Ep 26 - October 30, 2024 - MrBeast investigation

Welcome to another episode of the weekly crypto check-in recorded on October 30, 2024. I'm your host Robert Swerta. I'm interviewing my cohost, Andres Cindarte.

How's it going, Andres? Counting down to election. I mean, I'm hoping to one week from today, Robert, we'll have a a winner, and, we can start moving on to Yeah. Discussing crypto regulation and who's gonna run the SEC. Yeah. But until until then, we've got more headlines.

Yeah.

So I'm good. I'm good.

We have Halloween and the election, and then, yeah.

Oh my god.

We won't be recording next week because I won't be able to make that that we no longer record. So it'd be 2 weeks from now, we'll do our next one. But, yeah, it's, you know, I hope that I don't have to stay up terribly late Right. And we, get results quickly like any sort of civilized country.

Yeah. I, no. I an atypical lead in to the show. I'm, I'm doing good. This week has been kinda nuts. My wife is, on a business trip. So I'm on day 3 so far. There haven't been any, fire alarms or, police sirens or anything with the kids running around, you know, here in Smyrna, but, but we're doing good. It's been a, it's it's been a kind of an interesting few days with, like, obviously, anybody paying attention to the the news cycle with what's going on with the the the election. Yep.

a busy busy week. Awesome. Well, let's get rolling here. So, you know, we seem to always be talking about either the SEC or the Bitcoin ETFs, and we're not gonna let the, the listeners down today. We're gonna at least talk about a few things.

Yeah.

Or said slightly differently, 6 of the top 10 are all crypto, and 5 of those top 10 are Bitcoin. It's in the top 4 are only Bitcoin. So it's just amazing. Yeah. In a market that has done out you know, the the broader market has done well this year. So it's not like somehow crypto was soaking up from everyone else. They're fighting for the same dollars in a lot of sense. So

Yeah. And we're gonna talk about we're gonna talk about one of the other top, 6 names, which is the the Russell 2,000. Yeah. It turns out that the of the top 6, 4 are Bitcoin, Ethereum related. 56 are once a ultra short muni bond ETF, so, no, probably not something most people can get their head around even.

For sure.

To stay relevant, right, to get clicks, to get advertising, to get headlines. Because, you know, a year ago, this whole thing didn't exist in in ETFs. And now all of a sudden, you know, 4 of the top, you know, 30 are all Bitcoin Ethereum related. So Yeah. How fast things can change.

Well, you know, and this is shouldn't be a surprise to anyone, but, like, just the news cycle is so fast and it you know, you can't print it and put it in a paper and, you know, be fresh in the morning. It's it's gotta be within 15 minutes online somewhere, and then it's old already. So it's, crazy to see the the news move so quickly. Yeah. So kind of on the topic of news, we we have touched on the different, there's poly markets and there's different, betting markets specifically around this, you you know, election cycle we're in.

yeah. And like we were talking about before we went live, like, Bianco, Jim Bianco, who you're referring to, you know, he he's he's well known in at least in investing circles for, the research he's done. He's been at this, at the space, at this game, not just crypto, not just betting markets, but just overall, like, macro research for for decades. So, you know, who knows? Maybe Jim Grant is next.

Mhmm.

Blockchain and traditional finance. I think, you know, when we look back in, you know, 5 years to today, I think we'll say, gosh. That's all there was that was going on. So I think the more I see of these headlines, the more it's like you can sort of ignore it and say nobody's that's that's all, irrelevant, but I think that, that's a little bit, like, sort of sticking your head in the sand

Right.

And pretending like it doesn't exist because it does and it's real and there's a lot of capital flowing. So we'll see. It's, it's pretty interesting. You know, the last big election we talked about Russia influence and China influence and hackers this year. We're talking about election betting markets. Influence. It's kinda yeah.

Yeah. You know, in going on. Admittedly, Americans like to gamble. Right? I mean Oh, yeah. There's the sports betting, which has become huge. Oh,

gosh. Yeah.

5 years ago, you would have never thought to see that you would see betting odds on a live broadcast on ESPN or ABC. Sure. Now they are injecting it whenever they can because they're they found a way legally to make money with it. So you know, I just find it fascinating. In I was reading something recently about how, you know, you hear about these pollsters around election, you you know, you gotta take those with a grain of salt because who knows if they're accurate.

transparent. Yeah.

Yeah. We're far away from transparent elections in this country at this point. So who knows if we'll make that leap, anytime soon. So

Well, I think it's yeah. I I think the the final comment I would make is just how, like, you you said this, but just the amount of, now legalized, betting or gambling, the amount of, especially that under 30, cohort. They're they're they're digital natives. Right? They're much more comfortable with technology, and and have said over and over in just just about every poll that they intend to, be big users and adopters and are of, digital assets.

Yep. And hopefully, we can actually use this technology in an election, in my opinion, at least. I get how some people don't like it. But I would love to see blockchain used in an election. I think it would clean up some of the mess that we might might have.

Right. Right.

Right. It felt like so similar.

Yeah. We should pull the chart up. When we get fancier with our technology, we'll have a live look in like like an analyst, you know, or somebody behind the scenes, a studio analyst pulls it up for us. But if you go to, if if you go to his handle,

on Twitter Yeah. BC backer, on on Twitter. Yeah.

Yeah. The title of his tweet is birds of a feather. Right? And it's like you said, it's everything's moving in sync, at least back to July. Yeah. I mean,

a lot of volatility. I mean, both of them, obviously, because they're functioning the same line. But, like

Right.

You know, Bitcoin is effectively touching an all time high right now. You know, this, you know, it it's crazy to see that, basically, the news has not covered it. I mean, yesterday, Bitcoin was at functionally an all time high. Today, it's pulled back a little bit at 71,000 and change.

Okay. But yeah.

So we crossed 70 this week? It was up to 73. Okay. I had a a little bit of a run, basically, Monday, Tuesday, but it's a, but it's not in the news cycle. In the middle, I think, obviously, the election is just sucking all the air out of the room right now.

So Right. Well, one thing, the the Russell 2,000, this is the small cap index. So for those out there who are paying attention to the equity markets or the stock markets, like, 2,000, you know, publicly traded companies, obviously, key publicly traded. Mhmm. So obviously a lot more than, you know, 2,000 out there.

Sure.

But, but the 2,000 publicly traded companies that make up the Russell 2,000, if you look at, what they call the periodic table of investment returns, which is a fancy, chart that gets put out. It's sort of like that, chemistry, periodic table that we used to get way back in middle, high school. Yeah. Yeah. I didn't take chemistry probably till high school, so you probably took it in middle school.

small cap stocks. Really? Okay. Yeah.

And things revert to the mean and the average, you know, return over that long period of time. Now granted, the financial adviser in me says you gotta diversify. You should. Sure. But that goes to to the point of the volatility. Right? Some years, the Russell has been down 50%. Yeah. Other years, it's up 75%. So we see a lot of those parallels in in crypto, right, particularly, here in the last 3 or 4 years.

Yeah. And, I mean, admittedly, that also mirrors crypto. You know, I know the Russell struggled as of of late and, crypto, it's been up. Bitcoin's up 60% for the year, but it that is not the whole story. It's Bitcoin Bitcoin than everybody else and everybody else has not had, as as great of a year

to date. Right. Right. So yeah. Interesting. That's a that's a cool chart. We'll have to, find a way to share that with, with listeners. Yeah.

Absolutely. Our next is just an update. We recorded last Wednesday, then I think on Thursday, some more news came out. But basically, the SEC via Ripple case, the SEC said it was appealing. Ripple said they were cross appealing.

Yeah. Well, this didn't make our headlines, but it's worth noting this week out in Las Vegas is the annual money 2020 show, which is a big financial technology conference that attracts, you know, lots of big financial technology companies. Do you know who the fireside chat was, keynote, this week?

Oh, I'm not gonna guess Gensler, but I have no idea.

It sure was. It was, chairman, Gary Gensler. Now he did that from the confines of what appeared to be his living room, or or a home look home studio. Yes. And, you know, he talked a lot about industry innovation and the importance of trying to keep pace, but also embracing technology and Mhmm.

I don't

know if they were gonna get anything if they asked, but they did ask. So

Well, I can tell you he got that same question on CNBC Asia, earlier last week. Okay. And it sounds like this time he did a much better job answering it. Because she literally goes the lady the the lady that was interviewing him goes, you know, if Trump gets elected, he said that he would fire you day 1. Would you like to respond to that?

Yeah. He did 40 minutes. So, obviously, for, you know, for for money 2020 to get, you know, somebody like him who's constantly in the news, with the SEC, was a pretty big get. So I doubt he gets a speaking fee, though. You know? So Yeah.

Yep. Cool. Well

Alright. This next one caught my attention because, you said Microsoft and hedge fund and Bitcoin all in one sentence, and I said, sign me up. Let's let's talk about this one.

Yeah. So this this also caught my attention when I first saw it. So Microsoft is gonna put it up to vote for their shareholders whether the company should, invest in Bitcoin. I think, a, it's the right thing to do from a

From a corporate governance standpoint.

From a corporate governance. Yes. This is being done correctly. I'm not sure that I've ever thought of Microsoft in the in the light of are they a hedge fund? And obviously, this is maybe a great way to a great area to describe here, but, like, it just kinda blows my mind.

what I mean, Todd? Yeah. It it yeah. I do because it bring obviously, they've got I'm just gonna put a number out there. In the 100 of 1,000,000,000 in cash on the balance sheet. Yeah.

I

don't know what the actual number is. We could pull that up. But, but, yeah, they have this gigantic amount of cash sitting on the balance sheet. They're earning, you know, very small amount, but it's in cash. It it it it reminds me of the decision that Cowper made.

What's that number? Real quick. 75,000,000,000 as of the end of June.

75,000,000,000. So no. It was

Relatively small number, I guess. Yeah.

I was off by 25,000,000,000. Yeah. They have made some monster purchases, though.

Yes.

I don't know how much in cash and stock, but they bought some pretty big, competitors or bolt ons recently in the last 2 or 3 years. What I was gonna say is this reminds me of when CalPERS, the gigantic, pension fund in California, the California public and pension employee retirement system, decided to pull out of hedge funds. And a lot of people in alternatives took note of that, and it made a lot of headlines for a couple of weeks, led to a lot of interviews, and a lot of people wondering, are hedge funds dead? Mhmm. And their take was for it to make a meaningful impact in our program relative to the amount of money that we would have allocated, it just didn't make sense.

So Yeah. That's a that's a great segue to our next topic, actually. So, Emory University, based, you know, here in Atlanta, so this is a bit of hometown news, is the first endowment to buy into Bitcoin. They bought, like, $16,000,000 of Bitcoin through an ETF, I should be clear. Sure. But it's, I was surprised it took a university this long. It's, and it's, you know, it won't certainly won't be the last. So

Yeah. Yeah. I mean, Emery has a, has a has a a good size endowment. I think, my recollection was that it was close to 10,000,000,000. We could probably, again, look that number up.

But 11? Yep. Just over 11.

10, 11,000,000,000. So, yeah, I mean, a sizable investment. But Mhmm. You know, if you say 10% of that number, it's it's it's not a huge amount from a percentage standpoint. Right? I mean

And and and it may be that they're gonna buy quarterly that amount. Well, I guess time will tell. Time will tell. But it's to start buying now, either they feel like they're about to make a really good trade. And, generally, endowments are not in the trading business, but you could see there being some, taking of gains if it really starts to run.

It's 1 it's 1 and a half percent. Right? Like, it's a pretty pretty small amount. Mhmm. Less than no. It's less than 1%.

So 110%.

Yeah. It's, yeah. But it it is sort of note because they are, you know, a large private endowment. They are you know, they gotta be in the top 30 endowments, here in the US anyway, in terms of size. They have a healthy allocation to alternatives. Mhmm. Very smart, sophisticated CIO and staff. So, I'm curious how much research analysis and diligence went into the decision.

But Right. You know?

And to think You'd have to be on the board of trustees to really know that. It's kinda curious.

Yeah. You know, in I mean, props to them for being forward thinking potentially in this case. I mean, generally, these these boards are, made up of older people. Right? Like, so and it crypto doesn't skew that way, so they're potentially definitely reaching, if it truly was made up that way. I don't know what the makeup of Emory's board is, but it's,

Yeah. And it's it's also the question is, does the board get to, weigh in? So, like, in a public plan, a lot of times, you'd have an investment staff.

Sure.

They're making recommendations to the board. The board is ultimately voting. A lot of times in some of these private foundations, endowments, etcetera, it's the investment staff has the discretion, right, to

for certain stuff.

Invest and allocate, and don't necessarily have to go to a board. It it'd be interesting to know, how the process kinda played out there. But, yeah, nevertheless, like, local and, certainly right right in the sweet spot of of what we're reporting, so that's a good pickup.

I I figured the gentleman's name. I've met him a few times at some of those events that you run here in town. Yeah. Her memory's off to next time I see him, I have to ask him. I'd be curious. Yeah. Yeah.

For sure. Okay, Robert. This last headline, mister Beast. My kids don't probably turn into the show yet. Yeah. Yeah. But when mister Beast, makes its way on YouTube, I always have to do a double take because, it's fascinating what these creators he's a big YouTube creator, a big social media presence.

Biggest YouTube following period.

Yeah. I mean, it's fascinating, like, the the the empires that they've created. And, I'm always constantly pushing my kids off of off of YouTube. They they they tend to be the boys are are, they're 10 and 8, so they tend to be attracted to these, influencers who are doing, like, wacky, zany, crazy, like, challenges, and mister Beast is probably one of the leaders, if not the leader of that, you know, coming up with all these wild things. Like, can you adopt out, you know, 500 dogs in a weekend?

You know, I I don't know exactly the motives, but I can tell you investigation I need to define here. This is not a federal investigation of any kind at this point. This is purely the community, basically on Twitter.

I mean,

it's kind of or x. I keep calling it Twitter. It's always gonna be Twitter to me. Making, doing some investigation. And the way that they came about this, and this just shows that, like, once you put something online Yeah.

After after there's assuming Right. You know, there are people go out and buy them, say, oh, mister Beast is in those. Maybe I should be in those. Okay.

Yeah. I mean, you know, they let And the

SEC did come down on some of these celebrities who were in, if you will, you call them pump and dump, you know, in the in the penny stock terminology. Like, they got well known celebrities to sort of back and promote some of these tokens that ended up going to 0.

Right. And Yeah. So they alleged, in this case, that there's $23,000,000 in total profit. So it's a lot of money, but to mister Beast, it's kinda like is if if he really did this, this could actually turn into something if the SEC decided to care. Not just the $23,000,000 was not worth it.

Yeah. Yeah. For sure. So let me let me ask you about more of a tech tech a technical question, like, with wallets. So if if somebody goes out and sets up a crypto wallet and makes, does transactions in that digital wallet, that crypto wallet as they call it

Yep.

Is there any anonymity in that crypto wallet, or can it always be traced back to, like, an IP address or a legal entity or an owner of the wallet?

Generally, there's no identity of any kind attached. No IP address. No nothing. Typically, how this stuff, like, we just talked about come about is either somebody they call them doxing. So it basically means that you either somebody does it to you or you do it yourself.

Well, I when you when you said doxing, I I thought, I've heard of this in the in somewhat of a different context, not crypto related. So I pulled it up as you were talking and, showing my age here, but, like, it's it's it's derived from the term dropping docs or documents. Doxing is a form of cyberbullying that uses sensitive or secret information statements or records for the harassment, exposure, financial harm, or other exploitation of targeted individuals. Yeah. So I've I've heard about, you know, like, these pranks people play where they, like, send the SWAT team to someone's house.

a SWAT team. Yeah.

Right. Terrible things have happened as a result. People have died. Yeah. I mean, it's like so, obviously, as our lives become more digital, as there's more and more transactions and activities Mhmm.

A 100%. So, memorize that and repeat it every morning, and you'll be good. So

Yeah. Yeah. Alright. So next week, no show?

No show. Okay. We will, catch you soon. Week after. So

Yeah. And we'll maybe have a a new, a newly elected president? I I hope so. We'll see. Should be interesting.

Calling out, ballot ballot counting is not my favorite form of entertainment. So, awesome. Well, thanks for joining us in this episode of the weekly crypto check-in. If you wanna stay updated on future episodes, you can find us in any podcast player by searching TEE TIME crypto capital or the weekly crypto check-in. Take care.