$2.8 billion worth of Bitcoin was laundered
in 2019 via crypto exchanges. He was in Cuba hiding from the U.S. authorities. People were
seeing Bitcoin as a hedging asset. If we want to go into this, the rabbit hole, gold has
no intrinsic value as Bitcoin has no intrinsic value. Which, you know, sounds really fun
and interesting. Hi, my name is Jackson, and I’m Giovanni.
And welcome to Beer&Bitcoin, where we drink beer and we talk about Bitcoin and all things
crypto. Look at this nice steam. Cheers. Cheers. So this month, Bitcoin recorded its best all-time
January performance. It started the month at about $7,000 and then boosted up by 30%
all the way to $9,300. And this was its best January performance
in seven years. Which means that we should all be kind of bullish for the upcoming years,
I guess. Well, January was a great month for Bitcoin.
I mean, we saw a lot of really good surges. But why did it surge? I mean, what happened
in January that caused these price spikes? So the most important discussion during this
last month was whether Bitcoin can actually behave as a safe haven asset in times of troubles,
in times of global turmoil. The discussion has been around for a while in the crypto
space, I think. But this time there was a specific situation, the crisis between the
US and Iran that sparked when the General Soleimani was killed by a missile strike ordered
by Trump. Then Iran retaliated against the US, they launched a missile strike against
Iraqi base. In that moment, Bitcoin started surging. When I did my most recent markets’
video with DataDash, DataDash said something that I thought was really interesting. He
said that Bitcoin does well in times of fear. To put it simple, I would say Bitcoin tends
to do well in fear. Like we were able to see that in the last few months. And I thought
that this applied very nicely to the US-Iran crisis where there was a fear of war. I mean,
there was this chance that the US and Iran was going to create some kind of World War
3. And people, you know, were pointing to all
the different alliances and everything like that. And there was this palpable fear. Exactly.
I mean, it may not have been, you know, well-founded, but there was the chance that this could escalate
into something crazy. Exactly. And then when the crisis was going
down, I mean, was de-escalating, Bitcoin price also went down a little bit. So it seemed
like that as long as the crisis was real… As long as you could feel that, you know,
feel the crisis. Yeah. Yeah. Bitcoin was going up and then it went
down when the crisis deflated. And that was reflected in the other safe haven
assets as well, right. I mean, we saw movements with gold, with crude, silver. Exactly. And right now we are seeing the same
because now there is this overspread fear about the coronavirus outbreak in China. So
Bitcoin reached the mid-$9,000 right after news started spreading about this coronavirus
outbreak, which is also, I don’t think, a coincidence. So, guys, what do you think,
is the outbreak of the coronavirus related to the last spike in Bitcoin? Tell us what
you think in the comments. There seems to be or there at least appears
to be some sort of correlation between geopolitical events and Bitcoin’s price, and that when
there are these crises, the price of Bitcoin tends to go up, even though Bitcoin isn’t
actually related in any way to geopolitics. I mean, it’s not tied to any government, it’s
not tied to any institution. It’s totally financially independent from these things.
And yet there is still this correlation. Yeah, exactly. And as far as I understand,
it’s precisely because Bitcoin doesn’t really relate to any other external factors like,
for example, a specific economy or specific geopolitical issues that people seem to invest
to go to Bitcoin when some of these economies get affected by some problems. I remember,
for example, even Argentina, I remember about the inflation in Argentina, the inflation
in Venezuela. A lot of people were turning to Bitcoin in those kind of financial economic
crisis in their own countries. Yeah, to preserve the value of their money, exactly. Let’s imagine that you are a citizen of Iran
or Argentina or Venezuela with a very grave inflationary situation in your economy. Would
you consider to put your money into Bitcoin? Let us know in the comments below. Yes, when you have these correlations between
price and these crises, it raises questions, obviously. And the safe haven question is
really interesting one. But I think foremost, people are seeing Bitcoin as a hedging asset,
which explains these price spikes in the two crises. What do you mean by hedging asset? So they expect potentially a downfall in the
economy due to some sort of global crisis event. And they see Bitcoin as a way to hedge against
the traditional financial system that could experience some tension when this crisis occurs.
But, can we call a safe haven asset? That’s the question, right? Is it actually a safe
place to put your money? I mean, it may be a good place to speculate against the economy,
but is it a safe place for money? That’s the real question. You had a very interesting interview with
the professor Harvey Campbell. Yeah, I enjoyed that one, actually, a lot
yeah. He had something interesting to say about this specific issue, I think it was
pretty clarifying. Well, he had a number of interesting things
to say, but I think the glaring most obvious point against Bitcoin being a safe haven asset
is volatility. The volatility of Bitcoin is more than 80%. Just because of the volatility
it might be that in the crisis you lose value. And the question is – how much do you lose
relative to other assets. That’s the key. Right? Right. Because it has to be mentioned that I mean,
people that believe Bitcoin to be a safe haven asset say that Bitcoin, like the main feature
of Bitcoin that makes him an ideal safe haven asset are that fact that it’s not controlled
by a central bank. The fact that it doesn’t depend on underlying fundamentals, these are
the characteristics, the positive characteristics. But then, as you said, we have volatility,
a big problem. And another thing that he also mentioned that
I thought was a really good point is that we have no historical evidence of how Bitcoin
performs during a global crisis. I mean, of course, as you know, Bitcoin was
created just after the global economic crisis of 2008. And so we never got to see just how
Bitcoin performs in a situation like that. So it has yet to be proven, the trial has
yet to happen, you know. So, let’s hope for more crises to happen that
will test Bitcoin. Mike Novogratz would be proud. I mean, I guess that the hodlers will have
to be a little bit patient. Well, I think that is the nature of most hodlers,
right, to be patient. That’s a good point. So, guys, what do you think, is Bitcoin a
hedge against the economy? Is it a safe haven or is it neither of those? What do you think?
Let us know in the comments below. Another important character in this, in the
space, who said something interesting about this is Peter Schiff, the famous goldbug,
of course the always credible Peter Schiff. So the other guy is a very big fan of gold
and a bit more critical towards the digital gold, which is Bitcoin of course. A bit as
a soft way of putting it. Peter Schiff is saying that this surge in Bitcoin price during
the crisis was not something caused by genuine market reactions. It was more like a pump
caused artificially by speculators who are trying to drive people to think that Bitcoin
is a safe haven. They just start speculating and they create this kind of artificial moves,
which is, I guess, an interesting thought. I remember seeing this tweet and yeah, I think
on the surface it sounds interesting because it’s you know, it has this like nuanced complexity
to it. But I mean, at the end of the day, if you’re speculating on something being something.
Then aren’t you just kind of feeding into the narrative itself? If you’re speculating
on the narrative to be true, then aren’t you in a sense like believing in that narrative? I guess the difference Peter Schiff is making
is between genuine believers in Bitcoin as a safe haven asset and those cynical speculators.
Yeah, looking to take advantage of that situation. People that don’t have any real values, they
just look at the price going down, going up and so on. And my question to him is, what difference
does it make? You know, if you’re speculating on something that’s going to happen then and
then it happens, you know, and you’re speculating correctly, then… You are kind of implicitly
saying that to steal Bitcoin is attracting a lot of speculators, right? And that’s probably one of the problematic
things, because speculations is there where volatility is there, I think, because when
an asset is very volatile, people like speculators want to make money out of it, right. Of course. And I think that’s one of the problems which
still prevents Bitcoin to be a true safe haven. We just don’t have enough information to be
able to say that this is a safe haven asset. And unfortunately, the only way that we get
to find out the answer to this question is in the face of another global crisis, which
I don’t know about you, I definitely don’t want to see. So I think it’s important just
to remind everyone that although Bitcoin doing well is great, it’s not great when it’s on
the backs of deaths or conflicts. Yeah, I think that Bitcoin should be able
to demonstrate its validity independently from this kind of crisis situation. I mean,
the technology, I guess it’s there. No need to probably ride just on the back of this
kind of crisis. And the thing is, is like for most scenarios
and for most events, you just don’t know how Bitcoin is going to react. Most of the time. Exactly, I mean, we saw this a few events.
As you said, they are not enough to create a substantial narrative, substantial theory
or a narrative, exactly. There are also cases which actually contradict
the narrative. Like, for example, last year, Bitcoin has not always behaved like gold.
The traditionally considered safe haven because in the last two quarters of 2019, Bitcoin
fell from more than $12,000 to $7,000. While gold gained the 20% in the same period. So
that’s another case where the correlation between the two was not there actually. Right,
in response to that, I would say that it’s probably more important to look at how Bitcoin
reacts to big geopolitical events rather than simply its correlation with gold. Because
as the professor in my interview with him pointed out, gold is not actually a super
reliable, safe haven asset. True, that’s actually suprising. He studied gold for like 2000 years
and essentially he says that like gold has only been a safe haven asset like 30% of the
time in every crisis scenarios. I mean, if we want to go into this, the rabbit
hole, gold has no intrinsic value as Bitcoin has no intrinsic value, at the end of the
day, if an apocalyptic scenario will happen, probably a seed will, might be more worth
than gold one day. Of course. I mean, you can’t eat gold, right?
Exactly, or drink it. So safe haven asset… Like this savory beer,
this liquid gold. It’s our safe haven. It’s even yellow. So you’ve got a choice. You’ve got gold, silver,
crude oil, treasury bonds and Bitcoin. Where do you keep your money? Tell us in the
comments below. On January 10th of this year, the EU implemented
its fifth anti-money laundering directive, which, you know, sounds really fun and interesting
and it actually is quite interesting. So the EU, in response to the release of the
Panama Papers in 2016 has been trying to crack down on money laundering. And this amendment
is the Fifth Amendment to the original directive that was made in response to the Panama Papers.
That the motivation for this amendment is to gain greater transparency into the flow
of money, specifically in crypto to fiat exchanges and in custodial wallets. So far, sounds good.
Well, that depends on your perspective, does it? As the name implies, they want to combat
money laundering. And they also say terrorist financing is a reason for wanting to gain
more transparency into the way money is flowing in the cryptocurrency space. Again, I want
to be precise and say that this is specifically targeted at crypto to fiat exchanges and custodial
wallets. So crypto to crypto exchanges still do not fall under these regulations just yet.
There is some reason to have these anti-money laundering regulations because according to
a report from analytics at Chainanalysis, $2.8 billion worth of Bitcoin was laundered
in 2019 via crypto exchanges, which is kind of still a small sum compared to the overall
market cap. Exactly. So this is a very small sum compared
to how much money is laundered on a global scale this year. If you are curious to know more about how
big is the usage of Bitcoin for money laundering and terrorist purposes, check out our video
in our YouTube channel about terrorism and crypto. Hi, everyone, my name is Giovanni
and today we are gonna take a deep dive into the darkest corners of the blockchain. So when you compare the amount of money laundered
Bitcoin to the amount of money laundered all over the world. Well, according to the UN,
the estimated amount of money laundered globally is 2% to 5% of the global GDP, which comes
out in terms of U.S. dollars to about $800 billion to $2 trillion. Of course, that’s a wide range. But when you
compare that much money, about 1 to 2 trillion dollars to 2.8 billion dollars, it begs the
question, why is the EU cracking down so hard on such small parts of the economy that’s
laundering money? Well, I could answer this question. Probably
making another comparison. Like I know that like stealing bikes is not as impactful as
robbing a bank, but that doesn’t mean that you should necessarily allow people to steal
bicycles. And that’s pretty much, I guess, the same reason, the same situation with Bitcoin.
Of course, it’s a small amount of the whole economy, but that doesn’t necessarily mean
that it shouldn’t be regulated and the bad actors persecuted for it. I think that we
should draw a line in between two important concepts here. One is anonymity and the other
one is privacy. So I think that privacy is a good thing. Anonymity, not necessarily.
Privacy is basically entrusting your information to maybe a third party. You know that third
party is not going to give out your information to someone else. You trust this third party,
your privacy is still secured. Anonymity is basically when no one can know who you are,
what are you doing, why would you want to be fully anonymous if you don’t have anything
to hide. Well, I think it depends on, of course, what
activities you’re getting up to. So, I mean, if you’re getting up to legal stuff, then
obviously you want to be anonymous. That’s clear. But it also could depend on your perspective.
You know, maybe you are someone who is very distrustful of institutions and of governments.
You know, you don’t want the government to have your information or a governing body
to have your information. You don’t want an institution to have your information because
the governing body could go to the institution and say, based on these regulations, we need
this guy’s information and you should be keeping track of it. You know that actually reminds me of an interview
with John McAfee we recorded a few months ago. He was in Cuba. He was hiding from…
Not hiding, he was just on the run. On the run, exactly, from the U.S. authorities. I
am firm believer in privacy and even anonymity when it comes to financial transactions. And
he is the typical guy who would probably get mad because of these regulations. Yeah, he would. I mean, John McAfee is a whole
other scenario. But I’m saying… Not everybody is like John McAfee, of course. Of course not. I mean, not everyone creates
the biggest antivirus company in the world, right? Not everybody is “bringing down the U.S. government”
very soon. Well, you know, maybe you just don’t have
any trust in the establishment. Then you would have a reason to hide your identity because
you don’t want the government to take control of your indentity. Of course, you know, I’m
not saying that this is a valid mindset, but I’m just saying this is a perspective that
someone could have. Why would you choose to remain anonymous in
the cryptocurrency space? Please leave your comments below. What is going to be the main disadvantage
for a regular customer after these regulations are put in place in Europe according to you? The thing is, is that as a user of the platform
of the crypto to fiat exchange platform over a custodian wallet, you will have to provide
more information to comply with the KYC standards that the company is supposed to uphold. So
what this does is this ends up raising the bar for what it costs to exist, just exist
as a company within the EU. So do you think that this kind of trend reflects
a more global kind of trend? I don’t want to get outside of the EU just
yet because we still have some things that we need to address in the EU. For example,
this raising the bar has been clearly apparent with a couple of key cases. For example, there
is an exchange called Deribit, which actually split, which was located in Netherlands and
it split and the split went to Panama, relocated to Panama in order to avoid the regulations. They say in their blogpost when they were
talking about this was that they were unsure of how the directive would be implemented.
So they made this preemptive move. Ok, so they avoid… To move to Panama before
the decision was implemented. Exactly. Because they didn’t even want to comply. And
they say that they understand that the new regulatory framework is there to improve transparency.
But they say that this is done by almost fully sacrificing any privacy of cryptocurrency
holders and that all the KYC compliant, all the KYC regulations that they would need to
apply would be too cumbersome. Yeah, would increase the service costs and would be very
time consuming for the users. They say they take the angle that it would be a burden to
their users and that it would cost them a lot of money to comply with these regulations. Yeah, of course, they have to say that they
are doing it for their users, not because they don’t want to spend the necessary amount
of money for getting regulated. Of course. I’m kind of skeptical towards these kind of
statements. I don’t know about you. Sure, you can be skeptical for the statement,
but I think the important thing to note is that they left because of the regulation.
There is another example of a British company called Bottle Pay which closed, and they also
said that the type of extra personal information that would be required to collect from our
users would alter the current user experience so radically and so negatively that we’re
not willing to force this onto our community. All right. So it seems that if you don’t like
regulation, there are going to be less and less spaces where to escape. You can go to
Cuba… It’s true. And David Carlisle, who is the
head of community at Elliptic, which is a crypto forensics company, he says that even
if you go to these other third countries, like, you know, Panama, for example, that
have more crypto friendly regulation, you know, you could see actually sanctions. He says that he predicts that in 2020 that
the US will go into overdrive by sanctioning companies, that are based in other jurisdictions,
other jurisdictions, and are using crypto. You said the U.S.? Yeah, the U.S.. Well, this is his prediction.
He predicts as a sort of evolution of how regulation will begin to become more and more
relevant. You know, because then these companies will find themselves completely locked out
of the biggest markets in the world. Now you’re depicting a pretty worrying situation.
I started feeling for these companies a little bit, to be honest, at the beginning I was
very, very pro regulatory. Now I start feeling the pain of these entrepreneurs. Yeah, I mean, of course, it all depends on
who’s using the companies and why. How do you guys feel about crypto regulations
now that you know a little bit more about why they’re being implemented and where? Talking about things that made headlines in
January, Bitcoin SV, the notorious Bitcoin fork, promoted by Dr Craig Wright, skyrocketed
impressively, he got like over 100% gains in a few days and people were wondering what
was going on, what was happening because it was a massive, massive growth. And after a
while it dropped, but it’s still retain over 100% of its original gains. And yeah, people
were wondering what’s going on. I mean Bitcoin SV is connected with Mr Craig Wright, that
you personally know that I am personally very good friends with, you know, especially as
everyone in the YouTube comments of my last interview could tell, you know. Excellent.
I think you create nice friends, real lasting relationships. To everyone who was commentating
on that video, no, I was not disgusted with him. You were really appreciating his company. No, I mean, it was interesting to talk to
him for sure. Like, of course, I have to be skeptical about what he’s saying because it
can’t be proven. That doesn’t mean I despise him. I like your skeptical gaze. It makes people
talk a lot. It’s very good mirroring technique. Okay, so apparently there’s a surge in Bitcoin
SV. There were suspicions that the surge was a result of some news. You know, some small
news that potentially could have led to Craig Wright being revealed as Satoshi Nakamoto,
but it ended up not being the case. Essentially, what happened was that there was a bonded
courier that was supposed to arrive with some information regarding the Bitcoin that Craig
Wright owns, that Bitcoin, regarding the Bitcoin that Craig Wright supposedly owns, that Bitcoin
has links to the original Bitcoin that was mined by Satoshi. So we suspected that in
this courier there were the keys to the wallets that Craig Wright allegedly has his Bitcoin
located, which is also allegedly Satoshi’s Bitcoin. So there’s a lot of speculation regarding
this. And there is like a very complicated lawsuit that is going on, that is probably
going on for much, much longer, I guess, because, a couple of years now. And we still don’t
know the end of it. We will know the end of it in April. Let’s see if it’s gonna be the end of it.
I’m personally very doubtful but given the track record. Exactly. And anyway like we wanted to, we wanted to
ask him personally when is supposed to be when he’s supposed to get the keys of this
Bitcoin if he’s gonna get these keys. Unfortunately, on this regard, I definitely
dropped the ball a little bit, I only asked the if and not the when. So he said that he’s
99% sure. 99,9999 and a few more nines percent sure that he’s going to receive the keys at
some point. So according to him he’s 99.9999999% sure that he’s Satoshi Nakamoto. What does
it mean? That .0001 percent of him is not so sure. But I think he likes to keep this kind of
intrigue, you know, he doesn’t want people to get too sure about the situation. Of course.
Of course, regardless of whether Craig Wright is or is not Satoshi Nakamoto. The all important
question, why do we care? Why do we keep giving this man publicity? There are people who believe that if it becomes
true that he’s Satoshi Nakamoto, then probably Bitcoin SV will become like the real Bitcoin,
because, of course, Craig Wright thinks that Bitcoin SV embodies the original vision of
Bitcoin. “Satoshi’s Vision”. I think that he’s gonna have a very big impact on Bitcoin
and on Bitcoin SV, although to be honest, it’s hard to say. Of course it’s hard to say. I mean, everything
surrounding Craig Wright is a mild confusion of statements, allegations. So at this point,
I don’t know. It would take a lot of effort to really sift through everything and understand
what’s going on, who he is and how to approach this whole situation. So, guys, what do you think? How much the
future of Bitcoin depends on whether or not Craig Wright is Satoshi Nakamoto. Thank you, everyone, for watching. And next
time that we do Beer&Bitcoin, please grab your own and we can all drink together.