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Everyone should have the right to have sound money that is not debased, that allows them

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the ability to have censorship-resistant money and seizure-resistant money. When you look at

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all of the other options from an investment perspective, and you boil that down to what

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the upside is for Bitcoin over the next 10 years, which I still believe we've got 100x in front of

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in the next 10 years, Bitcoin becomes undeniable.

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And that word again is going to pop up

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when Bitcoin breaks an all-time high

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in the next however long it takes.

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There's going to be a lot of capital on the sidelines

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that is going to chase that.

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And that's where we'll see a real pop.

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Peter Dunworth back on the show,

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the most bullish man in Bitcoin.

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Price is down, sentiment is shot.

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This is why I need to talk to you right now.

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You're the most bullish man that I ever speak to.

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How are you doing, man?

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Life is beautiful.

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Always is.

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What's your take on this whole market right now?

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I think in a word, it would be testing.

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I think this is a period of time for Bitcoin that is different.

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It's unlike any other time that we've had.

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I think Bitcoiners have been very fortunate that they have had the fastest horse for the

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last 15 years.

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and this little startup called AI has come and taken that crown as the fastest horse.

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And I think it's causing a lot of doubts for people who were here for the number go up,

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but don't understand what that really is.

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It's really freedom go up technology as one of our good mates Alex Gladstein talks of.

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And this is where I think in this type of market,

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it's really important to understand from a first principles perspective,

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what you own, why you own it and what you want to do with it.

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And this is where recent changes to Bitcoin or recent developments in Bitcoin like the ETF and the treasury companies and the rest of it really sort of blurs that line to what Bitcoin's initial value proposition was, which was sovereign money, money you basically can't mess with.

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and the last two years a lot of attention has been distracted from Bitcoin to talk about the

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Bitcoin proxies which was the ETFs and the treasury companies and the whole value proposition of owning

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and self-custodying Bitcoin I think has sort of been lost in the wash with the marketing attempts

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for the treasury companies and the ETFs but in moments like this I think it's really important

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to go back to well what was that value proposition? It was about sound money that was censorship

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resistant, seizure resistant with absolute digital scarcity. And in times like this,

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when it's really bearish, I go back to that and think, has any of those values changed?

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Have any of those values been compromised? And at this point in time, I look at that and say,

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no, no, no. So for me, it's a massive tick of approval for an opportunity to buy at really

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discounted prices when sentiment is actually like, I've never seen it this bad because of

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those factors I talked about. It's a very different psychological condition for most Bitcoiners that

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haven't gone through this. We've never had to deal with it before. But if the value proposition of

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Bitcoin is still intact, then I haven't seen a better buying opportunity than where we are right

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now. Yeah, I think one of the reasons that sentiment has been so bad is like if you compare

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it to the crash, like the FTX crash, the bottom of last cycle, there was a very clear reason.

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There was like out and out fraud that had been happening, which had an impact across the entire

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market you knew why bitcoin was crashing and like you say the the fundamental value of bitcoin had

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nothing had changed so therefore like it's quite easy to hold through that whereas this time it

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feels like we've had a crash and it's like you can kind of blame it on iran but then we didn't

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perform that well last year compared to things like gold and silver and it's like it's hard to

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point point out why we're at where we are right now and it's also hard to point out why we'll go

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up again because like we always had the thing that was coming next which was like etfs or or whatever

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but it's like what's next like we've got countries that buy bitcoin we've got etfs like unless we

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just go to bigger and bigger countries like who's the buyer but i also think that's why whenever we

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do break through the next all-time high it's like we don't need a reason and if we don't have a

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reason that's even more powerful i agree wholeheartedly on that and i caught up with our

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mate check um just yesterday talking about this when it goes through the next all-time high

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all of this negative sentiment, I think, will go by the wayside. And the word I think would be best

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to describe that is Bitcoin will then become undeniable. There won't be a reason for it to

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break all-time highs. It's just going to chug along. It's going to bore us to death. It'll

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break new all-time highs. We'll be back there. Everyone will be looking around for narrative to

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spin. Oh, is there a strategic Bitcoin reserve? Has there been basically a large company that's

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you know, talking of buying it, a nation state's now mining it, like whatever the narrative is,

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I think price creates narrative. We're going to look for stories to explain what's happening.

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And we're just going to come to the point where, you know, absolute digital scarcity meets demand,

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and it's just going to create a completely new paradigm. And this is where it's probably very

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un-PC to talk about this at this point in time where cinema's so bad, but I'm like,

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So when unlimited demand meets a vertical supply curve, prices have to go up.

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And this is where I still don't put out of contention basically a vertical price rise in this.

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And if I can give you an example as to why I'm still hoping, well, I'm positive that that can happen in the next five or 10 years is,

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if you look at markets and market structure, everyone wants to say, oh, no, prices go up, it reverts to mean and all the rest of it.

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I'm like, yes, that's true, but we've never had absolute digital scarcity before.

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And if I look at the most egregious example of this just price spike in a traditional market

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that's had hundreds of years experience, have a look at the nickel trade from March 2022,

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where literally nickel prices went up 300% in 24 hours.

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And I look at that and I'm like, nickel, it's so innocuous.

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It's so available.

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There's no limitation on how much you can mine on this.

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and in the space of 24 hours, it went up 300%, maybe more. I'm like, well, I know Bitcoin's a

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little scarcer than that. I know it's far more valuable than nickel. What happens when the world

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figures that out? And this is where the omega candle that Samson loves talking about. I agree,

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at some point in time, we're going to see this. And this is where I think days like this and

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months like this that we've been through are just going to go by the wayside. And the problem with

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owning Bitcoin is that you need to hold it for a long period of time. There's no predetermined

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periods where you can get in and out on a daily or monthly basis that's going to outperform.

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And if you miss that type of candle, you've just blown your entire time in Bitcoin.

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And that's the hard thing, I think.

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100%. So do you disagree with the idea that we're going to have diminishing returns as these

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sort of cycles continue?

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100%. Yeah. Because as you build out the credit markets on the back of it, and this is where

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a lot of the criticism of what I talk about comes in the form of people really don't understand how

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price is determined at the margin. And this is where when you lock away self-custody Bitcoin

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and it's not available on the market, you can't re-hypothecate it, then there is only one thing

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that happens when those market conditions are in place. And that's where what we're going to see is

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the power law is flattening out. And I agree that that is a real thing. But what I actually think,

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and I haven't seen anyone talk about this, Wicked Smart's probably done some great visuals on this

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where it's actually going to be more like an S-curve where it flattens out like that and then

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it starts increasing in exponential returns through time. So it's going to be a reverse power law

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to the upside where returns start flattening and then they start steepening through time when people

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really understand what this thing is. But that confidence to talk about that really only comes

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from an understanding, a deep understanding of what Bitcoin is.

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And I actually think Bitcoin is a need, not a want.

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And when 8 billion people figure that out, they're going to want Bitcoin, not the fiat

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money that basically the US is trying to distribute globally and disrupt money supplies.

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Why do you think it's a need, not a want?

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I think it is a need, not a want, because everyone should have the right to have sound money that is not debased, that allows them the ability to have censorship-resistant money and seizure-resistant money.

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And Bitcoin is the only money that offers those qualities that I'm aware of.

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yeah it's i wonder if we get back to bitcoin being the hottest trade again um i think we will but

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it's hard to figure out how without a narrative forming around it because like narrative in

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markets is kind of everything ai has been has definitely had all the wind behind its sails

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over the last few years on that and i don't know how we get the attention back and maybe that means

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a massive blow up in the like the bubble pops in the ai market but at the same time when like i

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imagine that also means Bitcoin price goes down. I'm not sure about that. And let me give you some

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anecdotal stories of what's happened in the last month of me talking to clients. We have had,

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I've probably spoken multiple different clients, but just some high, high level stuff. Some clients

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who have been very successful in that AI trade. And this is if I just take a step back before I

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go into this. What I want from the AI trade is I want the AI trade to go exponential. I want that

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to be a massive blow-off, like absolute super returns like we've never seen before.

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Because what I am assured of, if that happens, is, and this is to my point talking to a number

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of clients, they've been very successful in AI, they've made a small fortune in it,

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and they're looking around thinking, hey, I'm holding really expensive AI stocks,

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I need to rotate, and I want to rotate into something. Bitcoin looks like a monopoly on

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sound money. I want to have some exposure there. And so the rotation is going to come.

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And because a lot of the AI investors are very tech savvy, they understand what tech looks like,

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the previous places that they could put money are no longer there. They can't put their money into

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the Mag7. They can't put their money into software stocks because those stocks are the

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very stocks that are getting disrupted by the previous investment that they're trying to roll

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out and get diversification from. So they're not going to put money into the assets and the

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industries that AI has disrupted. They're going to look around and figure out, well,

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what's the next thing that I can put money into that is not going to be disrupted by AI,

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that's going to be sound, that has a moat, that has a clear market leadership,

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that's basically won the race. And I look at this and I think they're going to roll into Bitcoin

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and they're going to realize that the total addressable market for Bitcoin is not in the

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trillions of dollars, it's quadrillions of dollars. And this is where we're going to have a host of

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money roll out from that into Bitcoin. That actually does make a lot of sense to me because

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like if I had a lot of money in the AI trade right now, like I would be looking at that in a Bitcoin

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denominated way and thinking, when's the best time to get out? And at some point I can actually see

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that capital moving across. The reason I said I imagine Bitcoin would perform badly in that

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scenario is because it is so correlated to the Nasdaq. I've not actually looked at the stats on

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that recently, but it at least was until sort of the back end of last year. It's still highly

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correlated. More than the NASDAQ, the software index, basically Bitcoin is more highly correlated

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to than the NASDAQ itself. And I look at that and think at some point in time, we're going to have

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the dislocation in that correlation. And then we're off to the races. And this is where I think

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over the next sort of six to 12 months, we will see a bottoming of price in Bitcoin. And we'll

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start to see that those markets have the dislocation that we talk of and want. So they won't be

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correlated for long. Do you think the AI trade is already getting overcrowded? I don't know if

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you see, I saw a crazy story about a shoe company that I think was a big deal in Silicon Valley.

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And then they were struggling, they sold off all their assets and turned into an AI data center

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company. That seems like peak top behavior to me. And I just don't know how much longer it's got to

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run. I think the demand for computers is going to be high for a long period of time, but it doesn't

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mean that the market's not overpricing it right now? Good question. I don't think it is. I think

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both things can be true. They don't need to be mutually exclusive. I think we can be in the

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early innings of AI. I think we're probably 10 to 15% of the way through the build out.

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But at the same time, I think things can be really expensive. I think there are going to be

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bottlenecks in certain areas of AI, which are going to be difficult to monetize and they're

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going to look like a bubble and they'll get ahead of themselves two or three years ahead of

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themselves, but I think we've got another five years of really strong investment in that space.

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And the thing that worries me and I guess it boils my confidence in the space at the same time is

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it appears to me that AI has been given approval or the endorsement, whether it's explicit or

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implicit from the US government that this is something through the Department of Defense that they have to win and it is an existential threat to the US that they will pull whatever money is required into winning that AI race Now if they got

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to build out the ability and the infrastructure for the next 25 or 30 years in order to win that

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race, they're prepared to do it. And we just need to look at what happened with the internet.

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Literally, we're still using internet that was rolled out in the early 2000s. We've only just

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digested that ability from the infrastructure that they created there. And I think the same

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thing's going to happen with AI. AI models need to get better. Tokens need to become more efficient.

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But a big concern for me is around the CapEx cycle of the big AI infrastructure companies in that

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all these GPUs have got basically a shelf life, not much longer than shortbread.

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And the problem with that is that you're on a continual CapEx cycle that you have to

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reinvest huge amounts of money on an ongoing basis just to get a similar return. So are we

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going to get it? I don't know. I think we will. Much smarter people are talking about this than I,

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but the concern I've got is that you've got a very expensive CapEx cycle with a very short

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payoff period that needs to be met. And I just don't know if we're going to get the revenues

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right now. I think in the future we will, but that's up for debate at this point in time.

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it's um the only reason i would kind of question the idea that this has another five years to run

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is i think it's going to get heavily politicized in the next election in the u.s like i don't think

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the democrat side like it at all i don't think they like the data centers um i think narratives

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will get really skewed around that i agree but there's a lot of money in it and so i think the

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the dems are going to change their mind on it and this is where um the dems are going to change

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their mind on the Clarity Act as well. Once they realize that once that Clarity Act passes,

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they can basically print money like it's going out of fashion and they can pay for all of their

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harebrained ideas on both sides of the aisle, Clarity Act gets passed. Maybe no one's explained

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it to the Dems in that way yet, but I look at that and think there's going to be a huge amount

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of wealth created with this AI and people will pay a lot of money. And for that reason, I think

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money talks, look at the incentives, I'll show you the outcomes. The Dems will come around to that

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and they won't want anyone else to win that war. Yeah, I guess, especially if they're being pitched

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by the deep state, this is a geopolitically important thing to do. I guess that might help.

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Just quickly, last thing on AI, have you been following this SpaceX IPO that's coming out?

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I think it's Friday. Yes.

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See, when I look at that, I think, is that another top signal in the AI thing? Is this going to be

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just completely destroyed as soon as it actually APOs?

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It looks that way to me, but I think they've been very clever with the way they've

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staged the escrow periods. So there's not one escrow period where after 30 days, 90 days,

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whatever it is, a lot of the stock comes to market. They have created the ability to stage

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that in a much longer cycle. And I just think there's enough demand for that, that I don't think

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that will drop significantly. And by significantly, I just want to sort of point out to everyone

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listening that significant now means a 50% drop because I think markets are now so much more

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volatile than they were previously, particularly around this AI space. So long-term, it's really

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hard to bet against Elon. He's been so successful. He's the richest man in the world. He's done so

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much for the world. Others would say he's done so much bad for the world. But as a net net,

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And I think he's had a great impact on humanity and wants the best for it.

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Whether you disagree with it or not is another thing.

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But I think he'll find a way to make it profitable and deliver on his promise to make everyone

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wealthy.

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And it's very hard to bet against the richest man.

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I think it's going to be really important to make sure you're on the right timeframe

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or you're investing with the same timeframe that he is, if you want to get wealthy doing

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that trade.

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But for me, there's too much noise around it.

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I know too little about it.

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So I'll just stick to Bitcoin at a 50 or 60% discount to its all-time highs.

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Looks like a better bet to me.

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Yeah, I'm with you there.

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Why do you think traditional markets have become so volatile?

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Like when you watch the AI stocks sort of intraday, they're way more volatile than Bitcoin at this point.

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That's a good question.

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I think traditional markets were very concerned about the volatility of Bitcoin.

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And they thought with the introduction of the ETFs and treasury companies that they were going to tame that volatility of Bitcoin.

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But what has actually happened, in fact, is the complete opposite.

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What we've seen is the cryptification of the TradFi markets.

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Volatility has increased.

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All of a sudden, you've got daily swings like you would not believe.

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It'd make your eyes bleed.

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Have a look at the AI stocks and everything that's happening in that space.

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You know, it'd make Bitcoin blush when it comes to volatility.

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And I think what we're seeing is we are in a hugely uncertain world right now, geopolitically, politically, macroeconomics, you name it, it's all up for grabs.

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There's no real certainty around what we have.

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And there is a disruption to the current business models that are making the day-to-day investment that we're used to for value investing become very difficult.

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and this is where, if you have a look at, say, Warren Buffett's performance since 2000,

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when some laws changed, where he wasn't allowed to get insider information,

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the return for Berkshire Hathaway has basically mirrored the S&P 500.

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And I look at that and think, well, that kind of says it all.

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There's certain parts of the market which are extremely volatile

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and they're going to continue to do that

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because that represents the growth and opportunity that lays ahead.

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And then the traditional space, I think, is going to get disrupted because that traditional space, I think, has huge headwinds ahead of it because over the last 20 years, rather than actually building productive businesses and working on the business, what they've done is they've financially engineered their balance sheets to create a better outcome.

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They had this stupid idea from business school, which worked for SharePrize, to have, they

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wanted to not have lazy balance sheets.

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What they wanted to do is they didn't want to sit on big amounts of cash.

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They wanted to basically run really lean.

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They wanted to have really high debt levels.

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So they could basically say, oh, we've got a really great return on equity.

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Look how efficient we are with your capital.

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And what the problem with that is, is that when you build up debt on the balance sheet,

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it makes you extremely fragile.

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from withstanding any sort of monetary hit or downturn in your business.

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And so, although it looks really good from a return on equity perspective and look how

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great we're growing and all the rest of it, it creates a vulnerability to the success

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or long-term success of your business.

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Then I think what we're seeing right now is the fragility in the system build up with

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those traditional businesses whereby they've over-financialized their balance sheets, they've

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been too smart by half and it's now making them vulnerable at a time when AI is coming in and

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disrupting these businesses like we've never seen before. And this is where, say, on the day-to-day

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when I talk to clients about businesses that want to pay dividends and they want portfolios that

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create a dividend income that they can rely on, I don't want to be investing in those types of

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companies because they're typically companies with high debt ratios. They've got vulnerable

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income streams that I think are going to be disrupted. And the income that the client's

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relying on, I don't think they can rely on that for too much longer. And this is where

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you really want to focus on total return versus income, because by the time you pay the taxes on

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total return, you're going to pay a much smaller amount of tax and you're going to get a much

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better outcome from a return perspective. But you've got to be comfortable with watching the

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volatility of your portfolio go up and down and not putting your head on the pillow at night

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thinking, isn't it wonderful? I've got a 5% treasury note that will never go down. It's like,

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no, you need to look at the big picture. You need to understand you're being debased. You need to

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understand you're getting ruined from inflation at the same time. And a lot of people, as they get

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older, I think they just don't want to deal with that. It's over. Like, just let me have my 5%.

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That's all I need. If you already self-custody Bitcoin, you know the deal with hardware wallets,

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complex setups clumsy interfaces and a seed phrase that can be lost stolen or forgotten

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well bitkey fixes that bitkey is a multi-sig hardware wallet built by the team behind square

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and cash app it packs a cryptographic recovery system and built-in inheritance feature into an

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intuitive easy to use wallet with no seed phrase to sweat over it's simple secure self-custody

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without the stress and time named bitkey one of the best inventions of 2024 get 20 off at bitkey.world

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when you use the code WBD.

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That's B-I-T-K-E-Y dot world

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and use the code WBD.

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The thing that keeps me up at night

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is the idea of a critical error

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00:22:31,990 --> 00:22:33,110
with my Bitcoin cold storage.

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And this is where AnchorWatch comes in.

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With AnchorWatch,

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your Bitcoin is insured

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with your own A-plus rated

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And all Bitcoin is held

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in their time-locked multi-sig vaults.

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So you have the peace of mind

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knowing your Bitcoin is insured

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while not giving up custody.

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So whether you're worried

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about inheritance planning,

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or just your own silly mistakes, you're protected by Anchor Watch. Rates for fully insured custody

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the US. Speak to Anchor Watch for a quote and for more details about your security options and

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coverage, visit anchorwatch.com today. That's anchorwatch.com. Bitcoiners, as you know, with

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accounts, tax loss harvesting, asset-backed loans, and more. SWAN have helped over 100,000 clients

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since 2020. And if you're serious about acquiring and securing Bitcoin, I recommend SWAN. Meet the

308
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team at swan.com forward slash WBD, which is swan.com forward slash WBD. So just a minute ago,

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you were talking about the Clarity Act and you said it allowed to print as much money as possible.

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What do you mean? This is something I've not heard before.

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Oh, so I've yet to hear people talk about the Clarity Act in this term, but the Clarity Act

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will enable the US banks to print as much money as they want and distribute stable coins globally.

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Now, what that means is you have a captive buyer for the treasuries that are required to be

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purchased to issue stable coins. And when the treasuries are being purchased, that basically

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gives the US government the ability to sell the treasuries, which they haven't been able to

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successfully, to new buyers. And what this is going to look like, I think, and I'm yet to hear

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anyone talk about it in this detail, but it's going to look a lot like the EU's euro that they

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developed. So they conglomerated a whole host of European countries, with Germany being the major

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manufacturer, France, England, the rest of it. When that came out, what that basically did was

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that allowed the Germans to basically sell their goods and make huge amounts of money.

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Exports went out the wazoo. They were hugely successful with that because they effectively

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lowered the value of their dollar. What that meant was they distributed a lower interest rate to the

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poorer economic countries in the EU. But at the same time, that enabled the German manufacturers

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to basically take advantage because they had a weaker dollar. Now, I look at that, what ended up

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happening was all of the economic development happened in Germany and France, and the rest of

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the EU countries basically went by the wayside. The payoff was that they got to access cheap

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interest rates from the EU. Great deal. Everyone wins, sort of, but not really. And we're watching

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the manifestation of the last 25 years, well, the last 20, yeah, 25 years or so of the euro

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come undone now because you're seeing, I guess, disharmony in Germany, France, Greece, you know,

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all around, no one's happy in the EU. I look at what we're about to embark on with the Clarity

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Act and the stable coins that are basically going to get issued around the world. You've got the US

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basically going to issue a global reserve currency that everyone around the world will be happy to

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use. And the reason why they'll be happy to use it is because it's far better than what their current

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option is. It'll be better than the New Zealand dollar, it'll be better than the Aussie dollar,

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it'll be better than the Chinese yuan, although they probably won't let that happen in China.

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It'll be better than the euro.

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It's going to be better than any other currency.

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And what we're going to see is a flood of capital into that stable coin because it's

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better than that.

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And at the same time, what that's going to do is that's going to disrupt and destabilize

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local federal governments because it undermines their ability to print money and do what they

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want because the local population is going to want to use a US dollar rather than a peso or anything else So that one of the arguments I totally understand it when you talking about a country

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like the obvious example

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that everyone always uses Argentina.

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They went through periods

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of really high inflation.

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And so you don't want to save

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in the Argentinian peso.

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So I get that they would want to save

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in the US dollar.

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But for me in Australia,

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I mean, maybe I'm a weird case

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because I don't really save anything in dollars.

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I have it all in Bitcoin.

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But like...

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I wouldn't want to use it as a, like, would you be able to use it as a transactional money?

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Like, would I be able to go and buy things with it?

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100% you will.

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Absolutely.

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Why?

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Like, what's going to make the coffee shop down the road to accept it?

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They're going to mandate it.

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It's not a choice of why would you make them accept it.

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The coffee shop owner is going to figure out, hang on a second, this US dollar doesn't go down in value.

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whereas my local currency goes down 15% to 20% per annum.

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The local coffee store is going to mandate a stablecoin payment on it.

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The thing that this just kills me with is I wish they would just accept Bitcoin.

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We need to push the Bitcoin message further.

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So do you think that really is like the start of the death of,

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I think there's 180 currencies in the world.

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Do you think in 10 years' time we're going to be down to like 20?

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Yeah, I do.

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And I think they're all going to be...

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basically surrogates of the US. And you look at how China works their currency, they've got the

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Chinese yuan, which is foreign, and then you've got the onshore dollar, which is the renminbi.

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The Chinese run two sets of books. Now, even Blind Freddy can tell you someone running two

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sets of books is basically conducting a fraud on you. So the US, and not saying that this is a

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fraud or the renminbi is a fraud or whatever, just to get out there and clarify, I don't want to get

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sued by anyone. But what the stablecoin looks like is they're going to issue stablecoins and

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the stablecoins are going to look like the Chinese yuan. That's going to be the euro dollar for

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America. That's going to allow them to control capital flows and be very beneficial to the US.

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At the same time, they'll have the onshore US dollar, which will be controlled by the local

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banks as well. So all of a sudden, liquidity flows are going to basically be controlled outright

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globally by the US. Because the benefit that the US have in that, which Germany never had,

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is they don't have to look after all the other states in their union. Germany becomes the big

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daddy of the EU and has to share money with Greece and the other failing states, whereas the US doesn't

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have to do any of that, but they still get to export their dollar. Is this kind of like the US

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just completely dominates in this situation? Yep, 100%. Is that good for the world?

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yes and no. I look at, you know, the US has been a pretty good provider as far as a world leader

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goes. They've done some shitty stuff, sure, but on the balance of things, they've been

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quite tempered with their response to a lot of things. And I think if you asked someone,

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would they want the US dollar or their local currency? I think nine out of 10 currencies

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would jump at the opportunity to have a US dollar as their stable currency.

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The people would, for sure.

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The governments might not.

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Well, this is going to be the clash that we're going to see.

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You're going to have governments try and enforce and ban the US dollar stable coins, and you're

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going to have local people want that.

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And this is going to cause great friction across the world, I think.

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And this is where, although I don't want to endorse the US dollar, I think it's really

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important that the US dollar, what I term as, it's better bad.

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Yes, it's bad, but it's better than what the alternative is at this point in time.

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And the problem is, and this is where I think maybe Bitcoiners, libertarians suffer the

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00:30:53,180 --> 00:30:56,960
same fate is, unless it's perfect, we don't want to have an improvement.

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We will die with the current system rather than say, look, nothing goes from zero to

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a thousand.

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You have to have incremental forms of improvement.

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And I look at this and think, is the US dollar better than, say, the Zimbabwean dollar?

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100% it is.

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Is it better than the peso?

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Yes.

412
00:31:13,140 --> 00:31:37,820
So if we're continually improving that, it just gets us down to a point in time where the future will look like the US dollar and Bitcoin. And truth be told, the beautiful thing about having a US dollar and Bitcoin as the two major currencies globally is that Bitcoin can go up forever when the US dollar exists. But it cannot go up forever exponentially if there's no US dollar.

413
00:31:37,820 --> 00:31:44,000
so i i never know which side of this i fall on whether i think stable coins can help

414
00:31:44,000 --> 00:31:48,340
bitcoin adoption or if they hurt it because like if you're in one of these countries with a poor

415
00:31:48,340 --> 00:31:53,280
currency and you have the option of you know bitcoin or us dollar stable coin like i think

416
00:31:53,280 --> 00:31:58,240
the obvious stepping stone is the stable coin like it makes more sense to you initially and

417
00:31:58,240 --> 00:32:02,240
then people use the idea that like once you're on a stable coin once you're on sort of cryptographic

418
00:32:02,240 --> 00:32:06,160
rails it's easy to get to bitcoin i just don't know if that part's true like i don't know if

419
00:32:06,160 --> 00:32:09,380
this actually delays the adoption of Bitcoin by giving them a better alternative now?

420
00:32:09,820 --> 00:32:13,140
That's a really good question. I'm torn on that too. I don't have an answer,

421
00:32:13,220 --> 00:32:19,620
but one thing I will say from the research I've done is it looks like 20% of all issued stable

422
00:32:19,620 --> 00:32:26,620
coins ends up in Bitcoin. So I look at that and think, well, that's a lot. And although it's not

423
00:32:26,620 --> 00:32:31,420
perfect, it's still better than nothing. And so I look at that and I'm really torn. Like you,

424
00:32:31,480 --> 00:32:35,320
I don't know where to fall on this side of the argument that I think there is benefit to stable

425
00:32:35,320 --> 00:32:40,920
coins. I think at some point in time, having used them personally, I think there's great benefit to

426
00:32:40,920 --> 00:32:46,200
them, particularly for short-term purchases. For long-term savings, I think it's a horrible vehicle,

427
00:32:46,340 --> 00:32:51,900
but for people who need to conduct business, who have got volatile swings in their own currency,

428
00:32:52,460 --> 00:32:58,800
having a stable coin to fall back on for short-term purchases and receivables, accounts payable,

429
00:32:58,860 --> 00:33:04,000
things like that, is wildly beneficial. And this is where, with Bitcoin and its volatility,

430
00:33:04,000 --> 00:33:14,160
I think it's difficult for anyone with less than a 12 to 24 month time period, as far as payments go, to really want to be saving Bitcoin from a short term perspective.

431
00:33:14,480 --> 00:33:15,620
Long term, undefeated.

432
00:33:16,100 --> 00:33:23,960
But that short term use case is very difficult for risk averse people to want to save in Bitcoin.

433
00:33:24,520 --> 00:33:24,680
Totally.

434
00:33:24,820 --> 00:33:25,340
And don't get me wrong.

435
00:33:25,460 --> 00:33:27,660
I think everyone should have the option of having better money.

436
00:33:27,780 --> 00:33:29,840
And I just think Bitcoin is the best money.

437
00:33:29,840 --> 00:33:40,460
But maybe the flip side of that is if they have a slightly more sound money in the US dollar rather than whatever the local currency is, maybe they're able to save better and then maybe they actually have capital to put into Bitcoin.

438
00:33:40,460 --> 00:34:00,760
That I think is a huge thing. And if you look at, say, how I use Bitcoin as a savings tool, all of my savings go into Bitcoin. And I guess the big thing about having that is I don't have the concern about short-term day-to-day fluctuations of Bitcoin, basically because I've sat in it for a long time.

439
00:34:00,760 --> 00:34:06,760
But I've got the equity built in that, that I'm not worried if we have a 10 or 50% drawdown in it.

440
00:34:06,820 --> 00:34:09,240
I understand that's part and parcel of what it is.

441
00:34:09,360 --> 00:34:17,920
But given where we are in the adoption phase, I think less than 5% of the globe has really adopted Bitcoin in any meaningful way.

442
00:34:17,960 --> 00:34:19,760
And I'd actually say it's more like less than 1%.

443
00:34:20,300 --> 00:34:20,820
Yep.

444
00:34:21,380 --> 00:34:25,800
You need time to build up that equity base that you hold in Bitcoin.

445
00:34:25,800 --> 00:34:31,780
and for that reason I think it's really important that you've got a less volatile version of it

446
00:34:31,780 --> 00:34:40,200
aligned in some way shape or form from a cryptographic perspective with Bitcoin that's

447
00:34:40,200 --> 00:34:44,960
not Bitcoin and the stable coin I think it does serve a purpose till everyone's on board it once

448
00:34:44,960 --> 00:34:50,680
everyone's on board it and has had that then that's a different story but we're a long way from that

449
00:34:50,680 --> 00:34:59,760
yeah totally um i mean bitcoin right now is at 62 500 um i actually once when we hit 60 last time i

450
00:34:59,760 --> 00:35:05,620
actually didn't expect us to go back here obviously totally wrong um do you think this is like we are

451
00:35:05,620 --> 00:35:10,920
forming a bottom here do you think we're close to the bottom we have to be just statistically

452
00:35:10,920 --> 00:35:17,500
speaking we've had a 50 drop from where we were um if you go back over the last major crashes for

453
00:35:17,500 --> 00:35:23,820
the last 10 or 15 years, you've typically seen an 80 to 85% drawdown. In a worst case scenario,

454
00:35:24,120 --> 00:35:30,580
we're 50% of the 80% there, so we're more than halfway to the bottom, I think. Do I think it's

455
00:35:30,580 --> 00:35:36,680
going to go much lower than that? I don't. I think we're pretty close to it. If you look at a cost

456
00:35:36,680 --> 00:35:42,140
basis, you look at a whole host of other measures, I can't see it really dropping more than 30% from

457
00:35:42,140 --> 00:35:48,280
here. We're already at a very low rate. We didn't have a huge blow off top. We've come off dramatically.

458
00:35:48,580 --> 00:35:52,000
There's a number of reasons I can give you for why I think we're at great value here. But

459
00:35:52,000 --> 00:35:57,600
typically, I suffer from a very optimistic bias when it comes to Bitcoin. So,

460
00:35:58,180 --> 00:36:01,120
I'm probably not the best person to talk to with that respect because

461
00:36:01,120 --> 00:36:08,080
I always think it has the opportunity to double overnight. So, any opportunity to buy at a 50%

462
00:36:08,080 --> 00:36:12,540
discount to all-time highs looks like a great idea to me yeah i mean i'm the same as you i'm

463
00:36:12,540 --> 00:36:18,720
always way too bullish um but like 30 from here would take us to 44k yeah i just can't see it like

464
00:36:18,720 --> 00:36:23,620
it might happen and if it does cool i'll buy some more bitcoin i just can't see it i just can't see

465
00:36:23,620 --> 00:36:32,080
it happening i mean a great buying opportunity it maybe set set a you know basically a finish your

466
00:36:32,080 --> 00:36:38,200
savings account buy at 45 000 and if it gets there then what a gift but it won't be there for long i

467
00:36:38,200 --> 00:36:43,620
think it'll go down touch it and then you're away it's done you won't see that again it's zero percent

468
00:36:43,620 --> 00:36:48,980
chance i'll have anything in my savings if we go that low yeah but uh and and so on the flip side

469
00:36:48,980 --> 00:36:53,840
like whenever this does turn obviously there's there's a long way to go to even get back to

470
00:36:53,840 --> 00:36:58,720
all-time highs now but do you think the next cycle is just going to be like part and parcel everything

471
00:36:58,720 --> 00:37:03,500
we've had before where it's just a bit higher, like 60% higher, roll over again? Or do you think

472
00:37:03,500 --> 00:37:10,300
the dynamics are going to change? I think they have to change. And like markets always continue

473
00:37:10,300 --> 00:37:16,320
to evolve, it'll be difficult getting a read on what to expect from the future. But I look at the

474
00:37:16,320 --> 00:37:21,620
amount of capital that is going to be sitting on the sidelines. And when we breach all-time highs

475
00:37:21,620 --> 00:37:25,840
for the next time, I think there's going to be latent capital that's just sitting there ready to

476
00:37:25,840 --> 00:37:33,220
ready to move. I think there's a huge, huge market opportunity for stretch and those treasury

477
00:37:33,220 --> 00:37:38,980
companies with their preferred stocks. That's an insatiable market that once we get back to that

478
00:37:38,980 --> 00:37:43,380
all-time high, their balance sheets look absolutely squeaky clean. They're going to get so much

479
00:37:43,380 --> 00:37:49,480
capital driven into those things. That to me could be the tipping point where once those things start

480
00:37:49,480 --> 00:37:54,020
humming, the amount of capital they've got access to, the $300 trillion market, and really it's an

481
00:37:54,020 --> 00:38:00,300
unlimited market because they can just print money to buy it, you're going to see that might

482
00:38:00,300 --> 00:38:04,880
be the tipping point that basically puts Bitcoin in that upward trajectory and we never see it

483
00:38:04,880 --> 00:38:11,460
go back again. Not like this anyway. I know you've been quite heavily following the treasury

484
00:38:11,460 --> 00:38:15,160
marketplace. It's been interesting to see Saylor getting so much heat over the last few weeks.

485
00:38:15,460 --> 00:38:19,540
Do you think that's just bear market things where everyone's angry and looking for someone to blame,

486
00:38:19,620 --> 00:38:22,900
so they're blaming the guy that buys all the Bitcoin? Or do you think there's something deep

487
00:38:22,900 --> 00:38:26,100
to that and you think there is something maybe systemically wrong with it?

488
00:38:28,120 --> 00:38:32,880
Look, I think there could be a bit of truth in all of it, but you know what? I just think it's

489
00:38:32,880 --> 00:38:39,500
sour grapes. Why don't I have 850,000 Bitcoin? Well, I wasn't smart enough, so I just look at

490
00:38:39,500 --> 00:38:44,720
it and I think, really? That's what we're complaining about? The guy who bought 850,000?

491
00:38:45,000 --> 00:38:50,060
Can you imagine being a sailor and all of these done? And you've got to deal with people just

492
00:38:50,060 --> 00:38:56,380
giving you shit for buying Bitcoin. It's like, you just would be like, he must be so reserved

493
00:38:56,380 --> 00:39:00,300
to just stop turning around and saying, what have you done for Bitcoin lately? You know,

494
00:39:00,660 --> 00:39:05,660
he's bought 850,000. He's holding up his end of the bargain. I'm doing my very best to buy as much

495
00:39:05,660 --> 00:39:13,520
of it as I can. Like at some point in time, it's like, hey, that said, you know, these type of,

496
00:39:13,520 --> 00:39:17,860
I think Sailor being attacked in the way he is is really,

497
00:39:18,500 --> 00:39:23,600
it's just case in point of exactly where we are in the market.

498
00:39:24,220 --> 00:39:24,340
Yeah.

499
00:39:24,400 --> 00:39:26,380
And this is where people want to eat each other.

500
00:39:26,660 --> 00:39:29,780
When we're near or at the bottom of a bear market,

501
00:39:30,300 --> 00:39:31,320
people are very unhappy.

502
00:39:31,700 --> 00:39:32,620
People have made decisions.

503
00:39:33,900 --> 00:39:36,120
It's like, look, you can only control the outcomes

504
00:39:36,120 --> 00:39:37,900
for the decisions that you make.

505
00:39:37,900 --> 00:39:40,700
And when people start looking around and attacking others,

506
00:39:40,940 --> 00:39:43,040
typically the problem lies with themselves,

507
00:39:43,040 --> 00:39:48,740
not the person they're attacking. So I think in the middle of a bear market, it's probably best to

508
00:39:48,740 --> 00:39:53,260
be introspective about what you've done rather than look for people to blame. And that's probably

509
00:39:53,260 --> 00:40:00,760
a wider thing, a wider mentality to take through life, which I think will lead to a much happier

510
00:40:00,760 --> 00:40:05,660
existence. Yeah, no, I agree with that. I think it's just classic bear market things. But it was

511
00:40:05,660 --> 00:40:10,620
interesting to see him sell Bitcoin. And I don't know if I've not seen if he's publicly said

512
00:40:10,620 --> 00:40:14,680
anything about why he did that. But do you think it's just to get rid of the notion that they'll

513
00:40:14,680 --> 00:40:22,120
never sell? Yeah. And I think that would be around the S&P 500. If he's made notions around never

514
00:40:22,120 --> 00:40:28,640
sell your Bitcoin, there's probably 10 or 12 tweets that the S&P could turn around and say,

515
00:40:28,780 --> 00:40:44,890
we don believe you going to sell your Bitcoin because here are multiple examples of you tweeting to the world that you never sell your Bitcoin You sell a kidney before you sell your Bitcoin I think was one of his tweets And it like is this really the responsible type CEO or chairman that we want to have in the S 500

516
00:40:45,650 --> 00:40:55,210
And I think what I've seen in the last, say, month is that the S&P 500, that institution, the NASDAQ, what have you,

517
00:40:55,210 --> 00:41:01,350
they really have the power to do whatever they want to do when it comes to breaking the rules

518
00:41:01,350 --> 00:41:07,710
to let people in to that S&P 500. And they've broken rules for SpaceX. They'll probably break

519
00:41:07,710 --> 00:41:13,310
rules for Anthropic and OpenAI to let them straight into the index. And they were very

520
00:41:13,310 --> 00:41:19,710
strict with Sailor and MicroStrategy. And I look at that and think, that's basically where we are

521
00:41:19,710 --> 00:41:26,850
at the moment with the DOD endorsement of AI as an existential threat to the US. So as a country,

522
00:41:26,950 --> 00:41:32,370
they are going to put pressure on everyone doing whatever they can to get that broadly adopted and

523
00:41:32,370 --> 00:41:37,590
integrated into markets. And part of that is basically having a standard buy for the S&P

524
00:41:37,590 --> 00:41:44,630
indexes and the NASDAQ indexes. So interesting how it's a two-tier system, one for Bitcoin and

525
00:41:44,630 --> 00:41:49,330
one for AI. But once that damn bursts, I think it'll be a very different situation.

526
00:41:49,870 --> 00:41:54,970
So the money that goes into it is weighted to the top companies. Where would strategy fall in that

527
00:41:54,970 --> 00:41:58,550
and how big do you think it would be? Good question. I'm not sure where it would fall now.

528
00:41:58,690 --> 00:42:02,870
Last time I looked at it, it would be about 124, but I actually think it's a lot lower than that

529
00:42:02,870 --> 00:42:09,430
now. It'd still make the S&P 500, but where in that, I'd only be guessing, but it's lower than

530
00:42:09,430 --> 00:42:16,310
125. So it's not that. And this is the weird thing about those indexes and what they don't tell you

531
00:42:16,310 --> 00:42:21,130
is that the bigger you are, the more weighting you get and the more passive flows you get,

532
00:42:21,130 --> 00:42:26,370
which reinforces your position in the stack. It's a very strange thing that's been created

533
00:42:26,370 --> 00:42:34,450
with the index investing. And I think there's going to be a come to Jesus moment for the index

534
00:42:34,450 --> 00:42:37,250
funds and the entire industry when it comes to that.

535
00:42:38,410 --> 00:42:43,650
Especially with the AI disruption of loads of those companies, it will be a very harsh

536
00:42:43,650 --> 00:42:45,550
reality they'll have to face at some point, you thought.

537
00:42:46,370 --> 00:42:46,750
Big time.

538
00:42:47,010 --> 00:42:52,290
And a lot of those indexes are really unevenly weighted to the future and that AI trade.

539
00:42:52,490 --> 00:42:58,030
So this is why I think the S&P and the NASDAQ were very keen to make any allowances they

540
00:42:58,030 --> 00:43:02,890
could to have SpaceX immediately into that index, because it'll give them a huge boost

541
00:43:02,890 --> 00:43:03,130
too.

542
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543
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544
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546
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553
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554
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565
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566
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569
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570
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590
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591
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592
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609
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I'm sure you've had a ton of calls over the past few weeks about Bitcoin.

610
00:45:55,950 --> 00:45:59,150
For anyone that doesn't know, you should explain what you do actually first before we get into this.

611
00:46:00,330 --> 00:46:01,010
Very good.

612
00:46:01,190 --> 00:46:04,130
Well, I run a business called The Bitcoin Advisor.

613
00:46:04,290 --> 00:46:09,510
And what we do is we help people procure and secure their Bitcoin in a form of self-custody.

614
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So Bitcoin and buying Bitcoin is not as easy as you'd think it would be, particularly after being in existence for 15 years.

615
00:46:18,170 --> 00:46:24,950
And a lot of people need help with not only purchasing it, but securing their Bitcoin in a self-custodied manner.

616
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that ensures they're not going to lose it. And this is where there's a big technological leap

617
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that needs to, or learning curve that needs to happen in order to do that safely.

618
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And I'm really proud to say that we help people self-custody their Bitcoin

619
00:46:39,330 --> 00:46:44,810
in a manner that ensures they're not going to lose any of it. And I'm proud to say we've never

620
00:46:44,810 --> 00:46:51,190
lost a Bitcoin with our clients. And we deal with a whole host of clients from baby boomers right

621
00:46:51,190 --> 00:46:56,290
down to teenagers and we help them look after their Bitcoin and secure it not only for themselves,

622
00:46:56,490 --> 00:47:01,830
but for our older clients, probably the biggest concern is not so much the Bitcoiner in the family,

623
00:47:01,970 --> 00:47:06,370
but making sure that they can pass on their Bitcoin if something happens to them, i.e. that

624
00:47:06,370 --> 00:47:13,650
inheritance base that we talk of all the time. And this is where having a number of professionals

625
00:47:13,650 --> 00:47:18,950
help you with your self-custody is actually really beneficial because over the last, say,

626
00:47:18,950 --> 00:47:25,130
10 years giving advice in this space. Sadly, we've dealt with four clients who have passed away,

627
00:47:25,790 --> 00:47:31,050
but I'm really proud and happy to tell you that their beneficiaries got all of their Bitcoin.

628
00:47:31,370 --> 00:47:38,650
Despite not having a clue how to recover it, we were able to help their estate, pass that on to

629
00:47:38,650 --> 00:47:45,550
the beneficiaries, and everyone got the Bitcoin that they were owed with their last, well, their

630
00:47:45,550 --> 00:47:50,890
their fathers or husbands or wives' last will and testament, we've been able to distribute that

631
00:47:50,890 --> 00:47:56,190
and everyone's got their Bitcoin. So I think the consideration with a lot of Bitcoiners is

632
00:47:56,190 --> 00:48:01,790
they think, why would I need help with self-custody? And the Bitcoiners don't need help

633
00:48:01,790 --> 00:48:06,090
with self-custody. Let me tell you, every Bitcoiner listening to this right now knows exactly how to

634
00:48:06,090 --> 00:48:11,330
do it. But the question is, do the loved ones that they're leaving their Bitcoin to? Do they

635
00:48:11,330 --> 00:48:18,030
understand how to recover it do they know how not to lose it and that is that's where the difficulty

636
00:48:18,030 --> 00:48:23,450
comes in that's the fly in the ointment for most bitcoiners yeah that's awesome you're securing

637
00:48:23,450 --> 00:48:27,810
generational wealth um and the other like the other piece that is not only do they know how to

638
00:48:27,810 --> 00:48:31,510
secure it and how to look after it like once they've had that passed down to them it's do they

639
00:48:31,510 --> 00:48:36,310
know enough about what it is to know that they shouldn't be selling it like i imagine you do so

640
00:48:36,310 --> 00:48:41,310
like an educational piece in there as well uh you're orange pilling people at that point but um

641
00:48:41,310 --> 00:48:50,650
And I can also imagine over the last few weeks, few months, that you've had a lot of calls with people saying, what the hell's going on? How are people dealing with it?

642
00:48:50,650 --> 00:48:59,550
I think there's two modes, two different types of clients. There are clients who have been in

643
00:48:59,550 --> 00:49:04,130
Bitcoin for a long time and they look at this as an opportunity if they're underweight Bitcoin to

644
00:49:04,130 --> 00:49:10,450
buy more Bitcoin. And then there are clients who are new to Bitcoin who are looking at this

645
00:49:10,450 --> 00:49:15,150
really without the deep understanding of what this is, thinking, hey, am I losing my shirt?

646
00:49:15,250 --> 00:49:19,610
Do I need to be selling? Has anything changed? And we get a lot of calls basically asking that

647
00:49:19,610 --> 00:49:25,170
exact question has anything changed do we need to be doing anything and that's the opportunity to

648
00:49:25,170 --> 00:49:30,470
talk to clients and say hey this opportunity doesn't come around very often and and this is

649
00:49:30,470 --> 00:49:34,350
where i think it's really important when we're giving advice around bitcoin to be very honest

650
00:49:34,350 --> 00:49:38,390
with clients up front and you know when we're starting the journey with clients we talk of

651
00:49:38,390 --> 00:49:44,590
the fact that most clients will never put in what what they would allocate to bitcoin in their first

652
00:49:44,590 --> 00:49:49,850
purchase. And with that in mind and having that understanding, I think we set expectations

653
00:49:49,850 --> 00:49:55,870
very early upfront and we say, look, we want you to put in say five or 10%, whatever the number is,

654
00:49:56,250 --> 00:50:02,590
into Bitcoin. And they typically put in half what they're prepared to. And when we see that it's

655
00:50:02,590 --> 00:50:08,130
half of what they talk of, facetiously, I tell them, look, I just need to tell you that the day

656
00:50:08,130 --> 00:50:13,250
you buy, it could drop 50%. And when it drops 50%, I'm going to come back to you and we're going to

657
00:50:13,250 --> 00:50:17,930
have the discussion around, you know, the 50% that you didn't put in, now's the time to buy that other

658
00:50:17,930 --> 00:50:24,010
50% that you didn't put in to dollar cost average down. And this is where I think a lot of time

659
00:50:24,010 --> 00:50:29,710
spent with clients explaining it, how that market works, the opportunity that lies in front. And

660
00:50:29,710 --> 00:50:35,470
really, this is where, not that we talk about this, but it really needs to be looked at,

661
00:50:35,550 --> 00:50:39,970
not in isolation, but really is a whole picture of their financial health. At this point in time,

662
00:50:39,970 --> 00:50:44,310
you know, where do you want to allocate money? Do you want to allocate money to the AI sector

663
00:50:44,310 --> 00:50:48,210
where it feels like it's at all-time highs? Do you want to be allocating the software sector,

664
00:50:48,250 --> 00:50:53,410
which is getting disrupted by AI? Do you want to go into the commodities market, which seems like

665
00:50:53,410 --> 00:50:57,810
maybe a questionable investment? Can you be investing in property right now? To me,

666
00:50:58,350 --> 00:51:04,250
property is near uninvestable across all of Western countries. And we're about to see probably a 20

667
00:51:04,250 --> 00:51:09,810
or 30% drop in Australia. The US has had troubles because they've got a very high 30-year

668
00:51:09,810 --> 00:51:16,310
fixed rate, the UK's had its problems, New Zealand's off 20%. So you need to have a look at

669
00:51:16,310 --> 00:51:22,170
what are you investing and what's the opportunity cost of investing in Bitcoin? And when you look at

670
00:51:22,170 --> 00:51:26,590
all of the other options from an investment perspective, and you boil that down to what

671
00:51:26,590 --> 00:51:32,150
the upside is for Bitcoin over the next 10 years, which I still believe we've got 100x in front of

672
00:51:32,150 --> 00:51:37,910
us in the next 10 years, Bitcoin becomes undeniable. And that word again is going to pop up when

673
00:51:37,910 --> 00:51:42,290
Bitcoin breaks an all-time high in the next however long it takes, there's going to be a

674
00:51:42,290 --> 00:51:46,870
lot of capital on the sidelines that is going to chase that. And that's where we'll see a real pop.

675
00:51:47,550 --> 00:51:53,830
I love it. We've got to talk about property because I'm glad you brought that up. I know

676
00:51:53,830 --> 00:51:59,910
you know this, but I've been looking at buying a place here in Australia for the last six months

677
00:51:59,910 --> 00:52:06,490
so in no rush. And Bitcoin's price has probably delayed that a little bit. But the interesting

678
00:52:06,490 --> 00:52:10,890
thing as i've been keeping a close eye on it is there's so many houses that are going to auction

679
00:52:10,890 --> 00:52:14,710
and not selling there's things that are hanging around for a very long time like the property

680
00:52:14,710 --> 00:52:18,490
market here does seem like it's in a really bad spot i don't know what it's like across the rest

681
00:52:18,490 --> 00:52:23,130
of the world but i'm guessing it's similar um i've actually another little piece on that is i've seen

682
00:52:23,130 --> 00:52:28,230
the property price in london have basically not changed in like a decade at this point um like

683
00:52:28,230 --> 00:52:31,910
what's going on like why do you think this is happening and do you think this is a long-term

684
00:52:31,910 --> 00:52:41,030
sort of bear market in the property? Well, let me talk to the broader market globally,

685
00:52:41,430 --> 00:52:49,050
and then I'll focus in on the, I guess, the limitations from the Australian sector.

686
00:52:49,710 --> 00:52:55,850
From a global perspective, I think we have reached peak debt. And the problem with peak debt is,

687
00:52:55,930 --> 00:53:01,710
is that we can't afford to borrow any more money. And if you look at how property prices and capital

688
00:53:01,710 --> 00:53:08,290
growth are driven. The two key factors for property growth are, well, outside of interest

689
00:53:08,290 --> 00:53:15,010
rates, which are really dictated by inflation. But outside of interest rates, the two key factors

690
00:53:15,010 --> 00:53:21,870
which drive property growth values is immigration, i.e. more people coming into the town to bid up

691
00:53:21,870 --> 00:53:28,690
property prices, and credit growth. Is credit growth growing? Now, I've told you, and literally

692
00:53:28,690 --> 00:53:32,510
I've talked about this probably for the last three or four years where we are literally saturated.

693
00:53:32,710 --> 00:53:37,350
We are up to our eyeballs in debt. We can't afford any more debt. And now we've had interest

694
00:53:37,350 --> 00:53:44,790
rates go from 0% to 5% in the US. Everyone is choking on debt. Now, the only way to get capital

695
00:53:44,790 --> 00:53:49,890
growth back into these properties is to lower interest rates and allow the borrowing capacity

696
00:53:49,890 --> 00:53:54,730
to go up so they can issue more debt to have higher prices. That's what's happening on a

697
00:53:54,730 --> 00:53:58,830
global scale. So I look at that and think it's going to be very tough for global property to go

698
00:53:58,830 --> 00:54:07,630
up because basically we're hamstrung by credit growth. In Australia, it's even worse for two

699
00:54:07,656 --> 00:54:11,516
First time, and I don't want to turn this political at all because I don't like other

700
00:54:11,516 --> 00:54:17,576
side of politics, but for the first time in 30 years, immigration is now a huge political

701
00:54:17,576 --> 00:54:18,356
issue in Australia.

702
00:54:18,916 --> 00:54:21,616
And people are unhappy with the level of immigration.

703
00:54:22,356 --> 00:54:23,416
I think this is the Western world.

704
00:54:23,536 --> 00:54:24,416
Like it's not just Australia.

705
00:54:25,276 --> 00:54:25,696
Agreed.

706
00:54:26,056 --> 00:54:29,816
So for that reason, I feel like immigration, there's going to be downward pressure on

707
00:54:29,816 --> 00:54:32,456
immigration, which means downward pressure on property prices.

708
00:54:32,756 --> 00:54:37,496
And at the same time, and this is the really big thing, the local changes to the Australian

709
00:54:37,496 --> 00:54:42,176
that the Australian government, federal Australian government, has introduced with respect to

710
00:54:42,176 --> 00:54:48,376
negative gearing on property has meant that investors can now borrow 30% less than they

711
00:54:48,376 --> 00:54:53,156
were previously approved for. So with the stroke of a pen, Jim Chalmers has changed the borrowing

712
00:54:53,156 --> 00:54:57,456
capacity. If you could borrow a million dollars before the budget, you can now borrow somewhere

713
00:54:57,456 --> 00:55:04,116
between $650,000 to $800,000 now. Now, what does that do for property prices? By default,

714
00:55:04,116 --> 00:55:10,116
given that 40% of the Australian market is made up of investors. Now, 40% of the Australian market

715
00:55:10,116 --> 00:55:15,456
has 30% less to borrow. So that is going to put huge downward pressure on these property prices.

716
00:55:15,616 --> 00:55:21,716
And this is where, if you draw a comparison to New Zealand, they had some similar policies that

717
00:55:21,716 --> 00:55:28,096
were detrimental to the property market introduced in 2022. And the New Zealand property market is

718
00:55:28,096 --> 00:55:32,396
probably off somewhere between 20% to 30%, depending on which locale you want to look at.

719
00:55:32,396 --> 00:55:37,556
it's been devastating for the New Zealand property market. It's been difficult for the

720
00:55:37,556 --> 00:55:42,756
Canadian property market. The UK property market's been not so good either. And the Australian

721
00:55:42,756 --> 00:55:48,356
property market, I think, is back at 2022 relative to the New Zealand property market. So I think for

722
00:55:48,356 --> 00:55:51,996
the next two or three years, we're going to have downward pressure on the Australian property

723
00:55:51,996 --> 00:55:55,996
market, which is great because I think your purchase is probably going to coincide with

724
00:55:55,996 --> 00:56:00,716
the bottom of that property market and a ripping price in Bitcoin. So you might have timed it

725
00:56:00,716 --> 00:56:06,016
perfectly. That's pure luck. But the crazy thing is in Australia that the housing market is like

726
00:56:06,016 --> 00:56:10,416
the stock market here. People aren't really investing in the stock market. If they are,

727
00:56:10,476 --> 00:56:13,576
they're investing in the US stock market generally. No one invests in the ASX.

728
00:56:14,216 --> 00:56:19,256
And housing is everything. So if the housing bubble does actually pop here, I think it'll

729
00:56:19,256 --> 00:56:23,496
be really damaging to a lot of people. I think it'll be just as devastating as it

730
00:56:23,496 --> 00:56:28,896
has been to New Zealand. And this is where what's worse than that is probably 60% of the Australian

731
00:56:28,896 --> 00:56:34,896
stock market is made up or related to the Australian property market. If you look at

732
00:56:34,896 --> 00:56:39,576
the major banks, they're basically a leverage bet on the Australian property market and

733
00:56:39,576 --> 00:56:55,048
the major banks make up about 40 of the all ordinaries which is the local stock market Then you got the property rates you got the building companies and everything else that tied to it You at 60 of the Australian index is tied to property prices in Australia And this is the thing that

734
00:56:55,048 --> 00:57:01,088
really hard as someone who is looking at this market. I would never bet against the Australian

735
00:57:01,088 --> 00:57:07,369
property market because everyone is in on it. If you look at locally, if you look at personally,

736
00:57:07,369 --> 00:57:10,188
If you look at families, you look at your friends, they're all in on property.

737
00:57:10,468 --> 00:57:13,009
And then you look at local, state, and federal government.

738
00:57:13,608 --> 00:57:13,968
Guess what?

739
00:57:14,128 --> 00:57:18,229
Local governments generate council rates and everything else, which is typically derived

740
00:57:18,229 --> 00:57:19,048
from property values.

741
00:57:19,708 --> 00:57:25,289
State governments earn a fortune from stamp duties that get charged, and federal government

742
00:57:25,289 --> 00:57:30,048
makes a fortune from capital gains tax, which is one of their major line items in their budget

743
00:57:30,048 --> 00:57:31,369
as far as revenue goes.

744
00:57:31,708 --> 00:57:33,729
And that's largely driven by property sales.

745
00:57:34,249 --> 00:57:36,208
And then you look at the corporations.

746
00:57:36,909 --> 00:57:40,229
The major banks are in on it and 60% of the Australian stock market.

747
00:57:40,349 --> 00:57:43,229
So it's very difficult to unwind that reliance on property.

748
00:57:43,409 --> 00:57:48,208
And sadly, I look at the future for the next two or three years and with the policies that

749
00:57:48,208 --> 00:57:52,269
are instituted, I think we're going to be down 20 or 30% relative to where we are today.

750
00:57:53,009 --> 00:57:53,128
Yeah.

751
00:57:53,269 --> 00:57:56,488
And it's like everyone here will look at a house as an investment.

752
00:57:56,648 --> 00:57:59,829
I'm looking at a house as a place that I want to live and have my family grow up in.

753
00:57:59,968 --> 00:58:01,088
It's a very different thing.

754
00:58:01,088 --> 00:58:02,889
I'm not looking at it to necessarily make money.

755
00:58:02,988 --> 00:58:03,628
If it does, great.

756
00:58:03,628 --> 00:58:08,449
but i know i'm preaching to the choir here saying this to you but i don't understand why you don't

757
00:58:08,449 --> 00:58:12,568
anything but bitcoin and that sounds crazy when you see it's down like 60 from its all-time high

758
00:58:12,568 --> 00:58:16,409
whatever it is but still like when you actually weigh everything up like why would you own anything

759
00:58:16,409 --> 00:58:24,309
else i couldn't agree more and this is where property is an indoctrination and particularly

760
00:58:24,309 --> 00:58:28,349
where we've grown up where you've grown up property was a way to get ahead you know you

761
00:58:28,349 --> 00:58:35,309
you look around, you look at the BRW's top 200 rich list, it's a little bit more diversified now

762
00:58:35,309 --> 00:58:40,088
with some tech founders and the rest of it. But that list used to be made up predominantly of

763
00:58:40,088 --> 00:58:45,468
property investors. And it's been a phenomenal way to grow wealth. I just don't know if it's

764
00:58:45,468 --> 00:58:50,689
going to be that moving forward with where we are from a digital perspective. I think we're moving

765
00:58:50,689 --> 00:58:55,668
into a more digitized world. AI is obviously going to prove that out. That's going to be really good

766
00:58:55,668 --> 00:59:01,049
for Bitcoin. And where I think a lot of property investors don't really want to face the music on

767
00:59:01,049 --> 00:59:09,189
this is across the Western world, most of the property charts that we see start in 1950 and

768
00:59:09,189 --> 00:59:16,608
they do nothing but go up. But people forget that property topped in 1930, dropped 50% for the next

769
00:59:16,608 --> 00:59:28,921
decade and then took 10 years to recover back to the 1930s price Now this is very convenient to leave out Property doesn always go up And this is where the problem is I think

770
00:59:28,921 --> 00:59:34,381
a lot of people are going to find out what negative equity is and how damaging that's

771
00:59:34,381 --> 00:59:38,841
going to be, particularly with the loan-to-value ratios which banks are giving out now. Like,

772
00:59:39,221 --> 00:59:44,641
you buy a million-dollar property and you can borrow 95% on that. Now, if property prices drop

773
00:59:44,641 --> 00:59:51,221
20%. You've put in $50,000 and you sell the house for $800,000. The bank's taking a $150,000 loss

774
00:59:51,221 --> 00:59:56,001
and you've ripped up your $50,000 and you're left with a bill from the bank for $150,000.

775
00:59:56,581 --> 01:00:01,981
So this is going to grind property to a hold as far as transactions and trading go. No one's going

776
01:00:01,981 --> 01:00:08,181
to sell the property. And to give, I don't often do this, but to give the federal government some

777
01:00:08,181 --> 01:00:14,081
kudos back in the GFC, one of the things that they instituted to support the local banks

778
01:00:14,801 --> 01:00:17,661
They gave them unlimited support to help them through that period.

779
01:00:17,881 --> 01:00:24,441
But it was on the condition that a contract for a residential mortgage in Australia was

780
01:00:24,441 --> 01:00:26,781
good for the term of the loan.

781
01:00:27,121 --> 01:00:28,561
There was no re-rating it.

782
01:00:28,641 --> 01:00:30,061
There was no re-valuing the property.

783
01:00:30,181 --> 01:00:36,561
As long as the borrower was paying the interest payments, principal and interest payments on

784
01:00:36,561 --> 01:00:40,921
it, there was no recourse that the lender could take to sell the property on them.

785
01:00:40,921 --> 01:00:43,101
and I think there's going to be a lot of people

786
01:00:43,101 --> 01:00:44,441
who are going to have to hold that property

787
01:00:44,441 --> 01:00:46,361
for the next 30 years just to break even.

788
01:00:47,021 --> 01:00:49,281
So that's dire.

789
01:00:49,461 --> 01:00:50,101
That's terrible.

790
01:00:50,961 --> 01:00:52,621
Yeah, it's scary, man.

791
01:00:52,781 --> 01:00:55,421
There's not many good things you can point to in the economy

792
01:00:55,421 --> 01:00:56,921
and be like, this thing looks great.

793
01:00:59,741 --> 01:01:02,501
Yeah, outside of Bitcoin, that's why I'm so bullish on it.

794
01:01:02,641 --> 01:01:04,521
Like you look around and when you understand

795
01:01:04,521 --> 01:01:07,101
what the risks involved are with everything else out there,

796
01:01:07,421 --> 01:01:09,501
all of a sudden the volatility of Bitcoin,

797
01:01:09,501 --> 01:01:14,681
you realize that volatility is not a risk. Risk is risk. Volatility is something all

798
01:01:14,681 --> 01:01:20,301
completely different altogether. And when you weigh up the risk of all of the other investment

799
01:01:20,301 --> 01:01:25,101
opportunities out there, the Bitcoin, to me, Bitcoin is a clear winner, head and shoulders

800
01:01:25,101 --> 01:01:30,321
above everything else. Absolutely. So for anyone who's made it this far, who might be panicking

801
01:01:30,321 --> 01:01:34,361
about the Bitcoin price action, what's your sort of parting piece of advice for anyone?

802
01:01:34,361 --> 01:01:41,401
them. This too shall pass. I think it's just a matter of bunkering down, making sure there's

803
01:01:41,401 --> 01:01:47,861
little to no leverage on what you have. Make sure you own what you think you own via self-custody.

804
01:01:47,961 --> 01:01:51,661
I think in these types of markets, you want to make sure that you're self-custaining your Bitcoin.

805
01:01:52,301 --> 01:02:04,793
You want to leave as little Bitcoin on exchange as you have to because you not sure what those exchanges are going to do Are they going to make it through Are they going to blow up I don know Will we have another FTX I not sure But when you self your Bitcoin

806
01:02:05,213 --> 01:02:08,554
it is a superpower for peace of mind when you know how to do it.

807
01:02:08,674 --> 01:02:11,434
And I look at that and think, self-custody your Bitcoin,

808
01:02:11,733 --> 01:02:13,713
know what you want, make sure you've got what you want,

809
01:02:14,253 --> 01:02:17,414
and just be patient because I think this period in time will pass.

810
01:02:18,573 --> 01:02:19,653
We'll be sitting high.

811
01:02:19,653 --> 01:02:21,873
We'll be thinking we're smart again before we know it.

812
01:02:21,873 --> 01:02:25,934
and it's really good to remember these times

813
01:02:25,934 --> 01:02:28,434
and basically plan for them in the future

814
01:02:28,434 --> 01:02:30,233
because I've got no doubt they'll return as well.

815
01:02:31,534 --> 01:02:33,114
One thing you said there that's actually interesting

816
01:02:33,114 --> 01:02:34,414
just to pull on before we close out

817
01:02:34,414 --> 01:02:37,354
is you said there may be another FTX, I don't know.

818
01:02:37,593 --> 01:02:39,733
It doesn't, at least right now, look likely.

819
01:02:39,833 --> 01:02:41,354
I can't point to any company in the space

820
01:02:41,354 --> 01:02:42,994
that looks like they're on the edge of blowing up

821
01:02:42,994 --> 01:02:45,273
and I think that would be the first time

822
01:02:45,273 --> 01:02:47,394
we've really had that since I've been involved in Bitcoin.

823
01:02:47,613 --> 01:02:49,673
Every time there's been a big bear market

824
01:02:49,673 --> 01:02:51,254
that was like exchange getting hacked,

825
01:02:51,254 --> 01:02:56,914
people doing rug pulls then there was ftx and the entire fraud around that with 3ac like if we got

826
01:02:56,914 --> 01:03:02,213
through this bear market without a major company blowing up i think that would be very very cool

827
01:03:02,213 --> 01:03:08,153
and like it just shows the maturing in the space i know right like who would have thought basically

828
01:03:08,153 --> 01:03:12,573
bitcoin's all grown up and the players in it so that's a really good point i hadn't thought of

829
01:03:12,573 --> 01:03:17,694
that like it's all every other bear market's been accompanied with absolute mass destruction

830
01:03:17,694 --> 01:03:24,974
total loss. If we get through this time, I think that's wildly positive. And contrary to what

831
01:03:24,974 --> 01:03:29,514
people thought before major institutions started getting involved in Bitcoin, everyone thought that

832
01:03:29,514 --> 01:03:33,914
would blow up, but it turns out maybe they're a lot more responsible than we gave them credit for.

833
01:03:34,494 --> 01:03:39,733
Yeah, I think that would be a very positive sign. Last time we recorded, Peter, it was, I think,

834
01:03:39,894 --> 01:03:46,293
when I released the show was four days before the final high in Bitcoin. So I'm hoping,

835
01:03:46,293 --> 01:03:50,073
we marked the top there and I'm hoping we're marking the bottom here. So four more days.

836
01:03:51,454 --> 01:03:57,713
I always love speaking to you, man. I know I say this every time, but next time we need to do it

837
01:03:57,713 --> 01:04:01,573
in person. We need to meet up in Sydney or something and do another one, but appreciate

838
01:04:01,573 --> 01:04:06,093
you coming on. Look forward to it. I always love catching up with you, Danny, and I'm eternally

839
01:04:06,093 --> 01:04:11,014
grateful for all your hard work in having the guests on that you do. I'm an avid listener and

840
01:04:11,014 --> 01:04:16,213
love your work and thanks for distributing that message and educating all of us. So thank you.

841
01:04:16,293 --> 01:04:18,314
Thank you, man. I appreciate it. I'll speak to you soon.

842
01:04:18,894 --> 01:04:19,254
Cheers, man.