JP Morgan's Bullish Bitcoin Case — Full Breakdown & Transcript

[00:00] JP Morgan just went bullish on crypto. There are three reasons why, some of which we could pull directly from the JP Morgan piece on it, others that we kind of have to impute. But first, let's look at the technicals for what's going on with Bitcoin.

[00:14] So, on a King A basis, if you will, we are working on confirming our breakout of a longer-term uptrend line

[00:26] that has been a resistance line. I know it looks like there are a lot of lines here. But if you look all the way back to where this line started in 2021, we had a peak of Bitcoin here in 2021. We had another peak over here in 2022.

[00:39] We had another peak right here in 2014. Another peak more recently in May. And then now we're kind of popping out again. I suppose this May peak was more of a localized rejection rather than a peak, I should say.

[00:52] But historically, we had these three peaks here. And then obviously we fell below that. Then in May, that line, the sort of uptrend line, became a rejection point. Now, we might prove that it is a new support for Bitcoin.

[01:09] This is where we're sitting right here. This is our rejection of that longer-term trend line. Here is where we might be testing support within the coming days on Bitcoin, which actually would be very bullish for Bitcoin.

[01:21] And there's a practical way this could play out. for example, and, you know, this is just an example of how this could play out. You could have fear that there's no Iran deal over the next week. You know, maybe the next two weeks we don't hear anything.

[01:35] People get nervous. We go into earnings season. Bitcoin goes back to about $82,000. Then maybe we get an Iran deal or who knows whatever happens. Ownings are great. Who knows whatever it is. As long as we don't go much past this, or ideally not past this at all,

[01:50] we bounce off of this line on a technical basis. confirming this breakout here on this line that has been here for five years, confirming this breakout, in my opinion,

[02:02] drives us back to the legendary 102,000 line for Bitcoin and potentially up from there. Now, I'm going to show you JP Morgan's piece on this

[02:14] because JP Morgan's got a few reasons going into what is contributing to this. But what I'd like to point out is right now, on Calchi. With $36 million of volume,

[02:28] you could make a bet on, will Bitcoin hit And what I going to do is I going to break down sort of my thesis for can it hit Because if we go into that contract

[02:41] and personally, if you're going to look at prediction markets, I don't like the low volume ones. They're too easy to be manipulated. But these higher, you know, $35 million of underlying volume, this is betting for a, with just a, basically, 3% chance right now,

[02:56] that Bitcoin hits $150,000 before 2027. I'm going to show how there might be a way you could actually win that bet, and Bitcoin could break over $150,000 by then. What has to go right? What has to go wrong?

[03:09] I do want to make a note that this video and what we're going to talk about just now regarding J.C. Morgan is sponsored by CalSheet. If you sign up for CalSheet using this QR code or my link in the description, which is just calsheet.com slash r slash me, Kevin,

[03:22] you get $25 when you sign up for CalSheet and make your first trade. They are a paid sponsor of my startup, and you can use code MEETKEBIN when you sign up. Helps the channel, helps the startup, and helps us keep preventing all that awesome value that we provide here.

[03:36] So what is J.P. Morgan saying and how do we end up getting to $150,000? What is it going to take to get there on Bitcoin? Okay, so first, J.P. Morgan tells us, in a positive development, the price of Bitcoin has finally moved above its production cost

[03:50] after 280 days below that production cost. The last time we sat under production cost, estimated to be about $85,000 right now, we saw a lot of liquidation in cryptocurrency and we spent about 220 days under that period in 2018.

[04:08] And so when we see liquidations in crypto, it's not just liquidations in crypto, it's liquidations of miners, miners in crypto. And so we saw that in 2018. After we started getting rate hikes from Jerome Powell back in 2018, we went through this sort of crypto winter here.

[04:24] And the blue line representing Bitcoin's price was a period where we stayed below the cost of production for producing Bitcoin. Usually what we end up finding is the price of Bitcoin sells for a premium above the cost of production.

[04:37] And right now we're roughly at par, right around that $85,000 range, $84,000 range, $900-ish for the custom production. I ended up adding these little labels here to show where we've seen these peak moments in Bitcoin pricing.

[04:53] And this will actually play into the $150,000 thesis as to whether or not we can get there. So you've got RainX right here, PrinterGoesBur right here, 2021, you've got the AI economy here. What really needs to happen for the next slide up we going to break down But first look at J Morgan take here J Morgan argues that one of the benefits of having 280 days below the cost of production

[05:16] and making it impossible to mine Bitcoin is you end up raising average efficiency for the remaining miners, and you basically kill the weaker miners. You force them to go to artificial intelligence compute.

[05:30] You force them out of Bitcoin mining, and therefore you force them out of being sellers. Because if you have inefficient miners, whatever they mine, they basically have to sell just to try to keep the lights on,

[05:44] even though they're losing money, and they're just basically expending, pretending, hoping and praying that they can get Bitcoin above the cost of production. So seeing less efficient miners shift over to artificial intelligence

[05:58] is one of the key components of this on the left. and J.P. Morgan argues from a Bitcoin perspective, reducing excess hash rate growth can prevent the network from becoming too crowded

[06:12] and therefore leading to more inefficient miners coming in and again, reducing selling pressure across not just the inefficient ones who die, but across just everybody who's flooding in. So there are two components there.

[06:25] Component number one is when you kill inefficient miners, you reduce selling pressure. And number two, if you have too much concentration risk, that's bad for selling pressure. So if you remove that, you reduce selling pressure.

[06:37] So two sort of sides of almost the same coin there for reducing forced selling per J.P. Morgan. And the idea here on a stabilizing hash rate and us getting to that 82,000 support level at a confirmation dump,

[06:55] In my opinion, what really gets you to $102K and above are the following conditions. And this is what you really have to bet on if you think we're going to get to $150K Bitcoin again anytime soon. I think what you need are the following conditions.

[07:09] This is the bet you're making. You're betting that we get a deal on Iran. You're betting that yields come plummeting down. you are betting that the economic AI boom keeps going and that fears around some form of artificial intelligence collapse plummet.

[07:26] I don't think it's horribly likely that all of those things are going to happen by January 27th. It is possible, and therefore I actually think, I would give it like a 10% chance,

[07:38] which means that's like a 3-to-1 payout there in terms of you being able to buy that bet on Cal Sheet you know 3 I think that probably closer to 10 And the reason I think that is I think post

[07:53] you're going to have euphoria, likely, around, you know, the catalyst being over, plus hopefully an Iran deal, plus hopefully peak yields in,

[08:05] plus hopefully peak oil, right? It's a lot of hopium so far. It could all be wrong. But then you get that anthropic IPO. You get the S1, the IPO, probably people will go gangbusters for it.

[08:18] You've got the N-scale IPO as well. If both of these actually do well, the anthropic IPO and the N-scale IPO, then you could kind of put a floor under some of the artificial intelligence build-up here. And a lot of these things all point towards risk assets go burr,

[08:36] especially if we price in fewer. Like, if we get an Iran deal, we'll price in fewer rate hikes. And so that's beneficial, in my opinion, for rest assets. And that's really what you're going to need.

[08:48] Now, can all that happen by January 27th? Eh, maybe. You'd really have to have a really good Santa Claus rally and a lot of things going right. I think we will end up getting an Iran deal. I think we will get peak deals.

[09:00] I think we will get peak oil. but I'm less certain that we're actually going to get this anthropic and end-scale IPO that will sustain a strong valuation as an IPO.

[09:13] I'm less certain about that. I actually am a little bit bearish on these guys and their IPO. I'm worried they're going to bleed out and cause more problems for the stock market. So that is how I sort of hedge, I guess, if you will, my bullishness.

[09:26] So that's my take. confirming 82 in the near term as we go into earnings and we get closer, hopefully, in a raw deal, that's the critical task. That's what it's going to take to get back to $102,000.

[09:40] If we don't get in a raw deal, I don't think it's happening. So that's pretty critical. Even though there's some optimism there from JPS, that's my take. So remember to use that link down below for CalSheet

[09:53] and get 25 when I make the first trade on the channel. We sponsor the channel and start up. That's cool. If you like that video, change this around. I think you're gonna love it. I know how to advertise.

[10:05] These things each one of us here, I feel like nobody else knows about this. We'll try a little advertising and see how it goes. Congratulations, man. You have done so much. People love you. People looked up to you. Kevin Passerath, FI National Analyst, and YouTuber, meet Kevin.

[10:17] Always great to get your take.