Who's going to buy their T-bills if they do that?
Right?
The US government requires buyers of their debt.
And the fastest growing buyer of debt is Tether right now.
In fact, if Bitcoin price goes over the next 10 years to a million dollars,
the T-bill buying, the short-dated T-bill buying is more than enough to
replace China who have stopped buying the T-bills.
So the US government debt is reliant on stable coins growing.
So I don't think they're going to freeze that because that's kind of committing suicide on their debt.
They could do it.
But that would be an absolute crisis, like absolute crisis, a fall of a nation state.
That could happen.
Yeah.
But, you know, like if that happens, the nation state's going down.
That could happen.
All views expressed by the host or guests are solely their own opinions.
Nothing stated in this podcast should be considered a specific endorsement
to make any particular investment or follow any specific strategy.
Willy, welcome back to All in Bitcoin in beautiful Florence.
Part one was just the beginning, so here we are, part two.
Time to go deeper into you, Winomics and Bitcoin.
Are you ready?
Yes, I am.
Welcome to Florence.
So, born in Hong Kong to Chinese parents,
raised in New Zealand, nomad for many, many years.
Who are you?
yeah i think um when you're born and into one culture and raised to another
um you get a perspective um obviously i i mean back when i was a kid being grown up in new zealand
there was a lot of racism actually there was a lot of hangover from
world war ii because the grandfathers would say we would fight the japanese and
And so I think there's like definitely it wasn't a very friendly upbringing.
You didn't feel welcome, I think, is the thing.
And so maybe that made me somewhat of a rebel.
And if you look at my later life, you know, I spent many years traveling the world.
and I think when you're born in one place
and you're multi-generational in that place
you feel like this is your place to be
you have these deep deep roots
and I know for myself I don't feel that
I mean when I go to New Zealand I feel like that's my place
but I don't have the multi-generational aspect
which some of my friends do
and you can see just how deep those roots are
Whereas I am really happy to live in different places and potentially even stay and let go of where I was born.
It's not really a big thing for me.
And so I think that shaped me a lot.
And if you look at, or if I look at my path through traveling to different countries, I call it me reminders.
When you're in one place all the time, you're always reminded of me, who you are.
And it's like you might even say the classic cliche is when adults go back to their parents' house.
They're treated like a 15-year-old or 12-year-old kid, even though they might be 30 or whatever.
And it's really hard to break that mold because you go into this unconscious habits of this behavior.
And so when you're in this new environment, I think you can reinvent yourself a lot.
I think that happened with me as well.
And my trajectory after I left New Zealand was to start businesses.
And I think it's easy to do that because you see opportunity, you see new things.
There's no hang ups on the past, what you can and cannot do.
Well, these are probably self-imposed.
So, yeah, I think that was the outcome of it.
being okay to travel, be anywhere, see new environments,
and not have sort of a hard lock on the mold that you were born into.
Yeah.
Do you see yourself as spiritual or religious?
Do you follow any religion in particular?
I think there should be like 8 billion religions in the world,
because I think everyone has their own path.
But the practices are good, you know.
I was born into Christianity.
Let's say not born, but being in New Zealand, that was the thing.
I went to church with my parents and so forth.
And so there was that Christian side.
When I was burnt out running a startup that was growing very quickly, but it was a very tough burnout for me, I needed to find some sort of grounding, I think.
And, you know, I did a Vipassana meditation, which is a Buddhist.
I did a yogic practice, a breath practice that was probably Hindu roots, you'd say.
And so I found that, like, all of them are grounded on something that's very, very beneficial.
And I think the secret is to look at where the common ground is and how it all works, because it should make sense.
and I think everyone's path is also very specific to them
and on what works.
So that's my view of it.
I wouldn't say I'm Christian.
I wouldn't say I'm Buddhist.
I wouldn't say I'm Hindu.
What do you think is the common ground among all of them?
Something bigger than us?
Yeah, I mean, I would say that.
I mean, I could say it in a very cliche way
is that they all point to love.
They're like all paths lead to love.
And you might say that's something bigger than us.
And maybe you could say, well, there's no real separation between all of us.
And so I think that they all point that way.
And they're just different ways of expressing it.
And the thing is, you can get into these conflicts over, you know, this path is the right path.
And that is the right path.
And you get, you know, into wars over it.
How important do you think is to grow strong local Bitcoin communities?
I mean, Bitcoin, where it is today, is from local community.
And it was everything in the early days.
And even today, it moves the world.
If you look at, say, the Bitcoin Beach initiative,
that was community-run and that spread out.
And it changed that country.
Ultimately, it got to the president.
And now you've got the first nation state
that really, truly made policies to adopt it.
And, you know, the president's a Bitcoiner.
What role do you see yourself playing in it?
Yeah, you know, up till now, my role has been to advocate for it.
And so before COVID, you know, I would go to meetups.
I've always made a point of going to meetups to be part of the communities.
Still do, right?
I'm not a community builder, you know.
I really enjoy the community.
I think I like to visit and being alongside and supporting that is good.
In terms of my role with community, that's a different story.
What's your greatest professional creation?
How would you measure that, CK?
I mean, that's to be judged from sometime in the future, I think.
My first startup was to put mobile email on the first generation of smartphones.
And I thought that was pretty cool in the day.
That was 2002, 2003.
I thought that was great.
And, you know, moving into Bitcoin, I mean, I've always been drawn to the next thing, you know, the future facing things.
And what excites me are the early stuff, right?
So I was really into 8-bit computers when they were coming out because you plug them into TVs and they were like magical little things, right, back in that era.
and mobile was back then really rough
and not ready for prime time
but that in itself was very exciting to me
and when I saw Bitcoin it was the same thing
it was so rough and not ready for prime time
and it was interesting
and so my contribution in Bitcoin
has been really to nut out the on-chain analysis
and wrap models around that
and be the first to sort of create market models
around all this data coming off the blockchain.
Obviously that now turned into running a series of hedge funds but I don think of the hedge funds as the great thing I think the great discoveries was contributing to the knowledge of analysis on the blockchain
I think that's probably more important than the mobile stuff because mobile's gone way ahead, right?
And I think the on-chain analysis is always going to be foundational to reading the markets within Bitcoin and altcoins.
Okay, so that's it.
With everything you do, investing, running funds, publishing, advising, analyzing markets, what does an ordinary day look like for you?
Could you walk me through it?
Yeah, I don't really have many ordinary days in terms of a strict routine.
Because right now, for example, the whole family is traveling around the world.
and other times we might be in a base
and I'll wake up and then
wake up the kids, all this sort of stuff
and then actually I will then go to
my computer set up
I will check the structure of the market
for about 5-10 minutes
if there's anything, any problems there
I would like, you know, adjust
my trades, that sort of thing.
Once the family's sort of gotten to their rhythm,
I'll go in and tackle the day, right?
And that could be anything
because there's so many balls in the air.
You know, I could be working on the hedge funds,
the next companies that we're working on,
the publications.
There's just a list and that changes every single day,
every single week in different priorities.
And then, you know, jump on Zoom calls
if we need to do specific IC, you know, investment committees to run the funds.
So it's different.
Sometimes I'll be writing software to work on a model to analyze market.
Sometimes I might be just a lot of time in chat with different people.
And so it just varies.
And so that will just go through the day.
I'll take breaks, you know, sometimes I'll take over with the kids and so forth.
But there is no real routine or structure.
and you like it that way?
it's the way it is at the moment
I think I would die in a totally structured environment
I'm not a soldier
and I would like a little bit more routine
a little bit more of a base to launch from
but right now we're traveling around the world
and it's a little bit less structured
do you see yourself traveling for a while?
you know our family loves traveling
but like our next thing is to
like we're saying
established into a good community and like the kids are getting to the point where we
we need to do that as well so i feel like that's it's going to be a more restful place okay so
you mentioned that you're running three funds if i remember correctly but you are also creating a
new one yeah yeah so i founded um crest with um cmcc global in hong kong yeah three and a half
years ago and that runs three funds right and that that's a it's a fund of funds operations so
that's relatively simple you bring in capital investors and we allocate and um and we generate
yield we can generate yield on us dollars we can generate yield on bitcoin and we have an
institutional product that is in partnership with seize banking group um in switzerland and so that
whole process has been very, very robust and we can build an institutional product.
And that's been a really big learning for me.
And so now we're in the process of creating Super Collateral Fund.
That's a whole new business and it's in partnership with Debify and we're going to lend
fiat US dollar to Bitcoiners whilst the Bitcoiner retains their private key.
So there's no hanky-panky funny business going on with their Bitcoins, which is what we've seen
in past cycles where it just moves and gets rehypothecated, never mind whether there's
promises or not. This excites me because it empowers Bitcoiners to not need to sell their
Bitcoin, they can borrow against them and they have a private key.
So they guarantee that those coins aren't going to move and they get to borrow fiat,
which is obviously debasing towards zero every year.
And so that's the premise of it.
And the fund will raise from traditional sources like traditional investors and ultimately
traditional markets.
Can retail invest?
Do you need to be a business in order to borrow or lend through your fund?
If you want to borrow it against your Bitcoin, you know, you can be retail, you jump on Debify and you can accept a loan offer.
We are lenders, so we will offer loans at different interest rates, different maturities, different LTV ratios.
now we will be sourcing capital from investors,
professional investors.
They're not retail investors.
They have to be higher net worth and qualified investors
or they will be institutions.
So we're tapping the larger liquidity pools
and then lending it to Bitcoin,
which is retail and also institutions
that may want to borrow as well.
So I could borrow from you?
I cannot invest?
If you're a qualified investor.
What does it mean?
What do I need to be to be a qualified investor?
It depends on the jurisdiction, right?
And so this fund, like many, are domiciled in Caymans.
And I believe the minimum is $100,000 investment.
Okay.
That, I think, is sufficient for a qualification to be qualified.
I need to double check with the legal guys.
But, you know.
So if I have $100,000 or Bitcoin and I want to invest with you.
If you want fiat that you get a yield from,
and obviously we're going to be getting that yield
from Bitcoiners that are paying interest to the investor.
That's how it works.
That's for the super collateral fund, right?
That's for lending against collateralized Bitcoin.
What's the deal?
Generally, it's a fee based, a management fee
and a performance fee.
We haven't established exactly what we'll charge yet,
but we will lend out to the borrowers
and we take our fees and then you get thrust.
There's nuances around how do you get a higher return
by lending yet to be seen.
There's ways in which we can get a higher yield.
And so in this fund, we're going to give you yield on cash.
So we're tapping traditional investors
who are used to getting maybe 10% by investing in stocks
and we might be able to get them the same.
And it would be interesting for me to lend you my cash during the bear market.
That's correct.
And to borrow against my Bitcoin in the bull market.
It depends.
I mean, everyone has their different thesis or whatever you call it on how they manage their money.
Right.
And so for someone like yourself, where you've just mentioned you might want to be in Bitcoin during the bull market and then you want to be in cash.
and then you may invest into the fund, right?
So if you're a qualified investor
and we would lend it out, get a yield
and then when you want to like redeem your capital,
your cash and buy Bitcoin at the bottom of the bear market ideally,
then sure, that would work.
But, you know, there's also hodlers out there, right?
That never intend on selling.
Maybe they're going to be taxed or capital gains if they sell.
So they're never going to sell the assets.
That's the other path.
Like, you just hold your Bitcoins till it goes to infinity, whatever.
You're never going to sell.
You're going to give it to your kids like you're never selling.
And you're going to just use it as collateral to borrow fiat.
And fiat's going to get cheaper and cheaper and cheaper.
So that's another valid strategy.
So if they want to borrow fiat, we will take Bitcoin as collateral.
You know, up till now, borrowing, you'd need to front your house as collateral.
You would need to front your stocks portfolio.
We will accept Bitcoin.
And that is the latest stuff that's happening in the traditional finance world where Bitcoin is accepted as collateral.
The difference is we will take native on-chain Bitcoin with our borrowers having a private key.
And that's unique.
Very few operators are doing that.
And still there are some risks as a borrower or as a lender?
If you're borrowing Bitcoin, and in this particular case,
your core risk is liquidation.
So if you going to borrow a lot against the collateral you fronted If Bitcoin price drops then you get liquidated And so my recommendation is to use a very low LTV
How low?
Pretty low.
I'd say if you're a hodler
and you want to hodl through all the bear markets,
I think you'd need to do an LTV of 10% or less
because Bitcoin dropped 85%, right?
If you're an LTV of 50%, right, which a lot of loans are, if Bitcoin drops by roughly 50%, you're going to get liquidated.
And we know Bitcoin drops by more than 50% historically.
So I wouldn't recommend using high LTVs.
If you're a savvy, you know, you have hedge fund managers that are like, I need to borrow fiat to lever up the trade.
They might borrow for one month.
That's a valid use case.
They might use a very, very high LTV because they're confident in betting on the market.
that's up to them.
So that's a risk.
If you're using other types of platforms
where you're actually giving them the Bitcoins
then obviously you're up for a lot more risk.
Even if they're legally saying
that they're not going to re-hypothecate it
those coins are given to an operator
and are those operations tight?
Who's holding those private keys?
Can they be hacked?
Can they be...
maybe they're incompetent.
Maybe it's just one person holding the key.
Usually you want to have this institution show you
and demonstrate through a due diligence process
that it's institutional grade,
that how is the custody handled and so forth.
And you want to make sure that those coins are never going to move.
And they might do proof of reserves,
but still you've lost control at that point.
And then there's other operators that will actually say, to give you such a good lending rate, we will actually move those coins and rehypothecate it.
You don't know what's happening with those coins, but people are using those coins either as collateral to trade the markets, get a higher yield and so forth, and they're making up extra profit on that.
So yeah, the risks start to climb depending on the type of loans.
in this type of lending where you have a private key,
you know that that's not going to happen.
The risk is really your liquidation.
What happens if we go bust, the platform goes bust,
the other key holders go bust?
Well, it's multi-sig, and then you could do a recovery process
with the software to get your coins back.
If like Debify goes bust, then the lender us
or the third-party custodian is still there
and we can sign it and resolve the issue.
If we go bust, same thing, you know,
and the custodian goes bust, same thing,
we can go DB Finance.
So it's very fail-safe.
Those risks are taken off the table.
So where do you clash with the Bitcoin macro crowd?
Name names.
Who? What are they saying?
Which crowd?
The thing I've learned is that the mainstream media, and it seems like the Bitcoin crypto media, love to report the price went up because ABC news event.
I think the daily news does not come into necessarily the price.
It just happened to be in a coincidence.
it's a coincidence
I would say
maybe even 70% of the time
on that 30% it's like real
like the news was
Elon Musk mentioned Dogecoin
and everyone jumped on and traded it
or the news is
FTX got hacked
and the whole price crashes
there's some urgent news that does affect price
but 70% is just a coincidence
generally
price moves in the short term
tactically
which means the setup between traders
and it was going to go one way or the other
and the incentives to go one way in particular
was overwhelming because a lot of people would lose money.
They would be liquidated
and generally trading in the short term,
it's like a football match
and you think that you're placing a bet on this game
and you're sitting in the stadiums.
The real traders are actually in the game
and they're pushing the price around to liquidate.
And it's a tactical game, right?
And so that's what's moving the price around in the short term.
In the medium and longer term,
medium term, it's about the investment that comes in.
That's a sea of investors.
Long term, it's the fundamentals of Bitcoin.
Is it hard money?
Will it win?
What are the regulations around it?
What will be, where will it go in the next 10 years, right?
And so these have impacts, but the news covers the short time frame and it's normally 70% of the time not the reason.
And so that's what I would say.
Okay.
You track liquidity closely.
Where are we right now?
And what kind of leverage do you see in the market?
When I'm looking at liquidity, I'm looking at the flows of money.
The flows of money coming into Bitcoin, coming out of it.
Where are we right now?
we're a late stage in the bull market.
And you can tell that because the liquidity
is not keeping up with the price rise.
Like you can see liquidity starting to weaken
relative to the price going up, okay?
And so when that happens,
the stability in the network becomes unstable.
And so also that's when you get a lot of price rise.
In 2017, for example,
The start of that year was when liquidity started dropping away, actually.
And it went from $1,000 to $20,000.
And at the top, there's no liquidity.
And the price is going haywire and it's highly volatile.
And so that's where we are.
Liquidity's been dropping away.
And I think it's around six months into it now.
So we know that we're in the late cycle of the bull market.
and it's an exciting time because that's when things get really volatile.
You can kind of think of it as like a ping pong ball
and liquidity is like the air that's pushing up against it.
In the bottom of the market, there's such a big air cushion,
it's going to push it up.
Near the top of the market, that ping pong ball's got a lot of momentum.
It's flying on its own, but the air cushion's moving away.
that air cushion gives it support and mutes the downside.
And as that starts to fall away, this thing starts trading like a meme coin,
and it's volatile.
And so that's where we are right now, heading into that.
And what kind of leverage do you see right now in the market?
The leverage in the system is, well, locally climbing.
You can see it builds up and then it purges, right?
So if we were talking about...
Why is that?
Because people get really speculative.
It's like it's a bull market, the price is running up,
then they pile on and put leverage on the system.
They want to take a long position, obviously.
That's usually a danger sign.
So, for example, we rallied to, I believe, $125,000
and now currently we're at $109,000, $108,000.
That's because so many people put in long positions
when it got to the $120,000.
Yeah.
and when it gets extreme with everyone taking long positions,
all it takes is to push a price the other direction
and they get liquidated.
And so what's happened is that everyone leave it up,
the incentive to liquidate them.
Remember, it's like that football match.
If you're a linebacker and you've got some firepower,
you can dump Bitcoin and push the price down and liquidate
and then the rest just, when they're liquidated,
sell, sell, sell, cascades down the water book.
And so that's actually in process.
And then the problem is everyone's still bullish
and they keep putting more long positions.
That's created more incentive to push it down.
So we're currently about 108,000 today.
We're talking about the tactical timeframes.
So the leverage in the system comes in
when everyone's getting FOMO
And then they get the shit beaten out of them, right?
Until they're no longer bullish and the leverage is out of the system.
That's when Bitcoin tends to be healthy to go on the next up leg.
Okay.
And it comes and it goes, but yeah.
Could you describe the Asian Bitcoin market and what makes it unique compared to the West?
I'd say it's size and liquidity.
In the early days, really, the focus was in America and Europe, I think.
Whereas Asia was always quite big The numbers that I have is that the liquidity in Asia equals US and Europe combined And I think it taken a while for that to be understood
And now I'm certainly starting to see
a lot of American and European companies
and investors and funds go to Asia
and do these conferences now
because they realize just how much liquidity
there is in the Asian markets.
Last cycle gave us FTX, Celsius, Luna,
3AC
BlockFi
and many more
who do you think
will end up
the billion this time?
Look
the bear markets
test the weakness
in the system
okay
and we saw
all the weaknesses
in 2022
as the thing came down
it was Lunar Terror
it was
the things
the people
in the companies
you mentioned
they were not robust
this time around
it's much more robust
at least
the leverage
you know
the virtual leverage in the system is the Bitcoin treasury companies
and now we've got the digital assets treasury companies.
Some of them are quite weak in their structuring.
I've only looked at a few and the few that I've looked at look quite weak
and they can be up for liquidation.
Let's call it a treasury company.
It's trading at five times the amount of the Bitcoin that they have.
You can expect that to go down to one to one or even lower.
and then the price of Bitcoin is probably going to drop as well on top of that
and a bear market definitely will be.
So you multiply all those drops together
and you could be like 90% down in the next.
But does that mean it blows up?
Well, some of them could get liquidated
and then that's going to be an issue.
I think that we really need to see what blows up.
I personally think strategy is relatively robust.
It won't blow up.
The price will go down.
I think the new DATs, they're looking at BNB, XRP, even ETH, these things, we know they
drill down so deeply in a bear market.
They're going to be toxic to hold.
The question is, what is this bear market going to be like?
And most people think, well, since we're so robust this time around, we might get a 30%
bear market instead of an 85 like last time and I don't think it's different this time around I
think that we're now the newest macro asset that's trading at scale that the world's seen in
150 years actually Bitcoin's this two trillion dollar asset and that is highly correlated to
macro cycles and I actually think the villain will be the global economy.
You think we'll have like a financial crisis that is going to bring the bear market down.
How real is the threat of governments nationalizing or even confiscating Bitcoin treasuries?
I think in short term it's not high. I think in the long term it's very high
because it's happened before.
And these things play out over decades.
So if a country has got their back to the wall,
they will do very extreme things.
And we just have to see how long this fiat train runs
and how things start to crumble around over extension,
too much debt in the system, what nation states do.
So if we're talking in a 10-year time frame
or 20-year time frame, I think the risk is extremely high.
Is it going to happen this year, next year?
Probably not.
I'm expecting a business cycle downturn,
not a crisis of trust in the money.
I think that we're heading into a business cycle recession,
which we really haven't had since 2008.
Yeah.
your models once hinted 337k for this cycle speak it was actually a top model that's published on
my charts website um and that's called the top model and the top model means that um that's
historically if you follow this trend um like it hits the tops right um meaning um the price should
be under that, you know.
But if you get an exponential blow off top, then it would hit that.
Fingers crossed.
I've never made a price prediction for this cycle.
The last cycle, I got a lot of heat for making, I don't know, what is it, 400,000, 300,000.
The numbers keep changing because it was coming off that top model.
And that was actually spoken about in, I think, Peter McCormack's show.
and what I've come to learn
is that the tops are ridiculously unstable
like we mentioned before
because liquidity drops away
and it gets pretty chaotic
but if people are trying to pick a top
it's kind of a fool's errand
because if you look at the system
liquidity is dropping away
the system is becoming unstable
and very noisy and volatile
so if you get it
you're lucky.
The bottoms are very stable,
but the tops are very unstable.
And so what to look for is
when does liquidity drop away?
And then you know the risk is high,
but you don't really know the price
that it's going to hit.
When did you expect this cycle to top?
If you look at the liquidity picture,
it's starting to drop away
and you just got to take a guess
on when that might start to really create that super, super high risk zone.
And I think that the high risk zone starts in October
and then it can run all the way into first quarter of next year.
Even second, no one knows the future.
It depends on the liquidity in the system.
Jerome Powell, when the rates cut, what the investors do.
There's a lot of unknowns in the system.
But I think that currently shaping up October onwards,
the risk starts to climb.
Do you expect a wild blow off top or a steady climb
with institutions cashing profits along the way?
I mean, this climb has been very, very steady, right?
This bull market's been relatively steady.
And so I think a lot of volatility will be taken out of the system
because the cycle is less volatile.
I think we'll get a bear market.
I think we'll have increased volatility, but it won't be as wild.
I don't think it'll be as wild as last time.
I think we'll have a long bear market.
A long one?
Yeah, I think we'll have a long one.
I don't think it'll be as wild.
Did you see any similarities between the previous bull markets and this one?
Every one's been different.
Every cycle has been different.
So, yeah, I would say no.
So the thing that's different is that it's spot-driven, this market.
This market is much more spot-dominated.
The last bull market was derivatives had a lot of say in the price action.
You can see it in the price chart if you know what you're looking for.
And when do you expect the next bear market to bottom and at what price?
This is just guesses, right?
the guess for me would be
I'd expect 12 to 18 month bear market
I'd prepare for it
anything can happen
price wise
also a guess
using models
I don't think it's going to drop below
40,000
but we need to see
what the macro picture looks like
and just how deep the macro
bear market will be
this cycle I'm very very careful not to make
predictions because that's not my role to predict. My role is to see what's happening in the structure
of the market in real time. What's happening now? How does it look? What's it suggesting for the
next four weeks? And I think that's enough. That's enough to get an understanding of it
and to manage capital. I think trying to think 18 months out, and it's a warning actually,
If some talking head on a show is saying it's going to bottom in 18 months, the top will be 500,000.
These are just guesses.
You'd be a fool to listen to that person and make a financial decision three months out and 18 months out because majority of these talking heads will be wrong.
That's what I would say.
And I think that in Bitcoin we have a lot of new investors that might not necessarily understand just how inaccurate predictions are.
Do you expect any panic selling this cycle?
Yeah, you can break market cycles.
into phases and in a bear market you have a very highly volatile top you get a dead cat bounce
where it bounces up that's usually when you see liquidity falling away even more you know it's
for sure a bear market that's probably the best time to sell not at the top because you don't
really know and then you're going to endure pain the market's going to endure pain and generally
the tail phases, you get to a halfway point in the bear market,
and then the second half is when the panic starts to set in.
And then you look for the capitulation event where people have endured
months and months of drawdown.
They're like, I've had it with this asset, and they capitulate.
And usually that's a big work down, and people are just selling their own care.
And so, yes, that's part of the cycle.
So I expect it too.
It's the human psychology as well.
It's a very human thing, yes.
So when you sell at the start of the bear market, where do you park it?
I think, I mean, it's changed because I've been through the first bear market I was accumulating,
Bitcoin, the second one I was in stables.
The last one, 2022, I was in our fund of funds, which was yielding on USD.
I think this one, moving forward, I'll be doing Bitcoin collateralized lending.
I'll lend US dollars for some yield backed by Bitcoin.
Yeah, that's relatively robust.
What are your thoughts on Tether Gold?
I think a Tether Gold is dog food.
Let me explain that.
They're dog fooding their own product, as we say in startup terms.
That's a good thing, not a bad thing, right?
Because you can see Taylor's treasury is holding gold, right?
So they've built a product for themselves to hold their gold.
They're tokenizing their gold and they've offered that to others that want to do it.
That's how I think about it.
So do you trust stable coins not to be frozen or confiscated in a major financial or government crisis?
You know, I wouldn't put in my bank cash any significant amount because of that bail-in threshold.
In terms of Tether or Circle or, you know, there's what changes every day, but I think it's around 170 billion US dollars in that pool of capital.
Is the US government coming in to freeze that?
They might take the money out of your bank account, but to take $170 billion from Tether or Circle, who's going to buy their T-bills if they do that?
The US government requires buyers of their debt, and the fastest growing buyer of debt is Tether right now.
In fact, if Bitcoin price goes over the next 10 years to a million dollars, the T-bill buying, the short-dated T-bill buying is more than enough to replace China who have stopped buying the T-bills.
So the US government debt is reliant on stable coins growing.
So I don't think they're going to freeze that because that's kind of committing suicide on their debt.
They could do it, but that would be an absolute crisis, like absolute crisis, a fall of a nation state.
that could happen.
Yeah.
But, you know,
if that happens,
the nation state's going down.
Yeah.
That could happen.
Let me play you a clip
from my interview with Adam Back.
Does the halving affect Bitcoin's price?
Empirically, it seems to.
And the reason why that might be the case
is that the amount of new coins available
shrinks.
Now, I think some people
are sort of surprised that the halving continues to have a large economic effect because the
percentage reduction in supply compared to the total is becoming smaller over time, right? Because,
you know, if you're at 19 million and the number of new coins drops by only a percent per year or
something quite small, right, then they would say, well, why would a percent make a big movement?
They guess it would be a diminishing return. But I think actually the reason that is not the
case is that there's another effect which is the behavior in the market of the investors so i think
effectively newcomers become more convinced over time and then they start to save and hold for the
longer term and so while the percentage change arising from a new halving is diminishing each
halving the number of coins that are being cold stored is increasing over time it continues to
have so far a big economic effect each halving because you're looking at the reduction the change
in supply versus the amount of coins available for trade and as long as that ratio is you know
constant or even increasing then it can still have a large economic effect what's your take
do you think the halving is still matter for price it does in the moment i like what adam says because
it's a unique view right he's saying that the ripples the supply shock and the ripples in the
pond are getting smaller and smaller and he's saying the depth of the pond is getting thinner
and thinner so those waves are still having the impact the depth being the actual supply that's
being traded um now uh there was a touch point where he says more and more is locked away in
cold storage, more hodlers and so forth,
then that might be the case.
I haven't done the study on it
because it gets pretty tricky.
But we need to see if that is really truly the case.
What I do know is Bitcoin is becoming very, very liquid.
It is incredibly liquid for its size.
That means there's a lot of trading activity going on.
it's true that we're getting more coins
into cold storage that because it being locked away into the Bitcoin ETF and MicroStrategy for example That in cold storage but they are being traded right
They are being traded as in the shares
of the ownership is being traded.
That does have an impact.
And so I'm on the other side of the camp.
I think that the halvening
is getting smaller and smaller.
And I think the depth of the pond
is actually staying the same
or getting deeper.
I think the liquidity is getting deeper.
So I think it has less impact in the future.
But we're all speculating right now
because to date it does have an impact.
We're talking about the next cycles ahead.
So what signs will tell you
the four-year cycle is breaking down?
I would say that the free market stopped working.
How?
Maybe we would say free markets stop working, central banks stop working.
Because the four-year cycle is a superposition of two impacts.
One is the halvening and the other one is the global liquidity cycle of money printing.
And it just turns out that money printing, the surges of liquidity when nation states print more money, central banks print more money, it is a four-year cycle.
So they go hand in hand?
Hand in hand, liquidity cycle of the amount of fiat being debased, the rate at which it's being debased is oscillating four years.
And they superimpose onto the halvening cycle.
And so when the halvening goes to insignificance, will the resonant frequency of the debasement move from four years to something else?
And if that's the case, then we'll move to something else.
will be correlated more to macro markets than internal supply shock within the Bitcoin pool or capital.
How would a super cycle look like?
If we get a macro bull market for more than four years, I guess that's possible.
But yeah, I mean, it's also how you define it.
We might say it's a super cycle because it only drew down 40% and a bear market should be 80% or something like that.
But, yeah, for me, a super cycle is, it's all about macro markets now.
For me, super cycle is when it always goes up steady.
But climbing up, we wouldn't have better markets.
That's how I understand that.
Yeah, I think that's a figment of people's imagination.
I imagine.
When have you seen a market that only goes up?
I mean, I'd be very scared if that was the case.
Yeah.
Something's wrong.
Do you see any signs this bull market could stretch into 2026?
I know you already mentioned the beginning of Q1 26, but do you see any signs?
I mean, if, you know, like Jackson Hole, that just happened.
They've just thrown out the use of, you know, inflation metrics.
And that means that the feds allow the print however they see fit on other metrics.
and currently it was inflation that was holding them back from printing money.
And so, sure, like if we get cuts in rates,
which means more money printing,
liquidity can come into the system.
And how does that interact with the economy is the big question.
Because everyone's thinking that a whole lot of liquidity injection,
a lot of money in the system, all markets go up.
But you'll see that often they print as the whole market's caving.
to soften the crash.
And so it's not always that liquidity pumps market.
It's actually there to stop it from hard crashing.
Right now, I think the market's looking pretty fragile
and they should have been printing money much earlier
to stave off the recession.
Because this happened in COVID, actually.
The business cycle had hit those warning signs.
and the Fed was printing early, way before COVID actually hit.
And then when it hit, they printed like crazy
and you saw how it just bounced up, right?
And so a lot of it comes down to the timing of when does the liquidity come in?
And so far, all of this year, it's been late.
You see Trump been pushing for lowering of rates
and Powell has been holding off.
And now it looks like they will print.
The question is, is the business cycle going to come down hard against that liquidity or is it going to hold up and it's going to rise?
You know, so let's see.
Yeah.
What's the difference when ETFs and company treacheries lead the market instead of retail?
The theoretical answer is that it's more steady, right?
because institutions like MicroStrategy aren't going to sell their Bitcoin.
ETFs tend to be more traditional wealth people that are more steady,
let's say, in their investments decisions.
So we would expect less like downward volatility.
The question is, how real is that?
Because we don't know the investors.
I just know a lot of Bitcoiners are buying MicroStrategy.
and buying ETFs as well.
And so is it the same investors
just going through an institutional wrapper?
That's my question.
I think a lot of Bitcoiners are actually using
the security instruments this cycle around,
particularly around the treasury companies.
You can see it all over Twitter,
the amount of interest around MetaPlanet.
Originally, it was MicroStrategy.
Now, all of these treasury companies,
everyone's interested in it.
And I think that we haven't had much of an alt season
because that was the thing that was exciting
and now it's securities wrapped around Bitcoin.
Do you think we are already in the thrill and euphoria phase?
No I don think so It pretty boring the cycle actually yeah what the trap you see everyone walking into right now without realizing it i think in general there a lot of talk about
the money spigot's going to open and the market's going to run higher and higher and i think in bull
markets we're too bullish yeah i think that's the main trap right now um we've had talks of the
samsung mal god candle we've got talks of bitcoin going to the moon like 200 000 400 000 i don't
know what um and i think um bitcoin's not we're not in 2016 anymore we're not in you know like not
2016 bitcoin was below a thousand dollars um today bitcoin is you know for every every one bitcoin
you buy that needs an investor that fronts $110,000 to buy it off you.
2016, it was 500 bucks.
Yeah.
You know, so we're in an era where we need to gobble up trillions of dollars to move
price.
When people are bullish, they're thinking price targets of a million dollars are 10x
from there.
You know, back in 2017, it was 100x in one year.
but forget about these 100x's
we're a macro asset now
in that world
20% gain is a lot
so I think that people are too bullish
I think people are too bullish
I think we need to think about things as investors
long term investors
it's a great investment long term
but these 100x's or the 10x's
is the huddle hype real conviction
or it's just influencers dumping their actual liquidity on retail?
Yeah, I think that's too conspiracist.
I think everyone believes it.
Is it?
And I think also there's a feedback loop within particularly Twitter
where when you're bullish, everyone likes it.
Yeah.
And so that encourages the influencer to post more bullish stuff.
There's this kind of dichotomy.
The mainstream press are constantly negative about Bitcoin until recently.
But it's generally overly bearish.
And everything on Bitcoin Twitter is overly bullish.
And then there's a feedback loop.
And it's like, you know, I saw one going,
Bitcoin's going to hit $2 million or something.
And I think Henrik Zeeberg was like,
why don't we just call it around, you know, X number?
I think it was getting quite close to 5.2 million,
which is a number I figured would be like world GDP.
You know, there's limits, you know, 5 million Bitcoin price.
This cycle means that it's more than world GDP.
And so, you know, we're hitting ceilings.
So it's just this feedback loop within this little microcosm called X, you know.
Yeah.
So in part one, you said that during the 2008 crisis, the dollar was the safest asset.
What's the safest asset today?
In a flight to safety, the dollar is the thing that's not going to drop.
Still today.
I didn't say that was necessarily safe.
Well, maybe in a flight to safety, it's safe.
So, yeah, I don't think it's changed.
The flight to safety, I think, happened over four to six weeks, right, as the whole system
deleveraged.
so if we're in a crisis like that
the safest place has been the US dollar
because that's a world reserve currency
it depends on the crisis
I quite like the Swiss franc
if that was like the yen
these are like safe haven fiat currencies
as we know these fiat is not a safe place
to put things long term
but we're talking about an unwinding of leverage
and those are the places to put it
How do you expect Bitcoin to behave when the next big financial crisis hits?
It'll go down like everything.
When crises hit, everything goes down and there's a shakeout
and then some assets will outperform.
The last one was gold, right?
Because there was very little trust in the banking system
because it was shook.
The banking system is basically the creation of our money.
and so gold has always been the place to go to.
Bitcoin would do very well in that type of situation as well.
Do you think the Swiss franc will remain stable
through the crisis, through this next one?
I think it'll be strong.
Historically, it's one that's strong.
It's stronger than the gold.
Remember, when we're talking about this,
this is like over a period of weeks in a shock system.
We're not talking about a bear market.
A bear market, I mean, even then, I mean, is assuming the system staying up.
Like, it's very hard for a bear market to see things climb against US dollars.
Commodities might.
What's Bitcoin's biggest risk?
Centralization of the supply.
I think most of the other risks we can work around.
quantum computing, all these types of things,
the code base we can fix.
Even if it forks, we can bring it back on track.
It's happened before.
It's been pretty battle-tested.
The centralization of the supply is the highest risk
because that opens up nationalization of the supply.
And how do you sort that one out?
Self-custody, yeah.
Self-custody needs to be prevalent.
These Bitcoin treasury companies, they are a risk to the system.
Imagine if 50% of the supply goes and gets wrapped up in these companies.
They can be completely nationalized.
And we've done that before.
We've seen that being done before.
And that's how we got to fee it.
We had gold as money for 6 years And it was medium exchange and store of value everything and then in the 19th century we started making the gold redeemable for paper notes
So now the store of value is sitting in a vault held by a bank.
By the 20th century, it was all sitting in Fort Knox
and everyone's trading US dollars around it.
And then what happened?
The redeemability got snipped and now we have fiat
and the whole world got rugged into fiat
through this kind of a
it took a couple hundred years to do it
now the same thing can happen to Bitcoin
if it doesn't get used as a medium of exchange
if people aren't self-custodying
we're all just happy with our micro strategy shares
and our ETF shares
store value is sitting in these vaults
these cold storage vaults
that are owned by the company
who have the private keys
and that can totally be nationalized
and the same history repeats
and that's a huge risk to the system
because we've taken 16 years to get this point
and it's been the hard work of so many people
and communities and everything that's gone into the Bitcoin
and if it gets rugged now or 10 years from now
and our little experiment called Bitcoin
that reached multiple trillions
just got turned into a gold story
where it got rugged into fiat again.
That's the risk.
What do you think is more probable
that the US government will nationalize, for example, Coinbase,
the custodial of most of the ETFs, or the Bitcoin miners in Texas?
I think Marathon Digital is the only one that's really holding a lot of Bitcoins.
They may be mining, and that's effectively providing security in the network.
But you can nationalize those companies, sure.
but the mining network is worldwide and global
and so miners will move elsewhere
and spin up new mining capacity.
They'll go to where the cheapest power is.
Who holds those Bitcoins that have been mined
is the issue.
Marathon Digital holds the most out of the miners.
Right, it doesn't hold it.
Yeah, they hold a little bit.
Marathon by far holds the biggest chunk of it
but that's nothing compared to the amount
that strategy holds and the ETF holds, right?
And so what's the point of nationalizing the miners
that are providing security onto the network
when that can be spun up anywhere?
That's quite decentralized in a way.
So the supply is the risk.
The supply is the risk.
What could outperform Bitcoin?
And what are you betting on?
I tell you, a lot of things will outperform Bitcoin.
Very, very few.
I don't know of anything that can outperform Bitcoin
adjusted for the risk you're taking.
The return's relatively easy to understand.
The risk you're taking is usually very hard in other investments.
Bitcoin's risks are very, very low if you're self-custodying,
if you're willing to handle the volatility,
particularly bear markets.
For myself, I'm more inclined to invest in Bitcoin infrastructure,
startup ventures, because they will outperform Bitcoin
if they're successful.
If they're not, you can lose everything, right?
So it's higher up the risk curve and higher returns.
I think it's a worthy thing to do to invest in the infrastructure.
And I think it's lower risk than other startup ventures
because you've got the tailwinds of Bitcoin growing from $2 trillion
to potentially $200 trillion in the next 10, 20 years.
So that's a huge tailwind.
These companies, if they get any kind of size beyond the early phases,
they should have a Bitcoin treasury.
So that's going to grow as well.
So there's a lot of de-risking
in these types of investments
if you can handle how to navigate them.
A few quick ones before we wrap up.
What's your strongest conviction
for the rest of 2025?
That a bear market's going to hit.
It's going to hit in 2025.
It's going to hit soon.
If it doesn't hit 2025,
you should be getting ready for it.
That's my opinion.
But don't trust me, do your own research, right?
So what's one thing you're still not sure about?
I'm not sure about the centralization risk.
I'm not sure how this is all going to play out, whether or not Bitcoin will actually work
because of the centralization powers that play right now.
Give me your Bitcoin price call for December 25 and for the midterms in November 26.
Didn't I say I don't do predictions anymore?
Yeah, I'm just testing, just trying.
Maybe you forgot, you know, it was like 20 minutes ago when you said it.
I could be, I'm pretty sure it's not going to go negative like Peter Zeehan says.
So how's that for a prediction?
That's it?
So for December 2025, they don't give us anything.
It depends if we're topped or not, right?
And I think we're, it's like we're playing chicken with a freight train, you know, when
we're looking at how close to the top we get.
Yeah.
Yeah, we know that the top's coming.
and what's a lesson you learned the hard way that you wouldn't trade for anything
can you narrow it down no i was hoping you could there must be a lesson there or a few
the lessons to learn are really the ones the most important are the ones on how to manage yourself
how to manage your mind, how to manage your emotions,
how to know yourself, I think.
Those are the lessons.
I think they're lifelong lessons and you never get there,
but know yourself.
Why is it so difficult to know yourself?
Because I believe we're infinite.
It just keeps going.
Yeah.
Thank you for your time in this generous conversation, Willie.
Where can people follow you and your work?
The easiest way is to get on X and look for my handle, Unomic, my profile links to the other stuff.
Can't wait to have you back. Until then, stay sovereign.
Thanks, Eke.