What's up? Another Tuesday night. My name is Cedric Youngelman. This is Bitcoin Center.
I'm joined by a special co-host, Ben Justbin. What's up, Ben? How are you?
Hey, Cedric. Pumped to be here. Pumped to get into these topics with you.
And I love this format.
Yeah, man. What are you up to these days in terms of Bitcoin?
Are you listening to any podcasts? Are you just kind of stacking and forgetting about it?
Are you kind of bemoaning the whole 33% pullback here?
You know, I wish I could be buying the dip harder.
And I've had a few people just that know I'm into Bitcoin and maybe are tangentially in
ask me if I'm buying the dip, kind of looking to read my sentiment.
And I don't really know how to respond.
I feel like I'm speaking a different language because I've been Bitcoin
and I didn't buy the dip anything special just because it's kind of a constant flow from the
business getting paid in Bitcoin. So I'm not worried by the dip. Thankful for the opportunity
always. Definitely was expecting more this year, but kind of sets up a nice 2026. So feeling happy
about that. Do you think everybody was expecting more this year? No one was making price predictions
below 100,000. Even the people that I was dunking on for being bearish were calling for 200,000 or
at least 150 by the end of the year. I think 126 as the top and who knows, could happen,
could get a real rebound. But 126 as a top for this year was definitely under what people expected.
But the thing is, with price predictions, is everyone who understands Bitcoin predicts something more.
But the majority of the world is predicting Bitcoin at zero.
So if you average everything together, the bulls are doing pretty good.
Now, Andy Edstrom, back in January on Bitcoin Matrix, said Bitcoiners might not see the liquidity they're hoping for this year.
and I think he's one of the few people who just kind of
expressed you might not get to sell those stats at the 175, the 225, the 275,
you know, in 2025 that everybody was kind of hoping for expecting.
And it's like it always goes differently than the way the crowd expects.
And then we think maybe our crowd is too small to be what everyone expects,
you know, but it always seems to go against the sort of the common consensus narrative.
But our crowd is definitely the crowd. Well, some of the crowd in the market, at least setting the tone in a lot of ways as some of the Bitcoin experts.
But you're right. He was right that the liquidity just didn't come.
And it was for all the listening I do, for all the research I do, just like as someone who's really into Bitcoin, really into learning about markets, I guess I didn't see it coming.
And that's kind of a shock to like my ability to discern things and kind of a reset to humble me once again in the ability to take off my bolt-hinted glasses and try and be a little bit more discerning.
But the consensus view is that once Trump gets control of the Fed leadership and is gearing up for midterms and sends out the idea potentially of a stimulus check, 2026 is setting up for a crazy year.
And so much in the backdrop of what's going on in 2025 is insanely bullish.
It's just, yeah, that liquidity isn't coming or isn't here yet.
and dissection we have.
But even in the last couple of days,
I was seeing, as we were correcting,
it was a bunch of AI fear and stuff like that.
And as we've corrected,
now all I'm seeing is basically
that Trump administration is going to backstop AI
and provide any funding they need
because if AI fails,
the United States goes into a crazy recession
or can't pay its debts.
Not that they can anyway,
But it just really seems like the fire was put on to or the fire was put out and they're going to smother it and just make sure we survive to another day at any cost.
Yeah, I mean, if I was putting my tinfoil hat on, I can't tell if, you know, sort of the Trump regime doesn't want Bitcoin price to run because they still want maybe Wall Street and ETFs and to stack before.
And I think they want to put a lot of legislation in place so that they could sell treasuries after it runs.
or is it sort of price suppression maybe from our, you know, Trump's enemies like abroad?
You know, the way maybe, you know, JP Morgan has been very influential in controlling maybe the gold market and gold pricing.
Maybe the United States is running up gold pricing right now.
You know, it's interesting.
And maybe none of that's happening.
So I don't know.
I want to get into the topics with you.
This is Bitcoin Center.
Please hit like and subscribe.
This is brought to you by Byte Federal.
Go bank yourself.
They got the point of sale, the crypto wallet and the Bitcoin ATM, of course, and buy it.
put it in self-custody.
Francis, let's get into the show.
Let's be real, right?
Praising Telegram for launching a Bitcoin wallet.
I've always felt like with Haley.
Bitcoin, this digital currency that's out there that people say, oh, it might be the next
big thing.
What do you think?
I think it's a wrap point.
Bitcoin. You never heard of them a few weeks ago? Now everybody's talking about them. But is it a currency?
I don't know. Or is it more like a stock? Or is it a tulip bowl? Or is it just stupid?
To me it smells like Ponzi scheme and the greater pool theory right here.
You do like five minutes of freaking research.
Well, thanks for coming to my set talk.
Yes.
Don't buy shit coins.
Oh man, I didn't get that wrong. Alright. Bitcoin's recent rally.
Do you agree? Is crypto finally dead? Go to the next one.
Matter of fact, they're kind of in the Ethernet.
What are they?
Some rumors that it's a Japanese guy,
but they know that he's a fake name.
It was a pseudonym.
You're literally putting real money onto a system
that we don't even know who created it.
It will come to a bad ending.
Is this the most exciting bull run ever?
Not for me.
No, it's not.
Welcome to Bitcoin Center, the fast-paced show where the debate is the story.
All right, Ben, we'll do it a little differently this way tonight.
I'll ask you, instead of all the topics, we'll kick it off and see what you're thinking.
So the latest, Jack Moller came out and said he was debanked by JP Morgan in September.
His father was, he said, also debanked, who has a long history of not just banking with
them, but in the commodities exchange market in Chicago.
And then Grant Cardone jumped in the mix.
And then part of this is they seem to be mad over maybe JP Morgan shorting or influencing
the strategy's price, share price.
So what do you make of this?
I think that we got a little bit complacent as Bitcoiners and thought that we won when Trump won and enacted the Bitcoin reserve with no teeth.
And this is a reminder that there's still a long way to go before Bitcoiners and Bitcoin companies start getting treated with the rule of law that they deserve to be treated.
My cousin on a family trip about a month ago, I finally got him into Bitcoin about a year ago.
And he was laughing at the Chokepoint 2.0 comments because he's still dealing with Chokepoint 1.0 in the marijuana industry.
And it's just kind of this continued thing that's going to keep getting swept under the rug and they're going to keep attacking.
Banks are going to keep attacking their competitors.
and strike is
I mean Jack Maulers today
or yesterday was saying like
we're basically building a bank but we're not allowed to say
we're a bank and so these
big institutions see the writing on the wall
and Bitcoiners are not the ally yet
do you think
JP Morgan's like hey look at strategy
they're trying to offer 8, 10, 12%
we're out here offering
2 to 4% and we just don't want
that to be successful
yeah I mean strike's offering
looking to offer the same thing on
on dollars and until banks really get their world together in bitcoin and even then they're probably
not as competitive as people that are already in the bitcoin sphere it's yeah it's a super
competitive uh market and the best rate wins assuming writ i mean risk adjusted rate wins so
yeah they're gonna be attacked with this and it's definitely like hey they still have the power
They're still the 800-pound gorilla.
They're still going to punch you down.
And it's easy to get complacent with prices going up.
So it's interesting to see this happen during a 33% dip.
Yeah.
I also can't tell if this 33% dip is great for Wall Street because they're maybe taking all the leveraged coins off people's hands.
Let's move to the next one here.
The Bitcoin for America Act was introduced.
does congress's move to let taxpayers pay in bitcoin make sense how big of a deal is this
i would say this is a moderate deal it's the first time i've heard of tax legislation
around bitcoin outside of just not taxing it not taxing sales not taxing using it as money it's
the first time that i've heard of an incentive structure that is a win for both sides congress
gets to stack Bitcoin, they get a reason to put Bitcoin in the reserve. Is that in the bill? I
got to ask you that. But also Bitcoiners get a real reason to actually pay their taxes in Bitcoin
because in Colorado, you've been allowed to pay taxes in Bitcoin for at least three years. And I
don't know anyone who would ever do that because you pay the capital gains tax and you're giving
Bitcoin to the government. So this is the first time I've actually heard of a reason that Bitcoiners
would pay their taxes in Bitcoin. Your company is Bitcoin preferred, correct? Yes, sir. And do you
have, how have you managed it up until now? I mean, you don't have to tell us, you know, at a very high
level. Do you have concerns around receiving sats and then either paying either your cost of goods,
your expenses, or even just other things and buying things with sats? Do you just maybe do
it one way and just receive and never spend those uh is there an evolution here like how do you
think through that for the business everything goes through um through kyc rails um in the same
place that i would sell and buy bitcoin so everything is tracked in that way and i just
get a sheet at the end of the year do you pay capital gains or lost uh sort of do you deal with
sort of gains and losses realized or unrealized and sort of track all that is or is that you try
to just not do car mentalize those stats and maybe not track that you know well i'm always trying to
stack as many stats as possible so selling is definitely something i try not to do and i
avoided for the first four or five years i was in bitcoin um i was doing that by taking on
just non-collateralized fiat loans to run the business and the goal for out of debt become free
and do that with as much Bitcoin as possible.
But we didn't reach a price that I really wanted to get,
like rip the full Band-Aid off.
So I sold a little Bitcoin to buy some infrastructure this year.
And that is all just in, it's all kept into that same system.
I get a tax report at the end of the year.
I have my Satoshi Patroli tax guys working me through that.
and um i did at 86 i said a what is it called a tax loss harvest so
hopefully that'll save me some tax money this year so the dip the dip came good if you bought
the top and and uh weren't going to sell anyway you know you'd love to have more sats but here we
are yeah well thank you for sharing that let's move on to the next one uh you know there's the
big censorship debate.
So rolling out BIP444,
which would temporarily ban
large op return data
and even disable
ordinal inscriptions.
Is this an emergency fix
against legal data,
fear-mongering,
or a dangerous precedent
of censorship on Bitcoin?
I lean towards the dangerous precedent
of censorship.
If Bitcoin's free to money,
you're going to get some people
doing things that you don't
like to do with it.
and i once you start censoring and and i've saw an argument that once you show you can censor then
you're going to be required to censor um and that's more from the mining perspective from
large miners but one of the things that argument and you know it just at a very high level it seems
very logical there sort of uh you know yeah i mean i don know if you compare it to uh you know your door and your lock on your front door is not going to prevent every single criminal from getting in potentially but it still worth using and to prevent the riffraff from getting in and the less enabled or you know abled criminals
You know, why wouldn't you want to prevent 99.9 percent?
Yeah, but that's my house.
Go for it.
Yeah.
No, no, I didn't mean to cut you off.
You're saying probably that's your house.
And then this is.
I mean, that's a.
That's my house.
that's my livelihood and bitcoin is a bit leans a bit more into the um the commons and in the
commons you have to allow a little bit more um freedom and flexibility if it is going to be a
global common good than um in your personal property um i understand the desire to run a
um a node that doesn't display those transactions and that's totally anyone's prerogative but
I'm not in the wanting to censor Bitcoin in any way camp. And I would, yeah, I've fallen onto that
camp. Yeah. All right. What about sort of maybe, you know, meeting in the middle and not maybe
blowing out the opportunity to 100,000, but like maybe just double or tripling or 10Xing it or,
you know, sort of listening to the community? I don't know, actually. I mean, when you say it like
that, you raised some good points. And I'm really trying to balance, you know, sort of like the idea
of, you know, like, yeah, like you could have a pool and say there's no rules here. But if people
start, you know, defecating in the pool, that's going to ruin the experience for everyone. And,
you know, and maybe no one goes to the pool anymore. And that's sort of the public square
or the commons. Like we need some sort of maybe decorum. And like, what I'm having trouble weighing
is sort of policy rules versus, you know, consensus rules as well.
Sure. And I'm a bit of a layman on the subject, but a turd in the punch bowl ruins it for everybody.
But some bad transcription on the Bitcoin blockchain, most people, it sucks for anyone
affected transcription, but it doesn't ruin the baseline protocol for everybody.
also i heard i one more thing is i i heard that the um initial operaturn limit didn't exist
initially the operaturn limit didn't exist and so it was a change to add an operaturn limit and um
thus further change to decrease it but ultimately like i'm just for less changes on bitcoin and more
freedom um and i guess this isn't necessarily a change on bitcoin and anyone could run their own
node software so um well this is bit 444 so it's a little bit different i'm i'm not in favor of some
contentious thing i think there's so much going on in bitcoin that yeah i agree that solidarity
yeah um i just i i yeah all right let's move on to the next one uh commerce secretary's 25
billion tether windfall as uh howard lupnick's once cheap five percent tether stake balloons
towards 25 billion dollar paper valuation does the u.s commerce secretary now sit at the center of
the most glaring conflict of interest in washington i would say that that's uh i mean that's a pretty
United States focused interest is stable coins. So yeah, while it's a conflict of interest from
the perspective of one specific company, the stable coins are such a powerhouse thing,
positive thing for the United States government in increasing dollar hegemony and increasing tax
receipts around the world. I don't know. I'm just, I'm so ambivalent at this point. It's like all
these people just have such conflicts of interest they're so corrupt that it is what it is and uh
let nick being in favor of that probably what are you going to do yeah all right let's move on to
the next one here the eu's single crypto uh supervisor the european commission is reportedly
planning an sec like agency for all crypto and stock exchanges does this pave the way for true
capital markets union or risk smothering innovation in smaller EU states?
Man, you got to think that this is going to mean more smothering, especially given the way the EU
has treated Bitcoin. They're not going to love this. Curious what you think on this one, Cedric.
I think the EU is just massively behind. I don't think they want freedom for their people.
I think they're reacting to the threat of both stablecoins and Bitcoin,
and centralization is their answer.
And I don't think it's going to go well, like you said.
I think it's going to be corrupt and just sort of smother sort of innovation
or anything good.
But we'll keep an eye on them.
We'll keep an eye on the EU over there across the pond.
All right, let's head over to the lightning round.
This is Bitcoin Center.
Please hit like and subscribe.
We got a special co-host here, Ben Justman.
and uh ben tell us a little bit about your wine i love your wine i like the merlot i think the best
and uh that was hard for me because i like the movie uh sideways and so i promised uh you know
myself i'd never drink below but yours is actually pretty damn good so hey i appreciate that um i do
get a lot of good feedback on my merlot it's just hard to get people to actually drink it because
they've all seen the movie sideways and luckily my dad planted a pinot noir vineyard right around
the time that movie came out. So we benefited massively from that. But yeah, I make low
intervention wine up in the mountains of Colorado in the highest elevation wine region in North
America. And I'm a Bitcoin forward business. So Bitcoin preferred always on my for sales of my
wine. A lot of my time is spent working, talking to businesses about how to reach Bitcoiners,
how to approach them, how to market to them, and what the best tools, the best way to approach
using Bitcoin in the real world for the goods we need is best done. And the thing I keep coming
back to is Bitcoin is not freedom money if we have to convert it to slave tokens in order to
buy all the things we want. So building this Bitcoin economy is something that I've really
felt like firsthand, but also I'm really motivated to continue working for.
That's awesome. And how do you say the name of your winery?
Peony.
Oh, like the flower?
Yes.
Peonies?
That's what I thought. All right. Awesome. And where does the name come from?
My dad named his short-lived winery Peony Lane. So what's the namesake of my town,
which is Paonia.
It's a bastard spelling of P&E because the United States Postal Service
didn't like P-A-O-E in the name.
They didn't like the three vowels in a row,
so they just ripped one off, and we got Paonia.
All right.
Well, all right.
Sounds awesome.
Well, I love your wine.
It's a great time to order it.
Hopefully, people should be able to order it now
and probably get it for the holidays like Christmas and New Year's,
but I already have some for Thanksgiving, so I'm a lucky guy.
Let's get to the lightning round.
I want to play that OG Andreas.
Summarize.
Any data can be encoded as any data.
One person spams another person's content.
The power to decide what is and what isn't allowed is dangerous
because it leads to censorship.
It also leads to giving the developers power over the protocol,
which will eventually be used by someone else.
and if the developers are shown to be able to censor,
then they will become required to censor
in any and all jurisdictions where they live.
And so that's extremely dangerous.
And people will be able to put ordinals and shit pegs
and JPEGs and NFTs and garbage and Bible verses.
I already said garbage.
And other stuff on the blockchain,
whether we want them to or not.
And so I would rather people put it in an op return
where we can then disregard it, prune it,
and not have to carry it anymore forever
than if they put it, hide it in other places of the protocol
because we may not return too hard.
And so I actually think that's a better...
It seems like you guys are quite aligned.
It's quite interesting that he showed back,
you know, kind of got back on the horn to kind of chime in on this.
I just don't like the idea, though, of like, we know you're...
it's like it's acknowledgement we know you're doing things that i don't want to frame it as we
don't want you to do but we know we you're doing things that are let's just call it garbage so like
we built you a huge garbage pail and i just find that they're still gonna put it in the places you
don't want i i think it's just like they'll go into the garbage pile plus all the places you
still don't want i don't think it prevents or changes incentives that much what do you think
Yeah, a lot of the debate tends to be like, yes, you center around, it centers around the child porn dynamic because that's the main thing that everyone agrees is bad.
But what's getting caught in the cross is differentiate as to what's good, what's garbage, what's not.
And the point of Freedom Tech is to not have to make people, like not give anyone the power to choose what is good and what is bad.
So I don't necessarily know what the opportune limit should be or where the other things can be stored in Bitcoin.
But my base case is when you say we agree something's bad or we think something's garbage, I ask who.
And I don't think anyone has the right to be that who.
I hear you.
All right.
The only, my last final note on this is though,
I don't want more bells and whistles necessarily on Bitcoin
unless it's more privacy and security.
You know, I don't want it to be like Ethereum
or, you know, necessarily like anything in that direction.
Like I just want it to be great money
and separate money from state.
That's.
Yeah.
I think the core principle of Bitcoin are sure that there's personal sovereignty, make sure there's 21 million coins.
And those are the two that can't be infringed upon.
But the rest is a gray area.
And if, you know, it's, I don't know, there's a lot that's just out of our hands and can't be, like, we can't really influence.
And this is, I guess there's like a developer class that has influence over it.
And, you know, Bitcoiners can vote with their nodes and vote with their voices and everything.
But ultimately, I think a lot of what Andreas Antonopoulos says there is just that there's going to be a war to control developers in Bitcoin.
And there needs to be talk now about how to deal with any changes in the future and how just because like as these nation states start buying Bitcoin and building Bitcoin reserves, they're going to absolutely influence the developers more if they're not already.
And so I don't think that this debate is that worthwhile outside of the sense that it's very important framing for future debates on topics like privacy and resilience.
All great points. All right, let's move on to the next one here.
The whale power struggle.
So a mysterious whale opened an $87.6 million short, three times short on BTC.
and meanwhile others all held huge longs is this contrarian hedging by us by a smart money or a
loaded bet that bitcoin can't break higher how do these multi-million shorts shape the crypto
battleground do you even care ben is this current this is current he's currently got an 87
hyperliquid this is whatever hyperliquid is we monitor this stuff and someone wrote about this
particular trade i mean you see these dead bodies fly by all the time in the the wrecked bot on
roster um i i don't know that's a lot of money but ultimately like there's there's huge bets either
way this person could be hedged um on a different platform sure no i don't think this is constant
the numbers are going to keep getting bigger and uh people are going to get wrecked losing money
and uh in this situation it seems like one or the other is going to get wrecked so
So do you pay attention to these whales?
Do I?
No I don really care about this I don trade So I think it interesting though and I think it my mind will get like a little fixated if someone makes one of these huge trades and it comes in within eight minutes of it happening
And it's just because you could see the tape.
And it's just something to kind of noodle on.
But ultimately, I don't care at all.
That's where I get interested is when it's right before a big move to that.
But at the same time, yeah, there's probably a million that we just don't even know about
because the move didn't happen or they got wrecked in the wrong direction.
And we said, yeah, rough.
You shouldn't have shorted Bitcoin.
So I don't know.
It's going to get more and more corrupt as the people on the inside
of the money printer dials start wanting to buy Bitcoin.
Yeah, I hear you.
All right, let's get on to the next one here.
Strategy pauses their buying.
After six consecutive weeks of purchases,
MicroStrategy announced it will not buy more Bitcoin this week.
is this a momentary breather or a sign that corporate buying is slowing and
who will fill that demand vacuum?
Man,
it seems like corporate buying is at a serious nadir.
They've pretty gotten wrecked over this past year.
So that's wild to see,
especially like I was having conversations with people like just expecting,
you know,
Oh yeah.
In the,
the Bitcoin treasury companies haven't even been really started buying.
It turns out that was the peak of them by back. I bet there's a lot of just volatility that they needed to have a little bit of Bitcoin upside they needed to have and they'll get reinvigorated again. But I think the the polish is is a bit rubbed off.
yeah i hear you i think you know i can't i can't help but wonder if it was insiders or ogs
funding the treasury companies to get their liquidity around 100 quay okay the the weird
thing about microtrategie not buying this week is uh what i want to hear what paul says it's uh
and thanks for uh look it's paul tarantino okay guys you know we've got ben justin here but like
Like, you know, the only thing I can I note about strategy pausing their buying after six consecutive weeks is like, do they just not want to buy the lows?
Do they only buy tops?
Like, I thought they were just going to buy consistently instead of only tops.
And like you would think they're, you know, the shareholders would want to buy more lows.
So, Paul, what do you note here?
My only note is that I think there's, I guess, a lot of analysis maybe or reanalyzing their strategy in the face of what MSCI is saying.
They're looking at changing the, I don't know if it's a change of the rules or applying the rules that they've previously applied to what they consider just holding companies or companies that just make investments.
And if they're starting to view strategy as having 50% or more of the value of the company just held in Bitcoin, then they might eliminate them from the MSCI index.
And if that happens, you could see other indices follow that.
That could change a lot of the passive flows that might change the structure of strategies game plan.
And so maybe a pause is prudent in order to reevaluate.
Do you think this is beyond sort of an attack around sort of MNAP valuation and more about, you know, eliminating or just deterring or just ruining MicroStrategy's 10%, 12% products because Wall Street, JP Morgan doesn't offer anything like that?
Right.
No, I can't rule that out.
You know, I mean, Wall Street is great at punishing you if if they're not getting what they want or you're doing something they don't like.
I mean, Bitcoin was punished for over a decade. Right.
Because we're considered a threat to the traditional financial system.
So I could see that. I mean, it's there was a lot of rhetoric back and forth.
I saw on Twitter about, you know, that, oh, JP Morgan didn't really short MicroStrategy,
but they had bought a lot of puts. And prior to buying those puts, they had sold a bunch of shares.
And so if anything, this looks like they knew this problem with MSCI was coming. So they unloaded,
They took an additional, they bought put, so they didn't actually short the stock, but they are benefiting from downward pressure on the stock.
So look at these companies know stuff long before we do.
And I think JP Morgan took advantage of it, or at least their traders did.
Not that Jamie Dimon had any awareness at all about any of this stuff.
But yeah, I just it wouldn't surprise me that when price gets to a certain level, they all compiling back in.
Yeah. All right. Let's move on to the next one here.
You make a lot of great points there.
The death cross warning that we just went through.
Bitcoin's 50 day moving average, moving average just crossed below its 200 day moving average.
The dreaded death cross.
Is this a harbinger of doom or an overhyped signal?
Historically, have savvy traders seen this as a buy queue instead?
What do you think, Paul?
Well, look at death crosses in bull markets have oftentimes been quickly reversed.
Death crosses in a bear market.
If we truly have crossed into a bear market, then there's probably significantly more downside.
So it kind of depends on your view of the next few months.
I mean, I'm kind of leaning towards the bear market scenario here.
I could see a relief rally in the meantime, but I'm leaning towards further downside.
But that's coming from a guy who doesn't trade, who doesn't analyze charts very well, has never been successful at trading.
uh so i just purely look at this as an opportunity to start buying uh sats at cheaper prices and the
lower it goes the more i get every time i buy and that makes me happy yeah i mean how can you not
see this as legendary entry point but doesn't you know mean timing i mean is it six months is it six
weeks is six years i mean my crystal yeah right my crystal ball says it's it's at least three to
six months. Probably not as deep as previous bear markets because we didn't go as high.
But I mean, anywhere between 80 and 40, I'm stacking as hard as humanly possible.
Any thoughts here, Ben?
Yeah, I'm not really expecting to go too much lower. I've seen a number of metrics comparing
the liquidations and the capitulation we had over the last month to the 2022 bottom and the
COVID crash. And that makes me think that the sentiment has happened in the market. Now,
I'm not expecting us to start ripping back up. I do kind of expect a bit of potentially a dead
bounce idea with just like the language coming from the Trump administration is like very positive,
very, very pro liquidity. But will that liquidity actually come? I think that we might see a top
when people start realizing that that's not going to come until maybe early next year,
mid next year, when they actually start gearing up to print money for midterms.
The only thing I can say now is with everyone getting so bearish, it kind of makes me bullish.
All right, let's move on to the next one here. There's a great clip coming up.
I know you got a lot of thoughts on Bitcoin. Can you give us your, let's say your latest view and
your criticisms on the asset? Well, I think the most important thing to understand is that Bitcoin
has marketed itself as multiple different things to try to appeal to investors at various points
in time. The initial implementation under the Satoshi white paper was a peer-to-peer payment
system. The idea being that our payment systems, the rails of the payment systems, ultimately depend
on the banking system. And so by moving to a distributed ledger and a peer-to-peer system,
we'd be able to get banks out of the system. That's been a total failure. There are almost no
real transactions that are occurring in Bitcoin. We have tons of transaction activity in speculative
markets trading Bitcoin, but the actual quantity of retail transactions or peer-to-peer payments
that occur over the Bitcoin network are remarkably small. And I'm sure every Bitcoiner out there can
tell you the anecdote of, oh, I transferred $1,000 to somebody else. It's an immaterial
component of its utilization. The second component is you have to understand that Bitcoin was born out
of a philosophy coming from the global financial crisis, the crisis that was created by banks, by
the overextension of credit. The banking system ultimately depends on credit. We talk about the
expansion of the money supply, that money printing is occurring, et cetera. There's two types of money
printing. There's money printing that comes from the government in which they largely are trying
to smooth over mistakes that have been made. We make a mistake around COVID. We need a whole
bunch of money to pay people so that they don't starve to death when we shut down the economy.
We make a mistake when we decide that the housing market is extraordinarily robust and can
accommodate any amount of credit that has been extended. As that credit defaults, it ultimately
shrinks the collateral that's available, destroys wealth that people believe that they have. They
shrink their spending in response to it. That means other business models now start to fail,
and the government basically creates a do-over by printing money. The more frequent type of
printing money is the extension of credit. You go to the bank and you say, hey, I'd like a loan for
$1,000. They give you $1,000. They didn't actually take the money out of somebody else's account.
They simply created a new account for you called your checking account that has $1,000 in it because
you've been approved for this loan. That expansion is totally normal and it has a credit function
associated with it. But Bitcoin destroys the ability to do that because it was intentionally
designed to skip the banking system. And so it is effectively just a monetary system where what
you're really seeing is Bitcoin is effectively the tokens that are paid to the accounting firms that
keep the blockchain in order. That's really every Bitcoin that's out there is basically a payment
to Deloitte and Touche, right? We're going to continue to do the accounting for this. In exchange
for that, you're going to give us a shrinking share of new coins. Because you can't extend
credit in that framework, right? No new money can be created. There is no capacity for mistake
forgiveness in that type of framework. It ultimately becomes very limiting. Interest
rates and credit spreads are just too high for a real economy framework. And that's by and large
what we've seen. It hasn't emerged as a payment system. It hasn't emerged in any meaningful
economic context, despite the fact that the asset has appreciated dramatically.
The other issue is, is because we have a finite quantity of it, ultimately that means everybody
who was born after the Bitcoin have been released finds themselves in deficit in a manner that you
would basically be a surf living off land in the 14th century that didn't belong to you and there
was no other land that would ever become available to you because you actually couldn't acquire it.
It creates a deeply unequal society. This is something that I recognized very early on and
to be clear, I was an early adopter of Bitcoin because I thought it was actually a really
interesting idea what happens if we decide that we have private money the problem is is if you run
through the simulation bitcoin because there is a finite quantity of tokens means that it basically
plays like a monopoly game right there is no entity that can accommodate unlimited growth you
can't add additional players as the game is being played in monopoly because they're just going to
lose very quickly they don't have any other properties they don't have any of the money
right and so they're going to be losers in that system over and over again how does every game
of monopoly end. Someone wins. With a single winner. And that's exactly what we've seen within
Bitcoin. We've seen increased concentration of Bitcoin in absolute defiance of what the Bitcoiners
all argue, that it was divisible and that everybody would end up getting it, et cetera.
What we've seen is a Gini coefficient, that measure of inequality in the Bitcoin world
that is beyond anything we've ever seen in the real world. It's a system that ultimately collapses
upon itself and locks people out.
Far from democratizing access, it does the exact opposite.
All right.
Who wants to respond to that criticism first?
I got something.
The biggest thing I really heard from him is the fiat apology.
And it's a lot of framing the onus on Bitcoin when really the onus on Bitcoin to provide
positive outcomes when one of the biggest benefits of Bitcoin is just avoiding the negative outcomes
of fiat. And that's realistically enough for a lot of people to get the huge benefits. And the
ability to paper over and make mistakes constantly just decreases the danger of those mistakes and
increases the frequency. So a lot of just not realizing the downside of fiat because he is
in a position where he doesn't really experience the downside of it and minimizing the issues with it.
Paul?
I couldn hear the whole clip I only caught the comment of the Gini coefficient at the end And so my only pushback there is that you know this distribution has over the last year has been massive and persistent
And that distribution has been consistently bought.
So, you know, when you see the central bank at the Czech Republic buying Bitcoin, you see the massive adoption that's spreading through Africa where they don't care about volatility.
They just they just want SaaS because it's so much better than fiat.
Sovereign wealth, pension funds, et cetera, buying Bitcoin to help support their goals
to create a retirement for people in the United States or to shore up the balance sheet.
I think Bitcoin is doing exactly the opposite of what he's talking about, which is distributing
from the few early winners to the rest of the world that's going to be holding this asset for
the long term. I didn't hear 90% of what he said, but knowing Mike, I'm sure it's relative to,
you know, dollars are going to go up, bonds are going to go up, and everything else is going to
die, and you better follow the old Wall Street game. So I don't know. I don't think he really
The future of decentralized money.
He was trying to throw some FUD or, you know, sort of discredit Bitcoin.
But BitPain was on X.
He said, here is Mike Green, who famously refused to buy Bitcoin at $25 cost basis on the advice of his wife.
Dismissing the significance of a U.S. state buying Bitcoin at $85,000 cost basis because they only bought $10 million worth.
You know, maybe he's just salty.
Let's move on to the next one here.
We got China.
China's got a mining comeback here.
They quietly reclaimed 14% of global Bitcoin hash power in October.
Has the mining dragon truly awakened from its 2021 ban?
And will cheap Chinese power catapult the next bull cycle?
Did they take it back?
Or did they just finally disclose that they never got rid of it?
I guess they are rising hash power.
so I think they sort of reclaimed 14%
I don't know how high they were
prior I know there was around
10% not too
long ago so maybe it's about a 4%
increase
40% on their own
turf
that's good
I think it's good for Bitcoin
the global hash wars are good
for Bitcoin right
yeah my first instinct was really
did it ever really disappear
Yeah, I think they just moved it around.
But what a resource, the electricity in China that is not being used for Bitcoin.
That is a sleeping dragon to awake.
And our enemies are going to get Bitcoin.
And I don't necessarily want China to get a ton of Bitcoin.
But I think that Bitcoin ends up getting into every society, every person, and potentially like awakening the desires for freedom.
Who knows if that ever gets to Chinese people.
But I don't want to say the more Bitcoin matter, but to that, the more Bitcoin everywhere.
And there's so much just there's so much power being developed in China.
It's going to be interesting when, yeah, their damn power, but when nuclear power gets focused on Bitcoin mining.
All right, let's jump to the next one here.
Oh, Italy opens a pathway, you know, for residency by you can you can now Italy now grants investor visas for 250,000 stake in a Bitcoin focused startup.
And that's euros. Does this mark Europe's first real experiment in tying national residency rights to Bitcoin exposure?
We're just sort of a clever arbitrage on immigration law.
To me, it just seems like it's a new twist on an old visa program that they've had.
So maybe they attract some people that want to get exposure to Bitcoin and have access to Italy and the EU at large.
But I mean, as an American, I don't know how attracted this would be because you're going to be taxed on your global income anyways.
Maybe it makes a lot more sense for people from other countries.
I don't know.
It just seems, you know, I mean, it's great.
I don't think, don't get me wrong.
I mean, all the more, the more investment or the more reasons to invest in Bitcoin, the better.
But didn't seem to be like a game changer from where I'm coming from.
All right.
Yeah.
Ben, you want to hear from you?
It seems like a nothing burger on the specifics there.
But I imagine that there is going to be this arm race to attract Bitcoiners.
And Italy's got some pretty nice spots to be.
And they need to differentiate themselves from the rest of Europe, given the regulatory framework in Europe.
So that kind of hurts them as of now.
But I imagine that we're going to see the dissenting European states trying to attract Bitcoin wealth, despite the overarching European in that field.
yeah i hear you all right we'll keep an eye on that they're gonna get they're gonna have to
throw some better offers out there yeah well that's what i'm looking forward to the competition
let's see it hopefully increases let's get to the next one i want to see the stale clip here
i don't hear it yeah we don't have any sound sorry i messed up
all right well uh sailor is floating the idea of digital credit as the new fixed income
what do you think paul do you think this is going to stick especially with all the sort
of trouble they're having now with the mcsi yeah let's talk in six months let's see let's see if it
sticks i mean look at them look at them oh sorry ben go ahead
just need to restore some reputation to that because ever since they launched all those it's
been pretty down um so they need to to show that they can recover in that regard before
anyone starts taking that seriously well uh how much does strategy need you know bitcoin price to
pump for this to all play out you know yeah more short term i i forget who did it on x but there
there was a pretty good analysis, right? As to attract enough buyers into, I believe it's stretch,
they've got to keep raising interest rates. And if they keep it raising the interest rate on
stretch into a falling Bitcoin price, you can get to a point where it looks pretty grim,
regardless of the fact that they don't have a lot of outstanding debt, right? So
So I think, you know, price, the price of Bitcoin going up is directly tied to strategies, long term ability to keep these perpetual credit offerings in good standing.
Because it would, you know, right now, right, he raises the interest rate to attract more interest in that security.
that's all well and fine but if you get if he gets to the point where he has to
pull some of those triggers to lower the interest rate change the terms um then you just you could
kill the reputation of that security and is at any point is he not not forced to sell like liquidate
but to sell a little bit of bitcoin to cover either expenses or show the market that he's he's
sort of going to like you know sort of uh provide some i mean sure there's there's there's things
that could go wrong in the global economy the financial sector right if you can't borrow at a
at a cheap rate if you can't issue the credit at lower rates and get any interest it's um
you know you know there's everything's a possibility in these markets especially going
into the type of environment where you're basically having some sort of reset on the
debt of the United States, whether you like it or not.
So we'll see.
All the time strategy bought and everyone said, look, price didn't go up.
And I wonder how much, you know, if strategy sold, you know, how much actual impact it
would have on the market, you know, if they didn't tell anyone and they were selling.
But let's say they told people they were selling.
I bet market sentiment would turn dramatically.
I think so too.
I mean, you could get into a position where,
I mean, this is one of the triggers
or one of the fears that could really
turn this bear market on
and maybe even signal the bottom, right?
Every bottom of every bear market we've had,
there's been a sacred cow that's been slaughtered.
I hope it's not strategy because I do believe in it, that he's trying to do something really cool.
But somebody is going to get hurt and that will be the sign that it's over.
Everyone will be petrified and think Bitcoin is dead finally again.
But, yeah, I mean, you can see a potential path that would lead to some catastrophic outcomes.
At least that's the way I think about it.
A better perspective is about 180 degrees from where it is now in a year's time.
Okay, let's say in a year's time, Bitcoin is $145,000.
right and um let's say that's october and then come january it's back down to
one 101 are we having the same conversation or are they just going to have the same balance sheet
just times 0.25 you know what i mean or is it going to be in a different place for them completely
like at what point do they sort of break out of like what happens to bitcoin price downward in the
next six months? And is that a threat to strategy? Well, they need the volatility, correct? They can
win up or down. It's obviously more beneficial for them to be up. But if we're talking about,
yeah, another year of up sideways to 150 for round numbers and then back down to 100, I'm seeing
another consolidation event and another higher low that ultimately ends up being extremely bullish
in the long term. If that happens in the backdrop of the amount of money printing that I expect
over 2026 that are concerning and I would expect gold to be on some insane bull run,
stealing all that capital. But the scenario you lined out is painful because we hope for more,
We expect more. And this past year has been a bit frustrating, but it's ultimately a pretty damn bullish setup.
Yeah, I mean, it couldn't be more bullish, this setup.
All right, let's move on to the next one.
So a little bit of a continuation of the thread.
So I don't know if you guys just want to bury this, move on.
But the MicroStrategy bear rumor is continuing the thread.
Did JP Morgan actually short MSTR to shake out Bitcoin supporters?
Or is that viral tweet, all hat and no cattle?
Is MSCR being targeted by bad actors spreading FUD?
I don't know if it's bad actors.
I think there's a bigger question for all these treasury companies, which is...
Are they just closed-in funds?
Right.
If your entire business or the vast majority of your business, in MSCI's case, right, it's more than 50% of your business,
is based on just holding bitcoin and relying on multiples on your mnav to be able to sell shares
to be able to buy more bitcoin that accretive dilution if that's your if that's your business
model then i think you're going to see these treasury companies just compressed to one mnav
and then you have to figure out how do you run this business model if your mnav's one
all the time right or the volatility above and below one is tiny right yeah um and then and then
what what's your true value what would i what now i think sailor's got some really interesting stuff
going on with all of his credit offerings um and i think those credit offerings are really really
cool and and brilliant um i just don't we'll just have to see how the market takes it right and um
I think the market needs to see that these credit facilities are going to be there,
these securities are going to be there through thick and thin.
And if he makes it through a bear market cycle, then I think they'll come piling right into it.
All right.
Let's see.
All right.
Let's go to the last topic here on El Salvador.
All right.
IMF versus Bitcoin.
The IMF warns El Salvador over its Bitcoin laws, but Bukele keeps buying dips, apparently.
Is this friction highlighting a currency sovereignty battle or just normalizing crypto in the face of fiat instability?
thoughts uh well i don't know if he's buying bitcoin uh there's been some you know is he
moving it around uh he's buying it cedric he's buying bitcoin and how much the finger
i don't know he's working with the imf sure and he's buying bitcoin
anyone who's gone against the IMF no one who's gone so let's say he keeps paying the IMF
and he keeps behind bitcoin what are they going to do are they going to be like
we're just going to default on you even though you're paying your your debt well he's risking
future financing I mean they are it's quite a lifeline they're giving him whether it's
predatory or not. I mean, they're talking several billions of dollars, tens of billions of dollars.
Who's the biggest contributor to the IMF?
Who's the biggest contributor? The states.
Yeah.
Yeah. So, I mean, you would think...
Who are the biggest participants in El Salvador?
You would think he's protected by the states.
He's said, yeah, no, Tether's headquartered there.
I mean, it seems like a closed loop there.
It's all good. El Salvador's going to be
I saw they had a picture with Giacomo Zuccomo.
He handed Bukele a bottle of rum called,
he gifted him a bottle of rum called Dictator.
Yes, yes.
I mean, he's running the MAGA playbook
to see if Trump can run for a third term.
And you think he's truly independent?
Do I think Bukele's truly independent?
Yeah, and not protected by the states if he's going to go against the IMF here.
Oh, no, I think he's.
Have you ever seen anyone?
Well, I think he has the blessing of the United States.
I wouldn't say protected, but I think he's he's been blessed.
I think so.
Just like when Tether came out of those congressional hearings and, you know, they were they were blessed.
Tether bought a bunch of gold, Paul.
What do you think?
I'm sorry.
Tether bought a bunch of gold.
Well, they've had gold for some time.
Yeah.
I'll read it.
Gold, Bitcoin, treasuries.
But that graph that came out that was exactly that Yeah Tether brought more gold last quarter than every central bank What the fuck is up with that
Somebody might have told them, hey, buy some gold.
That's what you have to do.
All right, I got another one.
Rohan Harani says, I mean, what did people expect?
You don't just walk into the $150 trillion fixed income cartel
and sustainably offer 8% to 12% yields without making some enemies.
JP Morgan is just the first domino.
Those who've spent decades selling investors a safe 2% to 4% yield
are not going to sit quietly while one firm shows up with a structure
that can plausibly deliver 3% to 5% that.
For years, anyone offering 10% was usually a DeFi casino,
a fund about to blow up, or some risky scheme that TradFi knew
wouldn't survive for long.
So they were shrugged off as not a threat.
But strategy is different.
It's simple and it's terrifying for traditional credit issuers.
Because here's the uncomfortable truth.
No institution can sustainably match 8% to 12% without touching Bitcoin.
And most of them are starting way behind the eight ball.
So if they can't compete fairly, some are going to try competing unfairly.
That's just how insurance systems behave.
Strategy had a massive head start because everyone else mocked them or assumed they'd blow up.
And there's still a ton of turbulence ahead.
But the direction of travel is obvious.
Bitcoin-centered digital credit will punch a giant hole straight through the fixed income market.
Not overnight, but step-by-step in a way the old system can't keep up with.
Interesting take.
No, that's very well said.
It's curious that just after listening to Jack's Monday night show,
a lot about offering those same products like cash, interest on your cash. And since that just
basically goes into allowing more Bitcoin loans, they can pay 6%, 7%, 8% interest on that. And
it's curious that the two things that are being attacked during this bear market
are the two things that are directly going after these big entrenched systems.
yeah you you you uh challenge treasuries you're gonna have a challenge in front of you
well they're trying to become buyers of treasuries though right i mean i don't think you can offer
interest on sort of the stable coins unless you offer i guess it's technically bitcoin back that
this could be interesting how this rolls out but i think you have to sort of have the treasuries
to offer the interest yeah but i thought we were talking about interest on uh the coin
the sailors creating right well i mean
which are they are fighting him i mean how good of a fight do you think they could put up
if you don't even on that pretty good they go they got a big big well i mean can they just
delay for a year or two or like can they really set it back five ten years you know and and would
it be in their best interest to try and do you know to sort of derail stable coins and crypto and all that or can they set strategy back i don know that they interested in derailing stable coins
sure but can they but i think if you derail bitcoin i think you sort of
you push back the rollout i think of stable coins and crypto and i think it's very related to bitcoin
prices uh going up really helps the momentum of issue of rolling those other things out
I just think that they're, I mean, I think the point of that tweet was that, look, if the entire mission of the big banks that own the central bank are to have as much liquidity as possible in the treasury market, because they are forced buyers of the treasury market.
Right. And anything that threatens that makes their life miserable and weakens their business model.
right so if sailor is successful at this and then it starts being copied in every major
jurisdiction every major financial market around the world that dethrones the treasury market
much more quickly so instead of a controlled demolition that they can steer the titanic through
they're going to have rough seas and chaos. So I think they're going to fight it the whole time.
Regardless of, but regardless of sailors success or not, Bitcoin is going to keep doing,
it's what Bitcoin does. We got, we got to this point, you know, without institutions and we will
continue. So it, you know, Bitcoin is designed to go up forever. The supply is going to be
constantly shrinking. New buyers are emerging globally all the time. And the best that J.B.
Morgan can do or any financial institution could do is delay the inevitable.
Bitcoin for sure. But with MSDR, it seems like they smell the blood in the water. And if there
was one chance to like take them out or derail what they're doing now is it but if mstr succeeds
makes it through this low period and and really gets back shows strength and shows resilience
it gets a lot harder to cut it out to get it out of there so um this is their operations yeah sure
mstr was down a lot before this back in the bear market but they weren't offering these yield
products. So it was just cute back then. Yeah, now it's something that could be existential
risk. And it's Bitcoin really attacking the financial system head on as the best way to
give the dividend markets I blanking on the word We were just talking about it But you know
the players in this are interesting
because like Lutnick,
Canada Fitzgerald has a huge position,
I think, in micro strategy,
don't they?
Yeah, I'm not sure.
It wouldn't surprise me.
So, all right.
Francis, we got any questions
or comments in the chat there?
We got a quick comment.
Robert Schmidt says,
Tether made a gold stablecoin.
That's why they bought the gold.
True.
Good job.
Thanks for filling that blank in for us.
I remember that.
Yep.
What do you think of that, Paul?
You think...
I mean, there's...
I mean...
Are we going to get a beef stablecoin?
What do I think of it?
There's been gold-backed digital tokens
for as long as I've been in Bitcoin.
None of them have ever taken off.
If anybody in the world has the connections
to make a viable gold token,
it's Tether.
They've got all the right connections.
So I'm sure it's going to be a good market for them.
But at the end of the day,
I think at the end of the day,
the true value of gold is the fact that it's not digital.
And it's not dollars.
Right.
So it's kind of a paradox.
Well, no, I don't believe this is a gold-backed dollar stablecoin.
This is, I believe, and maybe this listener can correct me if I'm wrong,
I believe it's just a gold-pegged token.
So it fluctuates with the price.
More like represents an ounce of gold.
Yeah, so it's a way to trade gold easily that sits in vaults.
sure.
Rehypothecated also like a thousand.
I don't know that it's rehypothecated,
but it is,
it is just a simple way of gold with gold sitting in vaults,
have a digital token issue on top of them that they can be traded.
All right,
cool.
Fair enough.
All right.
Anything else in there,
Francis?
That's it for tonight.
All right,
man.
Well,
this was awesome with Ben jumping in.
Yeah.
Thank you,
Ben.
Appreciate it.
Thanks for having me.
I'm sorry to hear you had some trouble.
beforehand oh that's all right that's what happens when you try and drive an old truck
well join us every tuesday uh at 8 00 pm eastern for bitcoin center my name is cedric youngelman
this was uh ben just been jumping in and paul tarantino hopping on for the end here uh
this is brought to you by bite federal so go bank yourself uh you know you got the bitcoin atm the
crypto wallet and the point of sale and put that stuff in self-custody i'm looking forward to
joining you in the shed next week, Cedric.
All right, next week, brother. Maybe we'll have Ben call in.
Perfect. Sounds good.
Love to. See you guys next week. All right, guys. Thanks.
Peace.