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Statistically, right now, according to a quantile regression, we are basically at the bottom.

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But all it takes is another boom to pull the trend back up with pretty high confidence.

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We're going to be at 550, maybe even higher.

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The world is moving fast.

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Be prepared for, say, central banks printing money, but Bitcoin doing nothing.

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Or be prepared for central banks printing money and Bitcoin also going gangbusters.

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and Bitcoin is going to be growing on a sustainable curve.

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Global money is going to be growing on an unsustainable curve

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with a lot of interest.

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Those things are going to merge.

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I think the place to start, Matthew, is on the power law.

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Has this drop in Bitcoin price affected that?

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Is it still accurate?

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Are we on?

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We're on, man.

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We're on.

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All right.

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Yes.

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I don't want to throw off your first question,

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because I actually want to start on money supply

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rather than power law.

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I have charts ready.

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Oh, let's just start again then.

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And we will.

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No, no, no, no, no.

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It's good.

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It's a good...

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We're going to do two things today,

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which I think are very important.

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As we were joking pre-show,

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it's not like there's anything going on in the world.

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So people need to back up,

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take a deep breath,

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touch grass,

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play with your kids.

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There are two things with Bitcoin

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that can really ground you,

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and I've actually been following them both

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since 2018.

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One is the power law.

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The other is the base money supply.

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Bitcoin is related to both.

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And the power law is something that what I plan to show you a little bit later, we can get into it, is when you think about all these technical charts, you know, straight lines, ABC, correction, Elliott Wave, all this stuff.

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This is always done in the context of an asset that moves exponentially.

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When I say exponentially, it means it just moves compoundingly, constantly, just like anything you think of.

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If you need a 10% return in your investment or bond yields 5%, inflation is 7%, you're losing money, whatever.

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These are sort of Bayesian calculations that everybody does every day, even though they don't know it.

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This is a, that's what exponential growth is.

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And you sort of think in probabilities, okay, am I going to be able to cover that or not?

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The thing is, with Bitcoin, it's totally different.

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is totally different.

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And so these sort of ABC corrections,

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Elliott waves, straight lines

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on a log linear chart, they don't work.

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And the reason is Bitcoin grows like a network.

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All right, so we're starting out a little bit power,

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but I want to get back to money supply.

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So very simple definition of power law.

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It's like an 80-20 rule.

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So if you think about something like Facebook,

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Amazon, Apple,

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this is a pure definition of a power law

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Those are huge nodes in the system, right?

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They're centralized, controlled nodes,

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and they have many connections, but there's a few of them.

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Okay, so there's a few gigantic nodes

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with an enormous amount of connections.

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Now, on the other end of that curve,

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or the other end of that spectrum, if you can just imagine,

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the internet has tons of websites, portals, servers,

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people have private servers, whatever.

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There are massive amounts of small nodes, right,

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with few connections.

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So many, many small nodes, few connections, few large nodes, many connections.

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That is a power law.

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And it's unique in that if you apply this concept to the growth of a financial asset, it never works.

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It just never works.

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The primary reason for that, we don't have to get too much into the math, is it's just compound interest.

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It's the way debt works.

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And usually you get this unstable result.

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You get the boom-bust cycle.

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It's really not a conspiracy.

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It's just how the math works.

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So I'll try to show you a little bit of that as well.

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It's just a boom-bust cycle.

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With the power law, what Bitcoin does,

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and it is 96% R-squared.

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It's a very good relationship.

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We'll get to it.

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I'll show you the charts.

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There is the word, there's a key word that you can think of,

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and the word is proportional.

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So Bitcoin grows proportionately to itself over time,

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unlike exponential growth, which is constant.

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And then you can also tag on something that usually happens

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with constant growth is it can be volatile

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when it gets really big, often ends in collapse or restructuring.

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Every company grows that way.

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It grows constantly.

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But with Bitcoin, it actually grows proportional to itself over time.

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So a very simple, simple example of this, and this is the number.

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This is what the power law tells us,

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is that for every 13% increase in the life of Bitcoin,

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in the life of Bitcoin, the price will double.

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that is the power law of Bitcoin.

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So that is unlike, say, a stock that gets you 10%,

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or let's say the rule of 72, it's actually 7.2%.

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So for every, a stock that is growing 10% per year,

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it will double every 7.2 years.

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That's the rule of 72.

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In its finest form, it works best around the 10% compound growth rate.

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It's a constant growth rate.

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It doesn't matter. 7.2 years later, if it's still growing at 10%, it will take another 7.2 years to double.

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That's what constant growth is.

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But with a power law with Bitcoin, it will actually, the doubling time slows down the larger the network, or you can even use this with organisms as well, with sort of caloric intake.

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There are some nice power law charts people can see online about that.

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Different organisms grow this way.

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But the bottom line is, so Bitcoin, and we can represent this with hash rate, addresses price.

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For every 13% increase in the life of Bitcoin, the price doubles.

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So Bitcoin right now is over 6,000 days old.

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I don't know exactly.

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The numbers even itself getting a little stale, maybe 6,400, something like that.

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So every 750 days or so, my math is a little bit off, but roughly 13% of that.

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750 days, i.e. two years, two years, Bitcoin's price doubles. That's the power of Bitcoin. That's

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what it is showing right now. But that percentage will always stay the same. The proportion stays

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the same, but the time itself, the raw number of days, the longer Bitcoin is around, kind of like

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think of a Lindy effect, but it's not exactly the Lindy effect definition. The longer Bitcoin is

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around, all right, the longer it will take to double. And so that is literally the measurement.

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People like to think in terms of doubling time, but Bitcoin doesn't work like the MAG7 or the

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stock market or bond yields. It just does not work that way. So bottom line is, if you think

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about this one number, I know it's kind of hard to calculate, but it's 13% and just roughly kind

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of take it to 10%, whatever. Think about how many days Bitcoin's been around, take a little bit more

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than 10% of that, that's the days left for Bitcoin from where it is right now, where the power law is

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right now for the power law to double. And it doesn't mean it's going to hit that right on the

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mark, right? I mean, you can do this at any point on the curve, but that's what the curve itself says.

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And it's very unique. And the bottom line, like the net net of all that sort of hashing out of

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the power law, which I didn't plan on going so deep into this point, but it's good, I think,

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is that it's actually quite stable.

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It's proportional.

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It's how networks grow.

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And it's going to surprise a lot of people

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because the financial world still doesn't think that way.

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It doesn't understand it.

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The financial world thinks in compound growth rates,

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regular interest rates,

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like, okay, I need to get a 10% return, this and that.

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And by the way, I guess I didn't say this number.

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Right now, that doubling every two years

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translates into a 40% CAGR, a 40% compound undergrowth. So that's an enormous return.

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It's enormous for anybody to have. It's bigger than the MAG-7, which I can show you in a second

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here. But that number is going to get smaller. It's going to get smaller. So prepare yourself

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for that. But regardless, it's a unique moment in time because to my knowledge, and I've studied,

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you know, a lot of banking, monetary history, looked at just a lot of, you know, interesting

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facets of free banking and stuff. To my knowledge, there's not an asset that has actually grown this

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way over time. It's a very, growing in power as opposed to growing in geometric or growing

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in exponential is a very stable. It's a stable sort of growth rate. Cities also grow in power,

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by the way. So just another quick side example. You know, the reason like cities don't explode

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into the sun with skyscrapers going, you know, million miles high, like the sci-fi movies,

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right, into space or whatever. The reason they're not doing that is because you don't need all the

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infrastructure in a city that you would need for a regular person, like living out in the countryside.

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So you don't need as many parking spaces in the city for as many people as there are there. You

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have public transport, you have, you know, the distribution of water and electricity is completely

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different in a city than it is out to, you know, some one farmer living in the countryside. So you

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had this interesting effect. And the bottom line is with city growth is, yes, it is true that back

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in the old days, like hundreds of years ago, when I say the old days, or even in ancient times,

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cities actually grew pretty fast at the beginning, just like Bitcoin. They grew very, very fast.

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You know, when Paris was a greenfield or London was a greenfield, it's growing very, very fast.

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the Romans colonized London, it's growing faster. But then over time, that growth slows.

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And so if you had actually, and there have been charts of this, like look up

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long-term growth of London or Paris, of any city, and you will see this power curve. You will see a

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very fast growth at the beginning, and then a more sustainable, gradual, sort of slower rate of

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growth as it goes forward. So that's what Bitcoin does. Bitcoin grows like that.

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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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00:10:28,280 --> 00:10:33,120
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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Bitcoiners, as you know,

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with fiat money constantly debasing,

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wealth preservation isn't optional.

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That's why I recommend Swan Bitcoin,

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who work with families and businesses

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which is a real person that you can text and call,

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And if you're serious about acquiring and securing Bitcoin,

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I recommend Swan.

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Meet the team at swan.com forward slash WBD,

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which is swan.com forward slash wbd.

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00:12:16,260 --> 00:12:17,900
I recently took out a loan with Ledin.

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And in a few hours, I had the dollars in my account.

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It was super smooth.

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So if you need cash, but you don't want to sell Bitcoin,

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00:12:28,560 --> 00:12:31,520
head over to ledin.io forward slash WBD

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00:12:31,520 --> 00:12:34,080
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That's L-E-D-N dot I-O forward slash WBD.

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so how far below what power law dictates as being the sort of fair price are we right now because

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um like bitcoin certainly feels very good value right now and and is there ever a time when you

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would say okay the power law is wrong is broken uh no so let's let's get on let's get on to the

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charts here all right so here is the power law of bitcoin this is one of the things that i used to

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show a lot was this the how the price looks over under the curve at any given time.

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A couple things to point out. All right. First of all, go down here. See, it's a 96.1% R squared.

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All right. So that means that this black line itself, the price moves around this black line,

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96.1% better with less variance than would move around the average, which should be obvious

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because it's a nonlinear growth. Notice, though, this is a log linear chart. Okay. So people in

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financially be familiar with that, except the fact is, if you put a log linear chart on any

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financial asset, it's going to turn into a straight line, typically. Here, you have this sort of

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pretty, it looks pretty gradual, but you know, you can say it's a little bit faster at the beginning,

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00:13:49,160 --> 00:13:55,260
and then you can see as we move into the future, it sort of tapers out. Now, a couple things to

240
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think about, and I'll show you, I'm going to show you two different types of regressions here,

241
00:13:59,020 --> 00:14:03,220
and this is, as well, people are going to get access, a lot of people ask me about these charts,

242
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I've been working hard to give people access to this.

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So it's coming in the next month or two.

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But finally, yeah, yeah, yeah.

245
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It's going to be good.

246
00:14:11,500 --> 00:14:12,360
It's going to be really good.

247
00:14:12,540 --> 00:14:14,880
Cloud Code is actually taking me to a different level here.

248
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It's you talk about the SaaSpocalypse and stuff.

249
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I mean, some of the stuff that I can do now, again, with pretty, pretty much all free and

250
00:14:22,620 --> 00:14:27,320
open data is like, in my opinion, miles better than you could get from like paying $2,000

251
00:14:27,320 --> 00:14:28,660
a month on Bloomberg or whatever.

252
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So it's pretty wild.

253
00:14:30,660 --> 00:14:34,640
But in any event, notice we're pretty far under the curve right now.

254
00:14:34,960 --> 00:14:36,940
But notice these other bands, okay?

255
00:14:37,580 --> 00:14:44,500
So this is, I show this as a sort of just a general guide,

256
00:14:44,620 --> 00:14:46,720
but actually this analysis is not great.

257
00:14:46,940 --> 00:14:51,360
I'm talking about these bands where what I'm doing basically is I'm analyzing,

258
00:14:51,360 --> 00:14:58,320
okay, what percentile or what percentage of the time would Bitcoin as a multiple be over or under the curve?

259
00:14:58,320 --> 00:14:59,640
And so if you just look back,

260
00:14:59,680 --> 00:15:01,600
you see that these bands are very close at the beginning,

261
00:15:01,820 --> 00:15:03,580
but then they expand, right?

262
00:15:04,340 --> 00:15:08,100
So what's happening there is as more data comes in,

263
00:15:08,140 --> 00:15:11,280
we can see, you know,

264
00:15:11,340 --> 00:15:15,340
if there are any extreme moves over or under the trend line.

265
00:15:15,460 --> 00:15:17,000
And of course, the trend line at the time,

266
00:15:17,080 --> 00:15:19,000
I'll just take some of these bands off just to show you.

267
00:15:19,440 --> 00:15:22,900
The trend line at the time was not this nice, smooth black line.

268
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It was actually this gray line.

269
00:15:25,360 --> 00:15:27,260
All right, so it's just sort of,

270
00:15:28,320 --> 00:15:36,640
A little bit of some bugs there, but you can see that it's generally growing pretty fast,

271
00:15:36,740 --> 00:15:42,420
but this black line sort of shows how it's sort of settled down over time.

272
00:15:43,460 --> 00:15:46,300
Okay, but then we want to see, okay, so where are we now,

273
00:15:46,420 --> 00:15:48,640
and how would that compare to the past?

274
00:15:49,020 --> 00:15:51,820
Well, we can do this thing where look in the tooltip there.

275
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You see how already by 2011, the Q100 or the 100th percentile, you see it's, right, these are very small Bitcoin prices, right?

276
00:16:02,200 --> 00:16:02,940
$7 Bitcoin.

277
00:16:03,380 --> 00:16:09,460
But already there, relative to the power curve, you see 7.7x on the 100th percentile.

278
00:16:09,540 --> 00:16:09,820
You see that?

279
00:16:10,940 --> 00:16:16,940
And on the zeroth percentile, you see 0.4x, which is actually 0.001.

280
00:16:16,940 --> 00:16:22,360
basically as low as you can get below the trend line,

281
00:16:22,720 --> 00:16:24,140
you see 0.4x.

282
00:16:24,560 --> 00:16:27,260
So what that's saying is already in 2011,

283
00:16:28,260 --> 00:16:32,660
getting 60% below trend or 7.7x above trend

284
00:16:32,660 --> 00:16:37,000
is as good as it gets.

285
00:16:37,140 --> 00:16:39,160
And actually, I need to go a little bit further out.

286
00:16:39,280 --> 00:16:41,060
It's really 2012, say.

287
00:16:41,300 --> 00:16:43,240
Now the 0.0 is 0.1x.

288
00:16:43,240 --> 00:16:45,800
So a 90% discount from the power curve

289
00:16:45,800 --> 00:16:48,280
or a 7.7x premium.

290
00:16:48,840 --> 00:16:49,840
Now, as we go forward,

291
00:16:49,920 --> 00:16:51,480
just look at those two bands.

292
00:16:51,820 --> 00:16:53,400
Let me even take this out.

293
00:16:53,820 --> 00:16:55,500
I'm talking about the extreme bands.

294
00:16:56,500 --> 00:16:57,660
You see how they don't change?

295
00:16:58,340 --> 00:16:59,980
7.7x, 0.1x.

296
00:17:00,060 --> 00:17:00,580
Doesn't matter.

297
00:17:01,020 --> 00:17:02,140
The price is happening.

298
00:17:02,660 --> 00:17:04,020
Okay, so that's pretty interesting,

299
00:17:04,260 --> 00:17:04,720
first of all.

300
00:17:05,200 --> 00:17:05,980
And it shows that

301
00:17:05,980 --> 00:17:09,120
you can even see with the 2017 boom,

302
00:17:09,260 --> 00:17:10,300
the 2021 boom,

303
00:17:10,520 --> 00:17:12,600
there's really no chance on log scale

304
00:17:12,600 --> 00:17:14,180
you could see that we were going to hit those numbers.

305
00:17:14,480 --> 00:17:15,200
All right, if you look back,

306
00:17:15,200 --> 00:17:16,940
if you did this analysis.

307
00:17:17,540 --> 00:17:19,880
In 2017, it got relatively close.

308
00:17:20,520 --> 00:17:21,360
It got close.

309
00:17:21,700 --> 00:17:22,040
You're right.

310
00:17:22,220 --> 00:17:24,480
But 2021 was not relatively close.

311
00:17:25,000 --> 00:17:25,060
Okay.

312
00:17:25,060 --> 00:17:25,900
So you see 20,

313
00:17:26,360 --> 00:17:28,160
and you got to find other bands to get close.

314
00:17:28,240 --> 00:17:30,800
So they did get above the 90th on both ones,

315
00:17:30,860 --> 00:17:31,740
which is about 2X.

316
00:17:32,240 --> 00:17:32,860
And by the way,

317
00:17:33,160 --> 00:17:34,520
I was having fun with my,

318
00:17:34,960 --> 00:17:35,120
you know,

319
00:17:35,140 --> 00:17:36,300
so I'm streaming this stuff every day.

320
00:17:36,340 --> 00:17:36,620
And I was,

321
00:17:36,700 --> 00:17:41,920
I was enjoying theorizing back in like June of last year

322
00:17:41,920 --> 00:17:42,920
that, you know,

323
00:17:42,980 --> 00:17:44,820
okay, so we're going to,

324
00:17:45,200 --> 00:17:47,920
we're going to be counting the days that we're going to be above the 90th percentile,

325
00:17:47,980 --> 00:17:49,000
which is 2x the trend.

326
00:17:49,160 --> 00:17:50,320
Like, this is really great.

327
00:17:50,620 --> 00:17:51,600
We're gearing up.

328
00:17:52,260 --> 00:17:52,420
All right.

329
00:17:52,820 --> 00:17:56,620
But what I did not, and what I say I'm pretty proud of, actually,

330
00:17:56,700 --> 00:17:59,080
because I try to do not too much bombast in my predictions.

331
00:17:59,940 --> 00:18:03,420
And as the summer was going into the fall,

332
00:18:03,860 --> 00:18:05,680
and we were just hanging around the power trend,

333
00:18:05,720 --> 00:18:06,980
and people were getting really bullish,

334
00:18:07,120 --> 00:18:08,740
everybody's saying the four-year cycle is over.

335
00:18:09,960 --> 00:18:11,840
This is a new world for Bitcoin,

336
00:18:11,980 --> 00:18:13,600
but they didn't really quite describe the new world

337
00:18:13,600 --> 00:18:19,640
other than there were a lot of ETFs buying Bitcoin, I noticed that we're starting to now go back under

338
00:18:19,640 --> 00:18:25,300
the power curve and it's not looking very good. And so I said, look, it is a weird cycle. We haven't

339
00:18:25,300 --> 00:18:29,980
boomed up to the 90th like we did in all prior cycles. We haven't even gotten close to the 100th,

340
00:18:30,100 --> 00:18:35,360
let alone 2x the power trend. We haven't gotten 7x. And by the way, just to put numbers, by the way,

341
00:18:35,800 --> 00:18:42,040
the power trend back last year at this time I'm talking about is about 100,000. So it was $100,000

342
00:18:42,040 --> 00:18:43,080
and Bitcoin was around that.

343
00:18:43,180 --> 00:18:45,580
We were just bouncing along the power trend all last year.

344
00:18:46,360 --> 00:18:50,300
So I was saying, okay, this possible.

345
00:18:50,460 --> 00:18:51,860
I think we can get up to the 90th.

346
00:18:52,120 --> 00:18:53,020
It's going to be fun.

347
00:18:53,100 --> 00:18:54,140
It's going to be an interesting fall.

348
00:18:54,240 --> 00:18:56,060
Let's count the days, the four-year cycle.

349
00:18:57,640 --> 00:18:58,760
I'm a simple guy.

350
00:18:58,860 --> 00:19:00,200
Let's not fix what's not broken.

351
00:19:00,760 --> 00:19:02,020
Here, it's coming, right?

352
00:19:02,040 --> 00:19:12,645
And it didn come And yet all if you remember Dan I sure you talked to plenty of them A lot of the commentator says you know four cycle over Yeah four cycle over It a new

353
00:19:12,645 --> 00:19:16,685
world. They didn't quite, a lot of these people who said the four-year cycle's over, by the way,

354
00:19:16,725 --> 00:19:21,745
were not power trend followers. So they say, you know, it's a new world, a global adoption of

355
00:19:21,745 --> 00:19:27,385
Bitcoin, this and this and that. And meanwhile, I'm watching it in October go under trend and

356
00:19:27,385 --> 00:19:33,825
pretty steeply. And so I said specifically, and I'm not saying this is a huge win because I really

357
00:19:33,825 --> 00:19:37,985
don't like I don't try to predict the future. But what I do want to show to your listeners and

358
00:19:37,985 --> 00:19:42,345
viewers is we can look at the relative risk. I said is in like October, November, I said it a

359
00:19:42,345 --> 00:19:47,005
lot. I said, I'm not going to say the four year cycles over until like February, January, February,

360
00:19:47,425 --> 00:19:53,805
where we're all of a sudden at 160,000, right? Where we're way above the power trend to show me

361
00:19:53,805 --> 00:19:55,045
that this is something different.

362
00:19:55,825 --> 00:19:56,685
And lo and behold,

363
00:19:57,865 --> 00:20:00,285
it's that fifth year,

364
00:20:00,645 --> 00:20:02,905
or the first year of a new cycle,

365
00:20:02,985 --> 00:20:04,445
if you want to end the cycle on the top.

366
00:20:04,645 --> 00:20:06,025
We're in 2026 here,

367
00:20:06,425 --> 00:20:09,185
and we're well below the power trend.

368
00:20:09,485 --> 00:20:10,505
So in my opinion, actually,

369
00:20:10,565 --> 00:20:12,085
the four-year cycle is completely intact,

370
00:20:12,385 --> 00:20:13,005
hasn't broken.

371
00:20:13,225 --> 00:20:15,685
I'm not saying it cannot not break,

372
00:20:16,305 --> 00:20:17,605
but it's completely intact.

373
00:20:18,445 --> 00:20:19,305
The funny thing there, though,

374
00:20:19,305 --> 00:20:21,065
is I was one of the people that,

375
00:20:21,645 --> 00:20:23,005
I kind of bought the narrative

376
00:20:23,005 --> 00:20:24,265
that the four-year cycle might be over.

377
00:20:24,665 --> 00:20:25,665
And loads of reasons,

378
00:20:25,865 --> 00:20:27,565
one being just the dynamics of the market

379
00:20:27,565 --> 00:20:28,505
definitely changed.

380
00:20:28,745 --> 00:20:29,985
But if you zoom out a little bit,

381
00:20:30,085 --> 00:20:32,145
you can also see that this cycle

382
00:20:32,145 --> 00:20:34,245
did look different in the run-up to it.

383
00:20:34,805 --> 00:20:37,325
I think the closest comparison

384
00:20:37,325 --> 00:20:40,805
would be maybe that 2014 to 2016 period

385
00:20:40,805 --> 00:20:42,205
where it's just like a slow grind.

386
00:20:42,325 --> 00:20:45,245
There wasn't really any big runs up in price.

387
00:20:45,245 --> 00:20:47,865
It did seem different, I think.

388
00:20:49,385 --> 00:20:49,965
I agree with you.

389
00:20:50,365 --> 00:20:52,445
And this is the other thing about Bitcoin, right?

390
00:20:52,445 --> 00:20:56,045
It's like, well, there's so many nice memes.

391
00:20:56,285 --> 00:20:58,565
I think everyone gets the price they deserve

392
00:20:58,565 --> 00:20:59,245
is the best meme.

393
00:20:59,525 --> 00:21:02,525
And Bitcoiners are going to really be enjoying that meme,

394
00:21:02,565 --> 00:21:04,665
you know, five, 10 years from now.

395
00:21:05,305 --> 00:21:09,145
But yeah, who said it was going to be easy, right?

396
00:21:09,205 --> 00:21:10,965
Like 2021 was kind of confusing

397
00:21:10,965 --> 00:21:11,945
because that first top,

398
00:21:12,025 --> 00:21:13,165
which was really the real top,

399
00:21:13,445 --> 00:21:14,665
was booming in,

400
00:21:15,405 --> 00:21:16,465
and I have a few other indications

401
00:21:16,465 --> 00:21:18,745
that show it was the real top was March of 2021.

402
00:21:19,365 --> 00:21:20,785
You know, that was early, right?

403
00:21:20,785 --> 00:21:22,345
The prior tops came in November, December.

404
00:21:22,445 --> 00:21:25,005
and then we had the double top

405
00:21:25,005 --> 00:21:26,185
and then we still went down.

406
00:21:26,845 --> 00:21:27,825
Same with this time.

407
00:21:28,045 --> 00:21:30,585
We had the ETFs approval in January 2024

408
00:21:30,585 --> 00:21:34,205
and so all of a sudden we're back at the power curve

409
00:21:34,205 --> 00:21:37,085
when actually that could have taken a long time,

410
00:21:37,125 --> 00:21:39,265
like you said, in 2015, 2016

411
00:21:39,265 --> 00:21:41,145
or, you know, again,

412
00:21:41,245 --> 00:21:43,925
no cycle's completely identical, that's for sure.

413
00:21:44,085 --> 00:21:45,245
Everybody needs to be clear on that.

414
00:21:45,705 --> 00:21:48,865
But this is the beauty of the power curve actually

415
00:21:48,865 --> 00:21:52,065
is it can ground you in what Bitcoin is actually doing

416
00:21:52,065 --> 00:22:00,525
and you can completely, completely avoid the YouTube thumbnails that tell you that you better

417
00:22:00,525 --> 00:22:03,745
watch this video or Bitcoin, you know, the world is going to end and Bitcoin's going to

418
00:22:03,745 --> 00:22:11,585
100,000 before you buy it or 60,000 sell it. It's just absolute nonsense. And these people are,

419
00:22:11,825 --> 00:22:15,685
they do not have a concept of what the power curve is actually saying Bitcoin's doing.

420
00:22:16,325 --> 00:22:19,885
But can you believe in the power curve and the four-year cycle at the same time? Because the

421
00:22:19,885 --> 00:22:24,705
power curve would say that cycles will become elongated all the time. Is that not right?

422
00:22:25,665 --> 00:22:33,185
No. There are a few different theories on, if you want to say elongated, but what the power

423
00:22:33,185 --> 00:22:38,985
curve will say is that the cycles will become dampened over time. Dampened. This is actually

424
00:22:38,985 --> 00:22:42,565
the point that I'm getting to. They will not necessarily become elongated or shortened or

425
00:22:42,565 --> 00:22:47,745
whatever, but the volatility will become less. And so that's actually what I'm trying to show

426
00:22:47,745 --> 00:22:52,485
right here. Look at, all right, we've looked at this chart now for a while as we've talked through

427
00:22:52,485 --> 00:23:00,805
it. It's very unlikely. Now, you have to think of statistics now. In all of Bitcoin's history,

428
00:23:01,625 --> 00:23:09,125
all right, the huge moves above the trend at the time, getting to 6, 7, 8x, the power trend,

429
00:23:09,125 --> 00:23:14,205
that happened all the way back in 2011. 2017 was close, like you said, and we did get above the 9,

430
00:23:14,205 --> 00:23:20,785
the 90th, but not above the 100th. And again, the 90th is 2x, but not even close to 7x. 2021,

431
00:23:21,045 --> 00:23:27,725
not even close to 7x. So I had it totally in mind that we were not going to get 6x, 7x last year

432
00:23:27,725 --> 00:23:31,865
when people were making their crazy predictions and also saying the cycle's over. But I did think

433
00:23:31,865 --> 00:23:34,985
possible because it happened in every prior cycle, we could have gotten to the 90th.

434
00:23:35,145 --> 00:23:40,085
That didn't happen either. Okay. So let's reevaluate our priors. Let's just see where we are.

435
00:23:40,085 --> 00:23:45,565
we're still on the four-year cycle it's totally intact i'll show you some more charts for the

436
00:23:45,565 --> 00:23:48,305
four-year cycle but i want to i don't want to focus too much on the four-year right now

437
00:23:48,305 --> 00:23:56,745
but look at so this is this is different than an exponential chart and i'll show you

438
00:23:56,745 --> 00:24:04,605
like apple for example as a comparison but as we can see the price if you just sort of

439
00:24:04,605 --> 00:24:09,765
see how it moves around these bands the price itself as we move up the curve is getting closer

440
00:24:09,765 --> 00:24:11,645
and closer to the black line over time.

441
00:24:11,705 --> 00:24:13,265
Yeah, it still has big moves.

442
00:24:13,505 --> 00:24:15,045
We're in a big move down right now.

443
00:24:15,325 --> 00:24:17,425
But it's getting closer and closer to the black line.

444
00:24:17,525 --> 00:24:18,725
It's not getting further away.

445
00:24:19,205 --> 00:24:21,865
It's not getting up to the 7, 8x.

446
00:24:21,925 --> 00:24:23,765
It's not getting down to the 0.1x,

447
00:24:24,145 --> 00:24:27,085
which will be $15,000 right now, right?

448
00:24:27,505 --> 00:24:31,505
To get even to the 10th percentile of a multiple,

449
00:24:31,665 --> 00:24:33,485
which is 0.3x, right?

450
00:24:33,665 --> 00:24:35,925
That would be 40,000.

451
00:24:36,565 --> 00:24:38,605
And the last time we would even have been close

452
00:24:38,605 --> 00:24:45,645
to that multiple would have been the scam, bank, and fraud puking of 2022. And there,

453
00:24:46,105 --> 00:24:52,025
the 10th was 13, 13, 14,000. We didn't get there either. All right. So you'd have to go all the way

454
00:24:52,025 --> 00:24:58,325
back to 2015 to where we hit that multiple. So just look, just, you know, just marinate on that

455
00:24:58,325 --> 00:25:03,485
chart now and look how the green line is not going farther away from the black line. It's getting

456
00:25:03,485 --> 00:25:11,585
closer. It's having less variance, less volatility. And that's a good thing. That's reaffirming what

457
00:25:11,585 --> 00:25:16,825
the power curve is actually showing, which is proportional stable growth. What do you got to

458
00:25:16,825 --> 00:25:22,445
say to that? I mean, it's super interesting. And really, the most interesting thing looking at this

459
00:25:22,445 --> 00:25:28,765
is that we're at like 60 something K right now. And it looks like there's not many times in the

460
00:25:28,765 --> 00:25:32,665
past that it's been this low. So do you think we are hammering out of bottom sort of where we are

461
00:25:32,665 --> 00:25:37,785
right now. I do. I do. Again, anything is possible. But there are two different ways to look at it.

462
00:25:37,785 --> 00:25:43,445
Now I want to show you a different regression. So as you see in the title here, it says evolving

463
00:25:43,445 --> 00:25:47,865
regression power. Okay. So what I mean with the evolving is just what I was talking about. Like,

464
00:25:48,105 --> 00:25:55,965
let's find the max over under plot that figure out, you know, where that is relative to future

465
00:25:55,965 --> 00:26:00,885
moves. And the point is, you can see, it's actually not great. It's not even that helpful,

466
00:26:00,885 --> 00:26:02,785
other than just to say it's not going to get there.

467
00:26:03,345 --> 00:26:04,485
And when I say not going to get there,

468
00:26:04,605 --> 00:26:06,065
I'm speaking statistically.

469
00:26:06,565 --> 00:26:09,105
It's extremely unlikely that the price

470
00:26:09,105 --> 00:26:12,525
is going to go to 0.1x the trend, i.e. 15K right now.

471
00:26:12,765 --> 00:26:14,385
And it's also extremely unlikely

472
00:26:14,385 --> 00:26:17,245
the price is going to go 7.8x the trend,

473
00:26:17,585 --> 00:26:19,745
i.e. a million right now at this moment.

474
00:26:20,265 --> 00:26:22,485
So having said that, let's look at the other one.

475
00:26:22,765 --> 00:26:25,025
Now this is a quantile regression straight up,

476
00:26:25,185 --> 00:26:25,785
not evolving.

477
00:26:26,205 --> 00:26:28,205
So here I can get these nice parallel lines.

478
00:26:28,805 --> 00:26:29,405
What does that mean?

479
00:26:29,405 --> 00:26:49,405
Right. So happening here, actually parallel was the wrong word, straight like these smooth lines and they're not parallel. But what they are having, what they are doing here is I'm taking each each each data point basically in the chart is analyzed relative to all the others.

480
00:26:49,405 --> 00:26:54,225
and then you try to do your own sort of mini regression in that range.

481
00:26:54,885 --> 00:26:55,365
Okay?

482
00:26:55,625 --> 00:27:00,045
So what I'm saying is I'm not, the governor here is not like this one,

483
00:27:00,245 --> 00:27:02,665
how far above or under the price am I?

484
00:27:02,705 --> 00:27:03,825
Am I 7x, 8x?

485
00:27:03,905 --> 00:27:04,025
No.

486
00:27:04,365 --> 00:27:07,925
The governor is relative to all the other points,

487
00:27:08,465 --> 00:27:12,545
can I just draw kind of different ranges of this black line?

488
00:27:12,705 --> 00:27:14,945
The black line is the OLS or narrowly squares.

489
00:27:14,945 --> 00:27:17,725
So like here, you see the black line is usually like,

490
00:27:18,045 --> 00:27:18,945
it's not exactly in the middle.

491
00:27:18,945 --> 00:27:20,085
It's actually close to two thirds.

492
00:27:21,285 --> 00:27:23,265
The median is the Q50.

493
00:27:23,425 --> 00:27:24,905
So this is, you'll see the difference here.

494
00:27:24,945 --> 00:27:25,385
I'll zoom in.

495
00:27:25,845 --> 00:27:26,625
They're a little bit different.

496
00:27:27,645 --> 00:27:27,805
Okay.

497
00:27:29,045 --> 00:27:30,545
So the OLS is 130.

498
00:27:30,725 --> 00:27:31,825
The median is 120.

499
00:27:31,965 --> 00:27:32,945
You see we're well below that.

500
00:27:33,445 --> 00:27:35,585
But then as I draw all the other bands,

501
00:27:36,365 --> 00:27:37,985
they have what's called a pseudo,

502
00:27:38,125 --> 00:27:39,905
like a pseudo R squared to measure them.

503
00:27:40,785 --> 00:27:43,025
The point is, none of this is, you know,

504
00:27:43,085 --> 00:27:43,865
it's all statistics.

505
00:27:44,085 --> 00:27:45,125
It's not gospel.

506
00:27:45,305 --> 00:27:47,865
But we can actually get even tighter bands.

507
00:27:47,865 --> 00:27:50,405
Notice how they're tighter, right, than this one.

508
00:27:50,565 --> 00:27:53,925
With this one, the Q100, the Q0, like way off.

509
00:27:54,285 --> 00:27:59,905
I'm trying to view this in linear space, right, with a simple multiplication when it's not.

510
00:28:00,085 --> 00:28:09,625
If we were in our old school ABC correction, Elliott wave, lines on charts, everything moves exponentially, this model would work.

511
00:28:10,025 --> 00:28:10,725
And I'll show you that.

512
00:28:11,485 --> 00:28:17,225
Doing these simple multiplication figures, right, that over or under trend.

513
00:28:17,225 --> 00:28:18,785
but it doesn't work with a power curve.

514
00:28:18,845 --> 00:28:19,625
It doesn't work as well.

515
00:28:19,845 --> 00:28:20,925
Now I do it, like I said,

516
00:28:20,985 --> 00:28:23,085
I still do it as an analysis to show you generally,

517
00:28:23,205 --> 00:28:24,505
okay, this is what 2x the trend is.

518
00:28:24,765 --> 00:28:25,705
This is where the line is.

519
00:28:26,005 --> 00:28:29,365
But you can see it's less helpful.

520
00:28:29,465 --> 00:28:30,585
This is the point I'm trying to drive home.

521
00:28:30,645 --> 00:28:32,945
It's less helpful as we move forward

522
00:28:32,945 --> 00:28:35,045
because all we can really say

523
00:28:35,045 --> 00:28:36,825
is these lines are not going to get hit, right?

524
00:28:36,825 --> 00:28:37,545
There's just no way.

525
00:28:38,225 --> 00:28:40,085
But here, here is more helpful.

526
00:28:40,765 --> 00:28:41,925
All right, so this is where we do

527
00:28:41,925 --> 00:28:45,725
individual regressions on every point

528
00:28:45,725 --> 00:28:47,805
and then we just draw the lines out.

529
00:28:47,865 --> 00:28:48,605
And they're not parallel,

530
00:28:49,385 --> 00:28:52,345
which my multiplication lines were parallel,

531
00:28:52,565 --> 00:28:54,525
but they sort of, they converge on each other.

532
00:28:54,525 --> 00:28:58,965
They trace that lack of deviation, right?

533
00:28:59,045 --> 00:29:02,745
They trace that sort of less, not lack of,

534
00:29:02,805 --> 00:29:04,945
but less deviation that happens around the trend.

535
00:29:05,425 --> 00:29:07,545
And so what you see is they start to converge on each other.

536
00:29:08,305 --> 00:29:10,125
And this is even more helpful, I would say,

537
00:29:10,145 --> 00:29:11,845
to show us where a top and where a bottom is.

538
00:29:11,885 --> 00:29:12,565
So let's go back.

539
00:29:13,585 --> 00:29:15,405
If anyone's listening to this on podcasts, I'm sorry,

540
00:29:15,405 --> 00:29:16,725
you're going to have to go to the YouTube.

541
00:29:16,845 --> 00:29:18,145
I'll put the video on Spotify as well.

542
00:29:18,465 --> 00:29:20,025
You kind of need to see this one.

543
00:29:20,685 --> 00:29:23,265
The first 10, 15 minutes talking about the power curve,

544
00:29:23,345 --> 00:29:24,045
hopefully it was helpful.

545
00:29:24,165 --> 00:29:29,185
But yeah, it really does help to watch the video with this stuff.

546
00:29:29,485 --> 00:29:33,705
So now you can see in 2017, we hit it.

547
00:29:34,245 --> 00:29:34,425
All right.

548
00:29:34,465 --> 00:29:37,825
We still like hit the 100th percentile.

549
00:29:37,885 --> 00:29:39,305
We did not in 2021.

550
00:29:41,205 --> 00:29:43,905
But still, these curves are now closer.

551
00:29:43,905 --> 00:29:44,845
And back to the 2022.

552
00:29:44,845 --> 00:29:46,765
I'll just switch back so you can keep seeing.

553
00:29:47,205 --> 00:29:51,065
2022, notice the 10th, the 0th was way far away.

554
00:29:51,505 --> 00:29:57,045
The 10th percentile, which in this model would be 13, 14,000.

555
00:29:57,185 --> 00:30:02,405
We still didn't hit in 2022, but now we are hitting the 0th in 2022 here.

556
00:30:02,525 --> 00:30:05,225
So we are getting, we are painting bottoms.

557
00:30:06,265 --> 00:30:08,465
Statistically, this is a much better chart.

558
00:30:09,085 --> 00:30:09,745
Okay, it's much better.

559
00:30:10,125 --> 00:30:12,325
And notice, by the way, notice how the multiples are different.

560
00:30:12,425 --> 00:30:13,445
I show the multiples here too.

561
00:30:13,445 --> 00:30:19,625
so this is now the multiple of price relative to the trend that you see and as you see

562
00:30:19,625 --> 00:30:25,005
it's declining they decline they all decline they get smaller which is a good thing this is

563
00:30:25,005 --> 00:30:30,165
this is a helpful model so this is only something you can do on a power curve that's what i'm gonna

564
00:30:30,165 --> 00:30:35,285
say you can't apply this method but it's it's gonna be different with an exponential curve okay

565
00:30:35,285 --> 00:30:40,805
so so with with a power curve doing a quantile regression this way is uh probably the best

566
00:30:40,805 --> 00:30:46,705
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586
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587
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590
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595
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596
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597
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598
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600
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601
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602
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603
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604
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606
00:32:48,025 --> 00:32:49,285
But the interesting thing there

607
00:32:49,285 --> 00:32:50,665
is like on the other one,

608
00:32:50,725 --> 00:32:51,825
other chart you were pulling up,

609
00:32:52,325 --> 00:32:53,225
the percentile multiple,

610
00:32:53,325 --> 00:32:54,465
it looked like we were

611
00:32:54,465 --> 00:32:55,745
probably close to a bottom,

612
00:32:56,065 --> 00:32:58,305
but there was still some room to go.

613
00:32:58,385 --> 00:32:59,305
Whereas on this chart,

614
00:32:59,325 --> 00:33:00,145
it looks like we're hitting

615
00:33:00,145 --> 00:33:01,385
the absolute bottom.

616
00:33:02,045 --> 00:33:03,285
Right, right, exactly.

617
00:33:03,785 --> 00:33:06,685
And so you have to kind of guess,

618
00:33:06,745 --> 00:33:07,305
you have to think,

619
00:33:07,305 --> 00:33:14,685
okay, so hopefully we're not going to set some crazy low, but it looks pretty, you know, it still

620
00:33:14,685 --> 00:33:19,325
looks low, but we're not, we're not quite sure here. We're scraping the bottom. Now, again,

621
00:33:19,325 --> 00:33:25,765
to be clear, this is just statistics. Anything can happen, whatever. Um, but statistically right

622
00:33:25,765 --> 00:33:30,765
now, according to a quantile regression of Bitcoin's price relative to the power curve,

623
00:33:30,885 --> 00:33:37,045
we are basically at the bottom. I mean, 63 K as cheap as Bitcoin gas. Yeah. Relative to the power

624
00:33:37,045 --> 00:33:42,085
trend this is as cheap as it gets and that's the key message that's the key point like yeah could

625
00:33:42,085 --> 00:33:46,965
it drop another leg down yeah but that's not going to break the power curve it's just going to pull

626
00:33:46,965 --> 00:33:52,405
this zero with line you know it's just going to slant its its tilt a little bit and the nice thing

627
00:33:52,405 --> 00:33:56,805
about this analysis by the way danny as opposed to the other one is these lines move independently

628
00:33:56,805 --> 00:34:04,005
of each other right with this one my multiple percentile multiple it's it's it's it's all about

629
00:34:04,005 --> 00:34:07,525
the multiple at the end of the day so the max multiple is what stays and that's what keeps this

630
00:34:07,525 --> 00:34:12,565
thing parallel it doesn't happen here they move independent and we can sort of see okay what could

631
00:34:12,565 --> 00:34:19,845
be a more realistic thing so in my opinion yes and again always never financial advice but this is

632
00:34:20,965 --> 00:34:26,965
relative to bitcoin's you know 6 500 day history whatever it is we are at

633
00:34:29,445 --> 00:34:33,765
as cheap as you can can get relative to the power curve relative to the bitcoin trend

634
00:34:34,005 --> 00:34:47,185
itself. That happened in 2022. It did not even happen in 2020. Although probably that was closer

635
00:34:47,185 --> 00:34:51,845
because this got pulled down further. This is also a thing you can't show it how it evolved, but

636
00:34:51,845 --> 00:34:59,405
it was probably closer in 2020 during that scare. And then really, you'd have to go back to like the

637
00:34:59,405 --> 00:35:05,625
most thin days of Bitcoin trading to put these sort of multiples in. So that's where we are.

638
00:35:06,145 --> 00:35:10,185
And I would say, you know, if you look at this chart, we're going to look at others. If you

639
00:35:10,185 --> 00:35:13,965
still want to tell me that the four-year cycle doesn't have some interesting impact here,

640
00:35:14,365 --> 00:35:17,645
I would say, you know, investigate your priors again. I mean, this is,

641
00:35:18,585 --> 00:35:24,485
we have hit these types of bottoms at every prior four-year cycle. What is different? Yes,

642
00:35:24,485 --> 00:35:29,145
we didn't have as high a high as last year as we talked about. What's also different is we have

643
00:35:29,145 --> 00:35:34,845
scream down towards the bottom. All right. So in the last cycles, as most people might remember,

644
00:35:35,105 --> 00:35:39,205
it took like a year, right? From 2017 to the year to bottom in December, 2018,

645
00:35:40,125 --> 00:35:46,705
2021, it took a year, November, December, 2022. Now we have done this in a matter of months.

646
00:35:47,305 --> 00:35:50,665
Yes, we didn't have a huge top and it was even a little bit earlier, October,

647
00:35:50,865 --> 00:35:57,025
but now here we are in February. And this is where I'd say I'm very proud of this analysis.

648
00:35:57,025 --> 00:35:59,225
This is something that really affirmed what I was saying.

649
00:35:59,445 --> 00:36:01,205
I couldn't tell you it was going to happen,

650
00:36:01,665 --> 00:36:03,445
but I was saying, you know,

651
00:36:03,585 --> 00:36:07,005
let's just hold off on this sort of prognosticating

652
00:36:07,005 --> 00:36:08,985
how Bitcoin's going to do something way different

653
00:36:08,985 --> 00:36:10,485
than it did in the past.

654
00:36:11,345 --> 00:36:13,885
I'll believe that if January, February,

655
00:36:14,185 --> 00:36:16,205
we're at like, you know, over 100,000.

656
00:36:16,305 --> 00:36:16,985
And look where we are.

657
00:36:17,365 --> 00:36:19,785
We're totally following prior cycles.

658
00:36:20,925 --> 00:36:22,265
Why do you think we're still trending

659
00:36:22,265 --> 00:36:25,665
quite far below that power law line,

660
00:36:25,665 --> 00:36:28,225
but we're not really going above it in the bull markets.

661
00:36:32,065 --> 00:36:33,025
Ah, okay.

662
00:36:33,325 --> 00:36:37,705
So I don't know the exact answer,

663
00:36:37,785 --> 00:36:39,385
but I can show you an interesting chart

664
00:36:39,385 --> 00:36:41,585
that would say we're actually not at the lowest.

665
00:36:42,345 --> 00:36:44,785
Okay, so this is a cool chart right here.

666
00:36:45,525 --> 00:36:47,165
What I'm showing you is,

667
00:36:47,265 --> 00:36:48,585
let's see, you can take the forecast off.

668
00:36:48,765 --> 00:36:49,745
So here's the old power curve.

669
00:36:50,145 --> 00:36:52,205
And this is that gray line that I showed you before.

670
00:36:52,305 --> 00:36:53,785
So at any given time, the power curve,

671
00:36:53,785 --> 00:36:58,405
It's not a beautiful, you know, the line that you can draw after all time data.

672
00:36:58,885 --> 00:37:03,865
But it's, you know, it does settle down and it goes to your question.

673
00:37:04,785 --> 00:37:05,485
More of it.

674
00:37:05,565 --> 00:37:08,825
In fact, two thirds of the time, we're under this green line that above it.

675
00:37:09,305 --> 00:37:11,545
That's just the nature of what the Bitcoin power law does.

676
00:37:12,285 --> 00:37:14,905
OK, so it generally tends to pull it down.

677
00:37:15,185 --> 00:37:19,065
But what's cool is we're not at a low even right or right here.

678
00:37:19,185 --> 00:37:20,665
Right now, we are not at a low.

679
00:37:20,665 --> 00:37:23,845
So to show that, you actually have to do an interesting analysis here.

680
00:37:23,965 --> 00:37:25,025
And again, this is where I can think.

681
00:37:25,605 --> 00:37:27,725
I used to do this like on a monthly basis by hand.

682
00:37:27,805 --> 00:37:28,925
It was more difficult.

683
00:37:29,285 --> 00:37:34,145
But now with the magic of AI, I can do a lot more quicker.

684
00:37:34,965 --> 00:37:43,065
But I could show you every day's forecast of what the power trend would predict today's price to be.

685
00:37:43,565 --> 00:37:45,505
February, sorry, March 2nd.

686
00:37:45,505 --> 00:37:47,045
March 2nd, happy spring.

687
00:37:47,885 --> 00:37:50,565
March 2nd, 2026.

688
00:37:50,665 --> 00:37:52,645
All right, so what you see on this blue line

689
00:37:52,645 --> 00:37:54,685
was the prediction of the price

690
00:37:54,685 --> 00:37:56,805
based on the Bitcoin data at the time

691
00:37:56,805 --> 00:37:59,825
in March 2nd, 2026.

692
00:38:00,125 --> 00:38:02,225
All right, so you'll notice in the early years,

693
00:38:02,285 --> 00:38:04,705
like I said, when we're way sort of booming,

694
00:38:05,545 --> 00:38:07,385
you get some crazy prices.

695
00:38:07,805 --> 00:38:25,291
All right you not reading this wrong billion Basically you know the June 2011 peak when it went up to This was just around the first empty Gox hacking The power curve and no one was looking at this at the time

696
00:38:26,251 --> 00:38:32,510
Trolololo was a famous Bitcoin talk poster, which is what I modeled my data off of. He was thinking

697
00:38:32,510 --> 00:38:35,791
that it was a logarithmic curve, which is a little bit different, even more explosive at the

698
00:38:35,791 --> 00:38:41,131
beginning. Any event, it's not how it's working now. If you did a power curve regression at the

699
00:38:41,131 --> 00:38:48,751
time, it would have predicted March 2nd, 2026, $68 billion Bitcoin. Didn't happen. We had to wait

700
00:38:48,751 --> 00:38:55,091
till we sort of settled into the data. And that happened really around 2016. All right. So Giovanni,

701
00:38:55,231 --> 00:39:01,331
the Italian who is big on the power law, he did it a couple months before me. I did it in

702
00:39:01,331 --> 00:39:08,410
December 2018. That's when I first noticed it. And then again, anybody can calculate it now.

703
00:39:08,490 --> 00:39:13,871
It's very easy. But right around that time, if you start to look at the forecasted price at any

704
00:39:13,871 --> 00:39:20,851
given time, it's pretty close to today's power curve. It is higher. All right. Notice 170K,

705
00:39:20,851 --> 00:39:26,311
190K, it's higher. And it will get pulled down. As you noticed, and as I said, two-thirds of the

706
00:39:26,311 --> 00:39:31,731
time, price is actually under the OLS. So we get pulled down, pulled down all the way to 130.

707
00:39:32,050 --> 00:39:37,930
All right. So 130 is the number right now. And indeed, we're, you know, 50% under that. So it's

708
00:39:37,930 --> 00:39:43,131
this huge buying opportunity, in my opinion. But let's look if that's actually the lowest,

709
00:39:43,391 --> 00:39:49,170
except for, of course, the first like few months of data, the actual lowest painted value

710
00:39:49,170 --> 00:39:52,371
is we have to go all the way here

711
00:39:52,371 --> 00:39:55,111
after the crypto winter, as they call it,

712
00:39:55,571 --> 00:39:57,631
to May 2017.

713
00:39:58,311 --> 00:39:59,811
See what it's starting to show there?

714
00:40:00,631 --> 00:40:01,851
125, 124.

715
00:40:02,651 --> 00:40:04,710
Yeah, 124, 125.

716
00:40:05,050 --> 00:40:05,811
So it's very interesting.

717
00:40:06,231 --> 00:40:07,111
What it's saying is

718
00:40:07,111 --> 00:40:12,391
we actually have about $5,000, $6,000 worth of room

719
00:40:12,391 --> 00:40:19,071
to spare before this lower-than-trend price

720
00:40:19,071 --> 00:40:25,030
action sort of pulls, you know, so we set a record low. And I would actually say that's a bullish

721
00:40:25,030 --> 00:40:29,751
indicator. That's a bullish indicator. It doesn't mean, again, the power curve is over if we set a

722
00:40:29,751 --> 00:40:36,010
record low. It just means, think about what that means. It means the curve doesn't always move

723
00:40:36,010 --> 00:40:40,391
lower. Yeah, it always adjusts every day. This is not a stock to flow, you know, fix sort of thing.

724
00:40:40,391 --> 00:40:47,430
This, it always adjusts the price, but it doesn't, you know, we are not at the all-time low here,

725
00:40:47,430 --> 00:40:55,271
which is good and another thing to think about that is so how do i reconcile this uh again think

726
00:40:55,271 --> 00:41:00,851
about how crazy that was the price in may 2017 was one thousand seven hundred dollars per bitcoin

727
00:41:00,851 --> 00:41:07,831
it predicted and when i say predict i'm very it's a very statistical term i'm saying it doesn't know

728
00:41:07,831 --> 00:41:15,930
the future but it projected 124 000 bitcoin by march 2nd 2026 it's remarkable it's a remarkable

729
00:41:15,930 --> 00:41:37,331
Yeah. And so the other thing to think about is, OK, so it says 124. Now we're 130, but we're pulling the power curve down every day because we're under it. That's true. But there's also another force, which is the curve itself moving upward. The curve itself moves up $100 a day. So, again, I can't tell you how the math works out. They just have to observe it and see.

730
00:41:37,331 --> 00:41:41,611
but if somehow we went into like super bearish mode

731
00:41:41,611 --> 00:41:43,811
which I again I can't quite see

732
00:41:43,811 --> 00:41:46,150
especially with all the geopolitical tensions in the world

733
00:41:46,150 --> 00:41:48,150
but we go to some super crazy bearish mode

734
00:41:48,150 --> 00:41:51,710
and the price stays at like the zeroeth

735
00:41:51,710 --> 00:41:53,510
the tenth percentile

736
00:41:53,510 --> 00:41:55,351
for a long time

737
00:41:55,351 --> 00:41:58,190
then it is true it's possible we could like threaten

738
00:41:58,190 --> 00:41:59,791
this sort of all-time low level

739
00:41:59,791 --> 00:42:02,311
but this is this remains

740
00:42:02,311 --> 00:42:04,010
this is one of my favorite data points

741
00:42:04,010 --> 00:42:05,050
and it just sort of shows like

742
00:42:05,050 --> 00:42:06,731
we're

743
00:42:07,331 --> 00:42:12,930
we're not as bad as it's ever been as far as the power curve, which is bullish. That is bullish.

744
00:42:13,071 --> 00:42:18,591
And it just shows, I think, the strength of where this curve is. And after all that diatribe, I hope

745
00:42:18,591 --> 00:42:23,271
it kind of gets to your question of, you know, why is the price always below the curve or whatever?

746
00:42:23,271 --> 00:42:27,391
It is true. It's below it two thirds of the time, but that's just the nature of the distribution.

747
00:42:28,351 --> 00:42:32,611
It can also pull the curve up when we get to the boom phases. So you just have to look and see

748
00:42:32,611 --> 00:42:37,571
where it goes. So you know what my next question is going to be. So if the four-year cycle is still

749
00:42:37,571 --> 00:42:43,710
real, by like 2029, what price is this predicting or projecting that we're going to be at?

750
00:42:44,150 --> 00:42:48,530
Sure. So let's go back to the quantile. That's the best way to look at it. Let's go to the end

751
00:42:48,530 --> 00:42:58,950
of the decade. We're about 550. Okay. So I'll take it. If you notice, oops, sorry, that's 2029.

752
00:42:58,950 --> 00:43:01,351
and notice the

753
00:43:01,351 --> 00:43:02,811
difference

754
00:43:02,811 --> 00:43:06,010
some people say end of the decade

755
00:43:06,010 --> 00:43:07,631
is 2029

756
00:43:07,631 --> 00:43:08,670
some people say 2030

757
00:43:08,670 --> 00:43:12,010
let's go to 2029 just to show you the difference in a year

758
00:43:12,010 --> 00:43:13,670
by the way so 2029

759
00:43:13,670 --> 00:43:15,990
the highest

760
00:43:15,990 --> 00:43:17,791
quantiles 550, 400

761
00:43:17,791 --> 00:43:19,891
the OLS itself 235

762
00:43:19,891 --> 00:43:21,811
but then let's just go out one more year

763
00:43:21,811 --> 00:43:24,291
end of year 2030

764
00:43:24,291 --> 00:43:28,190
OLS 544

765
00:43:28,190 --> 00:43:29,831
5.50

766
00:43:29,831 --> 00:43:32,490
5.44 on December 27,

767
00:43:32,591 --> 00:43:34,450
2030. And let's say the

768
00:43:34,450 --> 00:43:36,831
Q50, which would be the median, 5.16

769
00:43:36,831 --> 00:43:38,190
Q60,

770
00:43:38,650 --> 00:43:40,751
500. So again, pretty remarkable

771
00:43:40,751 --> 00:43:42,571
numbers. And

772
00:43:42,571 --> 00:43:44,851
that

773
00:43:44,851 --> 00:43:46,611
number, that 5.50 number

774
00:43:46,611 --> 00:43:48,331
has been there for a long time.

775
00:43:48,731 --> 00:43:50,650
I've been talking about

776
00:43:50,650 --> 00:43:52,291
this on streams and projecting it

777
00:43:52,291 --> 00:43:54,690
for a while. It has been

778
00:43:54,690 --> 00:43:56,591
pulled down during those boom years of

779
00:43:56,591 --> 00:44:02,690
2021. And even though the curve was being pulled down, you still would be projecting by 2030,

780
00:44:02,851 --> 00:44:08,950
December, like 590, 600,000. Now we're down to 550. So again, that's another example. It does

781
00:44:08,950 --> 00:44:16,690
get pulled down, but all it takes is another boom or just, you know, another crop of people to find

782
00:44:16,690 --> 00:44:21,950
the wonders of Bitcoin to pull the trend back up or back to a higher, you know, sort of level than

783
00:44:21,950 --> 00:44:28,411
it was. So I would say with pretty high confidence, we're going to be at 550, maybe even higher by

784
00:44:28,411 --> 00:44:34,851
2030. Hey, I will take 550 by 2030. That sounds all right to me, Matthew. It sounds all right.

785
00:44:34,930 --> 00:44:38,811
We still haven't gotten a money supply, but, and I want to skip it. That's fine. It's good to-

786
00:44:38,811 --> 00:44:42,311
No, we can't skip money supply. I want to do money supply. We've done a 45 minute tangent

787
00:44:42,311 --> 00:44:46,490
there on power law. No, no, it's good. Let's stick on the four-year cycle for a second.

788
00:44:46,490 --> 00:44:48,950
This is a very checkmatey chart.

789
00:44:50,050 --> 00:44:51,771
You can get this at Bitcoin Lab.

790
00:44:51,891 --> 00:44:53,530
A lot of great charts there.

791
00:44:54,071 --> 00:44:56,530
Some of them costs, which I do pay for,

792
00:44:56,591 --> 00:44:57,990
but I don't know if this is one.

793
00:44:58,571 --> 00:45:01,891
So hodlers and loss versus hodlers and profit.

794
00:45:02,010 --> 00:45:03,911
I'm going to take off short term just to look at long term.

795
00:45:04,670 --> 00:45:07,470
I think this pretty much shows what's happening.

796
00:45:08,091 --> 00:45:10,731
So this is UTXOs, right?

797
00:45:10,771 --> 00:45:12,050
So this is pieces of Bitcoin.

798
00:45:12,351 --> 00:45:12,851
Who's in loss?

799
00:45:12,891 --> 00:45:13,411
Who's in profit?

800
00:45:13,530 --> 00:45:13,911
Straight up.

801
00:45:14,010 --> 00:45:14,411
Very simple.

802
00:45:14,411 --> 00:45:18,030
let's ignore the

803
00:45:18,030 --> 00:45:20,811
2013, although you can see

804
00:45:20,811 --> 00:45:22,831
red certainly grows, but basically

805
00:45:22,831 --> 00:45:25,050
every time we go into that year of bust

806
00:45:25,050 --> 00:45:26,631
after the boom,

807
00:45:26,930 --> 00:45:27,751
you get a lot of red.

808
00:45:29,751 --> 00:45:30,550
Percentage-wise,

809
00:45:32,831 --> 00:45:34,710
if you count long and short-term,

810
00:45:34,811 --> 00:45:37,050
it can get even to 50% or 40%.

811
00:45:37,050 --> 00:45:38,411
It's a little bit less if you look

812
00:45:38,411 --> 00:45:41,131
at only long-term,

813
00:45:41,231 --> 00:45:41,871
but you can see that

814
00:45:41,871 --> 00:45:46,430
just like there's a period of deep red before the market bottoms out.

815
00:45:47,111 --> 00:45:48,851
Lo and behold, where are we right now?

816
00:45:50,010 --> 00:45:53,450
I mean, I would say, again, this is where I am super bullish long term,

817
00:45:53,731 --> 00:45:55,131
but this is where you just got to look at the numbers

818
00:45:55,131 --> 00:45:57,291
and think about what's happening here.

819
00:45:57,430 --> 00:46:00,210
I mean, this could go lower, right?

820
00:46:00,291 --> 00:46:00,950
This could go lower.

821
00:46:02,891 --> 00:46:04,331
And even if it's not lower,

822
00:46:04,411 --> 00:46:06,851
I think one of the things that looks obvious from this is

823
00:46:06,851 --> 00:46:08,851
it's going to go longer at the very least.

824
00:46:09,311 --> 00:46:09,430
Yeah.

825
00:46:09,731 --> 00:46:10,030
Yeah.

826
00:46:10,030 --> 00:46:14,950
that's probably even a more precise better answer it might not go lower but can go longer

827
00:46:14,950 --> 00:46:21,611
and in my opinion you just can't look at this and say the four-year cycle is is that so yeah we hit

828
00:46:21,611 --> 00:46:28,190
this quicker yeah we didn't have as high of a boom last year but you know in any market if you hit

829
00:46:28,190 --> 00:46:33,311
your revenue by 50 which is what happens in the bitcoin market every four years it's going to

830
00:46:33,311 --> 00:46:38,571
affect it it's going to affect it and it takes a while to catch up so let me just put this on

831
00:46:38,571 --> 00:46:47,990
percentage again just to show you so here we go the the first two busts long-term hodlers in profit

832
00:46:47,990 --> 00:47:00,271
and loss deep right 80 70 the next two 40 40 percent in loss and here where are we right now

833
00:47:00,271 --> 00:47:04,891
just to show you we're at this is long-term now this is not short and long-term just long-term

834
00:47:04,891 --> 00:47:10,071
of hot levels, it was over 155 days. We're at 2080. And again, you'd expect that number to

835
00:47:10,071 --> 00:47:16,150
continually drop, right? The longer people have held coins. Right. It would be less, less of a

836
00:47:16,150 --> 00:47:22,690
fall, which it has been, right? So it used to be 80% and 50 or 40. Now it's totally possible.

837
00:47:22,690 --> 00:47:27,591
This could maybe only bottom at 30, but I just don't know the number. I don't think anybody does.

838
00:47:27,771 --> 00:47:31,690
You have to, yeah, you can, we could do percentiles on this, by the way. I haven't done it yet. I've

839
00:47:31,690 --> 00:47:36,791
planned on it, but I would say lower and longer, honestly. So this is where I would caution

840
00:47:36,791 --> 00:47:41,050
sort of the bullish optimism we've been talking about. It's just, you know, we're just under the

841
00:47:41,050 --> 00:47:46,431
curve and it takes time to play out no matter how many ETFs, you know, are accumulating Bitcoin.

842
00:47:46,431 --> 00:47:52,170
It could come faster than prior cycles, but it's, this chart shows pretty clearly a four-year cycle

843
00:47:52,170 --> 00:47:56,431
to me. This chart shows pretty clearly it's a good time to be stacking some SaaS.

844
00:47:56,431 --> 00:48:23,771
Yeah, yeah, definitely. You want to do money supply? Let's do it. Let's do money supply. All right. So another thing, just to remind people that don't know who I am, in 2018, I also published a survey of the global monetary base. So I do that every quarter still. And as this little chart engine that I'm making continues to evolve, people will get access to that like every day in a nice format.

845
00:48:23,771 --> 00:48:30,611
that. But the thing about money supply is you'll also see a lot of hype here. And I just want to

846
00:48:30,611 --> 00:48:36,851
try to remind people, you just don't believe the hype. You have to be careful with the hype. Okay,

847
00:48:36,851 --> 00:48:40,331
so I'm going to show you. Here's the Federal Reserve's balance sheet, just the Fed, just the

848
00:48:40,331 --> 00:48:43,731
central bank of the United States. This is the craziness after the global financial crisis,

849
00:48:43,871 --> 00:48:48,030
right? They flooded the system with money to not let any of the zombie banks go out, except for

850
00:48:48,030 --> 00:48:54,891
Lehman. And Bitcoin was also born during this time. So Bitcoin on log scale, central bank is

851
00:48:54,891 --> 00:49:00,571
on linear scale. The green is the actual bank note. So you see the money supply always increases.

852
00:49:01,431 --> 00:49:06,990
And the blue, primarily the big blue number, that is the bank reserves. That is basically the

853
00:49:06,990 --> 00:49:13,611
digital money that banks have. Usually they don't want to hold it. But in this case,

854
00:49:13,611 --> 00:49:17,611
they did want to hold it because the system was so fragile. The Fed said,

855
00:49:17,611 --> 00:49:20,550
We're not going to let, you know, you guys go under for all your bad loans.

856
00:49:21,091 --> 00:49:22,371
We'll give you a bunch of bank reserves.

857
00:49:23,391 --> 00:49:24,811
And so this is literally the money supply.

858
00:49:24,911 --> 00:49:25,871
This is the printing press.

859
00:49:26,351 --> 00:49:27,950
Now, I just want to tell you a quick story.

860
00:49:28,071 --> 00:49:36,050
So I started publicly talking about Bitcoin 2017, 2016 a little bit, but 2016, 2017, so

861
00:49:36,050 --> 00:49:36,670
10 years now.

862
00:49:37,851 --> 00:49:43,431
I can't tell you how many people in the space, whether they were genuine or not, or sort

863
00:49:43,431 --> 00:49:51,150
have thought that they were, you know, honest about the numbers, they would say,

864
00:49:52,150 --> 00:49:56,251
the Fed, all the Fed does is print, all the Fed does is print, all the Fed does is print.

865
00:49:56,990 --> 00:50:02,710
It was not the case. It was not the case. If you look here, all right, the total balance sheet

866
00:50:02,710 --> 00:50:08,450
of the Federal Reserve, okay, it was, the total number here is about four and a half trillion,

867
00:50:08,611 --> 00:50:11,371
I need to get the total there, you don't see it, but it's four and a half trillion dollars,

868
00:50:11,371 --> 00:50:17,450
all right and it was fixed they actually fixed that number they didn't uh they wanted to show

869
00:50:17,450 --> 00:50:22,771
the market they weren't going to print into infinity and what happened to the bitcoin price

870
00:50:22,771 --> 00:50:27,490
while the federal reserve was actually even started to print its back or started to pull

871
00:50:27,490 --> 00:50:32,990
its balance sheet down well the bitcoin price went up now it is true the bitcoin price went down

872
00:50:32,990 --> 00:50:39,811
interestingly when the federal reserve more aggressively pulled the uh the balance sheet

873
00:50:39,811 --> 00:50:44,510
down. But then it started to go up again in a 2019 boom. All right, then you had the silly season

874
00:50:44,510 --> 00:50:52,231
really start to begin. And the market was way already, people could argue is way unstable here.

875
00:50:52,470 --> 00:50:57,391
In 2019, there was a big repo spike in the short term lending markets of repurchase agreements,

876
00:50:57,391 --> 00:51:00,150
which is the type of money, basically, it's treasuries that trade like money,

877
00:51:00,210 --> 00:51:06,251
and you get a little bit higher premium. That market seized up. So they had to increase their

878
00:51:06,251 --> 00:51:11,470
balance sheet again. You see it here in 2019. So this was already before the madness of silly season

879
00:51:11,470 --> 00:51:15,530
pandemic started in the start of 2020. All right. So the Federal Reserve balance sheet went up,

880
00:51:15,611 --> 00:51:20,591
Bitcoin was going down. Then of course we did harmonize again. We did harmonize again here

881
00:51:20,591 --> 00:51:27,391
and we all went up together in 2021. Okay. Bitcoin price and the balance sheet. Then the Fed,

882
00:51:27,470 --> 00:51:32,431
there's a very boogeyman number, $9 trillion. They never got to it. You can kind of see it's like

883
00:51:32,431 --> 00:51:36,231
they almost hit $9 trillion balance sheet, but they didn't get to it. And then they started

884
00:51:36,231 --> 00:51:42,071
to go down we had this uh weird that was the silicon valley yeah the regional bank crisis

885
00:51:42,071 --> 00:51:48,311
yep silicon valley bank crisis uh a lot of guarantees were given again to banks some

886
00:51:48,311 --> 00:51:54,630
liquidity so they popped the balance sheet up here but again powell uh actually to his credit

887
00:51:54,630 --> 00:51:59,710
said we got to normalize get down and there's other things happening here we don't have to get

888
00:51:59,710 --> 00:52:04,550
into all the detail the point is the balance sheet is going down all right from nine trillion

889
00:52:04,550 --> 00:52:08,190
all the way till today, it's like six and a half.

890
00:52:08,811 --> 00:52:08,950
Okay.

891
00:52:09,450 --> 00:52:12,130
But what happened to the price of Bitcoin during this period?

892
00:52:12,371 --> 00:52:13,091
It's going up.

893
00:52:13,170 --> 00:52:13,470
It went up.

894
00:52:14,311 --> 00:52:17,530
So, yeah, I just want to say this in a,

895
00:52:17,530 --> 00:52:21,950
just a purely like transparent manner.

896
00:52:22,111 --> 00:52:23,630
Like I've looked at this six ways this Sunday,

897
00:52:23,731 --> 00:52:24,650
a lot of different balance sheets,

898
00:52:24,731 --> 00:52:26,630
a lot of different central bank balance sheets.

899
00:52:27,611 --> 00:52:30,071
Bitcoin, it's totally fine to say that

900
00:52:30,071 --> 00:52:31,751
when central banks print,

901
00:52:31,990 --> 00:52:33,510
eventually Bitcoin is going to go up

902
00:52:33,510 --> 00:52:35,091
to handle the loss of purchasing power.

903
00:52:35,271 --> 00:52:36,931
That's the total correct thing to say.

904
00:52:37,271 --> 00:52:40,311
But in the short to midterm, nobody knows.

905
00:52:40,970 --> 00:52:43,431
And what is more interesting and important, I would say,

906
00:52:43,490 --> 00:52:45,411
is Bitcoin's movement itself

907
00:52:45,411 --> 00:52:47,351
happens totally different than the other markets,

908
00:52:47,510 --> 00:52:48,371
which is a power curve.

909
00:52:48,771 --> 00:52:50,550
So that's a more interesting indicator

910
00:52:50,550 --> 00:52:52,291
of where the price could be at any given time.

911
00:52:52,371 --> 00:52:53,831
And again, I can't tell you where it's going.

912
00:52:54,130 --> 00:52:55,751
I can just tell you the relative risk.

913
00:52:55,751 --> 00:52:56,950
Back to the chart we just showed,

914
00:52:56,950 --> 00:53:02,670
we are at an extreme, extreme low level

915
00:53:02,670 --> 00:53:03,851
relative to the trend.

916
00:53:03,911 --> 00:53:05,130
So again, it could always go lower.

917
00:53:05,271 --> 00:53:06,510
We could go down to 50, whatever,

918
00:53:06,650 --> 00:53:07,291
and set a new low,

919
00:53:07,391 --> 00:53:09,550
set a new 0th percentile in that power trend.

920
00:53:10,150 --> 00:53:12,811
But based on all the prior data,

921
00:53:12,931 --> 00:53:15,611
Bitcoin, we're at extremely cheap level, okay?

922
00:53:17,210 --> 00:53:19,690
And what is interesting is,

923
00:53:20,130 --> 00:53:21,030
as you can see here,

924
00:53:22,251 --> 00:53:22,710
the Federal Reserve,

925
00:53:22,811 --> 00:53:24,271
the ECB is doing this too a little bit.

926
00:53:24,771 --> 00:53:26,530
And everybody knows what Trump wants.

927
00:53:26,530 --> 00:53:27,611
He wants lower interest rates

928
00:53:27,611 --> 00:53:29,911
with his new Fed share.

929
00:53:30,251 --> 00:53:32,510
So they're going to start printing as well.

930
00:53:32,670 --> 00:53:42,010
Doesn't mean Bitcoin's going to skyrocket once they start printing, but it could line up again where we could have a boom with an increase in money supply.

931
00:53:42,490 --> 00:53:47,391
Which is another thing, by the way, like I'm never a lot of doom and gloomers in the space, right?

932
00:53:47,450 --> 00:53:48,291
I'm not that.

933
00:53:48,391 --> 00:53:55,150
I'm not going to say it's actually good that the financial markets go haywire and more money gets printed.

934
00:53:55,891 --> 00:53:57,490
We know for sure that's baked in.

935
00:53:57,550 --> 00:53:58,450
They're going to do it.

936
00:53:58,690 --> 00:53:58,931
Okay.

937
00:53:59,550 --> 00:54:04,970
But the point of showing you this curve over the long time and the detail the Fed's balance

938
00:54:04,970 --> 00:54:09,571
sheet is here, I don't think they're that correlated at the moment.

939
00:54:09,650 --> 00:54:13,571
In fact, you can basically see, yes, the numbers both go up over time.

940
00:54:13,931 --> 00:54:18,871
But Bitcoin can go in a two, three-year bull while the central bank balance sheet is going

941
00:54:18,871 --> 00:54:19,231
down.

942
00:54:19,831 --> 00:54:22,670
And it can also go up while the central bank balance sheet is going up.

943
00:54:22,731 --> 00:54:23,431
It just can do both.

944
00:54:23,871 --> 00:54:26,231
So I was talking to Alex Thorne about this recently.

945
00:54:26,231 --> 00:54:29,550
And so like you, I got into Bitcoin in like 2016, 2017.

946
00:54:30,010 --> 00:54:35,891
And the whole like Fed printing to make Bitcoin go up just wasn't a narrative then that I remember at least.

947
00:54:36,450 --> 00:54:45,950
And I think it would be really good to shake that narrative more because it's really like the macro side of Bitcoiners came in in like 2018, as I remember it.

948
00:54:46,571 --> 00:54:54,470
And I think all the Bitcoiners that came in sort of 2020 onwards after the COVID print associate like Fed printing money with Bitcoin going up.

949
00:54:54,470 --> 00:54:56,630
And I think that's a really limiting narrative.

950
00:54:57,630 --> 00:54:57,710
Yeah.

951
00:54:58,251 --> 00:54:58,470
Yeah.

952
00:54:58,550 --> 00:54:59,450
I mean, you can see it right here.

953
00:55:02,091 --> 00:55:03,611
They knew, everybody knew.

954
00:55:03,851 --> 00:55:05,591
Well, let me just take this to the next level now.

955
00:55:05,690 --> 00:55:08,490
So here's the Fed balance sheet, all right, with Bitcoin.

956
00:55:08,690 --> 00:55:11,010
Let's just do the global monetary base, okay?

957
00:55:11,271 --> 00:55:12,630
So I'm showing you the Fed still.

958
00:55:13,170 --> 00:55:13,851
That's slightly different.

959
00:55:13,931 --> 00:55:14,970
I showed you total balance sheet.

960
00:55:15,030 --> 00:55:16,251
This is just the monetary base.

961
00:55:16,371 --> 00:55:19,530
So going back here, it's just the notes and just the bank reserves.

962
00:55:19,630 --> 00:55:20,650
That's the technical difference.

963
00:55:21,470 --> 00:55:23,610
There's other crazier things that happen with repurchase agreements.

964
00:55:23,610 --> 00:55:26,010
We don't have to go into it, but this is the global monetary base.

965
00:55:26,110 --> 00:55:27,751
Okay, so this is every central bank in the world.

966
00:55:27,831 --> 00:55:28,970
It's like 100 currencies in here.

967
00:55:31,431 --> 00:55:34,791
The value of their currency relative to the price of Bitcoin.

968
00:55:34,891 --> 00:55:40,351
So just like you said, the narrative is not always hold true.

969
00:55:40,630 --> 00:55:45,891
And look, Bitcoin can go up while they print less money.

970
00:55:46,190 --> 00:55:48,190
So that's what it did over the last couple of years.

971
00:55:48,311 --> 00:55:51,710
And then here, so this is a very sort of slow moving, unfortunately, chart.

972
00:55:51,710 --> 00:55:53,791
I try to get it right and it takes a lot of time now.

973
00:55:53,951 --> 00:55:56,931
So this, even December now is going to get updated

974
00:55:56,931 --> 00:55:58,391
probably only by April.

975
00:55:58,710 --> 00:55:59,951
So this is only September.

976
00:56:00,190 --> 00:56:03,331
But I can show you with the Fed, as I see,

977
00:56:03,490 --> 00:56:05,030
we do have indications it's going up.

978
00:56:05,251 --> 00:56:05,951
So that's for sure.

979
00:56:06,010 --> 00:56:07,690
We can look at individual central bank balance sheets.

980
00:56:08,391 --> 00:56:12,130
But again, this might even be a little bit higher

981
00:56:12,130 --> 00:56:15,831
for fourth quarter, 2025, and Bitcoin went down.

982
00:56:16,771 --> 00:56:18,731
So again, it's that narrative.

983
00:56:18,931 --> 00:56:21,411
It doesn't work on a day-to-day, a week-to-week,

984
00:56:21,411 --> 00:56:22,411
or even a month to month.

985
00:56:23,331 --> 00:56:27,231
You can certainly see some things that overlap.

986
00:56:27,351 --> 00:56:29,411
The 2021 was very, very clear, right?

987
00:56:29,490 --> 00:56:30,050
Very, very clear.

988
00:56:30,530 --> 00:56:32,751
But it didn't happen this last time.

989
00:56:32,931 --> 00:56:35,811
And I think there's, as a Bitcoiner,

990
00:56:35,990 --> 00:56:38,630
if you want to think long-term, big picture, relax,

991
00:56:38,891 --> 00:56:40,291
like we talked about at the top of the show,

992
00:56:40,331 --> 00:56:41,311
the world is moving fast,

993
00:56:41,490 --> 00:56:44,530
a lot of just crazy geopolitical events.

994
00:56:45,170 --> 00:56:48,911
Be prepared for, say, central banks printing money,

995
00:56:48,911 --> 00:56:50,231
but Bitcoin doing nothing.

996
00:56:50,231 --> 00:56:53,690
or be prepared for central banks printing money

997
00:56:53,690 --> 00:56:55,510
and Bitcoin also going gangbusters.

998
00:56:55,771 --> 00:56:56,751
Both can happen.

999
00:56:57,731 --> 00:57:00,411
The data does not show us one way or another

1000
00:57:00,411 --> 00:57:02,411
that Bitcoin has to skyrocket

1001
00:57:02,411 --> 00:57:03,530
with central banks printing money.

1002
00:57:03,610 --> 00:57:07,050
And again, I wouldn't even encourage that, frankly,

1003
00:57:07,451 --> 00:57:11,110
for just a general attitude towards life.

1004
00:57:12,470 --> 00:57:15,851
But with this narrative of the debasement trade,

1005
00:57:15,911 --> 00:57:26,816
I think that probably would happen If you just go back to that other chart Because like you say you can see that those Fed balance sheets look like they are starting to go up again How aggressively do you think they will

1006
00:57:26,816 --> 00:57:32,636
go up? Do you think we'll see another big print? Actually, at the moment,

1007
00:57:35,076 --> 00:57:39,856
so when the central bank balance sheet goes up, interest rates go down, okay, that means they're

1008
00:57:39,856 --> 00:57:45,076
stepping in and buying. So on the other side of this trade, basically, the other side of all of

1009
00:57:45,076 --> 00:57:49,656
this money is basically the Fed's portion of government bonds. They have plenty of room.

1010
00:57:50,116 --> 00:57:53,456
And actually, I need to pull up another chart. Let me show you a different way to look at this.

1011
00:57:54,036 --> 00:57:57,536
The United States, like I've said this a lot, the dollar is the best looking horse in the glue

1012
00:57:57,536 --> 00:58:02,856
factory, right? So another thing that you can say with this chart, all right, let's take Bitcoin off.

1013
00:58:04,256 --> 00:58:11,016
You see how this chart has gone down since 2021, 2022. It is true that central banks around the

1014
00:58:11,016 --> 00:58:14,076
they all realized that they responded crazily,

1015
00:58:14,196 --> 00:58:15,236
whether that was right or wrong.

1016
00:58:15,336 --> 00:58:16,896
All of us in Bitcoin space would think it's wrong

1017
00:58:16,896 --> 00:58:18,256
and unnecessary and all the rest.

1018
00:58:18,676 --> 00:58:20,776
But they knew that they had to pull it back.

1019
00:58:20,956 --> 00:58:21,356
They did.

1020
00:58:21,916 --> 00:58:24,836
But also, they actually didn't pull it back

1021
00:58:24,836 --> 00:58:26,736
as aggressively as this looks.

1022
00:58:26,876 --> 00:58:28,976
The Fed did, as you can see for sure here,

1023
00:58:29,036 --> 00:58:30,476
the Fed pulled their balance sheet way down

1024
00:58:30,476 --> 00:58:33,376
from nine to six trillion, basically.

1025
00:58:34,896 --> 00:58:36,196
If you look at the global number,

1026
00:58:36,576 --> 00:58:38,116
this is a Wittgenstein's ruler thing.

1027
00:58:38,156 --> 00:58:39,036
I'm showing you in dollars,

1028
00:58:39,036 --> 00:58:40,636
but if you can just imagine like euros

1029
00:58:40,636 --> 00:58:42,016
and yen and yuan.

1030
00:58:42,936 --> 00:58:44,136
They did go down,

1031
00:58:44,556 --> 00:58:47,696
but actually it wouldn't be this low

1032
00:58:47,696 --> 00:58:50,596
if other currencies also didn't lose value

1033
00:58:50,596 --> 00:58:51,296
against the dollar.

1034
00:58:52,056 --> 00:58:53,916
So when they lose value against the dollar,

1035
00:58:54,076 --> 00:58:55,276
this chart looks even worse.

1036
00:58:55,956 --> 00:58:57,796
So that's another thing.

1037
00:58:58,276 --> 00:59:00,556
And so this goes back to the dollar depacement trade

1038
00:59:00,556 --> 00:59:03,276
or whatever, or even the position that Trump might be in

1039
00:59:03,276 --> 00:59:04,956
with all of this,

1040
00:59:06,116 --> 00:59:09,296
all of Putin's buddies toppling all over the world,

1041
00:59:09,296 --> 00:59:14,596
these dictators falling over the world, the dollar might come out of this looking pretty good,

1042
00:59:14,976 --> 00:59:19,036
even stronger, and maybe even too strong, you can argue. And that's what Trump would argue. And

1043
00:59:19,036 --> 00:59:24,956
that's why he would try to debase the dollar more. He just wants low interest rates for real estate

1044
00:59:24,956 --> 00:59:30,716
deals, as we know. But that's the argument he could make. And let me show you another chart

1045
00:59:30,716 --> 00:59:37,556
that basically, I know you don't like to do politics, Danny, and I'm not going to go into

1046
00:59:37,556 --> 00:59:45,316
But this is sort of, this is the same chart, it's a monetary base, but it's in the lens of free world versus autocracies.

1047
00:59:45,316 --> 00:59:49,516
Now, if there's a sprightly young 20-something saying, oh, we don't have a true free market, whatever.

1048
00:59:49,636 --> 00:59:58,836
Yes, I know. Nothing's perfect, okay, but go live in Pyongyang if you don't think that we don't have examples of free markets in the West versus autocratic countries.

1049
00:59:59,416 --> 01:00:01,856
So here I have, basically, I have the United States.

1050
01:00:02,296 --> 01:00:06,036
I have NATO, looking from a military sort of perspective,

1051
01:00:06,276 --> 01:00:08,976
non-US NATO, which unfortunately includes Turkey.

1052
01:00:09,156 --> 01:00:10,216
They're definitely an autocracy.

1053
01:00:10,716 --> 01:00:13,536
Japan, Switzerland, Australia, South Korea, Taiwan, Ukraine.

1054
01:00:14,136 --> 01:00:17,716
Then I have autocracies, China, unfortunately Hong Kong,

1055
01:00:17,856 --> 01:00:21,216
that's just rolled in, Russia, Iran.

1056
01:00:22,216 --> 01:00:23,416
And Iran is even overstated

1057
01:00:23,416 --> 01:00:25,156
because I'm using official market rates

1058
01:00:25,156 --> 01:00:27,616
and it's not even nearly as high as this.

1059
01:00:27,936 --> 01:00:28,556
And then rest of the world.

1060
01:00:28,836 --> 01:00:30,616
Rest of the world is basically global south.

1061
01:00:30,776 --> 01:00:31,696
You got big countries in there.

1062
01:00:31,756 --> 01:00:33,576
You got India, Pakistan, but that's the global south.

1063
01:00:33,896 --> 01:00:34,836
So it just shows you the difference.

1064
01:00:35,436 --> 01:00:38,636
And actually, don't look at this now as a debasement,

1065
01:00:38,896 --> 01:00:42,896
but look at this as just how much money countries have.

1066
01:00:42,936 --> 01:00:44,156
I'm going to show you this as a percentage.

1067
01:00:44,796 --> 01:00:45,496
Okay, so it's coming.

1068
01:00:45,656 --> 01:00:46,356
Just give it a second.

1069
01:00:48,136 --> 01:00:51,236
This is sort of interesting.

1070
01:00:51,736 --> 01:00:55,376
So people always talk about China's position

1071
01:00:55,376 --> 01:00:57,576
and they're gearing up to invade.

1072
01:00:57,576 --> 01:01:01,116
They've already said they want to be ready at least to invade Taiwan by 2027.

1073
01:01:01,216 --> 01:01:02,216
That's been publicly stated.

1074
01:01:02,956 --> 01:01:06,176
But look at the financial position of the monetary base.

1075
01:01:06,916 --> 01:01:08,156
In dollar terms, it's true.

1076
01:01:08,756 --> 01:01:10,276
It's a little bit different in different currencies.

1077
01:01:10,276 --> 01:01:17,976
But in dollar terms, China actually was its largest proportion of the pie back before the global financial crisis.

1078
01:01:18,516 --> 01:01:19,656
26% of the pie.

1079
01:01:20,376 --> 01:01:20,536
All right.

1080
01:01:20,536 --> 01:01:25,876
now, and when everybody hated what the communist regime was doing in China, and of course,

1081
01:01:25,916 --> 01:01:29,536
their dishonesty of all the pandemic, we don't have to go down the road.

1082
01:01:30,096 --> 01:01:31,676
They were 15% of the pie.

1083
01:01:32,476 --> 01:01:35,256
Now, they are up to 19%.

1084
01:01:35,256 --> 01:01:36,256
Okay, so they're growing again.

1085
01:01:36,876 --> 01:01:39,536
But that pie is pretty weak on that side, like Russia.

1086
01:01:40,776 --> 01:01:42,676
I'm gonna have to hold my tongue to say too many things.

1087
01:01:42,756 --> 01:01:45,096
But people that know me know I live on the border of Russia.

1088
01:01:45,096 --> 01:01:49,676
And Putin has lost three of his buddies in the last 15 months.

1089
01:01:49,676 --> 01:01:55,476
He's lost Assad. He's lost Maduro. And now he's lost Khamenei.

1090
01:01:57,516 --> 01:02:00,556
There's a new supreme leader certainly already tapped. We don't know who it is.

1091
01:02:00,676 --> 01:02:04,496
And Iran's going to try to keep fighting, whatever. We're not enough to comment on the war.

1092
01:02:04,576 --> 01:02:09,536
But my point is, this is a pretty weak pie of autocracies.

1093
01:02:12,136 --> 01:02:15,016
And the dollar might come out looking OK here.

1094
01:02:15,016 --> 01:02:20,156
and uh i could make a joke you know as long as the united states doesn't flip red on this chart but

1095
01:02:20,156 --> 01:02:26,596
that doesn't happen so that doesn't happen generally you know the rule of law the free world

1096
01:02:26,596 --> 01:02:32,896
even as sort of crazy as it is you might you might find support for the dollar a lot stronger

1097
01:02:32,896 --> 01:02:40,596
than people might be anticipating and even with that strength that would allow trump to uh debase

1098
01:02:40,596 --> 01:02:45,176
it more. This kind of plays into the Brent Johnson dollar milkshake theory thing, right? Like it's

1099
01:02:45,176 --> 01:02:48,816
all current, all fiat currencies might fail, but the dollar will be the last one to fail.

1100
01:02:49,496 --> 01:02:55,456
Yeah. Yeah, for sure. For sure. Uh, you know, I think people have said different variants of that

1101
01:02:55,456 --> 01:02:59,716
for a long time and it's absolutely the case. So I don't have this updated through February,

1102
01:02:59,716 --> 01:03:07,816
but I do, I think through January, this is the all time United States debt. And basically it's

1103
01:03:07,816 --> 01:03:10,316
It's that chart I showed you, the Fed's balance sheet.

1104
01:03:10,776 --> 01:03:12,856
This is the liability side of the Fed's balance sheet.

1105
01:03:12,936 --> 01:03:13,996
Okay, this is actual printing press,

1106
01:03:14,076 --> 01:03:16,176
the money that they print to buy debt.

1107
01:03:16,736 --> 01:03:18,896
And here is the asset side of the Fed's balance sheet.

1108
01:03:18,956 --> 01:03:22,796
So the dark green is the actual treasury securities

1109
01:03:22,796 --> 01:03:23,376
that they own.

1110
01:03:23,876 --> 01:03:26,736
So let's just zoom in to, let's say,

1111
01:03:26,816 --> 01:03:28,516
post-global financial crisis era.

1112
01:03:29,876 --> 01:03:32,736
You see this COVID print, pandemic print here.

1113
01:03:33,776 --> 01:03:36,196
And if you take this as a percentage,

1114
01:03:36,196 --> 01:03:44,416
the picture becomes very interesting. So in 2021, the Federal Reserve owned more United States debt

1115
01:03:44,416 --> 01:03:49,276
than it had ever owned in its history, 28 cents on the dollar. This is literally what you would

1116
01:03:49,276 --> 01:03:56,596
call the printing of debt. So this is the, what you see here is the visual of debt monetization.

1117
01:03:56,956 --> 01:04:02,016
For every dollar that the United States had issued in debt throughout its history,

1118
01:04:02,016 --> 01:04:06,956
This was a record in that the Federal Reserve printed 28 cents of that debt.

1119
01:04:07,176 --> 01:04:08,496
That's what it means.

1120
01:04:08,576 --> 01:04:09,756
Which is an insanely high number.

1121
01:04:10,136 --> 01:04:11,296
It is a very high number.

1122
01:04:11,376 --> 01:04:12,176
But think about this.

1123
01:04:12,756 --> 01:04:14,996
Other hyperinflations, they go to 100%.

1124
01:04:14,996 --> 01:04:21,176
The only buyer of Zimbabwe dollars would be the Zimbabwe Bank.

1125
01:04:21,776 --> 01:04:29,196
Okay, so you go Powell, again, to his credit, to his credit, higher interest rates.

1126
01:04:29,196 --> 01:04:37,136
He said it very clearly at the Jackson Hole speech a couple of years ago, and this was sort of like his life's goal, and he did it.

1127
01:04:37,616 --> 01:04:50,556
So now, look, we are at a level already pre-pandemic, 16%, 16% or so of, so we've gone from nearly 30 cents on the dollar down to only 15 cents.

1128
01:04:50,556 --> 01:04:57,136
And that's actually a prior record that was set in like more distant times in the Vietnam War.

1129
01:04:57,416 --> 01:04:59,056
It's about 15, 16 cents on the dollar.

1130
01:04:59,196 --> 01:05:04,076
at the very end of the Vietnam War. By the way, that percentage went down not because the Federal

1131
01:05:04,076 --> 01:05:07,036
Reserve was printing less money, but because the United States started to issue more debt.

1132
01:05:09,036 --> 01:05:14,076
But the interesting thing about that chart is that while it does go down in the interim,

1133
01:05:14,076 --> 01:05:18,796
like that dark green section is only going up over time.

1134
01:05:18,796 --> 01:05:24,156
100%. 100%. Yeah. I mean, it's not going to end well. I'm not saying that... This is where

1135
01:05:24,156 --> 01:05:29,896
where Bitcoin plays into it. It really, this is the long-term Bitcoin thesis. At some point,

1136
01:05:30,656 --> 01:05:35,536
every nation is going to want to get, I'm not going to say they're going to want to get off

1137
01:05:35,536 --> 01:05:40,796
all fiat currency. And I know the timing of that. Of course, I don't. Again, just look at the relative

1138
01:05:40,796 --> 01:05:46,816
risk of the power curve and where we are. But the last thing they want to get off in the fiat world

1139
01:05:46,816 --> 01:05:51,876
is probably dollars because the dollar is still managed in a way where they want to try to protect

1140
01:05:51,876 --> 01:05:56,496
it relative to the debt. And they have actually done that. Again, the numbers tell a very different

1141
01:05:56,496 --> 01:06:01,456
story than the narrative. Okay. So to be clear, for those that are listening, we are far from the

1142
01:06:01,456 --> 01:06:05,756
record of monetizing debt. We're only at 16 cents on the dollar. I'm not saying it's a good thing.

1143
01:06:05,836 --> 01:06:09,556
I'm not saying I'm not defending the Federal Reserve. I'm not saying, you know, I'm not a

1144
01:06:09,556 --> 01:06:13,596
Bitcoiner, whatever, if people are thinking about these different things. I'm just saying this is

1145
01:06:13,596 --> 01:06:19,316
the reality of the situation. So if Trump comes off of, if Trump has a success, and I'm not sure

1146
01:06:19,316 --> 01:06:24,416
he has planned that out. But if he does have success in Iran, and somehow there's regime change,

1147
01:06:24,696 --> 01:06:31,096
you could see plenty of room for people to want to buy dollars, use dollars.

1148
01:06:32,596 --> 01:06:39,416
And that would actually give Trump even more room to make this percentage increase,

1149
01:06:40,076 --> 01:06:43,696
and thus have lower interest rates, and thus, you know, put another sugar high for everybody

1150
01:06:43,696 --> 01:06:49,096
for another boom. So I still remember your original question, Danny.

1151
01:06:49,316 --> 01:06:56,976
It's not going to go as high unless there's a major shock to everyone in the free world.

1152
01:06:57,216 --> 01:06:59,516
And I use that term strictly, like in the free world.

1153
01:06:59,516 --> 01:07:15,036
If this goes on in Iran for like 50 days or 100 days and the Strait of Hormuz can't get opened and shipping is completely cut off and there are major, major geopolitical disruptions, then it could be like some issues here.

1154
01:07:15,036 --> 01:07:42,776
But if somehow some sort of normalcy goes, let's even not even theorize with what happens. Maybe some new regime in Iran stays and Trump doesn't fully get the goals done or whatever. You could still generally see pretty moderate growth of economies. Shipping lanes get back open and Trump has plenty of room to print.

1155
01:07:42,776 --> 01:07:45,276
and then you could also see even a better outcome

1156
01:07:45,276 --> 01:07:46,796
where there's even more demand for dollars

1157
01:07:46,796 --> 01:07:48,576
and Trump doesn't even need to print as much

1158
01:07:48,576 --> 01:07:50,696
but you could still get interest rates to go down.

1159
01:07:51,076 --> 01:07:52,916
So the point is I do not see in the future

1160
01:07:52,916 --> 01:07:56,776
any sort of pandemic style printing of money

1161
01:07:56,776 --> 01:07:58,436
or 2008 style printing of money.

1162
01:07:58,536 --> 01:07:59,296
It doesn't mean it couldn't happen.

1163
01:07:59,416 --> 01:08:02,156
It doesn't mean there's not massive debt problems

1164
01:08:02,156 --> 01:08:04,536
in the consumer credit market and other things

1165
01:08:04,536 --> 01:08:09,656
but there are, I do have to say

1166
01:08:09,656 --> 01:08:10,896
as someone who lives next door to Russia

1167
01:08:10,896 --> 01:08:15,036
Like, it is actually encouraging to see dictators falling.

1168
01:08:15,436 --> 01:08:20,256
How that's going to work out for the free world, the democratic world, very much an open question.

1169
01:08:20,456 --> 01:08:27,536
But I would say the United States is actually at a relatively decent position, how their balance sheet looks.

1170
01:08:27,656 --> 01:08:32,596
And certainly, certainly, if something bad did happen, they have plenty of room to print more.

1171
01:08:33,136 --> 01:08:37,336
So, again, that's just my narrative, sort of how I'm seeing the world.

1172
01:08:37,336 --> 01:08:45,416
Again, none of it has to do with, I have no, everything I just said has nothing to do with what's going to happen to Bitcoin in the next two to three months.

1173
01:08:45,596 --> 01:08:47,616
For that, go back to the power curve.

1174
01:08:47,836 --> 01:08:49,256
For that, stick with the statistics.

1175
01:08:50,016 --> 01:08:53,576
Stick with, for now, the idea that the four-year cycle is not broken.

1176
01:08:55,276 --> 01:09:06,176
And judge your opinions, your decisions, based on the relative risk of where Bitcoin sits relative to this amazing growth trajectory that it's on.

1177
01:09:06,176 --> 01:09:13,716
which is uh which is a power law and bitcoin doesn't need the fed to go up um i love it man

1178
01:09:13,716 --> 01:09:17,636
this has been cool and anything else we've been through a ton of charts there is there anything

1179
01:09:17,636 --> 01:09:23,116
else that uh you want to go through before we finish we have i think i one thing i teased on

1180
01:09:23,116 --> 01:09:30,236
that i did not actually fully get to so let me just find it is the is the how a normal trajectory

1181
01:09:30,236 --> 01:09:34,996
of a of a stock would grow these are the fastest growing stocks in the world this is an ai trade

1182
01:09:34,996 --> 01:09:41,216
So this is Magnificent Seven, you know, NVIDIA, Microsoft, Apple, even Tesla.

1183
01:09:41,356 --> 01:09:45,136
I wouldn't put Tesla in here, frankly, because I don't think they're pure tech, but that's what it is.

1184
01:09:46,316 --> 01:09:48,756
So this is now, this is similar.

1185
01:09:48,876 --> 01:09:49,616
This is that evolving.

1186
01:09:52,036 --> 01:09:54,696
This is a good way to end the pod, actually.

1187
01:09:54,956 --> 01:10:01,316
So it's the same evolving curve that I started before, right?

1188
01:10:01,316 --> 01:10:09,316
I said that notice how with Bitcoin's power curve, it gets closer to the line, but actually farther away from the extremes, right?

1189
01:10:10,636 --> 01:10:15,296
With this one, this is an exponential chart.

1190
01:10:15,396 --> 01:10:16,196
This is compound growth.

1191
01:10:16,276 --> 01:10:16,916
This is what we talked about.

1192
01:10:16,956 --> 01:10:17,756
This is totally different.

1193
01:10:17,836 --> 01:10:19,236
This is how all financial markets grow.

1194
01:10:19,336 --> 01:10:20,696
It's a straight line on log linear.

1195
01:10:21,276 --> 01:10:27,696
But notice how Bitcoin set its extremes at the very beginning, right?

1196
01:10:27,796 --> 01:10:29,676
7x over trend, 0.1x.

1197
01:10:29,676 --> 01:10:33,576
This is setting the extremes. This goes back to the same life of Bitcoin, by the way, 2008.

1198
01:10:33,776 --> 01:10:41,856
This is setting the extremes around the pandemic and after. And I would dare say, in fact, this is

1199
01:10:41,856 --> 01:10:46,996
not even a risk to say this at all. These markets can go back to the extremes very easily because

1200
01:10:46,996 --> 01:10:51,116
they're exponential, because they're more volatile. They don't follow what a power curve follows.

1201
01:10:51,436 --> 01:10:56,056
And the math is totally different in log linear space. And so you can actually see

1202
01:10:56,056 --> 01:11:03,216
it's still a great curve all right 98 percent r squared 98.7 percent r squared but look at the

1203
01:11:03,216 --> 01:11:07,636
volatility and by the way i'm not saying don't invest in mag 7 stocks like it's you know as long

1204
01:11:07,636 --> 01:11:14,036
as this ai trade ai trade keeps going it's been a great you know look at these keggers 27 25 percent

1205
01:11:14,036 --> 01:11:18,736
i imagine like passive flows count a lot to this as well and things like that but like this straight

1206
01:11:18,736 --> 01:11:23,296
line up just looks like eventually that's unsustainable that can't continue forever surely

1207
01:11:24,096 --> 01:11:28,056
Well, you know, the stock market itself,

1208
01:11:28,156 --> 01:11:29,976
if you did this over 200 years of stock market,

1209
01:11:30,036 --> 01:11:30,776
you'd have a straight line.

1210
01:11:31,236 --> 01:11:34,556
It'd be a very gradual, it'd be like a straight line

1211
01:11:34,556 --> 01:11:36,696
and then the next, you actually get a faster,

1212
01:11:36,816 --> 01:11:38,696
it's what Jeffrey West calls super exponential growth.

1213
01:11:38,756 --> 01:11:40,296
You get faster and faster curves.

1214
01:11:42,296 --> 01:11:45,916
You know, I did a pod, not a pod,

1215
01:11:45,916 --> 01:11:50,036
a circuit last summer around the European Bitcoin conferences

1216
01:11:50,036 --> 01:12:00,156
And I was trying to compare Jeffrey West theorized about the singularity as a mathematical event, not like Ray Kurzweil talking about, you know, if it's AI or whatever.

1217
01:12:00,616 --> 01:12:03,556
But there's no doubt everybody's getting, you know, the world is moving faster.

1218
01:12:03,916 --> 01:12:04,896
People are trying to figure it out.

1219
01:12:06,936 --> 01:12:08,036
There's a couple scenarios.

1220
01:12:08,156 --> 01:12:15,256
First of all, I think it's totally possible that all this sort of circle jerk of capital that's flowing into the AI companies, which is pretty well documented, right?

1221
01:12:15,256 --> 01:12:22,136
Like, you know, Microsoft invested into Anthropic and OpenAI and Amazon as well and back into Amazon and all this stuff.

1222
01:12:23,976 --> 01:12:25,976
That could be a bubble.

1223
01:12:26,136 --> 01:12:30,116
It could be like something as extreme as you go up here and then you go all the way down here, right?

1224
01:12:31,076 --> 01:12:32,116
That's totally possible.

1225
01:12:32,756 --> 01:12:44,396
But at the end of that carnage, it's totally possible that we have something like, you know, Amazon, the strong, well, you know, functioning companies.

1226
01:12:44,396 --> 01:12:49,376
just regular business, well-managed companies could come out of that better after the carnage.

1227
01:12:49,456 --> 01:12:54,156
Now, again, I'm not predicting it. I don't know for sure. It does seem crazy. But if you look at

1228
01:12:54,156 --> 01:12:58,556
this curve itself, this is the market cap of the Magnificent Seven, $20 trillion. They're actually

1229
01:12:58,556 --> 01:13:04,676
right on trend. It's not as extreme as it was back in 2021 with the meme stock trading. It's

1230
01:13:04,676 --> 01:13:10,936
not as bad as it was in 2022 when it went down to $7 trillion. So we'll see. Maybe it could run

1231
01:13:10,936 --> 01:13:11,896
for a couple more years.

1232
01:13:12,096 --> 01:13:12,916
I'm not sure.

1233
01:13:13,416 --> 01:13:15,196
But the point of bringing up

1234
01:13:15,196 --> 01:13:16,496
the speaker circuit

1235
01:13:16,496 --> 01:13:18,436
that I did in last year

1236
01:13:18,436 --> 01:13:19,836
was Jeffrey West,

1237
01:13:19,996 --> 01:13:21,236
he did not talk about Bitcoin

1238
01:13:21,236 --> 01:13:21,716
in his book.

1239
01:13:21,776 --> 01:13:22,716
It's a really good book, Scale.

1240
01:13:22,856 --> 01:13:23,456
People should read it

1241
01:13:23,456 --> 01:13:24,416
if you want to really dive

1242
01:13:24,416 --> 01:13:24,916
into the numbers

1243
01:13:24,916 --> 01:13:25,796
of what we're talking about

1244
01:13:25,796 --> 01:13:27,116
with the statistics here

1245
01:13:27,116 --> 01:13:28,336
and regressions and power laws

1246
01:13:28,336 --> 01:13:29,456
versus exponential curves.

1247
01:13:31,336 --> 01:13:32,816
He kind of theorizes

1248
01:13:32,816 --> 01:13:34,296
that we're going to move

1249
01:13:34,296 --> 01:13:35,936
into some sort of a new,

1250
01:13:36,016 --> 01:13:36,856
his singularity

1251
01:13:36,856 --> 01:13:38,216
is a mathematical singularity.

1252
01:13:39,076 --> 01:13:40,676
And he theorizes

1253
01:13:40,676 --> 01:13:42,896
that it could be technology

1254
01:13:42,896 --> 01:13:46,116
that takes us to the next level,

1255
01:13:46,256 --> 01:13:46,976
but he's just not sure.

1256
01:13:47,036 --> 01:13:47,976
And he doesn't mention Bitcoin.

1257
01:13:48,596 --> 01:13:50,676
And I think Bitcoin is a nice answer

1258
01:13:50,676 --> 01:13:53,136
to his theory of where

1259
01:13:53,136 --> 01:13:55,356
a lot of this craziness could end

1260
01:13:55,356 --> 01:13:56,776
and it could kind of, you know,

1261
01:13:56,816 --> 01:13:57,796
smooth out the volatility

1262
01:13:57,796 --> 01:13:59,736
and we get onto something more grounded.

1263
01:14:00,056 --> 01:14:00,656
And it's like,

1264
01:14:00,836 --> 01:14:03,836
the good analogy that Ray Kurzweil talks about

1265
01:14:03,836 --> 01:14:05,016
is the transcendent man.

1266
01:14:05,316 --> 01:14:07,316
Okay, so it might have seemed,

1267
01:14:07,376 --> 01:14:09,176
you know, crazy in the 50s

1268
01:14:09,176 --> 01:14:09,996
to have rock music

1269
01:14:09,996 --> 01:14:12,376
and the devil was, you know, going to take over society.

1270
01:14:12,516 --> 01:14:13,736
But, you know, we moved on from that.

1271
01:14:13,836 --> 01:14:14,596
You know, it didn't take over.

1272
01:14:14,796 --> 01:14:18,756
And we, you know, we then have, you know, the World Wide Web,

1273
01:14:18,816 --> 01:14:19,556
and that seems crazy.

1274
01:14:19,616 --> 01:14:20,536
Then we have the dot-com boom.

1275
01:14:20,596 --> 01:14:21,196
That seems crazy.

1276
01:14:21,236 --> 01:14:23,116
But we just keep moving forward and forward.

1277
01:14:23,456 --> 01:14:25,216
So I think all of that stuff is going to hold.

1278
01:14:25,716 --> 01:14:28,936
Again, regular markets have huge booms and busts.

1279
01:14:28,936 --> 01:14:30,576
But the beautiful thing about Bitcoin

1280
01:14:30,576 --> 01:14:34,776
and the thing that is really undeniably different about Bitcoin

1281
01:14:34,776 --> 01:14:37,196
is it moves on a more sustainable curve.

1282
01:14:37,676 --> 01:14:41,816
And so I think I've been theorizing a lot about this on my own show.

1283
01:14:41,956 --> 01:14:42,776
What could it mean?

1284
01:14:42,816 --> 01:14:44,696
What could it mean for interest rates, growth, all that?

1285
01:14:44,776 --> 01:14:47,016
Let's not get into that too much at the end of your show.

1286
01:14:47,016 --> 01:15:02,336
But I do think five, 10 years from now, when Bitcoin is theorized to be $20 trillion, right, in market cap 10 years from now, let's say, roughly, that's going to match the global monetary base.

1287
01:15:02,616 --> 01:15:04,536
I mean, I plot it quite clearly.

1288
01:15:04,536 --> 01:15:11,036
Okay. By the end of the 2030s, you're going to be at the level of global money. And Bitcoin is going

1289
01:15:11,036 --> 01:15:14,796
to be growing on a sustainable curve. Global money is going to be growing on an unsustainable curve

1290
01:15:14,796 --> 01:15:18,936
with a lot of interest, a lot of fiat interest. Those things are going to merge. They're going

1291
01:15:18,936 --> 01:15:26,056
to merge. How it happens, I still don't know yet, but that's the hope that the Bitcoin network gives

1292
01:15:26,056 --> 01:15:30,276
to us. So that's what I'd say about all that. I think that's the next show we should do.

1293
01:15:30,276 --> 01:15:35,636
next time we're in the same place let's do that in person and do bitcoin is the singularity good

1294
01:15:35,636 --> 01:15:41,236
good my friend i'm good for that awesome um matthew this has been fun i'm gonna see you in bed for

1295
01:15:41,236 --> 01:15:46,156
in a few weeks um thank you i appreciate you coming on the show no problem danny looking

1296
01:15:46,156 --> 01:15:50,356
forward to it bitcoin is cheap now is a good time to stack some stats uh tell everyone where they can

1297
01:15:50,356 --> 01:15:57,416
catch out your stream yes uh so uh one base money you can find me at the handle one base money

1298
01:15:57,416 --> 01:16:04,456
everywhere basically youtube twitter uh nostr and uh the channel's called porkopolis economics

1299
01:16:04,456 --> 01:16:11,016
on youtube let's go all right man i will see you in bed for a few weeks thank you all right danny

1300
01:16:11,016 --> 01:16:11,416
take care

1301
01:16:27,416 --> 01:16:57,396
Thank you.