A Wall of Liquidity is Coming! US Reaches Agreement with Japan
Summary
TLDRThe video script discusses a significant influx of liquidity into the markets due to the collapse of Japan's currency and an agreement between the US and Japan to prevent Japan's Central Bank from selling US treasuries. This situation could lead to a doom loop for both nations. The script highlights the growing interest of institutions in Bitcoin, with a $429 billion asset manager reporting ownership of $831 million in Bitcoin ETFs. Additionally, Argentina's entry into Bitcoin mining using stranded gas is noted, which could serve as a model for other nations with excess natural gas. The video also addresses concerns about Bitcoin mining's environmental impact, citing a study that suggests its potential benefits. The narrative emphasizes Bitcoin's role as a legitimate institutional asset, its potential in funding new infrastructure, and its positive outlook despite market fluctuations.
Takeaways
- 💹 A significant influx of liquidity is expected to enter the markets due to the collapse of Japan's currency and an agreement with the US to prevent Japan's Central Bank from selling US treasuries.
- 🌐 The US and Japan have reached an FX intervention agreement to stabilize the Yen, which has recently seen a decline.
- 📉 Japan, being the largest holder of US treasuries, faces a potential economic disaster if it needs to sell these assets to support its currency, leading to a rise in bond yields and further weakening of the Yen.
- 🚀 Institutions are increasingly investing in Bitcoin, as evidenced by a $429 billion asset manager reporting ownership of $831 million in Bitcoin ETFs.
- 📈 Argentina has joined the Bitcoin mining sector by purchasing over 12,200 machines to mine Bitcoin using stranded gas, indicating a growing trend of nation-states engaging in cryptocurrency mining.
- 🏦 The asset manager VanEck has announced its Market Vectors Metaverse Index, which includes a diverse set of cryptocurrencies, reflecting institutional interest in the crypto market.
- 🤔 Despite criticism, Bitcoin is gaining recognition as a legitimate institutional asset, with even skeptics starting to acknowledge its potential.
- ⛏️ Bitcoin mining is becoming an attractive proposition for nations to fund new infrastructure and development, with Bhutan planning to increase its mining capacity sixfold.
- ⚡ The Bitcoin mining difficulty is projected to drop by 7%, which could make mining more profitable and attract more participants.
- 💼 Tether, through Swan's managed mining service, aims to deploy 100 exahash of mining hash rate in Bitcoin by 2026, highlighting the significant capital being allocated to Bitcoin mining by institutions.
- 🌡️ A new product by Constellation is set to allow Bitcoin miners to heat pools, showcasing the versatility and potential for innovative uses of Bitcoin mining technology.
- 🌿 Bitcoin mining is being recognized for its potential environmental benefits, with proposals to use vented methane for mining that could significantly reduce carbon emissions.
Q & A
What does the term 'wall of liquidity' refer to in the context of the script?
-The term 'wall of liquidity' refers to a large influx of money entering the markets, which is expected to have significant effects on various financial assets, including Bitcoin.
Why is the collapse of Japan's currency a concern for the US?
-The collapse of Japan's currency is a concern for the US because Japan is the largest holder of US treasuries. If Japan were to sell these treasuries to support its currency, it could lead to rising bond yields and further weakening of the yen, creating a negative feedback loop for both economies.
What is the significance of institutional investors entering the Bitcoin market?
-The entry of institutional investors into the Bitcoin market signifies a growing acceptance and legitimacy of Bitcoin as an institutional asset. It also suggests that there is increasing interest and capital flow into Bitcoin from large financial entities.
What is the role of Bitcoin ETFs in the context mentioned in the script?
-Bitcoin ETFs (Exchange-Traded Funds) are investment vehicles that allow institutional and retail investors to gain exposure to Bitcoin without directly buying the cryptocurrency. The reported ownership of Bitcoin ETFs by a $429 billion asset manager indicates a growing trend of institutional investment in Bitcoin.
Why is Argentina getting into Bitcoin mining?
-Argentina is getting into Bitcoin mining as a way to utilize its stranded gas resources more effectively. By mining Bitcoin, the country can turn unused energy into a profit center and fund new infrastructure and development.
What does the 'game theory' mentioned in the script refer to?
-The 'game theory' in the script refers to the strategic decision-making processes taking place among nations and institutions regarding Bitcoin. It involves predicting and responding to the actions of others to optimize outcomes, such as economic gains or environmental benefits.
How does the script suggest Bitcoin mining can benefit nation-states?
-The script suggests that Bitcoin mining can be a profitable and effective way for nation-states to fund new infrastructure and development. It also provides an opportunity for countries with excess energy resources to monetize them through mining.
What is the significance of the Bitcoin mining difficulty adjustment mentioned in the script?
-The Bitcoin mining difficulty adjustment is significant because it affects the amount of computational power required to mine new blocks of transactions. A projected drop in difficulty, as mentioned in the script, would make it easier and potentially more profitable for miners to mine Bitcoin.
How does the script address concerns about Bitcoin mining's impact on the environment?
-The script addresses environmental concerns by citing a paper by Daniel Baton, which suggests that if a small percentage of Bitcoin mining in the US were to switch to using vented methane, it could lead to significant reductions in greenhouse gas emissions.
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What is the implication of the 'realtime dashboard' mentioned for institutional investors?
-The 'realtime dashboard' implies that institutional investors will have access to real-time data on their Bitcoin mining assets, including their cash flow, mining hash rate, and Bitcoin received. This level of transparency and immediacy is a new development in the market.
What is the potential impact of the 'massive wall of liquidity' on the Bitcoin market?
-The potential impact of the 'massive wall of liquidity' could be a significant increase in the value of Bitcoin, as more money chases the same asset. This could also lead to greater volatility as large amounts of capital enter and exit the market.
Outlines
📈 Financial Agreements and Bitcoin's Institutional Adoption
The video discusses a significant influx of liquidity into the markets due to an agreement between the US and Japan, which aims to prevent Japan's Central Bank from selling US treasuries. This could potentially trigger a doom loop for both economies. The situation is expected to benefit liquidity absorbers like Bitcoin, as institutional investments are on the rise. A $429 billion asset manager has reportedly invested $831 million in Bitcoin ETFs, signaling a growing institutional interest. Additionally, Argentina has joined the Bitcoin mining scene, which is part of a larger trend of nation-states engaging in cryptocurrency mining as a strategic economic move.
🌍 Nation-State Bitcoin Mining and Environmental Impact
The second paragraph focuses on the global trend of nation-states mining Bitcoin, highlighting its profitability and potential to fund new infrastructure. It mentions Bhutan's decision to increase its Bitcoin mining capacity sixfold and the potential benefits for countries with excess natural gas or stranded energy resources. The paragraph also addresses the environmental concerns surrounding Bitcoin mining, referencing a study by Daniel Baton that suggests Bitcoin mining could reduce methane emissions if it were to utilize vented methane. The video concludes by emphasizing Bitcoin's potential as a store of value, its macroeconomic implications, and its positive environmental impact when compared to traditional energy consumption.
Mindmap
Keywords
💡Liquidity
💡US Treasuries
💡Bitcoin
💡Asset Manager
💡ETFs (Exchange-Traded Funds)
💡Bitcoin Mining
💡Nation-State
💡Game Theory
💡Institution
💡Environmental Impact of Bitcoin Mining
💡Swan's Managed Mining Service
Highlights
A massive wall of liquidity is expected to enter the markets due to the collapse of Japan's currency and an agreement with the US to prevent Japan's Central Bank from dumping US treasuries.
Japan, the largest holder of US treasuries, is facing a potential doom loop for both countries if it needs to sell its holdings to support its currency.
Institutional investments are flowing into Bitcoin, with a $429 billion asset manager reporting ownership of $831 million in Bitcoin ETFs.
Argentina has joined the Bitcoin mining sector, purchasing over 12,200 machines to mine Bitcoin using stranded gas.
The game theory of currency devaluation is playing out, with nation-states starting to get involved in Bitcoin mining as a profitable venture.
The Bitcoin mining difficulty is projected to drop by 7%, indicating a significant decrease in the difficulty adjustment.
Tether, another institution, is planning to increase its mining hash rate deployed in Bitcoin by 2026.
Swan's managed mining service targets institutional investors looking to invest over $100 million into Bitcoin mining.
Constellation is set to launch a product that allows Bitcoin miners to heat pools, with an expected ship date in 6 weeks.
Bitcoin mining is being explored for its potential environmental benefits, such as reducing methane emissions.
Bitcoin is increasingly seen as a legitimate institutional asset, even by those who were previously skeptical.
The Market Vector mCoin Index, offered by an ETF issuer, includes a diverse set of cryptocurrencies with varying allocations.
Americans are increasingly turning to gambling; in 2023, $113 billion was spent on lottery tickets, more than on movies, books, concerts, and sports tickets combined.
Nation states like Bhutan are increasing their Bitcoin mining capacity, indicating a growing trend towards the adoption of Bitcoin mining for economic development.
Bitcoin mining is being positioned as a way to fund new infrastructure and development, making it an attractive option for countries with excess energy resources.
The potential for Bitcoin mining to change the world is highlighted by its ability to utilize excess energy and contribute to economic growth.
Despite concerns, recent research suggests that Bitcoin mining could be environmentally beneficial, especially when utilizing vented methane.
Transcripts
a wall of liquidity is about to enter
the markets with Japan's currency
collapsing right before our eyes the US
has reportedly entered into an agreement
with them to prevent Japan's Central
Bank from dumping us treasuries creating
a doom Loop for both countries what does
this mean for liquidity absorbers like
Bitcoin well one thing's for sure
institutions are starting to flow in as
$429 billion asset manager reported
owning 831 million in Bitcoin ETFs is
this just the beginning Plus Argentina
becomes the latest nation state to get
into Bitcoin mining as the game theory
continues to play out before our eyes
like an evitable currency devaluation
Nothing Stops this
train welcome to bitcoin daily I'm Dante
cook head of swan business a massive
wall of liquidity is about to enter the
markets in an unsurprising agreement the
US and Japan reached an agreement on FX
intervention over the last last several
weeks Japan has spent billions of
dollars trying to prop up their currency
which rose to as high as 158 Yen to the
dollar and it started to show signs of
working but over the last two days we've
seen a reversal as the Yen has began to
collapse again to almost 156 Yen per
dollar This spells disaster for Japan
and the US potentially as Japan is the
largest holder of us treasuries only 4%
% of its Forex reserves are in Gold the
rest almost exclusively are in us
treasuries without the US intervening
with swap lines or backdoor liquidity
Japan would need to sell its Us
treasuries in order to prop up its
currency which would lead to bond yields
Rising which would cause the yen to
weaken even further and because of this
I see this as just the beginning of
another massive wall of liquidity
entering the markets and you know what
else is getting wave of liquidity from
institutional players Bitcoin $429
billion asset manager Susana
International reported earning $831
million in ETFs you know what speaking
of institutions in ETF approved spot
Bitcoin ETF issuer van e just announced
their Market Vector mem coin index they
haven't done so great in the Bitcoin ETF
race and so they're finding other ways
to capitalize on the crypto craze right
now the market Vector mcoin index has
just six Assets in it let me read them
off and try not to be disgusted Dogecoin
at 30% Sheba enu at 28% paye at 14% dog
with hat at 133% flaky at 7% and bonk at
6% it's kind of shocking that an
institution would offer this to retail
clients but I guess it's not at the same
time because the money is broken more
and more people are turning to gambling
in 2023 Americans spent $113 billion on
lottery tickets that's more than movies
books concerts and sports tickets
combined back to the institutional
thread for a second even Bitcoin haters
like Keith McCulla are starting to
realize that it's Bitcoin and not crypto
and Bitcoin is a legitimate
institutional asset so salana breaks
back to bearish Trend today you already
had Avalanche down there and a lot of
these crypto crappers down there um
bitcoin's teetering on a trend breakdown
so it had its move alongside the NASDAQ
but Bitcoin is not crypto so pay
attention to that there's an
institutionalization of Futures don't
forget in Bitcoin the rest of this crap
it's crap today like sailor said a few
years ago all your models will be
destroyed the game theory is playing out
in Bitcoin and real money is Flowing
after real productivity in real assets
which is why nation states are starting
to get into the game
is Argentina became the latest nation
state to get into Bitcoin mining as it's
purchased over 12200 machines to mine
Bitcoin using stranded gas a widely
known and respected bitcoiner Mark Moss
pointed out this trend to George gam on
his podcast over a week ago the reason
why this is important is two two reasons
one currently the plan is the existing
plan is to build a secondary power plant
that only gets used in times of need
that's that that's a lot of money going
to waste so now they can produce Bitcoin
mining so they can turn that into a you
know into a profit Center and then push
that power back now the rest of the
world wants to know about this how can
other countries that are producing a lot
of natural gas and need a lot of high
base low do the same thing and so it's
starting to change the world that way
we're starting to see even in Africa
places that don't have energy they want
to put in a new Hydro Dam for example
but there's not enough people there to
make that Hydro Dam investment
economically viable so what they can do
is they can put Bitcoin mining there
until there's enough demand for the
power and then the Bitcoin mining can
just leave and go somewhere else pretty
soon Every Nation will be mining Bitcoin
it's the most profitable and effective
way to fund new infrastructure and new
development almost a year ago today the
kingdom of Bhutan became one of the
first nation states to mine Bitcoin and
just last month the nation state
announced that it plans to increase its
Bitcoin mining capacity sixfold and you
know what right now it seems to be a
pretty good time to be getting into
Bitcoin mining according to the
blockware team the Bitcoin mining
difficulty is projected to drop by 7%
tomorrow that's the largest decrease in
the difficulty adjustment that we've
seen since Bitcoin was at $166,000 a
coin continuing this threat of sovereign
Nations and institutions getting into
Bitcoin tether is another institution
that is pouring massive Capital into
Bitcoin it plans on getting to 100 ex
aash of mining hash rate deployed in
Bitcoin by 2026 through the help of
Swan's managed mining service Swan
announced yesterday its managed mining
service which is aimed at institutional
investors looking to invest over $100
million or more into Bitcoin mining with
this service large institutions like
tether are going to be able to own their
assets not Swan and get the industry's
first realtime dashboard for this
segment of the market that allows them
to view their assets view their cash
rate view the Bitcoin flowing into their
wallets in real time this is not Cloud
Mining and this is not for retail but
there is a way that retail can get into
Bitcoin mining did you see that
announcement from constellation heating
you're going to be able to heat your
pool with Bitcoin miners it says that
this product is aiming to ship in 6
weeks it's going to be a hot summer
Bitcoin miners have so many applications
in use cases that have yet to be
productized or explored yet
but one thing has been explored about
Bitcoin mining and found to be falling
short and that's the fud that Bitcoin
isn't good for the environment in a
recent paper published by Daniel baton
Bitcoin mining expert and former
Greenpeace activists if just 1% of the
6,000 megawatt of Bitcoin mining in the
United States switched to vented methane
that would be a reduction of 131,072
that's the same as 9 billion miles
driven by an average gas powered car
whether we're talking about Bitcoin as a
store of value Bitcoin in the macro
economy or Bitcoin mining in the
environment the backdrop Remains the
Same the system is broken and for each
generation in America things have
continued to get worse and worse take a
look at this chart about America's war
on the young at 25 years old the pre-tax
income that our grandparents had was
$74,000 and the price to own a home
relative to that income was just 3x fast
forward down to us at 25 years old the
average pre-tax income is just at
$56,000 and the cost to own a home
relative to that income is seven times
higher Bitcoin provides better returns a
better environment and a better future
and with that we're signing off for
today this this is Dante cook sw.com
happy stacking
[Music]
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