154: The Separation of Money from State
Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Tone Vays. Tone was on Consensus Network a couple of months back and that was right around the time when well I don’t know if it was a couple months it seems like time’s going on forever right now if you follow Bitcoin and cryptocurrencies in general but at that time Bitcoin was hanging out at around 6500 and everybody thought 6,000 was the bottom etc and Tone came on to talk about Bitcoin and he was just talking about it to the Consensus Network audience. I’m bringing them back today and I want to start from the beginning because this is going out to Wealth Formula Podcast as well. First of all Tone tell us a little bit about your background because you’re coming at this from a different approach I think than a lot of you know Bitcoin people which is that you come from a Wall Street background. Can you talk a little bit about that?
Tone: Sure. so I started out actually being a high school teacher in math and science and I didn’t like that so after one year of teaching people that didn’t want to be in my classroom I decided to make some money and signed up for a program and financial engineering not really know much about finance. I got a degree in financial engineer and started looking for about Wall Street and the work experience that’s also when I learned how to trade around the same time so I actually started trading first and like most traders that like I would say like almost all traders the first portfolio you start trading you end up kind of blowing it up by making too many stupid mistakes that happened to me though my mistakes and this is the really funny part is I ended up running out of money in my portfolio because I continued to short the real estate market and this was between 2006 going into 2007 and just ran money in my portfolio I need trade but I’m gonna take tonnage waiting Tone an eager connection eventually completely ran out of money so I had to go get a job and that job was actually at Bear Stearns as ironic as that sounds the company that blew up about nine months later because of the real estate crash right and that’s when I got absorbed by JP Morgan and I’ve worked in that industry it was actually a risk analysis industry for about nine years and but throughout that whole time I continued to trade I had a better job now I was able to build up another trading portfolio at this time around I was trading more profitably I eventually quit that job in 2015 with a combination of investing in some businesses trading my own portfolio and really enjoyed this Bitcoin thing at conferences and the end result is I now go around the world continue to speak at conferences I’m too busy to trade my portfolios so I’m taking a little bit of a break but I did start doing videos about trading and looking at the price and you were talking about the $6,500 area I was being made fun of for about three to four months. People are making fun of me because I kept saying six thousand is gonna break it’s gonna go down it’s gonna go down hard we’re gonna fall at least 50% and boom was making fun of me until we broke six thousand and it fell 50 percent in a week and after that people weren’t making fun of me as much anymore but I still make fun of the hair though. But anyway so now I go around the world speak at conferences. I start my own conferences now I did conference in u.s. in January my second conference is going to next week and Malta called Understanding Bitcoin and I teach people how to be better traders you know each of the mistakes that I used to make you know ten fifteen years ago when I started out teach people technical analysis teach them how to do chart reading and that’s pretty much what I’m up to these days.
Buck: So Tone, what was it about Bitcoin that got you so interested. And you’re clearly you know sort of not only your hardcore Bitcoin guy but you’re a Bitcoin maximalist. But let’s specifically what is it about Bitcoin that has got you so convinced that this is something?
Tone: This is actually a great question. If you can read my shirt and see if I can move up here. My shirt reads Unconfiscatable censorship resistant store of value and that is what got me interested and it’s actually in that order. The first time I ever heard about Bitcoin was from Max Keiser where he talked about it as being a savior for WikiLeaks in early early 2011 even before the Silk Road was launched and because WikiLeaks got cut off from a Visa MasterCard and PayPal and had to find a way to get donations in order to keep their servers running so that’s an example of censorship resistant value transfer but the second example of that was the Silk Road case now so crow didn’t really interest me that much I didn’t even know about it because that I wasn’t part of my life nor did I have a need for it. But what really got me interested was the word unconfiscatable. And I realized that bitcoin is the only uncomplicated asset humans have ever owned in our history when the Cyprus events happened of April 2013 when the European Union decided to just confiscate 50% of your money that was sitting there in a bank account above a hundred thousand euros and that’s when I realized that you need to have at least some of your wealth in something that is unconfiscatable and this concept of unconfiscatable it’s so hard for people to understand I’m saying like humans because like nothing in history whether it’s a human whether it’s an animal it doesn’t matter nothing you have ever owned has ever been unconfiscatable and the word didn’t even exist right it’s the word unconfiscatable is not in the dictionary about nine months ago I was able to get the dot-com unconfiscatable.com I have a conference called unconfiscatable this word just does not exist in the English language because we’ve never had and I think people realize this Bitcoin will really really change the world to me that is the most important property of Bitcoin but Bitcoin is also a store of value. What makes it a store of value is the fact that there will only be 21 million Bitcoin and while I’ve always gone back and forth in my economic career and understanding you know do we really need inflation how was the government doing monetary policy running an economy okay for the last hundred years look at all the global innovation we’ve had under easy money so it’s hard to deny that and look at how much wealth you know with the stock market if you if you everyone loves the point to gold like hey a gold coin would have bought you a suit in the year 1900 and advise you the same suit today that’s true but if in the year 1900 sold that gold coin put it in the Dow Jones we can probably hold multiple suit factories right now maybe even have maybe even have the money to buy almost every suit in the world. It’s hard to sometimes hard to argue years of my points together save it change underneath sound money like gold so I do believe bitcoin is a great store value and this property of 41 million Bitcoin and this coins unchangeable monetary policy is another thing that continues to attract hopefully other.
Buck: So Tone you know it brings me to another question I think which i think is a useful question to get perspective on which is in your view is Bitcoin money or is it a storage of value? Because it seems that even within the Bitcoin community you know you’ve got these guys who are on the Bitcoin cash and you know all that you know the other guys who are we’re trying to make this skill into something that you know that can make it something that would really be a daily use type of thing where it’s money or is it a storage of value the same way maybe you build a second layer on top of it and use Bitcoin as the quote-unquote gold standard and you have you know some kind of transactions on top of the blockchain and a second layer, ot that dissimilar to necessarily having like you know a dollar that was pegged to gold. What is it? In your view which is it or is it still to be determined?
Tone: No it’s both it’s both the second layer scaling of Bitcoin is nothing like dollar being backed by gold your second layer scaling of Bitcoin is still the transfer of Bitcoin it’s just now doesn’t settle to the Bitcoin blockchain until later on when you want to close the channel. So it’s not a comparison of dollars being backed by gold. It’s both but in order to be really good money you need to have the store of value property. I mean the Venezuelan currency is probably the best money we have in the world by the definition of the Bitcoin cash people and the big blockers the Venezuelan currency should be the best money in the world because as soon as you get your hands on the Venezuelan currency you want to immediately spend it because if you hold it for even a few hours it could significantly depreciate in value. So that’s not what you want from your currency you want to be able to save that currency if you want to save it and not only have it not go down and purchasing power but potentially go up in purchasing power. Now does that mean you will be less willing to spend it? The answer is sure you will be less willing to spend it if you have other crappier options to spend. But the moment you start earning a living in Bitcoin the only currency you can now spend is Bitcoin so if your Tone Vays you’re constantly trying to spend Bitcoin because that’s how I earn a living so that’s a huge misunderstanding. Of course it can be both and the dynamic goes back and forth there are instances where everybody wants to spend it when the value of Bitcoin goes up and there is a lot of hype around Bitcoin businesses want to start people in general are getting interested those people own businesses they want to suddenly start accepting Bitcoin also when Bitcoin goes up people that own Bitcoin are richer so they want to buy more things so they want to spend that Bitcoin on the flip side right now we’re what in the 14th month of the bear market 15th month of the bear market so right now it’s you know you don’t really want to spend that Bitcoin because you think it’s near the lows and a lot of there’s interest is dying out many of the businesses that start accepting Bitcoin a few years ago are now stopping accepting Bitcoin because no one is coming in and paying with it. And this is what I don’t understand when people say you have to incentivize people to spend your Bitcoin well the best incentive to spend the Bitcoin is inflation and that’s what the government does is that what you want? In fact other forms of cryptocurrency whether it’s Bitcoin cash the Bitcoin SV litecoin it doesn’t matter all these other cryptocurrencies are is useless inflation on top of Bitcoin. so if someone is gonna argue with me saying that litecoin has a future in our cryptocurrency world what they’re really saying is I believe in inflation and the government has been doing the right thing for the last hundred years I’m a believer in the Fed I want inflationary monetary policy and I will spend the money that is inflating the fastest so therefore you’ll be spending that light coin because you have no reason to hold on to it.
Buck: So you know you’re you’re clearly you know I think what you would call a Bitcoin maximalist for sure right and you’ve expressed your dislike distaste or disbelief rather in a number of projects even projects that I think a lot of people who would call fairly you know not exotic like for example etherium can you explain your perspective on this I look at some of these blockchain projects for example in the gaming world for example there’s an interesting one that I just think is an interesting project called world wide asset exchange and it’s solving fundamental problems that are unique to the world in that world right of non fungible you know I tomate cross-border trade and you know basically tokenizing virtual assets things like that isn’t there a role in for some of these projects you know other than just Bitcoin or if not why not?
Tone: Well they’re to me so let’s go back to the definition of a blockchain I’ve read the Satoshi white paper many times the word blockchain is never mentioned the word blockchain is a buzzword it was picked up from the code where Satoshi used the word blockchain in a comment describing the process of mining blocks with proof-of-work and attaching those blocks to one another forming a chain of blocks he called the blockchain. The reason why the word blockchain ever became popular is because some people didn’t like the association of Bitcoin to you know the gray market like the Silk Road or WikiLeaks or you know simple protection of your own money. So they clung to this word blockchain without understanding what the innovation that Satoshi invented. Satoshi invented an ability to solve the double spending problem in computers. Prior to Bitcoin every digital message every digital piece of data you ever sent was simply a copy of that data. With Bitcoin you’re able to actually send the data that’s all Bitcoin is the Bitcoin is the finite transfer digitally the moment the send button is hit digital data called bitcoins leave your electronic system whether it’s your computer your cell phone whatever your USB stick and it goes to another address that you have no control of and that is what makes it uncomfortable and censorship resistant. So if some company is telling you that well first of all that company if a company is telling you that they’re using a blockchain there are two fundamental things that you need to first investigate as a person listening to someone trying to sell you a blockchain. One of them is conceptual and the other one is technical and the conceptual side they need to convince you that a blockchain is needed that you need unconfiscatable censorship resistant value transfer. Let me tell you where it’s not needed. It’s not needed in say things like real estate property ownership because unless you want to accidentally delete the ownership of your property or you want to accidentally send the ownership of that property to your neighbor who now owns that property or you want some government official to input into the blockchain the fact that he now owns that property and you sold it to him and you treat that as unconfiscatable censorship resistant you are basically screwed with putting real estate on the blockchain okay. It is totally not useful for most things. The only time it’s useful is when you want to have full control of that digital data and more importantly it doesn’t have a physical form because if it has a physical form its confiscatable. If it’s confiscate about your blockchain is meaningless okay your real estate is confiscatable by someone with a bigger gun okay they can take that land from you the government can take that land from you having on a blockchain is meaningless you know if there was a blockchain 300 years ago in the USA and a Native American comes to you and your home where your family has now lived in for the last hundred years and says the blockchain says that I actually own this land what are you gonna do you’re gonna hand it over to him no you’re gonna say my family’s been taking care of this land for 100 years it’s now my land right like the blockchain doesn’t help you at all it’s totally useless. So that is the fundamental view of a blockchain. Now let’s talk about the technical view of a blockchain. To me the only blockchain that has proven itself to be functional and actually abide by these properties of being decentralized unconfiscatable censorship resistant is the Bitcoin blockchain. All other block chains just fail. They’re all in my mind centralized. So if someone is going to convince me or you that a blockchain is gonna revolutionize something anything right. The technical question you have to ask them is what blockchain are you talking about because if their answer is any blockchain other than Bitcoin I’m gonna call bullshit because ethereum is a centralized database that has already proven that they can reverse transactions and it is not unconfiscatable and very soon it’s not even going to be proof-of-work it’s gonna be some database proof of stake. So to me the fundamental side I can probably in 90 percent 90 95 percent of cases I will explain to our company why they don’t want they why they don’t need and don’t want the blockchain and even if they do need a blockchain if they’re not using the Bitcoin blockchain for their purpose they’re gonna find themselves in a lot of trouble because their blockchain is gonna hurt them in the long run more than help because it will turn into just another centralized database with all the disadvantages of a blockchain without any of the benefits. So that is now people seem to demonize people like me that are using science and logic to explain why bitcoin may be the only thing that will succeed and the other two extremes to quote my friend Giacomo Zuko you have the no coiner who thinks all block chains are useless including Bitcoin that is your Nouriel Roubini and many of the others and then you have somebody like Vitaly Butyrin or anyone else that believes in an alt coin who thinks that bitcoin is so useless and not revolutionary that they can sit down and in one hour create a better version and that is a complete misunderstanding of what bitcoin provides us.
Buck: Right so I think I think the misunderstanding of a lot of you know at least people what what you’re saying on what you’re saying is that Bitcoin as a Bitcoin maximalist you’re not saying that there are not situations in which a blockchain is not valuable for example you may have right now a very valuable project or idea but it’s being built on top of Ethereum you’re saying that okay well first prove to me that the project needs to or benefits from or has some increased efficiency and from using a blockchain and if you do that then build it on top of the Bitcoin blockchain is that accurate?
Tone: That is accurate and one of the reasons why Ethereum became so popular is that etherium did provide a use case for a blockchain. That use case was for all kinds of crazy ideas to separate common people from their money. That’s what the ICO boom was so 99% of every single ICO I’ve looked at I considered it a totally useless project and these people felt that they deserved millions of dollars of funding for their project and because VC’s and people that are actually smart weren’t willing to give them that kind of money they went after the general public you know that wanted to speculate and just sell the token in order to profit. So the etherium business model is basically to recreate ethereums because that’s how ethereum the only reason why ethereum even exists today is because I believe they sold an unregistered security in order to fund the project that’s like hey we’re gonna give you the digital asset you pass a bunch of money and we’re gonna build this you know digital platform. To me this was immoral and illegal according to regulation and security laws which is why I never participated in the etherium crowd sale and warned people that hey this is an illegal security that they’re building that they funded to build it and now their project has one use case and is to you know encourage the illegal creation of securities but the regulators are now starting to get a handle on this and if you’ve done an ICO last year you should be nervous.
Buck: Right so since the last time I talked to you you know I started following your channel channel I also started following Tyler Jenks so you do a lot of looks like you do a lot of things together and have some interesting perspectives and at the time that you were on this show and we talked about this before it seemed like 6,000 the bottom everybody was talking about 6000 being the bottom you and I didn’t talk about price we really just talked about the virtues of Bitcoin etc and so what I didn’t realize at that time despite your you know your overall bullish feeling towards Bitcoin is that you were very bearish on the price of Bitcoin and have been predicting a big correction throughout that time even though we’d already gone from you know near twenty thousand down to six thousand. What made you so sure that we hadn’t finished that bottom?
Tone: So a couple of things and look I always wanted to be wrong I want to I want to see Bitcoin go up I didn’t sell my Bitcoin at the top even though I was talking about it I just held on held on to it because I have a long-term time horizon. Now for me it was all about technical analysis I’ve spent 15 years trading and I’ve learned to trust my charts and probabilities and it was while fundamentals had something to do with it 80% of my confidence in the fact that Bitcoin was gonna crash from 6,000 down to 3 and I still think that we’re gonna go sub 3000 as well sometime this year and all of that has to do with the technical picture though I will say that right now the technical picture isn’t as clean I was 80% sure from a TA perspective that because between Bitcoin being at about 15,000 to 6,000 over a 6 or an 8 month span Bitcoin formed something in technical analysis we call a descending triangle. Trading a descending triangle is one of my favorite things to do in trading and the descending triangle basically said the Bitcoin was due for a big crash in October of 2017 so I put on a big short position in October of 2017 that position did not work out until November of 2017 so it took about a month for it to break down but that’s ok you know I didn’t get my time perfect but I got my price pretty damn well so it was mostly about technicals but fundamentals play into it as well. Right now the technical picture is a little more 5050 I am looking for a bounce back to 5,000 I want to see a rejection at 5,000 and then go sub 3000 from there. But from a fundamental perspective while Bitcoin continues to strengthen and look amazingly good in the code under the hood it looks great the perception of Bitcoin is absolutely terrible and I think that the fact that people still believe in these alt coins continue to drag Bitcoin down. I think that Bitcoin will not enter another bull market until Bitcoin separates from all the alt coins the day I see Bitcoin go up in price and things like ethereum litecoin Manero cardano everything else continue to stay down or even better go down Bitcoin has some trouble. My best comparison to this is what happened after the 2000 Nasdaq crash. People don’t realize that the Nasdaq was at $5,000 in valuation of all the tech companies when that top came we did not cross 5,000 again until sometime late in 2013. If you inflation-adjusted we probably only cross the new all-time highs like last year in the Nasdaq and the tech sector. So what 16/17 years it took so imagine that look how much better is the Internet in 2015 versus the year 2000 and yet the tech sector was valued about the same and that’s because in the year 2000 people believed in dot-coms that had no clients no revenue basically just a website but it was trading publicly on the market for $100 they were just useless companies. This is how I see everything in crypto other than Bitcoin and the Nasdaq was only going to recover with the good companies that were left and I believe the same thing will happen in the crypto space only in the crypto space it’s simpler to me it’s just gonna be Bitcoin. If there is a small probability that one or two other cryptocurrencies or projects are gonna be very valuable in the future but when you have three thousand to choose from I am not in the business of guessing which three out of three thousand it’s going to be. I will ride the Bitcoin horse all the way back up but until fundamentally that changes. Also in the last bear market like everyone was a Bitcoiner everyone was a Bitcoin maximalist 90% of the people were only talking about Bitcoin today the average person believes in nonsense like ripple and Ethereum and all this other junk and the community is so fragmented today compared to what it was in the last bear market and I think until the community realizes that the only innovation in the space is Bitcoin and not only is that Bitcoin blockchain going to be the backbone of everyone that actually needs a blockchain and the value of only Bitcoin starts to rise it’s gonna be very difficult to end the bear market.
Buck: So you know it’s interesting I see a lot of things happening at the macro level you know in terms of the news right that make Bitcoin seem to inch forwards at least in the mainstream like for example you have you know Wall Street involvement the IntercontinentalExchange releasing Bakkt its partnership with Starbucks. University pensions getting involved.
Tone: Yeah can I weigh in on that real quick so back has been laid for like the third time no one knows when it’s actually going to launch. The Starbucks is a little overblown they were just an investor like the investing division arm of Starbucks just through a little bit of money probably because the people at that side of the company are probably friends with people at the New York Stock Exchange so the Starbucks thing is was really really really overblown it doesn’t mean that Starbucks is gonna start accepting Bitcoin these two divisions of a giant company have absolutely nothing to do with each other and also Bakkt isn’t really gonna revolutionize anything back there’s just another exchange in fact I think it’s a downgrade I mean it’s an upgrade technologically I mean Bakkt has very smart people in the exchange space they understand exchanges unlike say coinbase I think coinbase is a terrible company they don’t understand exchanges they have no experience in it but coinbase gives you your Bitcoin immediately Bakkt will only give it to you once a day. So it’s not any kind of an upgrade to what we currently have other that’s simply more professionalism.
Buck: So you know I know what you’re saying and I get that there’s you know maybe some of these things earn as a big deal as they may appear you know whether it’s Bakkt or Starbucks all these things are there’s clearly some appears to be some acceptance that sort of the larger money you know the endowments are getting involved you’ve got some more mainstream acceptance and the idea that maybe at bitcoins not a flash in the pan is gonna disappear tomorrow and maybe it’s worth something worth looking at something which is admittedly you know you have to admit I mean if you said that five years ago people would be laughing at you right. So how do you take those kinds of movements and apply those to your prediction models? I mean with technical analysis how do you how does that affect it if at all because as I understand it you still believe that bitcoins gonna go under three thousand before it before it ever rebounds how how do you put those two together?
Tone: Sure. Tyler Jenks and myself are both believers and well believers probably not the best word practitioners and like in trust of our ability to recharge with technical analysis because it doesn’t matter what people say it only matters what people do and what people do reflect in the price of that asset so throughout the twenty sixteen and seventeen bear market I can name you infinite amount of bad news that was completely ignored from Bitcoin is gonna fork on to Bitcoin is slow Bitcoin doesn’t work people panicking the Chinese regulators showed up shut everything down in China hacks constantly and none of that mattered and the price kept going up and up and up and up and markets eventually top when there’s no one willing to buy at that price and the opposite is also true the market will eventually bottom when there’s nobody to sell at these low prices and I still think there are plenty of people to panic and sell at these prices I can I mean I kind of like these guys but I know I’ve been using them a little bit as a you know punching bag and that’s people like Mike Novogratz and Tim Draper yeah Tim Draper famously bought all the Silk Road Bitcoin at about $450 they’re probably sitting on hundreds of thousands of bitcoins bought for their clients at maybe $1,000. Mike Novogratz I believe bought most of his Bitcoin somewhere between three and four thousand dollars so he’s getting very close to our break-even period and what happens is when you have a money manager and there’s pressure on you there’s pressure you to make money for your clients and when they’re looking at you and why didn’t you get out at the top what are you doing and well now your position is in the red you were up what five hundred percent and now you’re losing me money on this position you know pressure comes from your investors and if you don’t make your investors happy they’re gonna take their money and they’re gonna go elsewhere so I can still see people with lots of Bitcoin panicking and selling and the news doesn’t really matter it’s basically one when there’s nobody left to sell and the Bitcoin has migrated to those that believe in it going into the future from the current low prices and that’s that’s pretty much how I see it but like I said at the moment the charts are somewhat neutral I actually am using more longer term charts and fundamental analysis to have those low targets but the last technical analysis target for me has played itself out. Now if we bounce up to 5,000 and get rejected hard by a moving average in that $5,000 zone my technical analysis will come back in line with my fundamental view that people have not yet felt the pain of what it’s like to be in a true bear market after a bubble because people haven’t learned their lesson. Every time I see Bitcoin jump up you know 10% or 15% I see Ethereum go up 30% 35% iI see litecoin go and go up 40% 50% I see it they I see things like ripple which is a totally useless token again illegal security if you ask me my opinion that sucker can go up like two three hundred percent until that stops it tells me fundamentally that people haven’t learned what is a blockchain and until people learn what is a blockchain I think the entire space gonna continue to go down until people I’ve learned their lesson.
Buck: So I get this question a lot from people because we you know we talk once in a while we talk about Bitcoin even on the Wealth Formula Podcast which is on now and you know they see these numbers and they’re like well it’s three four thousand dollars okay I’m convinced I want some exposure to this stuff and you know I know you’re not giving financial advice but you know given what say you didn’t own any Bitcoin today you’re not an active trader but you want to start getting accumulating some exposure, what would you do right now if you own no Bitcoin but you know wanted to to buy some and hold it over the next five years would you start volume averaging right now or would you really wait I mean would you wait you know until you get into sub 3,000 numbers.
Tone: I’d buy right now. I always tell people the best time to buy Bitcoin was yesterday. Now the ideal way to do it is not to just you know take a chunk of your money out of other investments and go out and buy Bitcoin because if it still drops from here you’re gonna be grossly disappointed and you gotta be real careful you really want to put in what you’re willing to lose and you have to understand the protocol. Now the best way to accumulate Bitcoin is if you have a business and you can find a way to slowly just accumulate Bitcoin without it taking a chunk of your financial assets. Here’s an example my barber this is how I should have known at my barber I know I never cared so much about hair now that I cut it but I haven’t had one in a while can’t wait to get back and see my barber my barber is an old friend of mine I known him for 15 years now probably something like that it’s been a while and she wasn’t a barber back then a little bit a barber about five years maybe I started going to him kind of recently and I should have known it was the top you know when your barber calls you up frantically trying to buy a Bitcoin from you when the Bitcoin is like 16 thousand dollars each okay so I did my best I told them it this is not the time to buy but hey if you’re gonna buy from somewhere might as well buy from me and but I convinced him into only buying half a Bitcoin you really wanted a full Bitcoin which is again a mentality that I try to get people out of it’s not about having a whole Bitcoin it was the whole day so I talked him out of buying a whole Bitcoin but he still wants to get a whole Bitcoin so how is he gonna get his whole Bitcoin well ever since that 16 thousand dollars every time I go to him for a haircut I came in Bitcoin and he doesn’t feel it right he’s just like it’s just another haircut in the day but it’s that fancy haircut you know trims are all nice you know chip takes care of my beard you know so and I tip them nice because he’s a friend of mine so whenever I’m around I try to go to him once a week once every 10 days and it’s just another client during the week he doesn’t even feel the fact that he’s getting you know twenty thirty dollars worth of Bitcoin every single week that I’m in town and after a year or two of that that starts to accumulate you know especially when the price drops to these low levels and that’s a way for someone to slowly accumulate Bitcoin and not even feel that it’s happening so if you have a business that you know you have a lot of clients getting a little bit of money see if you can squeeze some Bitcoin out of it a little bit so that it doesn’t affect your bottom line whatsoever and that’s the best way to slowly accumulate and then you won’t be upset whatever price it goes to. Buck: So give me give me your projections for you know the rest of the year five years or whatever you want I just I just want to get some idea of well I think the history is gonna how this is gonna play out and if you have any sense of the timeline because I’ve as you mentioned we’ve been in winter for a long long time.
Tone: Yeah so when the bear market started when I declared that Bitcoin is gonna fall that was in January of 2017 I remember exactly when I went bearish and people still give me a hard time about not calling the perfect top but that’s not what trading is you know that’s guessing. Real trading is money management and I called the bear market around the second week of January 2017. Now I think I did pretty good you know Bitcoin was still about $15,000 at the time so that wasn’t a bad call and I had my most optimistic price target being 5000. We’ve already broken that my most pessimistic price target was 1,300 and my in-between was 3,000 so we made it to my middle target but my worst-case scenario target was 1,300 and that’s still on the table. My time projections were my earliest time was actually like around now around January February of this year that wasn’t my earliest time. My latest time was gonna be October November of this year. So the worst-case scenario would be a price bottom at the longest time out right so hitting 1,300 in October is the worst case scenario on both time and price. Now after just because the low in price is made it doesn’t mean we’re ready to go up for example in the 2014 bear market the low price was in January 6th like the first week of 2015 but the market didn’t start to go up until like October November of that year so just because you’re low price target gets hit it doesn’t mean the bull market is ready to start so at the moment it looks like this bear market is you’re just gonna drag and drag and drag. Right now I’m looking at a bounce to $5,000 get rejected there and then go sub 3,000. Now how fast that’s gonna happen really hard to say. I have a time target of October 5th specifically it’s part of a cyclical pie model made by Martin Armstrong that I applied to Bitcoin so I really love my October 5th date just so people know that this isn’t crazy talk the last two key dates one of them was August 11th and it was to the week of the user activated soft fork that changed the history of Bitcoin for the good that was in August of 2017 August 11 and the prior target was I believe like June 15th or something like that of 2015. There approximately every two years and a couple of months and that key date corresponded to the week of the Greek banking shutdown which I believe was instrumental in finally reversing the bear market to a bull market of 2015. So I take these time targets very seriously and the next one coming up is gonna be October 5th of 2019. Ff that’s gonna be the bottom and the price of Bitcoin or somewhere in that vicinity that’d be great it’s still long, doesn’t mean that the bull market is gonna start. So I’m still looking right now I’m looking at 5,000 a rejection they’re going down sub 3,000. How low we’re gonna get it’s hard to say right now 1,300 is my worst case scenario the most likely scenario is let’s say something around 1800 maybe 2200 but so many people are calling for 2200 that I find that very unlikely and then that is so weak you are gonna be right about that one and wonderful market is gonna start who knows I do think that it should start at the latest early 2020 because the 2020 having is critical that’s when the new mined Bitcoin gets cut in half and that tends to drive the price up historically we’ve already had 2 for 2 in this instance
Buck: That’s January 2020?
Tone: No it’s looking more like May, but the data is unclear because it’s the number of blocks mined and if the price goes down hash power offline that slows it down if the price starts to rise more miners come online the hash rate speeds up so about right now the projection is around May to June.
Buck: Got it. Well l I’ve been watching you you and Tyler closely because I’m interested in and you know accumulating at some point but I you know I’ve actually been kind of waiting you know based I should have listened to Tyler he was on the show my Consensus Network show just a few days before the you know the six thousand down to three thousand hit but I kind of held on there but got out some of my stuff but anyway I’ve been watching you closely tell us about your channel what you do and where we can find you and then also talked about this Malta event I don’t know if it’s too late to get out there or what but and we do have listeners who are in Europe and stuff so it may not be that difficult for some of them.
Tone: Yeah of course so also I’ll mention a multi events first and right actually right now we’re getting so much interest in that Malta event because so many people are last-minute and they are unsure where we had a lot of the speaker’s turn us down and now some good speakers not not the ones that turned us down but some some additional good speakers are reaching out to us looking to speak at the conference more people are registering it’s called Understanding Bitcoin that the domain is understandingbtc.com and there’s not gonna be any finance to the conference it’s not going to be any regulation at the conference the conference is specifically tailored to people that already have Bitcoin and they want to be a more responsible user of Bitcoin. So what are some of the things we’re gonna do there we’re gonna teach people how to why and how they need to set up nodes to how to decentralize the network, we’re gonna educate them on second layer scaling of lightning and why they shouldn’t be scared of it and and show them how to use it, we’re gonna talk about how to protect your private keys very important how to set up those hardware wallets and it’s basically geared towards a better understanding of Bitcoin, we’re gonna have some panels talking about you know what happened last year and why the scaling debate went out of control, we’re gonna talk about the future and what are some of the new projects coming in and teach people how to use privacy within Bitcoin which is getting better every day. So it’s geared to people already have decided that bitcoin is interesting to them but now they want to be a more confident user that helps the network so that’s why it’s called understanding Bitcoin and you can get my information everything is Tone Vays the Tone this YouTube channel Tone Vays on Twitter Tone Vays on Instagram even though I don’t really use it that much Tone this everywhere including the website Tone Vays.com it has links to the conferences that I organize along with training educational section my travel schedule when I’m teaching workshops to help people be better traders all of that you can find at ToneVays.com.
Buck: Fantastic again Tone thanks so much for being on the show I will continue to follow you and follow Tyler and just keep up the good work.
Tone: Thanks man thank you so much always glad to be on and yeah we’ll have to do it again maybe in less than nine months because I think that’s how long has it been since bitcoins been 6500.
Buck: Yeah maybe an October 5th yeah no that I’d be interesting.
Buck: We’ll be right back