remember that very Bitcoin Christmas. I think if I’m not mistaken, either that was going to release on Christmas Eve or we actually recorded it Christmas Eve morning, and so I have fond memories of this, yes.
Rob Booker: Yeah, I do too, especially of those episodes. Back in 2013, I can’t even go back this far on my Bitcoin charts right now. I can’t even go that far back. After that time, Bitcoin went up and down, sideways. It went down again as far as … it halved in value at that time. It dropped precipitously in value. It went down to 200, then it hovered around $200, $250, $400 or whatever, and I have a friend and a friend of the show that around the time that Bitcoin was still trading in the $100-$200 area put his life savings into Bitcoin, Jason.
Jason Pyles: Wow, okay.
Rob Booker: Not because of the podcast, but put life savings into Bitcoin, and then started a business that basically ended up handing him a 1,000 … it was so many Bitcoins I can’t remember anymore. 2,000 Bitcoins? A lot of Bitcoins. Today as we record this episode, Bitcoin has now reached $5,800 per Bitcoin, is trading at $5,500 per Bitcoin right now, and all of this movement has happened this year. All of it, from $700 to $5,800, the big jump happened this year.
I just want to say two things: Number one, everyone should listen to us, because it only takes about four years for stuff that we say to come true. When Facebook IPO’ed, we did a podcast and we talked about it, and I said Facebook will be $100 a share stock, and we had people write us and tell us that we were stupid and that we were crazy. We had a lot of people tell us that we were insane. Today Facebook is trading at $172 a share, and it will probably fall from there, but …
Jason Pyles: Right.
Rob Booker: Still the same, that’s an extraordinary move. Anyway, the point that I want to make is that Bitcoin is on this run, and everybody’s calling for the end of it, and everybody’s talking about how this is a bubble, and it is a bubble. It is a frothy bubble, and it is insane. It is crazy, but it’s for real. This is really happening, and every time you think that a trend is going to stop, it just keeps going. Trends will go a lot farther for a lot longer than we think they will. It just happens.
Jason Pyles: That’s amazing. One question about Bitcoin, Rob, and I’m sorry if I reveal my ignorance to everyone here, but do you think Bitcoin has had this kind of a run and this ride because digital technology and the world of the internet itself is so insulated? I don’t know if that’s the word I’m looking for, but it just seems like a very secure … the future of it just seems like a very secure place to go.
Rob Booker: There are a couple reasons, I think, and I’m going to do my best here. This wasn’t always true; however, it’s really hard to hack the Bitcoin or trace the route of transactions in Bitcoin, so if you want to hold a bunch of Bitcoin and then you want to spend that Bitcoin or you want to move it somewhere, no one’s really going to know it’s yours. You’re going to know it’s yours, and you’re going to have a unique identifier. That’s number one. Number two, all transactions on the network are peer to peer, so the entire network is supporting the transaction log of all the Bitcoins. So there’s an incredibly secure process for verifying and processing transactions that’s not instantaneous but is verifiable and trustable instantaneously.
That is really appealing in a world where the entire financial system is really easy to hack, and people are very suspicious of it. Bitcoin is, on the other hand, a complete fiction. It is a completely made up, absolutely made up coin. It is no different than US dollars. US dollars are backed by the full faith and credit of the United States government, which means as much as you want it to mean. And the value of a dollar can change, and so can the value of a Bitcoin. The value of a Bitcoin is really just what the collection of people who are holding Bitcoins, or who want to hold Bitcoins, think it is. You can say Bitcoin is worthless and doesn’t have any underlying value, but that doesn’t really make it any different than any currency in the world today.
Jason Pyles: That’s amazing.
Rob Booker: It is really amazing.
Jason Pyles: It’s just fascinating. It’s like, “Hey, everybody, let’s across these clouds, and just because we believe they’re there, they will support us.” It’s just amazing to me.
Rob Booker: Yeah, right, it is. The insular nature, or whatever you want to call it, of Silicon Valley and the tech industry in general perpetuates this. There’s confirmation bias. Bitcoin is amazing, and you say that to your friend who thinks that Bitcoin is amazing, and then your friend says, “Yes, Bitcoin is amazing.” And then you both go out and you buy more Bitcoin, and you’re like, “Yeah, we’re amazing.” You don’t really ever have to hear the counterargument. I’m not real familiar with any credible counterarguments right now. Four years ago when we talked about this, I said that what a lot of people think ought to be happening with gold is going to happen with Bitcoin, and that’s played out to be absolutely true, that Bitcoin has been the one that has moved in response to the fact that people don’t trust the international financial system anymore. They don’t trust it anymore.
Four years ago when we were podcasting, gold was trading around $1,300. Guess where gold is trading now? $1,200. It’s basically gone sideways over that same amount of time, and Bitcoin has gone straight up. The point is this, that when Donald Trump was elected I said he’s going to be elected President, there’s no way he’s going to lose, and then I said the dollar’s going to tank and gold’s going to shoot up to $1,400 and then $1,900 an ounce. None of that … the financial side of that didn’t happen. The Bitcoin side of it did. And what the price of Bitcoin is reflecting is a distrust in the political systems of the day, and plain and simple a place where people can go off-grid with their money.
Gold really doesn’t represent that. If you want to store gold in your house, it represents that, but Bitcoin can be stored securely and privately, and almost no one is ever going to know. And eventually you’re going to be able to spend it. On top of everything else, eventually you’re going to be able to spend it too. At some point in time, Amazon’s going to accept Bitcoin. It’s going to happen, and when that happens, that’s where Bitcoin goes to 10,000.
The other side of this is that China is just filled with miners, companies that are building giant warehouses and water-cooled computers where they are mining Bitcoins, and when China says it can’t be done anymore, that’s going to go someplace else. Someone else is going to do it. This trend, like all other trends, will last longer and go farther than people think it will, and it will have deep corrections and significant problems, but it’s hard for me to imagine a world in which it goes away, because of its nature as a private peer to peer transaction network that people will depend on in the face of political and economic uncertainty.
Anyway, Bitcoin is going up, the stock market is going up. They’re both what you would call risk-based assets, but if the stock market takes a significant drop and people run out of the stock market, I don’t know what will happen to Bitcoin. I imagine there would be a correction, but I imagine that Bitcoin is becoming more and more the new flight to safety. Now it’s too expensive for a lot of people to get involved. It’s kind of sad, Jason. But we did do a podcast long ago about it, so I feel like we’ve done the right thing there.
Jason Pyles: Mm-hmm. Yeah.
Rob Booker: And gold probably is … I mean, I was early but I don’t think I was wrong. At some point in the Trump presidency, love him or hate him, gold is going to rise to $1,900 an ounce. I guarantee it. If not to all-time highs. I guarantee it. Because Bitcoin is so expensive right now and there’s just no chance I’m going to buy Bitcoin at these levels, my thing is I’m now looking at ways to buy the gold ETF and have some exposure to that, because although it won’t go as far and it’s not going to double in value necessarily, I think it really in times of uncertainty and political strife and whatnot, it really will be one of the safest places to go.
Jason Pyles: Mm-hmm. Nice.
Rob Booker: All right, so do we have anything in the mailbag?
Jason Pyles: We sure do, Rob. Yeah, we got a text from… let’s see, this is from is it Bama Garrett. It says, “Hey, Rob. Bama Garrett here. I hope all is well with you and your family. I’ve told you previously that I listen to every episode of The Traders Podcast twice, well all the ones prior to the reboot. Anyway, the latest episode reminded me of episode 211 where you said, ‘Peace comes from the doing. The unhappiness/anxiety comes from the wanting.’ That’s so true, and it goes hand in hand with what you were saying about just putting in the time and not wanting everything right away. I’m happy to report that I’ve been trading stocks live since February 2016 and just recently have crawled out of the negative, thanks to a $2,300 September, and I feel that I have turned a corner. I’ve been trading only one system for probably about 14 months of the 18 that I’ve been trading, and I have tracked every trade via a Profit.ly. My system is solely focused on the stocks that have missed three or more daily pivots, using Paladino’s brilliant missed pivot scans, and distilled further with Nox D and 5 RSI.”
And then he says, “I hope to meet you soon. Ever since you had to go and meet your now wife the weekend we were supposed to catch the ‘Bama game, I have wanted to meet you. Thanks for all you do and God bless.”
Rob Booker: The story behind that, Jason, is that the weekend that Garrett from Alabama had bought us tickets to go see the University of Alabama play in Tuscaloosa … I think that’s where they play … go to a college football game, to the best college football team in the United States at the time, and still is today, I had an invitation to go see who is now my wife for the weekend. I just said to Garrett, I said, “Alabama will play more games, but I may never get another chance …”
Jason Pyles: That’s amazing.
Rob Booker: “… to date this woman, so I am going out to see my …” Because I kind of knew I wanted to marry her too. I mean, it was pretty early on.
Jason Pyles: It sounds like you certainly made the right decision, but I think you owe Bama Garrett a game, it sounds like, Rob. Just saying.
Rob Booker: I do owe him a game, that’s true. That’s great. Appreciate him. If we can stop there and come back to the mailbag next episode, I have a couple announcements to make.
Jason Pyles: Let’s do that.
Rob Booker: All right. Everyone’s asking us how they can easily get the archive of all the episodes of The Traders Podcast, and it’s not easy to do. For reasons of space and time and the time-space continuum vortex, if we plug all 500+ episodes into iTunes, because our show notes are sizable and descriptive, it blows up the iTunes feed. So what we’ve done is if you … This is what I want you to do if you’re listening right now and you’re someplace that you can use your fingers and whatever else, and you’re at your computer, I want to ask you go to The Traders Podcast website, and that is TradersPodcast.com, and on the right hand side of the page on the navigation page, I will put up a link where you can download every episode in .mp3 form straight to your computer, and then you can load it into iTunes and sync it up with your phone. But you could just have all of those files, all of them, all the episodes right on your computer, and that makes it easy to listen to all of them.
We’ll never be able to count those downloads, Jason, which is really unfortunate. I wonder if there’s some way to count those downloads. I’m going to find a way. But anyway, we want you to have those episodes, so go to TradersPodcast.com, click on the right side of the page. This will be up for just a limited amount of time, because it’s going to cost us like $1,000 in bandwidth just to give so many people all the downloads, but we want you to have those episodes, so go there, check that out right now.
And then, Jason, while we’re talking about downloading a bunch of podcasts, are you going to go to the “Star Wars: The Last Jedi” the night it opens?
Jason Pyles: Well, it’s actually the very next morning is what it will be, the 16th I believe it is, or 17th.
Rob Booker: I can’t get tickets. I can’t get a ticket.
Jason Pyles: I know. I almost didn’t … I waited 12 hours, it was like seriously 12 hours, and I’m like, “Yeah, I’ll get them, it’s fine.” And almost all the seats were gone, and they were like, “You can sit in the front row.” And it’s like there’s no way I’m sitting in the front row for that movie, this terrible place. So anyway, I went around to theaters and I found a theater that happened to have two seats for my boy and me, and we got it. We got it.
Rob Booker: Oh, that’s awesome. Speaking of movies and where someone can hear your review of “The Force Awakens” and “Rogue One” and other Star Wars movies, where can they find that?
Jason Pyles: Yes, sir, that would be at MoviePodcastWeekly.com.
Rob Booker: Excellent. All part of the Movie Podcast Network?
Jason Pyles: Yes, sir. We got lots of different kinds of shows there, like western podcasts, sci-fi, horror, whatever you want.
Rob Booker: That’s so awesome. I love just the regular Movie Podcast Weekly. Highly recommended, friends.
Jason Pyles: Thank you.
Rob Booker: I’m Rob Booker, that’s Jason Pyles, the producer, and you’ve been listening to The Traders Podcast. We’ll see you next time.

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