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Matthew is anxious.

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Our pet's heads are falling off.

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Bitcoin down 6% today, sitting at $86,262.

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Is it over?

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Marty, we've been through this before.

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We need to step back, congratulate everyone who's listening for still having diamond hands.

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If you traded a little bit, congratulations even more.

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But life is good when you hold Bitcoin, spend time with your family.

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Don't think about this too much.

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Although I haven't done, you know, like I was telling you, I was even blissfully sleeping.

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Usually I'm blissfully sleeping during Twitter drama, you know, primetime US Twitter drama over here in Europe.

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But I did want to check and I didn't even check it.

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This $5,000 drop has to be, not necessarily in percentage terms, but in gross dollar terms, one of the biggest daily drops we've had.

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Really?

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We're right back to where we were seven days ago.

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We're actually up 37 basis points since this time last week.

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Depending on your time frame, it's either bullish or bearish.

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We did a nice little BART formation here on the chart.

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Yeah, you got the old Simpsons.

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People are very worried, though.

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People are looking out there and they're saying,

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hey, cycle theory is broken.

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There's a lot of demand out there.

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There's a lot of buying, a lot of ETF inflows,

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but the price isn't moving.

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JP Morgan is manipulating the price of MicroStrategy's stock.

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there's Caitlin Longs out there saying there's price repression.

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What are you seeing, sir?

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Well, you know, on my streams, I try to do some deep dives on the price

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relative to other assets over a longer period of time.

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And with the theory being that, you know, you can manipulate,

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if you want to use that word, manipulate or suppress markets,

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So you can absolutely do that in the short term, maybe even the medium term, but it's very difficult to do that over the long term.

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I think that'd be most evidenced by gold, right?

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There's a lot of Bitcoin conspiracies don't hold a candle to gold conspiracies.

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You know, Alan Greenspan said in 1996 or so, central banks stand ready to sell gold should the price rise.

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And yet here we are, gold $4,000 an ounce.

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Now, a Bitcoiner wouldn't like that.

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Bitcoiners expect bigger moves faster.

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And we are indeed on a much faster growth trajectory than the gold market.

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But I think the market eventually gets that price that buyers and sellers accurately reflect

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their demand and supply.

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And I think will eventually sort itself out.

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But yeah, I envisioned doing my daily streams here.

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You've seen all my percentiles and running against the power curve.

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And I envisioned during exactly this time talking about,

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okay, so how many days have we been above the 80th percentile, 90th percentile,

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just preparing people that we could run, trying to stay calm.

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I like the phrase, my friend, he goes by APSK.

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He's a good power law.

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He does a lot of charts on Twitter.

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He's like, you said Bitcoin would break all our models,

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but didn't expect that to be to the downside.

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So, you know, we're going to have to see.

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But in general, you know, we can look at the charts whenever you want.

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But I mean, in general, we're still on a power trend.

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Nothing is broken there.

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And as long as you understand that Bitcoin grows like a network, which obviously you've talked to plenty of people who can reinforce that way different than any other traditional finance asset.

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I think you're going to be okay.

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And the best way to do that is we've been talking about now for, I don't know how many years.

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Going on seven.

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It's crazy.

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Yeah. But I was not going to say just about the base money stuff, because that is true for the sort of the taxonomy of where we are. But rely on that power curve for some comfort.

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because I still think, and I've said this before in your show, I still think that

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95% of what Bitcoin does right now is relative to the power curve, right? Whether it's over,

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under, this is a trajectory of network adoption. You put it on log-log scale. It's a beautiful

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straight line. This is how networks grow. We can talk about that in as much detail as you want.

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but that nothing has changed from that thesis.

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And, you know, you can compare it with gold,

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compare it with dollars, the stock market.

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They all have power relationships, which is wild.

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It is a wild thing because, you know,

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the rest of the world is run on credit

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and grows exponentially and often very in a non-stable manner.

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So, even with these big swings in Bitcoin, you're still very much hugging this 96% R-squared

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power trend, which is something to take comfort in. It's a sustainable trend, unlike

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TradFi trends, which are not stable, often very volatile, often booms and busts.

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Bitcoin has a different trend.

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Yeah.

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And I'm not sure if you've been following it, but to your point, 95% of what we see in price action is driven by this network adoption.

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The other 5% by external variables.

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If we're looking at short term.

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Impact on price.

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I mean, I was a bit tongue in cheek with the suppression talk earlier.

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But I think what we're seeing now is McQueen's use case as a liquidity alarm bell.

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I'm not sure if you saw Japanese bond markets last night and over the course of last month.

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Looks like they're blowing out.

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BOJ came out.

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I don't know if it was the BOJ or just an official, but sort of signaling, hey, we may have to raise rates here to control this runaway yield curve that we have here.

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Yeah. Yeah. And it's funny because Japan, it's a story like Greece. I mean, they've been going at this for 30 years now. Excess of money printing. It sort of always seems to be this surprise that we have to deal with.

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But how long this carry trade will continue to go, to anybody's guess, I don't know.

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The yen, unless you're really worried about MetaPlanet, most people, it's just Japanese

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investors that are usually...

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The ones most affected are Japanese investors trying to get in and out of other currencies

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to get more yield than they used to get or typically get with their own currency.

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I don't think about it too much, but yeah, it is a major currency.

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Yeah.

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Well, let's dive into the charts, give people some peace of mind.

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Good.

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All right.

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So obviously, you want to start with price first and foremost.

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Okay, this is the old power curve.

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If this was an exponential trend, as I often talk about, this would be a straight line,

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not this nice, smooth, sustainable line.

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And we're definitely low.

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All right.

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I got this little dip in, 86,600 when I pulled in the model.

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If you just go to the fun ones, let's go to say the 90th percentile.

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All right.

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I did quantiles now, which is a little different.

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I would have the sort of jagged lines in the past sometimes because that was a multiple overrun trend.

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To keep a fixed multiple now, this is a fixed percentile.

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In any event, it's a very similar result.

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So I envisioned somewhere here, Bitcoin jumping above, and then I'd just be talking to my viewers like,

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okay, so let's just expect how many days are we above it here? Let's just think about how many

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days we've been above it, which usually is not more than two to three months, right?

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But that hasn't materialized other than a little bit at the end of last year after the election,

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and then a little bit last summer. But again, when I show these charts, I always caution

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a lot of what the analysts, the technical traders will do on trading view is they're usually thinking

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in straight line and log linear space or exponential growth, which is how typically

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stocks move. And Bitcoin just doesn't do that. So I think whether you're talking about these

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Elliott waves or ABCD corrections, all that stuff, Bitcoin, there's not an established

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method over the long term that it's definitely going to do that because it just does not have

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a straight line uh exponential growth on log scale so anyway if we take it the median the

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50th percentile it's a little bit below the trend uh 40th and then 30th is where we are

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so another way of saying that is based on the power trend which should give everybody a lot of comfort

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the price right now uh has only been this low 30 of the time okay so 6 500 days of bitcoin or

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whatever it is you know 600 days would be 10 so 1800 days something like that you know you can just

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do the rough math it's been at this level of course it can go lower can always go lower but

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But what this can tell us is just the relative risk of where the price is relative to its relationship to the trend in the past.

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And if we go to the lowest levels expected, which would be levels like this back in 2022 with the SBF puking and all the other DeFi scams of that time.

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right now that suggests a lowest lowest level of 57 000 bitcoin by the end of the year

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it'll be a little bit higher of 60 59 000 right the trend itself the overall trend will be 125k

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uh and then getting in the 90th percentile which whether you do it a two different a

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couple different metrics. I think you get like 200k or 250k. Now I have been one of the few people to

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not fully discount four-year cycles simply because we haven't been through it. I know a lot of people

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seem to be keen to make that call. I'm not saying it's definitely not going to be over. So it's kind

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a wimpy call from that side.

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But I just, I don't know.

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The data, you know, the data's not all in yet.

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We haven't even finished the year.

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You never know.

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There could still be a pump.

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And there's just some other interesting little data

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that I could show you that shows at least something

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is happening on chain with some movement of coins.

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So we can look at that as well.

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But yeah, I'll stop there.

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Yeah, I mean, this is a good day to hop on.

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with you. The price is falling.

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Wondering if you're out there,

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particularly if you relatively new I sure you thinking maybe you bought Bitcoin above 100 maybe maybe you bought a little bit at the top at to You thinking gosh what did I do

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What did I do?

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What am I doing?

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Did I get duped by these people?

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This is why we check in with Matthew once a quarter.

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Look at the power trend because nothing is out of whack here.

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Yeah, and it moves fast.

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If you want to know some numbers as far as how this thing goes,

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The trend itself goes up $100 a day, still does.

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All right.

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By the end of the year, the trend will be growing at 42% a year, 42%.

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So you compare that to your stocks, bonds, gold, whatever you want to, JGBs, whatever

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you want to compare it with.

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The trick, the interesting thing, which a lot of people are trying to figure out, including

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myself is there's this interesting, as we have this thing, it's not a straight line, right? Like

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the stock market would be the gold market, which I'll show you in a second. That actually means

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that the rate of growth is declining for Bitcoin ever so slightly. You can find these calculations

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on my website, but it's an interesting phenomenon.

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And well, without getting too deep into it, I think it's possible that Bitcoin could go

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exponential, which means it could turn into a straight line on log scale, which by the way,

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is faster growth. If you just want to go sort of full case or...

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I don't know, you might like exponential growth.

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But the thing is, wrapped inside of exponential growth,

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there's a lot of fiat interest.

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And that's just the nature of the math.

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Mortgages, your car mortgage lines of credit,

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everything in the world is exponential growth.

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And so if Bitcoin starts to take on enough fiat credit behind it,

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maybe Bitcoin itself will be pulled into this exponential growth.

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What I'm hoping though, because this is sort of an idea that I think is like, okay, well, maybe early investors will just have number go up, but the rest of us will be still laden with a lot of debt and there'll be debt, you know, a lot of fiat interests swirling around the lower levels of the Bitcoin system.

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I think a more interesting scenario could be as the world continues to go through these debt crises.

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However, they may play out.

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There's a lot of theories there.

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But however these sort of sovereign debt crises or situations may play out, whether there's excessive inflation or some deflationary crashes, which, as you know, you and I are both inflationists.

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They're always going to print to paper over that.

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But in any event, how this might play out is if the world starts to understand that Bitcoin really is that risk-free asset, and no matter how you want to phrase it, you cannot print Satoshis like you can print dollars, there's a possibility that credit could completely change.

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The whole game of credit could change.

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And so that's what I'm trying to think about right now a lot.

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I talk about this a lot because then you might be in a situation where this nice, beautiful, sustainable power curve of Bitcoin changes the entire TradFi system.

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The entire TradFi system doesn't go into these unsustainable booms and busts, but it more becomes into the sort of gentle growth that mirrors the growth of Bitcoin that you can see with the hash rate or address growth or the growth of the price and market cap itself.

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so that's a little bit you know that's a lot for the start of the episode but that's one of the

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things that i'm thinking about sort of will bitcoin change the system or will bitcoin be changed

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by the system yeah and this is a thread we've been pulling on all year essentially when the power

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trend slope and the exponential slope intersect what what takes over what

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I hope it's the

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I hope it's the

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the Bitcoinization of finance

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and the sort of curbing of

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excess risk taking

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and credit creation

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I'm hopeful that can happen too

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yeah

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but it's going to be a fight

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you know I mean like

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we talk about this all the time

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in crypto Twitter right

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Bitcoin Twitter

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crypto Twitter

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it's like okay

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well we have all these

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you know you have these like

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Ethereum ETFs

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You have a lot of Wall Street chasing a lot of garbage, as they usually do.

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Zcash.

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Zcash.

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It's not good right now.

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Zcash.

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Yes.

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Yes.

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Unfortunately, I don't have any of those saved.

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Hawk into Bitcoin, but when you win some, you lose some.

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um the the idea that wall street can just sort of come in and overtake the bitcoin industry like

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it's overtaken any sort of native nascent industry is of course strong in this you know you started

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out the top of the show talking about what caitlin long's saying what a lot of people in wall street

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are saying and i think still a lot of people in wall street don't even buy into bitcoin right they're

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more interested in AI, not at all asking about the energy consumption of AI versus Bitcoin,

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but that's another story. And the verdicts, the jury's still out on that, obviously. Bitcoin is

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a global thing. It's just not, even though it might be very nicely tailored for some collateralized

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Bitcoin instruments where you can draw on it,

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sort of like you can draw on Manhattan real estate

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and all that stuff.

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Bitcoin is a global system

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that's really outside the purview of any central bank.

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And as long as it doesn't get co-opted by central banks

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like the gold market has done in the last 100 years,

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I think at least that short to midterm manipulation to use that word would be very difficult.

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And probably not even the longterm, as we said, I don't think the longterm, you can manipulate this stuff over the longterm, but they're going to give it a big fight, man.

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They're going to give it a big fight. And, you know, all these people were talking about a year ago, how the Trump administration, I'm curious to hear your thoughts about this.

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like the Trump administration's going to legitimize Bitcoin and crypto.

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It's hard for me to see them legitimizing anything at the moment, Marty,

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but I'd be curious what you think about how –

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I do not think that the nation-state threat to Bitcoin is over yet.

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A lot of people thought it was a year ago.

245
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No, I don't think it is either.

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I think we have some recent actions that would prove that the fight is not over, particularly the samurai plea deal and then sentencing, which was incredibly egregious.

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in terms of the attack on open source developers

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building non-custodial wallet software being punished for that.

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That's not a good sign.

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That's happening in Trump's America.

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And then as it pertains to Trump and his crypto policy,

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I think obviously the two of us are of a certain purview

253
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that Bitcoin is a thing worth focusing on

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And if we're just being objective of the first 10 months, 11 months of 10 months of this administration, it's been unfocused on Bitcoin and more focused on stable coins market structure and potentially.

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creating the foundation to co-op Bitcoin

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by putting strict laws and regulations around it

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and sort of ordaining particular companies

258
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as those are the ones that you're allowed to interact with Bitcoin.

259
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And again, going back to the samurai thing,

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the sort of punishment of those using Bitcoin

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in a self-sovereign fashion and building tools to enable people to do that.

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But yeah, I think we're in a weird spot.

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And actually, I think the way you set that up in terms of

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is Bitcoin going to get co-opted like gold or is it going to break free

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considering the fact that it is this unique beast, this unique tool

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that gives you the ability to do both.

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I think the last six months specifically have been, if you're not paying attention, you probably should be because we've seen this sort of conflict coming to be, whether it's micro strategy, strategy, launching all these preferred offerings, trying to put Bitcoin into these wrappers and provide yield on top of it.

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obviously strategy stock has not been doing well we can get into the theories around jp morgan and

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their attempts to co-opt products like that because they they deem them as a threat but i

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think if you juxtapose sort of those actions with what we've seen from companies like block

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and their square point of sale rollout to really and their aggressive their aggressive campaign to

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make Bitcoin everyday money. I think if you look at public markets and two of the behemoths

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in public markets as it pertains to Bitcoin strategy in block, we're seeing those two

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visions sort of duke it out at that level right now as well. Maybe not even duke it out,

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just simply present two different paths for Bitcoin's future.

276
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Yeah. And it's going to be interesting to see how strong the US really can be in some of these things with this global asset.

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Because I was on a panel in Helsinki with Peter Todd, and I'm back over the summer, and it always revolves back to this sort of political nature versus the sort of economic force that Bitcoin is.

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And Peter was he said this a lot.

279
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You've probably seen him, right?

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You know, he's referenced the cypherpunks in the 90s and the

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code of speech and, you know, the national security issues

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that were surrounding code crossing borders in the 90s and

283
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the US as the sole

284
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hegemon at the time, that was a huge deal.

285
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And it was one that that issue was one in the courts of the US that, that, you know, code was speech to some extent.

286
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And it's not, you know, these national security issues like you could take code across borders.

287
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And the cypherpunks did that.

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On the other hand, so I think there's a lot of.

289
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So what Peter was saying, basically, is at some point it is going to have to be political.

290
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You're going to have to win politically.

291
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But then on the other hand, I think about this a lot.

292
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in that it seems almost bizarre that Bitcoin would have to be deemed legitimate.

293
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At the end of the day, what's it going to come down to?

294
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A Supreme Court ruling over something specific?

295
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It's like five guys in black robes or ladies in black robes deciding that this some Bitcoin ruling is really going to sort of set the policy for Bitcoin.

296
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in the next 50 years.

297
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I think that that's actually less likely,

298
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especially based on the way that the rest

299
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of the geopolitical world is kind of going at the moment.

300
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You know, China's trying to be big in gold

301
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and obviously Russia's a basket case,

302
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which we are dealing with over here.

303
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And the U.S. is having its own new approaches

304
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to geopolitical issues in the Americas, North and South.

305
00:26:01,643 --> 00:26:06,903
So it seems less likely to me that a Supreme Court ruling

306
00:26:06,903 --> 00:26:11,703
would be sort of like the final arbiter of where we go with some of this.

307
00:26:11,822 --> 00:26:15,663
But anyway, starting to philosophize a lot on that,

308
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so we can bring it back to the charts.

309
00:26:17,463 --> 00:26:37,605
So anyway point is 70 of the time will have been higher than this relative to the trend So with some statistical accuracy you can say there a 70 probability that we be higher than this into next year

310
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especially if you don't consider,

311
00:26:42,185 --> 00:26:45,165
or if you consider that we have not had really a blow off top,

312
00:26:45,165 --> 00:26:47,145
which would make it more likely

313
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that we shoot below these levels.

314
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Anything can happen,

315
00:26:50,205 --> 00:26:52,505
but that's sort of how I'm looking at it.

316
00:26:52,505 --> 00:26:59,605
If you look at gold now, all right, so here's gold over the last 50 years on a weekly basis.

317
00:27:01,025 --> 00:27:06,505
And its trend is not as good, but it's an exponential trend, straight line.

318
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See, Bitcoin has this nice curve, right?

319
00:27:08,865 --> 00:27:12,545
Which everybody should know now, by now in log space, log linear.

320
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Gold is a straight line, so it's exponential growth.

321
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And obviously, we're super, super high.

322
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If you do these quantile regressions, which sort of just take every individual level as their own thing and try to run their own trend lines, the worst was in the early 2000s.

323
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And the best is indeed now.

324
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It's relative to the 1980 top.

325
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And relative to the 2011 top, we're creating new highs basically almost every day.

326
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whether this is some real long-term resistance i have no idea but i can tell you one thing

327
00:27:54,885 --> 00:28:01,385
the peter like some peter i've drawn these different trends on my stream like this line

328
00:28:01,385 --> 00:28:06,645
right here if you just like imagine here like the price my mouse is over the b here which it

329
00:28:06,645 --> 00:28:11,245
shouldn't be a b actually just realized with this chart because it's a gold price but uh over the b

330
00:28:11,245 --> 00:28:19,165
it is obviously going super fast from the end of 2023 and

331
00:28:19,165 --> 00:28:28,805
or the end of uh yeah the end of 2023 that's like a 40 percent uh trend line growth a year

332
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40 it's matching bitcoin basically that and you know that that's like a peter shift trend i just

333
00:28:34,645 --> 00:28:40,625
do not imagine that continuing uh in fact you can run all the numbers like it's just it's not

334
00:28:40,625 --> 00:28:45,085
going to continue it could it go for another year too yeah could we get to ten thousand dollar gold

335
00:28:45,085 --> 00:28:53,985
sure but gold just is not on any sort of a trend to reflect you know a hundred thousand dollar gold

336
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or two hundred thousand dollar gold well so yeah does this chart speak to you in terms of the thread

337
00:29:02,185 --> 00:29:10,385
we've been pulling on in terms of bitcoin power trend meeting the exponential growth trend of

338
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credit at some point in the future.

339
00:29:14,345 --> 00:29:16,065
And what happens with this?

340
00:29:16,365 --> 00:29:18,325
So we're looking at gold over the last 50 years.

341
00:29:18,445 --> 00:29:21,525
Obviously, gold, I would imagine in the early days,

342
00:29:21,625 --> 00:29:24,165
millennia ago, it had a power trend adoption

343
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as it was being monetized.

344
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And obviously, it's been fully monetized for

345
00:29:30,205 --> 00:29:32,705
millennia now at this point.

346
00:29:32,705 --> 00:29:35,985
And now that it's on this exponential growth trend,

347
00:29:36,545 --> 00:29:37,805
is that what happened to gold?

348
00:29:37,805 --> 00:29:42,905
it sort of ran into the exponential trend of credit growth

349
00:29:42,905 --> 00:29:46,365
long before Bitcoin.

350
00:29:46,965 --> 00:29:48,805
And this was the end product.

351
00:29:50,805 --> 00:29:52,245
That's an interesting question.

352
00:29:52,345 --> 00:29:53,825
I've never been asked that or thought about that.

353
00:29:56,065 --> 00:29:58,825
I have no idea if gold would have followed a power trend

354
00:29:58,825 --> 00:30:05,805
at the beginning, but I imagine that...

355
00:30:07,805 --> 00:30:25,485
If gold was the general unit of account in silver as well, and we had credit, which is Sydney Homer has said from the history of interest rates credit, which I agree with, you know, credit, credit is long before gold, right?

356
00:30:25,485 --> 00:30:27,665
It can be in primitive societies, advanced societies.

357
00:30:27,765 --> 00:30:28,425
You don't need barter.

358
00:30:28,565 --> 00:30:29,185
You don't need money.

359
00:30:29,425 --> 00:30:40,925
You can promise your uncle the proceeds from the yield from the crop next season if he lets you use his plow or something.

360
00:30:41,125 --> 00:30:42,845
I mean, you can make credit out of anything.

361
00:30:43,445 --> 00:30:46,265
And credit itself by nature has interest.

362
00:30:46,685 --> 00:30:52,785
I would imagine that there would still be some sort of an exponential function always, which, again, makes Bitcoin really, really unique, weird.

363
00:30:52,785 --> 00:30:55,405
Like, I've never seen an asset grow in power.

364
00:30:55,485 --> 00:31:06,705
so that's what i would say there um as far as uh bitcoin's or sorry gold's growth it's really not

365
00:31:06,705 --> 00:31:14,245
that uh exciting which is another funny thing right it's been you know a lot of people say

366
00:31:14,245 --> 00:31:18,945
this number like eight nine percent but that's if you're over the long term of gold that's if

367
00:31:18,945 --> 00:31:28,205
you cherry pick down here, the $35 price, and like now, $4,000 price, then you can get up to

368
00:31:28,205 --> 00:31:32,485
8%, 9%. But that's a cherry picked sort of present future value, as I always try to do.

369
00:31:32,485 --> 00:31:38,505
If you take the long term trend, measure the slope of that, you're at 5.25%, 5%.

370
00:31:38,985 --> 00:31:45,485
So it's actually not even been a great hedge if we consider that the global money supply,

371
00:31:45,485 --> 00:31:53,405
which I also measure and have always measured every quarter for the last eight years, has been

372
00:31:53,405 --> 00:32:00,285
growing at 10% to 12%. 12%, if you think about it more in native terms, 10% in USD terms, it means

373
00:32:00,285 --> 00:32:07,525
the USD accretes 2% over other currencies or other currencies lose 2% relative to the dollar.

374
00:32:07,725 --> 00:32:13,025
On average, it shows the dollar's supremacy. If you think about those rates of growth, then yeah,

375
00:32:13,025 --> 00:32:15,925
Gold is actually not even that great there.

376
00:32:16,745 --> 00:32:18,805
So I would say it doesn't apply.

377
00:32:19,905 --> 00:32:23,825
It's a gold, gold, just it's so wrapped around credit.

378
00:32:24,445 --> 00:32:25,625
Here's the thing with Bitcoin.

379
00:32:26,205 --> 00:32:31,925
Bottom line, if Satoshis are so rare, as rare as we know that they're going to be,

380
00:32:31,985 --> 00:32:37,505
you can look at the supply schedule that how many Satoshis are going to be, you know, minted 50 years from now.

381
00:32:37,685 --> 00:32:39,185
And it's like such a small amount.

382
00:32:39,185 --> 00:32:44,345
credit's going to become

383
00:32:44,345 --> 00:32:45,265
you know

384
00:32:45,265 --> 00:32:46,585
it's

385
00:32:46,585 --> 00:32:49,205
going to be

386
00:32:49,205 --> 00:32:51,965
in my view very difficult to have credit markets

387
00:32:51,965 --> 00:32:52,465
because

388
00:32:52,465 --> 00:32:55,605
holding on to those satoshis

389
00:32:55,605 --> 00:32:57,745
passing them down to your family is going to be a much more

390
00:32:57,745 --> 00:32:59,885
valuable endeavor than just

391
00:32:59,885 --> 00:33:02,025
you know going after a few extra percentage points

392
00:33:02,025 --> 00:33:02,645
on some

393
00:33:02,645 --> 00:33:05,885
short term corporate loan which might

394
00:33:05,885 --> 00:33:07,025
fail right

395
00:33:07,025 --> 00:33:08,305
and

396
00:33:08,305 --> 00:33:11,505
so that's the one thing. Then the other thing is

397
00:33:11,505 --> 00:33:16,565
it's just how long can this fiat game keep going?

398
00:33:18,145 --> 00:33:21,425
I think it can actually keep going for a long, long time and I can show you lots of charts

399
00:33:21,425 --> 00:33:25,165
that will sort of reflect that.

400
00:33:26,065 --> 00:33:28,845
But I have a hard time, unless it's

401
00:33:28,845 --> 00:33:32,905
full, this is where unless we sort of lose the legislative or the political

402
00:33:32,905 --> 00:33:34,665
battle, like unless

403
00:33:34,665 --> 00:33:42,305
everyone is literally sort of at the you know in a financial panopticon at the

404
00:33:42,305 --> 00:33:48,905
wind of a gun forced to use fiat currency for the next 80 years and again that's going to happen for

405
00:33:48,905 --> 00:33:53,425
a while you know next 10 20 years that's going to start to be a question mark when there's

406
00:33:53,425 --> 00:34:01,345
you know bitcoin starts to become so huge uh i think it's gonna be hard you know everything that

407
00:34:01,345 --> 00:34:05,145
You've always talked about on your show is basically what I'm describing here in mathematical terms.

408
00:34:05,625 --> 00:34:11,285
It's going to be hard to issue more and more debt to raise money for your armies and militaries.

409
00:34:11,345 --> 00:34:14,565
It's going to be hard to issue more and more debt for your welfare programs.

410
00:34:16,325 --> 00:34:18,445
Bitcoin is what you're going to be fighting for.

411
00:34:18,765 --> 00:34:19,905
Everybody's going to be fighting for.

412
00:34:20,845 --> 00:34:25,885
And Bitcoin doesn't mix well with exponential growth.

413
00:34:26,185 --> 00:34:28,745
It's a limited sustainable growth pattern.

414
00:34:28,745 --> 00:34:35,145
And it's just doesn't, you know, it's hard to wrap your mind around this idea.

415
00:34:35,145 --> 00:34:50,985
But, you know, if credit, if debt, if interest represents something that can take off, can gallop exponentially and cause a lot of these booms and busts, Bitcoin by its nature, and we've seen this in the math, does not do that.

416
00:34:52,105 --> 00:34:54,445
Even in dollar terms, which is wild.

417
00:34:54,445 --> 00:35:02,405
so i have a hard time seeing that it might do that in the future i can serve charts on this

418
00:35:02,405 --> 00:35:07,905
as well to make it more concrete like as far as bitcoin continue to grow as power versus maybe

419
00:35:07,905 --> 00:35:15,505
growing exponential we can look at those but the general idea is yeah i think a more uh just and

420
00:35:15,505 --> 00:35:22,985
exciting future for everybody would be if we're not all forced to use these fiat units

421
00:35:22,985 --> 00:35:36,505
And then the powers that be understand that they need to accumulate Bitcoin for their war chests and their treasury chests more than having the right to print money.

422
00:35:37,785 --> 00:35:39,405
So it's going to be crazy.

423
00:35:39,905 --> 00:35:43,405
Next 20 years is when you're going to start to really, the rubber is going to hit the road.

424
00:35:43,405 --> 00:35:53,825
That's where Bitcoin is going to be large enough to meet the level of the U.S. debt or the monetary base or a lot of these other things in the TradFi system.

425
00:35:55,905 --> 00:35:56,425
Yeah.

426
00:35:58,085 --> 00:36:03,145
Well, bring it back to, I mean, you mentioned on-chain data that you've seen.

427
00:36:04,105 --> 00:36:06,405
What are we seeing?

428
00:36:07,905 --> 00:36:09,145
There's some hot waves.

429
00:36:09,145 --> 00:36:16,465
This is a great site, by the way. It's ResearchBitcoin. People don't know about it.

430
00:36:18,465 --> 00:36:24,225
You can get most of the data for free, a little bit for some of the extra data, but these are

431
00:36:24,225 --> 00:36:31,045
all the different HODL waves, right? So generally, as people HODL, you'll see longer and longer,

432
00:36:32,245 --> 00:36:38,405
more darker, purpley, blue-colored waves here. Every once in a while, though, you'll see those

433
00:36:38,405 --> 00:36:44,825
waves shrink like we did here July 4th. Someone sent like 84,000 bitcoins to Gemini, right?

434
00:36:45,425 --> 00:36:53,045
Actually, this deep 10-year hodling wave shrank. Anyway, if you take out the longer-term waves and

435
00:36:53,045 --> 00:37:02,105
you just cap it at a year, we are seeing some little bit of short-term UTXOs growing, which

436
00:37:02,105 --> 00:37:05,545
typically have been around booms, right?

437
00:37:06,385 --> 00:37:08,545
That takes time. It could take a year.

438
00:37:10,285 --> 00:37:13,765
But you see it happen here, you see it happen here, you see it happen here.

439
00:37:14,685 --> 00:37:17,125
And of course, we've had this long boom, right?

440
00:37:18,125 --> 00:37:21,985
With the three distinct tops here since the ETFs were

441
00:37:21,985 --> 00:37:25,225
approved. But there was an interesting notable jump here

442
00:37:25,225 --> 00:37:28,485
over the last couple of days.

443
00:37:28,485 --> 00:37:37,785
again i'm not i'm not saying but the farm on it but as the utxos are destroyed on the longer side

444
00:37:37,785 --> 00:37:46,985
and uh created on the shorter side that sometimes means some excess hype in the markets for price

445
00:37:46,985 --> 00:37:56,425
well in fact all the times means that when we go really extended and we're you know you can see we

446
00:37:56,425 --> 00:38:00,505
had three sort of two booms in the last one and even during this last price

447
00:38:00,505 --> 00:38:11,745
can you hear me yeah all right sorry uh and even during this last uh price spike in august of 2025

448
00:38:11,745 --> 00:38:21,885
we did not have as much of a sort of a boom in the short term uh utxos but now we are which is

449
00:38:21,885 --> 00:38:29,525
interesting with this deep discount where we got down to you know 80 85k intraday i think intraday

450
00:38:29,525 --> 00:38:36,545
was even 80 right i don't think i picked it up on the daily 85 but so there's something

451
00:38:36,545 --> 00:38:44,505
so we're gonna pump in the end going straight to the to the 90th percentile

452
00:38:44,505 --> 00:38:52,065
it's uh it's probably too early too early to tell uh you know i was talking to james

453
00:38:52,065 --> 00:38:58,305
check matey a couple weeks ago and he was trying to you know he's very good at reading the on

454
00:38:58,305 --> 00:39:02,905
chain data he's like probably shouldn't say it but it kind of looks like a dip and uh

455
00:39:04,025 --> 00:39:09,545
it turned out to be a deep dip if it still is just a dip you know to be seen but

456
00:39:09,545 --> 00:39:11,885
there is a noticeable jump

457
00:39:11,885 --> 00:39:13,165
in

458
00:39:13,165 --> 00:39:15,925
short-term

459
00:39:15,925 --> 00:39:17,905
UTXOs. And if that

460
00:39:17,905 --> 00:39:20,145
spike in short-term

461
00:39:20,145 --> 00:39:21,225
UTXOs gets

462
00:39:21,225 --> 00:39:24,165
sort of proportionately high

463
00:39:24,165 --> 00:39:25,725
relative to the other UTXOs,

464
00:39:25,985 --> 00:39:28,145
then you

465
00:39:28,145 --> 00:39:30,125
always see the price pump.

466
00:39:30,565 --> 00:39:30,645
Yeah.

467
00:39:31,985 --> 00:39:32,405
So,

468
00:39:33,565 --> 00:39:35,805
look,

469
00:39:36,765 --> 00:39:38,125
do I have to give my Midwest

470
00:39:38,125 --> 00:39:49,207
caveat of not financial advice I never going to give you that I never never going to say bet the farm We pumping to the 90th percentile but it fun to look at right

471
00:39:49,347 --> 00:39:49,487
Yeah.

472
00:39:49,487 --> 00:39:50,487
It's fun to look at this data.

473
00:39:50,727 --> 00:39:53,688
It's fun to look at all of it. Well, and that's the other thing I think

474
00:39:53,688 --> 00:40:00,547
I've been trying to really wrap my head around too, is like, what's going on in the incumbent

475
00:40:00,547 --> 00:40:06,287
fiat system? Like, what's your read on what's going on here in the United States? What's

476
00:40:06,287 --> 00:40:12,507
happening broadly with these geopolitical tensions increasing obviously we talked about the japanese

477
00:40:12,507 --> 00:40:19,887
bond yield blowing out earlier it seems like we're at this point and i don't know if you've

478
00:40:19,887 --> 00:40:27,027
been following the tea leaves of like deep economic prognostic not prognosticating but

479
00:40:27,027 --> 00:40:32,067
people trying to read what besant and trump are doing at the treasury and what they're trying to

480
00:40:32,067 --> 00:40:37,207
do at the Fed. And there's a lot of talk about this needle threading that they're attempting to

481
00:40:37,207 --> 00:40:47,107
do with tariffs, reshoring manufacturing, weakening the dollar, and trying to make sure that we can

482
00:40:47,107 --> 00:40:53,087
get it on the other side and still have a sense of dominance, particularly in the realm of

483
00:40:53,087 --> 00:41:01,887
monetary economics. And I think we're just in a really weird inflection point as it pertains

484
00:41:01,887 --> 00:41:06,767
to geopolitics and its effects on macroeconomics?

485
00:41:06,767 --> 00:41:10,367
Yeah, two things I would say.

486
00:41:10,367 --> 00:41:11,427
Two things come to mind.

487
00:41:11,427 --> 00:41:16,148
The first one, to be a little bit redundant on purpose, what I just talked about at the

488
00:41:16,148 --> 00:41:24,007
top of the show, take comfort in the fact that we have a very unique trend for Bitcoin.

489
00:41:24,007 --> 00:41:28,487
That, you know, look, I've been on this trend, you know, the bleeding edge of this trend

490
00:41:28,487 --> 00:41:30,867
since the beginning.

491
00:41:30,867 --> 00:41:36,867
a lot of wacky characters in the space of the in bitcoin in general but you know the people talking

492
00:41:36,867 --> 00:41:43,347
about different trends and you know we've had stock to flow projections and all this stuff

493
00:41:44,307 --> 00:41:52,948
i've been following this for seven years the the power curve itself what's your 2025 yeah and 2018

494
00:41:52,948 --> 00:41:58,067
i first did it so the giovanni character uh he's big into it he's a little bit ahead of me

495
00:41:58,067 --> 00:42:06,707
but no matter how you you know follow people in this space in this in this space everybody's very

496
00:42:06,707 --> 00:42:15,987
passionate let's say and what i can tell you trying to be you know mostly understated with

497
00:42:15,987 --> 00:42:23,607
some disclaimers as i usually do uh i'm highly confident that the power curve itself is

498
00:42:23,607 --> 00:42:29,827
it's it's like one of the main drivers of growth and it's the reason you know i was on danny's show

499
00:42:29,827 --> 00:42:35,747
recently talked about it the reason is this is how networks grow there's a lot of this is you know

500
00:42:35,747 --> 00:42:42,827
there's a lot of research to suggest that organisms grow this way you know uh i talked about this on

501
00:42:42,827 --> 00:42:49,387
my uh talk uh sort of my summer circuit when we're talking about growth rates and stuff like

502
00:42:49,387 --> 00:42:54,468
this might have been a jeffrey west book as well scale which is a great read

503
00:42:54,468 --> 00:43:00,707
like something like godzilla that would be an exponential growth type animal all right it would

504
00:43:00,707 --> 00:43:05,648
like it's a massive thing it would need like a mountain of food and by the way it would just

505
00:43:05,648 --> 00:43:11,367
collapse on itself it's just not possible sort of in nature but what we see in nature is you have

506
00:43:11,367 --> 00:43:16,487
this nice relationship with proportional relationship with the way organisms grow like

507
00:43:16,487 --> 00:43:21,067
pretty much all mammals. Sometimes people take it to the whale size until they get to an elephant

508
00:43:21,067 --> 00:43:29,107
size. But they need actually a proportionately less food as they get bigger. But they also,

509
00:43:29,107 --> 00:43:34,107
they don't grow to Godzilla size. This is proportionate growth. And if you

510
00:43:34,107 --> 00:43:40,127
charted that, sort of calories and size on log-log scale, you'd see a nice beautiful straight line.

511
00:43:40,367 --> 00:43:46,367
You see it with networks, right? You see a few large nodes take a ton of connections,

512
00:43:46,487 --> 00:43:53,648
and a bunch of small nodes take few connections. It's 80-20 rules, basically. It's a power law.

513
00:43:54,487 --> 00:43:59,707
There's power curves everywhere, but to see it in Bitcoin is really, really wild.

514
00:44:00,188 --> 00:44:05,847
And so again, take comfort in that because you don't see it in the growth of gold. You don't

515
00:44:05,847 --> 00:44:10,047
see it in the growth of the S&P. You don't see it in the growth of stocks. Let me show you this.

516
00:44:10,047 --> 00:44:16,787
this is the top eight tech stocks in the world same thing now this is a very fast r squared by

517
00:44:16,787 --> 00:44:25,248
the way and uh you know big drops it can go from this is you know this is all the like this is apple

518
00:44:25,248 --> 00:44:31,507
microsoft google uh top eight stocks got broadcom in there as well as now a big one with the chip

519
00:44:31,507 --> 00:44:38,688
chip race but you know they were 11 trillion dollars the top eight tech stocks in the u.s

520
00:44:38,688 --> 00:44:47,707
in 2021 fell down to 6.8 by 2023 then the ai boom started just like gold they've had 40 growth by

521
00:44:47,707 --> 00:44:56,267
the way with like a huge 30 uh well not 30 maybe 15 percent drop yeah during during liberation day

522
00:44:56,267 --> 00:45:06,188
liberation day my favorite day of the year now it's hilarious 13 goes down to 13.9 trillion now

523
00:45:06,188 --> 00:45:12,907
all of a sudden back up to 22.8 that's volatility that's volatility and this is a uh this is an

524
00:45:12,907 --> 00:45:17,707
exponential curve actually one of the best performing uh if you if you just track these

525
00:45:17,707 --> 00:45:24,668
eight stocks so sometimes exponential growth can help you sometimes it can hurt you with inflation

526
00:45:24,668 --> 00:45:29,227
but it's it's a very volatile volatile thing but the fact that bitcoin is not growing that way is

527
00:45:29,227 --> 00:45:37,027
very important, very interesting. The next thing that I would show you is this chart. Remember this

528
00:45:37,027 --> 00:45:45,487
one? I always show this guy. Yes, yes, yes. This is long-term debt of the United States.

529
00:45:46,527 --> 00:45:52,688
And again, having in mind what I just said about how the nature of Bitcoin is something to take

530
00:45:52,688 --> 00:45:57,587
comfort in itself, here's the nature of debt in the history of the United States itself.

531
00:45:57,587 --> 00:46:06,867
it grows, grows at 7% or so doubles every 10 years. It's actually growing even slower in recent years,

532
00:46:07,127 --> 00:46:11,067
surprisingly, compared to where it's growing, say, just after the Bush years. But anyway,

533
00:46:11,967 --> 00:46:21,507
we have overlaid with this is the central bank holdings of US debt. You see it peaked in like

534
00:46:21,507 --> 00:46:27,127
18% at the end of the Vietnam War. And it went down, but it was actually going down because

535
00:46:27,127 --> 00:46:32,168
debt was growing faster than central bank holdings then you had the crisis this big dip was a wall

536
00:46:32,168 --> 00:46:38,087
street bailout they swapped corporate bonds for treasury bonds on the balance sheet for a time

537
00:46:38,087 --> 00:46:46,567
then they gave everybody guarantees and they went back then they'd q123 drop big uh taper tantrum

538
00:46:46,567 --> 00:46:53,207
repo spike in september 2019 before the madness of 2020 then the madness of 2020 and now we're down

539
00:46:53,207 --> 00:46:56,967
So where does that leave us today? November 2025, the Federal Reserve

540
00:46:58,007 --> 00:47:06,887
held $6.2 trillion in treasuries. $38.3 trillion have been issued. All right, so that's 16%.

541
00:47:08,807 --> 00:47:15,527
Where have they been at the max? Well, during the crazy season, November 2021, they max it out at 28.3%.

542
00:47:16,407 --> 00:47:21,847
So by my count, that's over 12 points, 12 percentage points that they could go.

543
00:47:21,847 --> 00:47:28,668
So, all right, it's not a full double, but basically, the Fed could double what they

544
00:47:28,668 --> 00:47:39,507
have held in the past and still proportionately not be bigger than the highest inflation they've

545
00:47:39,507 --> 00:47:40,547
ever had on their balance sheet.

546
00:47:41,027 --> 00:47:41,987
Now, would they want to do that?

547
00:47:42,567 --> 00:47:43,367
Probably not.

548
00:47:43,507 --> 00:47:44,727
Certainly not all at once.

549
00:47:45,267 --> 00:47:51,827
But we know that we're going to get a very dovish Federal Reserve Chairman in soon.

550
00:47:51,847 --> 00:47:59,287
And anyway, anybody who casually follows economics knows that the Federal Reserve, no matter how much they say it's independent, it's not independent.

551
00:48:00,307 --> 00:48:07,748
The president will always get the interest rates that they want eventually, no matter the president, Democrat, Republican.

552
00:48:08,668 --> 00:48:11,948
So it's part of the course as far as I'm concerned.

553
00:48:12,188 --> 00:48:16,787
And look, they have a lot of room to go higher if they want to go higher.

554
00:48:16,787 --> 00:48:20,787
No matter all the noise, all the talk, you just look at this chart.

555
00:48:20,787 --> 00:48:23,027
I'm not saying it's a good thing, by the way.

556
00:48:23,047 --> 00:48:24,967
I'm not defending the actions,

557
00:48:25,387 --> 00:48:30,248
but they have a lot of room to inflate.

558
00:48:31,188 --> 00:48:32,007
I mean, at the very least,

559
00:48:32,047 --> 00:48:35,948
it would not be unprecedented if they did inflate

560
00:48:35,948 --> 00:48:38,387
and go back to all-time highs from here,

561
00:48:38,567 --> 00:48:42,307
which is like eyeballing the chart pre-2008.

562
00:48:43,767 --> 00:48:46,168
Like well before that dip pre-2008,

563
00:48:46,168 --> 00:48:49,168
they were 10%, 9%.

564
00:48:49,168 --> 00:48:51,727
We're hovering at 16 now.

565
00:48:53,927 --> 00:48:57,067
It's an interesting history of the United States right here all in one chart.

566
00:48:59,168 --> 00:49:02,867
Federal Reserve was not really involved in the funding of World War I.

567
00:49:02,967 --> 00:49:05,507
You see they had less than 1% of government bonds.

568
00:49:07,188 --> 00:49:08,248
It was more like J.P. Morgan.

569
00:49:08,668 --> 00:49:09,787
Private bankers were doing that.

570
00:49:10,207 --> 00:49:14,327
They did become involved after the Great Depression or during the Great Depression

571
00:49:14,327 --> 00:49:18,007
and as well during World War II.

572
00:49:18,007 --> 00:49:20,948
and much more during Vietnam, actually.

573
00:49:22,567 --> 00:49:24,067
And then much more after the crisis.

574
00:49:24,367 --> 00:49:30,487
But there's no start date or end date to this stuff.

575
00:49:30,587 --> 00:49:34,347
They're just going to continue to print

576
00:49:34,347 --> 00:49:36,688
and to try to hold on to their power.

577
00:49:37,347 --> 00:49:37,467
Yeah.

578
00:49:37,847 --> 00:49:40,887
So that's what we can expect.

579
00:49:40,887 --> 00:49:44,227
Can you overlay the percentage of holdings of followers?

580
00:49:45,967 --> 00:49:46,487
Sure.

581
00:49:46,487 --> 00:49:48,748
this one hasn't been up to

582
00:49:48,748 --> 00:49:50,807
this might not be exactly correct

583
00:49:50,807 --> 00:49:52,887
in the last couple months but basically it goes

584
00:49:52,887 --> 00:49:53,248
down

585
00:49:53,248 --> 00:49:56,887
and that's a problem

586
00:49:56,887 --> 00:49:58,867
for Besson he wants

587
00:49:58,867 --> 00:50:00,367
more foreigners for sure

588
00:50:00,367 --> 00:50:02,127
and

589
00:50:02,127 --> 00:50:03,527
it's going down

590
00:50:03,527 --> 00:50:06,948
foreigners used to hold

591
00:50:06,948 --> 00:50:08,407
maybe 35% of the debt

592
00:50:08,407 --> 00:50:10,448
at the peak

593
00:50:10,448 --> 00:50:12,107
and now they're down somewhere to

594
00:50:12,107 --> 00:50:14,707
22

595
00:50:14,707 --> 00:50:15,688
23

596
00:50:15,688 --> 00:50:19,567
this might even be a little bit lower i haven't updated this in

597
00:50:19,567 --> 00:50:25,688
a couple months it's some something like this do you buy into the theory that the genius act

598
00:50:25,688 --> 00:50:29,727
was a way to get this like would tether be considered a foreign holder

599
00:50:29,727 --> 00:50:38,367
i don't buy into the theory of any of that at all yeah uh it's what was the market cap of

600
00:50:38,367 --> 00:50:46,127
stable coins 180 billion i think right now yeah the repo market itself is by my count seven

601
00:50:46,127 --> 00:50:54,267
trillion i've heard higher uh it's not very um clearly stated but i can show you the old

602
00:50:54,267 --> 00:51:07,707
yeah tether's money supply there's 184.6 billion usdc 76.5 billion right growing growing but here's

603
00:51:07,707 --> 00:51:14,107
old total money supply of the united states all right calculated by yours truly federal reserve

604
00:51:14,107 --> 00:51:20,188
has not calculated m3 since 2006 so you actually have to go back into the numbers most of the data

605
00:51:20,188 --> 00:51:28,107
is still there but it's hard to sort of parse through and euro dollars are not there so this

606
00:51:28,107 --> 00:51:35,067
is even bigger than it shows so it's a little bit conservative here but the most analogous

607
00:51:35,067 --> 00:51:40,507
buckets of money that will fit into stable coins are these buckets right here, which is part of

608
00:51:41,387 --> 00:51:46,107
M2 and M3. By the way, what's the difference between M2 and M3, Marty?

609
00:51:47,627 --> 00:51:59,148
Uh, M2 and M3. M3 gets into credit, right? It's a common, you know, how many Twitter charts have

610
00:51:59,148 --> 00:52:03,407
you see of Bitcoin lagging M2's money production.

611
00:52:03,767 --> 00:52:04,327
Too many.

612
00:52:04,567 --> 00:52:05,047
Clairvoyt.

613
00:52:05,987 --> 00:52:06,507
Yeah.

614
00:52:07,248 --> 00:52:09,587
First of all, Bitcoin is not comparable to M2, folks.

615
00:52:09,867 --> 00:52:10,507
It's M2.

616
00:52:10,668 --> 00:52:16,307
The difference between M2 and M3 is M2 is less regulated retail deposits.

617
00:52:16,607 --> 00:52:20,267
M3 is less regulated institutional deposits.

618
00:52:20,547 --> 00:52:20,847
There we go.

619
00:52:20,927 --> 00:52:22,327
And by the way, what's the hottest money?

620
00:52:22,948 --> 00:52:23,387
Institutional.

621
00:52:24,047 --> 00:52:27,547
So why in the hell would Bitcoin be anything related to M2?

622
00:52:27,547 --> 00:52:34,948
M2 is a retail type money supply. It does not include the hot money.

623
00:52:36,467 --> 00:52:43,267
It's basic stuff. And again, I can forgive plenty of people for being confused on this,

624
00:52:43,327 --> 00:52:46,867
because the Federal Reserve themselves have not published M3 since 2006.

625
00:52:47,648 --> 00:52:50,927
So you got to go through these numbers. You got to sort of figure it out. But my account,

626
00:52:50,927 --> 00:52:58,787
The hottest money right now is $7 trillion in all-out repurchase agreements on the

627
00:52:58,824 --> 00:53:11,044
Bank and shadow bank side, $5.3 trillion in money market funds for institutional and $2.1 trillion in retail money market funds.

628
00:53:11,104 --> 00:53:12,364
You put those two together, obviously, it's seven.

629
00:53:12,464 --> 00:53:14,224
So seven and seven, $14 trillion.

630
00:53:16,344 --> 00:53:17,664
$14 trillion.

631
00:53:17,664 --> 00:53:26,504
probably not mostly you know this is the instrument itself but probably 14 2. trillion is

632
00:53:26,504 --> 00:53:33,904
us and some foreign holders mixed in there it's not just you know but this is that's the biggest

633
00:53:33,904 --> 00:53:40,884
holders of treasuries right there if these these instruments and so i don't i don't see any like

634
00:53:40,884 --> 00:53:45,744
tomorrow fix for sort of a lack in demand for treasuries, if there is one,

635
00:53:46,424 --> 00:53:52,024
coming from stablecoins. I mean, it's a drop in the bucket compared to these markets.

636
00:53:52,344 --> 00:53:56,024
It's $14 trillion compared to $200 billion in stablecoins.

637
00:53:56,424 --> 00:53:58,964
Hey, $250 billion. Okay, they're picking up.

638
00:53:58,964 --> 00:54:04,564
Yes, yes. Look, it's going to grow. It's going to grow, no doubt. But none of this stuff is...

639
00:54:04,564 --> 00:54:12,244
Trump definitely wants a bite of Lutnik's Cantor earnings.

640
00:54:12,684 --> 00:54:14,424
Everybody knows there's a great business.

641
00:54:14,504 --> 00:54:15,004
Don't get me wrong.

642
00:54:15,064 --> 00:54:16,304
It's all great stuff for them.

643
00:54:18,244 --> 00:54:22,544
Clean, just collect that interest and issue the token.

644
00:54:24,084 --> 00:54:25,344
But that's a money market fund.

645
00:54:25,404 --> 00:54:29,304
It's going to take a long time for that stuff to revolve into stable coins.

646
00:54:29,304 --> 00:54:31,164
And it probably is going to come, but it's just not.

647
00:54:32,064 --> 00:54:33,124
Structurally, it's not even there.

648
00:54:33,124 --> 00:54:37,224
It's like when I show you the chart of Fedwire versus Bitcoin, right?

649
00:54:37,344 --> 00:54:37,784
Remember that?

650
00:54:37,964 --> 00:54:38,944
I can pull that up if you want to see it.

651
00:54:38,964 --> 00:54:40,224
Yeah, well, that's one of my favorite charts.

652
00:54:41,384 --> 00:54:45,204
So I guess I was loosely correct when I said M3 is when you get into credit instruments.

653
00:54:45,384 --> 00:54:53,164
It's when you have all these repo, money market funds, retail market funds, buying bonds, which are credit instruments.

654
00:54:54,144 --> 00:54:54,924
Sure, yeah.

655
00:54:55,124 --> 00:55:02,724
But to be strict on what I'm counting here, it's actually you're just counting liabilities of financial institutions and banks.

656
00:55:02,724 --> 00:55:03,544
That's how you count money.

657
00:55:03,784 --> 00:55:03,924
Yeah.

658
00:55:04,164 --> 00:55:05,184
So it's just liabilities.

659
00:55:05,624 --> 00:55:10,604
And what they buy on the other side is not specifically stated in the money supply.

660
00:55:10,924 --> 00:55:13,804
That's why I said it's probably mostly treasuries, but not always.

661
00:55:14,844 --> 00:55:19,824
But if you want to talk about the hottest, fastest money that's chasing U.S. government

662
00:55:19,824 --> 00:55:21,404
bonds, it's here.

663
00:55:22,644 --> 00:55:24,504
And this is not part of M2.

664
00:55:25,464 --> 00:55:28,804
Well, retail money market funds are, but institutional money market funds and re-burchase

665
00:55:28,804 --> 00:55:29,604
agreements are in M3.

666
00:55:29,604 --> 00:55:36,344
So again, it's kind of a nitpicky thing, but that's important for people to think about.

667
00:55:36,504 --> 00:55:39,184
All right, this one, what have I, I haven't actually, it doesn't really matter.

668
00:55:39,284 --> 00:55:47,604
I haven't updated this one since August, but here's the old Fedwire.

669
00:55:48,304 --> 00:55:50,724
This is again why, you know, just relax.

670
00:55:51,224 --> 00:55:53,304
Bitcoin's got some time here.

671
00:55:53,304 --> 00:56:02,424
we have 1.1 quadrillion dollars that goes through fedwire a year and bitcoin as of august

672
00:56:02,424 --> 00:56:08,604
uh four and actually that actually looks even wrong i think something happened on my back end

673
00:56:08,604 --> 00:56:14,924
i think it's seven but it doesn't really matter one of those uh is close enough

674
00:56:14,924 --> 00:56:18,584
it's just orders of magnitude difference

675
00:56:18,584 --> 00:56:25,584
actually yeah something happened on my back end that's why i don't have this up on my site yet

676
00:56:25,584 --> 00:56:29,864
it's it's it's like seven seven trillion i don't know why this is showing four now so the black

677
00:56:29,864 --> 00:56:34,044
line is slightly better down a little bit yeah black line will be down better but it doesn't

678
00:56:34,044 --> 00:56:39,884
really matter for the it illustrates the point i mean in the black line uh for people both

679
00:56:39,884 --> 00:56:44,584
watching the video and listening at home they can't see the black line it is on a consistent

680
00:56:44,584 --> 00:56:48,304
trend down into the right as time goes on.

681
00:56:48,424 --> 00:56:51,964
And what it's measuring is the sort of ratio

682
00:56:51,964 --> 00:56:56,524
of Fedwire transfers to Bitcoin network

683
00:56:56,524 --> 00:56:58,924
transfers. That means that Bitcoin is

684
00:56:58,924 --> 00:57:04,064
growing in prominence. When that gets to one,

685
00:57:04,564 --> 00:57:08,884
then Bitcoin will be competing, you know, apples to apples

686
00:57:08,884 --> 00:57:11,824
with Fedwire. Yeah. So we're not,

687
00:57:11,824 --> 00:57:16,824
I think starting like 2010 on the black line.

688
00:57:17,484 --> 00:57:18,664
Yeah, I could just take this off.

689
00:57:19,724 --> 00:57:20,944
Something happened on my back end.

690
00:57:21,064 --> 00:57:23,564
This is partly right, but I don't know what happened just here.

691
00:57:23,624 --> 00:57:24,644
But anyway, it doesn't really matter.

692
00:57:26,204 --> 00:57:28,684
The best, we're actually not even at the best.

693
00:57:29,264 --> 00:57:30,824
Say it's seven right now.

694
00:57:31,724 --> 00:57:35,524
The best that Bitcoin did on a trailing 12-month basis was 18 trillion.

695
00:57:36,524 --> 00:57:40,944
18 trillion, which would have been at the time 57 times.

696
00:57:41,824 --> 00:57:45,344
smaller, or Fedwire, more appropriately stated,

697
00:57:45,464 --> 00:57:48,944
Fedwire within 57 times larger than Bitcoin, which is good.

698
00:57:49,124 --> 00:57:52,504
I mean, that's a great run by Bitcoin.

699
00:57:52,644 --> 00:57:56,444
But still, if you just look at this simply with your eyes

700
00:57:56,444 --> 00:58:00,524
and you see how huge the dollar network is, it's massive.

701
00:58:01,344 --> 00:58:04,944
And you got to think about how day-to-day, block-to-block,

702
00:58:04,944 --> 00:58:10,964
how much time this is going to take to accrete, right?

703
00:58:10,964 --> 00:58:12,544
for Bitcoin to accrete in value.

704
00:58:12,624 --> 00:58:13,404
It's going to take time.

705
00:58:14,144 --> 00:58:15,204
It's not going to take forever,

706
00:58:15,544 --> 00:58:19,144
but we're on the sort of 10 to 20 year track

707
00:58:19,144 --> 00:58:21,744
when we're going to meet a lot of these levels,

708
00:58:21,884 --> 00:58:25,304
both in terms of volume and in terms of value.

709
00:58:26,864 --> 00:58:26,964
Yeah.

710
00:58:27,564 --> 00:58:29,104
I mean, if you put the black line too,

711
00:58:29,184 --> 00:58:30,184
just to put it in context,

712
00:58:30,184 --> 00:58:34,564
in 2010, 2011, Fedwire was more than a million times.

713
00:58:34,564 --> 00:58:47,324
or excuse me more than 250 000 times yeah we get to no 2011 may uh which was very close to a

714
00:58:47,324 --> 00:58:51,724
peak in bitcoin right i could probably zoom into june

715
00:58:51,724 --> 00:58:59,444
june was a peak 420 000 the month before 5 million

716
00:58:59,444 --> 00:59:08,464
so uh and these are correct by the way so so it's uh you know it can be growing very fast at times

717
00:59:08,464 --> 00:59:16,464
for sure but this is a massive network with a lot of guns behind it and it's going to take time

718
00:59:17,144 --> 00:59:19,404
yeah

719
00:59:19,404 --> 00:59:28,084
uh let me show you this one so we talked about bitcoin we talked about tech stocks

720
00:59:28,084 --> 00:59:32,044
let's look at Bitcoin market cap in terms of tech stocks.

721
00:59:33,564 --> 00:59:34,984
This is another interesting thing.

722
00:59:35,044 --> 00:59:36,204
So this is also a power curve,

723
00:59:36,664 --> 00:59:39,124
nice, beautiful curve line on log scale.

724
00:59:39,124 --> 00:59:44,024
But what is sort of interesting is Bitcoin has fallen off it

725
00:59:44,024 --> 00:59:46,884
since it's been coming down in 2022

726
00:59:46,884 --> 00:59:51,964
because AI has been growing so massively,

727
00:59:52,184 --> 00:59:53,404
specifically during this time.

728
00:59:54,784 --> 00:59:56,424
So if we draw some percentiles,

729
00:59:56,424 --> 01:00:00,844
you will see we are putting in new lows basically every day

730
01:00:00,844 --> 01:00:06,684
which is wild so again depending on how you want to look at this depending on how

731
01:00:06,684 --> 01:00:12,564
an investor might look at this especially if they are in if they are coming at this from the lens

732
01:00:12,564 --> 01:00:19,144
of being a tech ai investor which there are a lot of those for bitcoin bitcoin is getting cheaper

733
01:00:19,144 --> 01:00:25,024
every day compared to the top eight tech stocks now again you could argue some of that's justified

734
01:00:25,024 --> 01:00:30,244
AI is an amazing tool. It's going to take the cost down for a lot of things

735
01:00:30,244 --> 01:00:38,184
and the market cap up for certain companies. But Bitcoin itself

736
01:00:38,184 --> 01:00:46,704
is a more amazing tool, as we know. So it's getting very cheap for tech investors

737
01:00:46,704 --> 01:00:52,644
looking at Bitcoin. If you had all eight stocks and you were just sort of looking at maybe

738
01:00:52,644 --> 01:00:58,604
rebalancing, getting very, very cheap. It's basically putting in new lows every day.

739
01:01:01,504 --> 01:01:05,384
Yeah, which is wild. Now let's look at Bitcoin in terms of gold.

740
01:01:06,524 --> 01:01:12,124
Same thing. The power curve dominates. It's still a 95% R-squared. But similarly, this run,

741
01:01:12,124 --> 01:01:17,404
since gold has also had, just like tech stocks from 2023, 40% growth since 2023.

742
01:01:17,404 --> 01:01:24,744
you know very if you're a gold investor now looking at bitcoin you are at

743
01:01:24,744 --> 01:01:29,424
almost as far as the quantile model goes

744
01:01:29,424 --> 01:01:32,804
all-time lows

745
01:01:32,804 --> 01:01:41,364
it's relatively cheap right now it's relatively cheap right now 20 20 ounces of gold per bitcoin

746
01:01:41,364 --> 01:01:47,324
And I would also caution here, which I think is very wild.

747
01:01:48,584 --> 01:01:52,764
So 20 ounces of gold per Bitcoin, that's like setting a new low on the quantile model.

748
01:01:53,624 --> 01:02:01,284
But go back even here, where Bitcoin didn't get, in terms of gold,

749
01:02:01,924 --> 01:02:05,544
was not at the zero with percentile, was definitely under the 10th.

750
01:02:05,844 --> 01:02:08,204
It's probably around the 5th or something of all time.

751
01:02:08,204 --> 01:02:20,304
the price of bitcoin at the time was nine ounces of gold so three years ago bitcoin was still

752
01:02:20,304 --> 01:02:28,104
uh cheaper or in other words bitcoin right now even with its extremely poor performance against

753
01:02:28,104 --> 01:02:35,164
a booming gold asset bitcoin is still double what it was three years ago that's a wild thought

754
01:02:35,164 --> 01:02:35,984
That is why.

755
01:02:35,984 --> 01:02:39,764
And to think if we have this saying, right?

756
01:02:39,964 --> 01:02:44,124
At least the investors I used to work with would joke about a lot.

757
01:02:44,224 --> 01:02:46,124
Like, you can be a pig, but don't be a hog.

758
01:02:48,384 --> 01:02:53,124
I am very curious how good gold bugs might have it at this point.

759
01:02:53,224 --> 01:02:54,704
Like, is it going to go back to nine?

760
01:02:54,824 --> 01:02:57,024
I have a very hard time believing.

761
01:02:57,164 --> 01:03:05,064
I mean, literally, again, just like the tech thing, the tech analysis, we're setting new lows.

762
01:03:05,064 --> 01:03:06,484
on this trend every day.

763
01:03:07,344 --> 01:03:11,524
So, you know, statistically,

764
01:03:11,764 --> 01:03:13,784
Bitcoin is as cheap as it's ever been

765
01:03:13,784 --> 01:03:19,904
relative to the trend of gold, BTC gold.

766
01:03:21,284 --> 01:03:24,404
Well, if we go down to the zero percentile

767
01:03:24,404 --> 01:03:27,844
of the power trend, that would be nine times.

768
01:03:28,004 --> 01:03:29,224
That's when we would go back, right?

769
01:03:29,484 --> 01:03:30,604
Be around 56, 52.

770
01:03:30,604 --> 01:03:32,704
You mean the power trend in dollars?

771
01:03:33,544 --> 01:03:33,744
Yeah.

772
01:03:33,964 --> 01:03:36,904
I mean, if gold stays at 4,000, Bitcoin goes to 56.

773
01:03:37,244 --> 01:03:38,804
That's nine times, right?

774
01:03:39,984 --> 01:03:40,504
Yeah.

775
01:03:40,624 --> 01:03:48,964
Or if another way to think about it is the power trend of Bitcoin right now in gold ounces,

776
01:03:49,324 --> 01:03:51,684
the trend is 64 ounces, right?

777
01:03:51,744 --> 01:03:52,584
So we're at 20.

778
01:03:53,264 --> 01:03:59,324
So 3x staying at current gold prices would take us back to trend for gold.

779
01:03:59,324 --> 01:04:10,664
So 3x in dollar terms, meaning definitely close to 200,000, if not more.

780
01:04:13,004 --> 01:04:14,164
Doesn't mean it's going to happen.

781
01:04:14,444 --> 01:04:16,004
Doesn't mean it's going to happen in this cycle.

782
01:04:16,104 --> 01:04:18,984
Doesn't mean the cycles are not over.

783
01:04:18,984 --> 01:04:29,424
but it's it's it's we're at wild extremes you know globally on a macro level from where bitcoin

784
01:04:29,424 --> 01:04:34,204
has been and certainly at levels that wall street you know like wall street knows about the power

785
01:04:34,204 --> 01:04:41,724
curve by now like they love this fear they love it so they would love to exacerbate this more

786
01:04:41,724 --> 01:04:47,124
accumulate more bitcoin no question about it how long do you think they could exacerbate it

787
01:04:47,124 --> 01:04:48,824
I know you said short to medium term.

788
01:04:49,324 --> 01:04:49,924
No idea.

789
01:04:50,304 --> 01:04:50,524
Yeah.

790
01:04:50,984 --> 01:04:52,284
Your guess is as good as mine.

791
01:04:52,684 --> 01:04:52,964
Yeah.

792
01:04:53,644 --> 01:04:58,904
There's a lot of fiat dollars and fiat interest running around,

793
01:05:00,144 --> 01:05:01,324
paying people salaries.

794
01:05:03,064 --> 01:05:09,964
You know, I mean, they could go a long time pushing this price down.

795
01:05:09,964 --> 01:05:15,424
But, of course, Bitcoin has a very, specifically in the gold analogy,

796
01:05:15,424 --> 01:05:21,424
Bitcoin, as we know, balances its budget every 10 minutes. And Bitcoin, due to the difficulty

797
01:05:21,424 --> 01:05:29,084
adjustment, is not susceptible to the same supply-demand relationships of gold. So gold

798
01:05:29,084 --> 01:05:34,244
miners are just loving life right now. I mean, they are... I'll show you this one.

799
01:05:34,244 --> 01:05:35,864
How hard are they digging right now?

800
01:05:36,944 --> 01:05:45,344
Very hard. And I mean, you got projects, no doubt, that are just absolute duds that are

801
01:05:45,344 --> 01:05:59,964
now being revived and just pie in the sky projections, I'm sure, scaling up slowly.

802
01:06:01,224 --> 01:06:03,344
And some of those projects are going to work out fine.

803
01:06:04,504 --> 01:06:06,804
Other projects are going to remain complete duds.

804
01:06:06,884 --> 01:06:22,686
And there probably a lot of jokers that are coming into this business just like jokers coming to the Bitcoin business But the difference is this As they say the cure for high prices is often high prices if you a buyer And the cure for

805
01:06:22,686 --> 01:06:32,566
low prices is often low prices if you're a seller. So the idea that Bitcoin is...

806
01:06:32,566 --> 01:06:38,427
is, you know, or sorry, that gold is just going to, like I said at the beginning, looking at the

807
01:06:38,427 --> 01:06:44,506
gold trend, just going to continue to 10, 20, 30k per ounce. Again, it might go a little bit on the

808
01:06:44,506 --> 01:06:49,307
short term, but supply and demand is going to start to rear its ugly head. And people are just

809
01:06:49,307 --> 01:06:53,707
going to like wonder literally in the jewelry shop, like, why am I paying this much for gold?

810
01:06:53,707 --> 01:07:02,427
And they might go into platinum or whatever. Let me show you this chart, which will show you

811
01:07:02,566 --> 01:07:13,127
a little bit what I mean here about how crazy this is for some of these people right now.

812
01:07:17,747 --> 01:07:20,887
Again, I'm missing something here, but I'll zoom in from this point.

813
01:07:25,287 --> 01:07:29,387
All right. This is similar. Hold on.

814
01:07:29,387 --> 01:07:35,407
it's a little bit outdated but it'll do the job this is similar

815
01:07:35,407 --> 01:07:44,747
chart um kind of like the transaction throughput but this is mining revenue okay this is through

816
01:07:44,747 --> 01:07:52,087
june actually this is through september close enough all right to today um 16 billion by the

817
01:07:52,087 --> 01:07:59,146
way not even a top on a trailing 12 month basis around this just assumes all miners sell their

818
01:07:59,146 --> 01:08:03,506
Bitcoin in terms of their block reward and their fees every 10 minutes at whatever

819
01:08:03,506 --> 01:08:09,167
prevailing price there is. This is academic calculation. A lot of miners hodl. A lot of

820
01:08:09,167 --> 01:08:14,627
miners don't even pay fiat. They take credit. They don't pay out of pocket. It's a crazy business,

821
01:08:14,627 --> 01:08:21,967
as you know. But this is generally how the mining business is. It's a $16 billion business right now.

822
01:08:21,967 --> 01:08:30,627
this is gold now over the same oh shit gold is getting you know fourth it's about 100 million

823
01:08:30,627 --> 01:08:36,707
ounces of gold that are on a mind a year gold is becoming a 400 billion dollar industry it's

824
01:08:36,707 --> 01:08:41,207
massive like that i mean this christmas is just going to be amazing for gold bucks they're just

825
01:08:41,207 --> 01:08:49,387
going to be you know i don't know how i used to curse more on your show but i feel less inclined

826
01:08:49,387 --> 01:08:57,047
to now. I mean, it's going to blow off. There's no question. This is not going to sustain,

827
01:08:57,167 --> 01:09:02,266
but it's going to be a fun ride for a lot of people in that business right now. And it's just

828
01:09:02,266 --> 01:09:12,827
like, even from, say, January of 2021, they were making record revenues for this business at $200

829
01:09:12,827 --> 01:09:16,987
billion. Now it's getting close to a $400 billion industry. But just so you see how

830
01:09:16,987 --> 01:09:21,507
small Bitcoin and gold are compared to oil. This is the oil markets,

831
01:09:21,947 --> 01:09:25,526
right? Trillions of dollars a year. So,

832
01:09:26,387 --> 01:09:31,327
you know, again, doing the math on where we are in Bitcoin,

833
01:09:33,827 --> 01:09:37,367
back out, don't freak out, block the block day to day,

834
01:09:38,547 --> 01:09:43,287
you know, not financial advice, but maybe take advantage of some of these cheap prices.

835
01:09:43,287 --> 01:09:47,107
there's just a lot more

836
01:09:47,107 --> 01:09:49,747
to the whole structure of all of this

837
01:09:49,747 --> 01:09:53,427
than I think can be

838
01:09:53,427 --> 01:09:56,247
than one needs to stress about

839
01:09:56,247 --> 01:09:59,087
over one morning waking up and see a Bitcoin crash

840
01:09:59,087 --> 01:09:59,787
you know 5k

841
01:09:59,787 --> 01:10:04,106
and I think another thing to put into context is this is not abnormal

842
01:10:04,106 --> 01:10:04,867
for

843
01:10:04,867 --> 01:10:07,986
bull markets either

844
01:10:07,986 --> 01:10:10,247
it's 30% corrections which is

845
01:10:10,247 --> 01:10:12,167
what we've seen over the last month

846
01:10:12,167 --> 01:10:17,526
and look i mean it's going to go on for a while i mean look at the oil markets you know they can

847
01:10:17,526 --> 01:10:26,627
they can crash a trillion dollars in annual revenue um it's it's just it's part of the game

848
01:10:26,627 --> 01:10:31,686
still going back to what we talked about bitcoin being the sort of pristine asset risk-free asset

849
01:10:31,686 --> 01:10:35,526
i believe all of those things i do believe that we could have all of these markets you know

850
01:10:35,526 --> 01:10:41,287
eventually priced in btc or something like that but it's going to take a long uh long time

851
01:10:41,287 --> 01:10:46,247
trillions and trillions and trillions, tens of trillions of dollars to come in before that happens.

852
01:10:46,947 --> 01:10:50,367
Right. What do you think about silver and its blow off top right now?

853
01:10:50,526 --> 01:10:54,986
What does that say historically? Sort of lagging silver off top to gold?

854
01:10:55,747 --> 01:11:02,287
Yeah, it's high. I don't think I have one charted, but it's obviously it's the same deal.

855
01:11:02,287 --> 01:11:09,627
I mean, you're at 100th percentile, right? I mean, it's it's could not have been higher.

856
01:11:09,627 --> 01:11:11,627
Let me see if I have one on the 10th.

857
01:11:13,067 --> 01:11:14,426
Let's see, where is it right now?

858
01:11:15,167 --> 01:11:20,826
Silver is trading at 57.

859
01:11:21,247 --> 01:11:22,106
New all-time high.

860
01:11:22,167 --> 01:11:23,506
Yeah, this is all-time high.

861
01:11:26,727 --> 01:11:29,907
And as far as, if you would measure that as far as minor revenue,

862
01:11:30,486 --> 01:11:33,947
even more of an all-time high because there's more bullion,

863
01:11:33,947 --> 01:11:38,846
silver bullion being mined now than there was 15.

864
01:11:39,627 --> 01:11:46,287
years or not 15 12 13 years ago when silver was last at 55 bucks so

865
01:11:46,287 --> 01:11:52,287
yeah these guys metals investors are having a good christmas no doubt

866
01:11:52,287 --> 01:12:00,127
um but oh maybe i didn't completely finish the thought about the supply demand though so

867
01:12:00,127 --> 01:12:05,907
at some point a lot of these jokers particularly i believe in the gold industry which is obviously

868
01:12:05,907 --> 01:12:15,826
a very analogous asset to Bitcoin, high prices will become the cure to high prices. There would

869
01:12:15,826 --> 01:12:25,506
just be too many speculators, investors, miners in the business chasing too many projects,

870
01:12:26,067 --> 01:12:31,426
too many jokers will start to come in, and supplies just going to outstrip demand.

871
01:12:31,426 --> 01:12:34,026
And once that happens, price falls.

872
01:12:34,867 --> 01:12:35,047
All right.

873
01:12:35,266 --> 01:12:39,947
As we know, Bitcoin is not susceptible to that problem because of the difficulty adjustment,

874
01:12:40,087 --> 01:12:41,826
because its budget balances every 10 minutes.

875
01:12:42,426 --> 01:12:45,747
It's just a completely different beast.

876
01:12:46,047 --> 01:12:48,067
You know, that's why we have number go up technology.

877
01:12:48,326 --> 01:12:54,407
We have just a, you know, however you want to define it, the only fixed asset in the universe.

878
01:12:54,407 --> 01:12:57,127
It's a completely different thing.

879
01:12:57,127 --> 01:13:19,026
I'm very much looking forward to how Bitcoin will react in the future to some of those supply-demand dynamics because there's just simply a cap on the amount of coins that can come out every 10 minutes due to the difficulty adjustment.

880
01:13:19,026 --> 01:13:21,207
And you just don't have that in the gold industry.

881
01:13:21,207 --> 01:13:22,426
You don't have it in the silver industry.

882
01:13:22,807 --> 01:13:25,106
You don't even have it in the oil industry.

883
01:13:25,106 --> 01:13:34,787
so that's the again backing out trying to be more calm about what's happening we can we can expect

884
01:13:34,787 --> 01:13:41,266
that's going to happen you know do i you know this could go another year or two these gangbuster

885
01:13:41,266 --> 01:13:46,567
prices for gold and for tech with ai they're growing at 40 a year right now on a trend it's

886
01:13:46,567 --> 01:13:52,727
massive but bitcoin actually is also growing at 40 a year on a trend so have that in mind as well

887
01:13:52,727 --> 01:13:53,407
Yeah.

888
01:13:54,186 --> 01:13:56,167
It's interesting to bring up Bitcoin mining too,

889
01:13:56,266 --> 01:13:59,407
because it did, I don't know, for...

890
01:13:59,407 --> 01:14:00,826
Yeah, we're still over as ZetaHash.

891
01:14:02,227 --> 01:14:05,266
We sort of crescendoed a couple weeks ago.

892
01:14:05,326 --> 01:14:07,627
We've had two downward difficulty adjustments in a row,

893
01:14:07,686 --> 01:14:12,426
but there was a point where we passed an XAHash

894
01:14:12,426 --> 01:14:15,506
with authority on a trailing average in the middle of September.

895
01:14:16,707 --> 01:14:21,887
And then between the middle of September and the end of October,

896
01:14:22,727 --> 01:14:27,207
we added 100x a hash in that six-week period.

897
01:14:27,367 --> 01:14:28,686
And I think putting things in perspective,

898
01:14:28,686 --> 01:14:35,506
like it took, I think my memory serves me correctly.

899
01:14:36,326 --> 01:14:40,787
It took us until 2020 to get to 100x a hash.

900
01:14:41,846 --> 01:14:45,006
And so the network, yeah, it took us like April 2020

901
01:14:45,006 --> 01:14:47,926
to get to 100x a hash with authority.

902
01:14:47,926 --> 01:14:57,707
and so it took 11 years to go from zero to 100x and my work added in six weeks between september

903
01:14:57,707 --> 01:15:04,467
middle of september and end of october this year yep precisely that perspective like when i

904
01:15:04,467 --> 01:15:11,426
sat back and looked at the chart and put that in perspective like holy crap that's uh it's an

905
01:15:11,426 --> 01:15:13,606
insane amount of hash rate coming on the network.

906
01:15:13,727 --> 01:15:17,467
And now, granted, the ASICs are way more efficient.

907
01:15:18,467 --> 01:15:20,387
Bitcoin's been industrialized to an extent,

908
01:15:20,487 --> 01:15:23,346
but I still think there is some signal there

909
01:15:23,346 --> 01:15:26,066
in the hash rate markets.

910
01:15:27,066 --> 01:15:27,247
Yep.

911
01:15:27,247 --> 01:15:33,967
I would really like to chart that, actually.

912
01:15:34,207 --> 01:15:41,247
That's a nice, that's a very nice...

913
01:15:41,426 --> 01:15:46,146
nice stat basically uh let me show you what we've done in terms of

914
01:15:47,907 --> 01:15:50,707
market cap this is going to go a little slow hold on

915
01:15:53,506 --> 01:16:02,146
hash rate by the way another screaming power curve when it comes to bitcoin right and

916
01:16:02,146 --> 01:16:19,026
And we can show you how the hash rate relative to the market cap, or i.e. the network value, has trended.

917
01:16:21,106 --> 01:16:27,426
So this is literally dollars per hash of value.

918
01:16:27,426 --> 01:16:39,047
So you get extremely small numbers, even smaller as we go up because hash is so outstripping market cap.

919
01:16:39,146 --> 01:16:45,367
But nonetheless, you would assume that during the booms, you would have, you know, these busts.

920
01:16:45,426 --> 01:16:48,846
Sorry, you would have these peaks in market cap versus the trend.

921
01:16:48,846 --> 01:16:56,047
And it's interesting.

922
01:16:58,506 --> 01:17:08,026
It's not growing as fast as it used to at the beginning, but it is kind of stabilizing.

923
01:17:08,367 --> 01:17:08,686
I don't know.

924
01:17:09,287 --> 01:17:17,987
This is one of the other ones that I would say is more for a more stable sort of Bitcoin future with not as much volatility relative to the trend.

925
01:17:17,987 --> 01:17:38,627
But this is with my multiple around the trend. It's a little bit different. Might need to run this on the percentile or the percentile quantile analysis. But in any event, yeah, it's not like, as one would expect, prices booming relative to the hash rate at the moment. And it's just sort of stabilizing at this number.

926
01:17:38,627 --> 01:17:50,247
But regardless, it's just incredible how much Bitcoin security has grown relative to the value of the system.

927
01:17:50,947 --> 01:17:52,326
Yeah. What does that say to you?

928
01:17:54,947 --> 01:17:57,326
It's maturing. It's maturing.

929
01:17:58,606 --> 01:18:03,926
Do you think there's more price-insensitive hashers in the market?

930
01:18:03,926 --> 01:18:08,926
You would be able to probably answer that question better than me.

931
01:18:09,926 --> 01:18:12,926
I don't know.

932
01:18:12,926 --> 01:18:21,926
But I would say, looking at the revenue, which is another way to back into this question, I could find the damn chart.

933
01:18:21,926 --> 01:18:24,926
Here, here, here.

934
01:18:24,926 --> 01:18:29,926
So here.

935
01:18:29,926 --> 01:18:45,287
here, this is a little bit more refined. This is 30-day miner revenue. It's not even at a

936
01:18:45,287 --> 01:18:54,686
30-day all-time high. Miners would make $2 billion a month back in March 2024. Now,

937
01:18:54,686 --> 01:18:56,606
making 1.6, 1.7.

938
01:18:57,867 --> 01:18:58,307
And

939
01:18:58,307 --> 01:19:00,587
hash is what it is, right? Growing, growing,

940
01:19:00,707 --> 01:19:02,026
growing. So

941
01:19:02,026 --> 01:19:04,766
again, like super secure

942
01:19:04,766 --> 01:19:06,006
network, competitive.

943
01:19:10,846 --> 01:19:12,747
At some point, you would expect these

944
01:19:12,747 --> 01:19:14,087
numbers to be much, much higher.

945
01:19:15,127 --> 01:19:16,867
But predicting that is

946
01:19:16,867 --> 01:19:18,227
difficult.

947
01:19:18,227 --> 01:19:18,587
Yeah.

948
01:19:20,707 --> 01:19:22,266
This is definitely a number

949
01:19:22,266 --> 01:19:36,329
go up chart right I mean and it going to be more profitable in the future to mine This very scarce asset one can argue about you know the reasons why it not so high or whatever

950
01:19:36,329 --> 01:19:48,069
But it's undoubtable to me that this is going to be a huge number in the future, something that compares with the gold markets or, you know, even the oil market.

951
01:19:48,629 --> 01:19:50,129
It certainly looks to be trending in the right direction.

952
01:19:50,129 --> 01:20:01,469
yeah but you know one would think it'd be much higher yeah one would think well but you're the

953
01:20:01,469 --> 01:20:06,589
mining guy yeah i think there's more price insensitive hashers in the market and i think

954
01:20:06,589 --> 01:20:12,529
i also think the market's got like i said obviously the machines are more efficient and i think uh

955
01:20:12,529 --> 01:20:18,889
there's been enough time that the industry has sort of wised up to,

956
01:20:19,049 --> 01:20:22,389
okay, we need to really focus on cheap energy, cheap electricity.

957
01:20:23,089 --> 01:20:26,829
And there's a ton of people going out there and finding stranded,

958
01:20:26,829 --> 01:20:30,329
wasted, isolated energy to mine Bitcoin with.

959
01:20:32,449 --> 01:20:36,209
Then obviously you have the industrialization of the mining industry

960
01:20:36,209 --> 01:20:40,489
on the demand response side, which is becoming critical to grid systems.

961
01:20:40,489 --> 01:20:54,589
I don't think they're there yet, but I think you will have somewhat price insensitive or less sensitive grid operators that really need it for demand response.

962
01:20:58,529 --> 01:20:59,089
Yeah.

963
01:21:00,369 --> 01:21:01,549
But let's bring this back.

964
01:21:01,549 --> 01:21:03,429
I know we got less than 30 minutes here.

965
01:21:04,649 --> 01:21:10,829
Really focusing on the topic of the soul of Bitcoin.

966
01:21:10,989 --> 01:21:11,509
And what is it?

967
01:21:11,569 --> 01:21:14,289
Is it this capital asset?

968
01:21:14,289 --> 01:21:24,009
Is it digital capital that is to be used as a collateral asset only to have structured credit products built on top of it?

969
01:21:24,009 --> 01:21:30,889
Or is it peer-to-peer digital cash to be used in everyday transactions?

970
01:21:30,889 --> 01:21:33,189
I'm a believer it can be both.

971
01:21:33,369 --> 01:21:35,649
It can get both out of it.

972
01:21:35,729 --> 01:21:39,449
But I do think there is, again, this year particularly,

973
01:21:39,749 --> 01:21:44,669
I think the fight over the soul of Bitcoin's future,

974
01:21:45,869 --> 01:21:47,829
or maybe it's like a perceived fight,

975
01:21:47,989 --> 01:21:50,049
because I don't think it really is a fight.

976
01:21:50,229 --> 01:21:53,909
Like I said, I think it can and will be used as both.

977
01:21:54,029 --> 01:21:55,749
And I actually think it's very productive

978
01:21:55,749 --> 01:22:00,829
that this conversation's been, for lack of a better term,

979
01:22:00,889 --> 01:22:08,009
hashed out this year and going back to the juxtaposition of block versus strategy i think

980
01:22:08,009 --> 01:22:14,409
that's actually extremely healthy for the long term and i've been more focused on how do we

981
01:22:14,409 --> 01:22:22,269
make sure that bitcoin becomes peer-to-peer cash more recently because i do think it's important

982
01:22:22,269 --> 01:22:27,689
i do think the meme of it's only going to be digital capital never sell your bitcoin never

983
01:22:27,689 --> 01:22:31,529
spend your Bitcoin is completely short-sighted and asinine.

984
01:22:33,469 --> 01:22:35,729
And I am really

985
01:22:35,729 --> 01:22:39,769
interested to see what the data looks like a year, two, three years

986
01:22:39,769 --> 01:22:43,529
from now, post Square opening up

987
01:22:43,529 --> 01:22:46,529
Bitcoin capabilities and their point-of-sale systems. And I think

988
01:22:46,529 --> 01:22:51,269
the product that they released with the highest signal is probably the

989
01:22:51,269 --> 01:22:55,829
automatic conversion of daily revenues to Bitcoin.

990
01:22:55,829 --> 01:22:58,029
You can sort of choose the percentage.

991
01:22:59,309 --> 01:23:02,009
That's the Bitcoin treasury play I want to see.

992
01:23:02,169 --> 01:23:06,169
Small, medium-sized businesses sweeping some cash flows in the Bitcoins

993
01:23:06,169 --> 01:23:08,609
and holding it on the balance sheet.

994
01:23:14,889 --> 01:23:15,829
Is that a question?

995
01:23:16,869 --> 01:23:21,009
This is a thought, a jumping off point to jump.

996
01:23:21,069 --> 01:23:22,669
It's a great thought.

997
01:23:22,669 --> 01:23:35,329
I have all the thoughts here because like we talked about, I personally have a hard time

998
01:23:35,329 --> 01:23:40,789
chalking all this up like the future of Bitcoin only to be what the Supreme Court of the United

999
01:23:40,789 --> 01:23:49,929
States says. I have a lot of... I can understand the sympathy for US being the largest economy,

1000
01:23:49,929 --> 01:24:06,689
largest capital markets, largest military, that there's a lot of reason to believe that sort of whatever the U.S. says to enforce the moneyness of Bitcoin, like that could be the future of it.

1001
01:24:06,689 --> 01:24:16,669
but due to the fact that it is unlike gold where it's not easily confiscatable and remember

1002
01:24:16,669 --> 01:24:20,329
during the first year of world war ii

1003
01:24:20,329 --> 01:24:31,249
um 1940 80 percent of the world's gold found its way into the united states

1004
01:24:31,249 --> 01:24:35,629
or somewhere around the United States like Canada into their coffers

1005
01:24:35,629 --> 01:24:40,169
because this is actually the biggest nail in the coffin

1006
01:24:40,169 --> 01:24:42,489
of the international gold standard was not Roosevelt.

1007
01:24:42,969 --> 01:24:48,229
During the 1930s, it was Hitler and Stalin during World War II.

1008
01:24:49,629 --> 01:24:54,469
So, and by the way, we're going back to, as you well know,

1009
01:24:54,749 --> 01:24:59,209
very unstable geopolitical times, which is a topic for another conversation,

1010
01:24:59,209 --> 01:25:07,529
But the nature of holding Bitcoin, I think, is way outside of their hands at this point.

1011
01:25:07,909 --> 01:25:12,449
Like, you know, ETFs still, large amounts are getting there.

1012
01:25:12,609 --> 01:25:18,329
You know, anybody can hop on Bitcoin Treasuries and see it pretty closely how all of that stuff is tracked.

1013
01:25:19,249 --> 01:25:27,809
But this is still a, you know, cypherpunk retail, like decentralized phenomenon.

1014
01:25:27,809 --> 01:25:29,769
And we all want to see it stay that way.

1015
01:25:30,549 --> 01:25:43,169
So I would say, hold on to that vision no matter all the news that comes out with the economy and interest rates and Wall Street and this and that.

1016
01:25:43,449 --> 01:25:44,709
We have this power curve.

1017
01:25:44,989 --> 01:25:46,249
It's the way the networks grow.

1018
01:25:47,569 --> 01:25:55,669
It's censorship-resistant cash with many use cases that you have studied with your guests throughout the years.

1019
01:25:55,669 --> 01:26:04,849
and as long as i would say particularly as long as that decentralized nature holds

1020
01:26:04,849 --> 01:26:13,329
uh we're going to you know we're going to be fine we're going to be fine but how that would

1021
01:26:13,329 --> 01:26:21,569
play out as a pricing mechanism i think that is most interesting and i really would say that i

1022
01:26:21,569 --> 01:26:26,489
hope that it continues on this power curve because the power curve would show you something

1023
01:26:26,489 --> 01:26:33,689
sustainable. So here, I don't know if I've shown you this before, but this is same thing,

1024
01:26:33,869 --> 01:26:37,849
got the old power curve, and we also have an exponential curve. So I've shoehorned in

1025
01:26:37,849 --> 01:26:42,969
what Bitcoin would look like if it was on an exponential trend. You can clearly see it's not

1026
01:26:42,969 --> 01:26:47,749
an exponential trend, right? So at the beginning, it wasn't here. And then when it went through the

1027
01:26:47,749 --> 01:26:51,149
whole mid cycle of its life.

1028
01:26:51,289 --> 01:26:53,609
It barely hit this trend line a little bit here.

1029
01:26:53,989 --> 01:26:55,929
And then we've been off it since 2022.

1030
01:26:57,549 --> 01:26:58,389
Not even close.

1031
01:26:58,429 --> 01:26:59,529
So it's not an exponential trend.

1032
01:26:59,609 --> 01:27:00,429
The R squared is worse.

1033
01:27:00,509 --> 01:27:01,369
It's just clearly not.

1034
01:27:02,149 --> 01:27:03,649
It fits this nice trend.

1035
01:27:04,649 --> 01:27:14,769
And if Bitcoin would do what a lot of the people that have been

1036
01:27:14,769 --> 01:27:19,869
clamoring for, I guess, in Wall Street,

1037
01:27:19,969 --> 01:27:22,929
and if it would just be this sort of base asset

1038
01:27:22,929 --> 01:27:25,329
where you could collateralize against it

1039
01:27:25,329 --> 01:27:26,449
and then draw on it,

1040
01:27:26,489 --> 01:27:28,729
and we just have a bunch of fiat interest around Bitcoin,

1041
01:27:29,349 --> 01:27:30,889
this trend would not hold.

1042
01:27:31,049 --> 01:27:31,749
It could not hold.

1043
01:27:31,849 --> 01:27:34,609
It actually, this is where it would have to be something

1044
01:27:34,609 --> 01:27:38,689
where all your models sort of break,

1045
01:27:39,229 --> 01:27:42,369
but presumably it would break to the upside,

1046
01:27:42,469 --> 01:27:43,849
but it might not be the world that we want.

1047
01:27:44,769 --> 01:27:56,069
So to have the world that we want, it would need to be on this sort of a trend line, and we'd have to have just a different credit market surrounding this.

1048
01:27:57,289 --> 01:28:05,329
But if we do have Wall Street take over for whatever reason, you might see something like this where it turns exponential like here.

1049
01:28:05,329 --> 01:28:07,469
If it happened at the end of the year, it would be more like this trend.

1050
01:28:07,869 --> 01:28:10,749
Or here, if it happened after 10 years, it would be more like this.

1051
01:28:10,749 --> 01:28:14,849
So this is where you could get it, maybe go on a straight line and you get something like this.

1052
01:28:14,849 --> 01:28:17,569
So still could be crazy numbers.

1053
01:28:17,689 --> 01:28:28,569
Like if it started to go exponential by the end of this year, and then we go out 15 years, that's $22 million Bitcoin by 2040.

1054
01:28:29,449 --> 01:28:32,689
Exceeds everybody's expectations, well higher than the power curve, by the way.

1055
01:28:33,429 --> 01:28:40,569
But what's behind that $22 million Bitcoin probably loads, mountains and mountains and mountains of fiat interest.

1056
01:28:40,749 --> 01:28:44,569
and government bonds and stable coins and all the rest.

1057
01:28:45,229 --> 01:28:50,229
That's not really a future that people would envision, right?

1058
01:28:50,509 --> 01:28:53,049
And for you, the statement that you just made

1059
01:28:53,049 --> 01:28:58,549
about it's only this sort of hodling or investable technology

1060
01:28:58,549 --> 01:29:00,649
where it's not using peer-to-peer transactions,

1061
01:29:01,649 --> 01:29:04,269
that would be more likely under this scenario.

1062
01:29:05,069 --> 01:29:05,909
Does that make sense?

1063
01:29:05,909 --> 01:29:06,169
Yeah.

1064
01:29:06,529 --> 01:29:07,769
When it goes exponential,

1065
01:29:08,089 --> 01:29:10,609
it's going to look more like a Wall Street asset

1066
01:29:10,609 --> 01:29:13,369
And that would be, in my opinion, not an ideal scenario.

1067
01:29:13,849 --> 01:29:16,149
It may still be great for investors, right?

1068
01:29:16,249 --> 01:29:22,789
Like on that number go up sort of, not even on the number go up ethos, just on paper, it

1069
01:29:22,789 --> 01:29:23,409
looks good, right?

1070
01:29:23,749 --> 01:29:25,629
But that's the same thing like Manhattan real estate.

1071
01:29:25,729 --> 01:29:26,509
It looks good on paper.

1072
01:29:26,669 --> 01:29:33,309
You have, you can pull out whatever you pull out a year for your expenses and everything,

1073
01:29:33,309 --> 01:29:40,309
but you still get rolled over more accumulative debt each year.

1074
01:29:41,789 --> 01:29:45,049
And at some point, that's harder for anybody that's there,

1075
01:29:45,149 --> 01:29:48,309
unless you have some major business that can keep ahead of

1076
01:29:49,249 --> 01:29:54,609
lots of inflation and economic growth.

1077
01:29:54,709 --> 01:29:58,149
At some point, that debt for personal balance sheets becomes very difficult,

1078
01:29:58,349 --> 01:30:01,149
especially in rising interest rate environments.

1079
01:30:01,149 --> 01:30:06,649
So that's where I sit, basically mathematically, kind of looking at what you said.

1080
01:30:07,889 --> 01:30:11,889
You could see $15, $20 million Bitcoin in the next 15 years.

1081
01:30:12,009 --> 01:30:17,309
But in my opinion, that would be too high, actually.

1082
01:30:17,589 --> 01:30:23,509
You would want a little bit more sustainable, something along this curve.

1083
01:30:25,329 --> 01:30:29,189
And compound interest does not work on a power curve.

1084
01:30:29,829 --> 01:30:30,829
It just doesn't work.

1085
01:30:31,149 --> 01:30:39,629
So that's the thing that I'm sort of trying to figure out with this, how our time, our work is

1086
01:30:39,629 --> 01:30:47,629
valued and how people are going to value Bitcoins. But I would be very personally very careful. I

1087
01:30:47,629 --> 01:30:52,109
know this is like a booming industry and everybody's loving it and Sailor himself has accumulated a

1088
01:30:52,109 --> 01:30:56,269
boatload of Bitcoins doing this. But I would just say on a personal level,

1089
01:30:56,269 --> 01:31:05,329
one should be very careful about accumulating too much debt behind their stack of Bitcoin

1090
01:31:05,329 --> 01:31:09,369
because you don't want Wall Street to take it or whoever you're posting the collateral to,

1091
01:31:09,509 --> 01:31:15,369
especially if you got to liquidate in a day or less than a day and all of a sudden your Bitcoin's gone

1092
01:31:15,369 --> 01:31:18,649
because you were margin called.

1093
01:31:18,649 --> 01:31:19,349
yeah

1094
01:31:19,349 --> 01:31:21,309
so

1095
01:31:21,309 --> 01:31:22,249
in other words

1096
01:31:22,249 --> 01:31:23,709
if you want to see that

1097
01:31:23,709 --> 01:31:25,189
decentralized future

1098
01:31:25,189 --> 01:31:25,869
I think it's

1099
01:31:25,869 --> 01:31:28,109
it's got to come from

1100
01:31:28,109 --> 01:31:28,749
around the world

1101
01:31:28,749 --> 01:31:29,689
you know it's got to come

1102
01:31:29,689 --> 01:31:31,889
from other currencies

1103
01:31:31,889 --> 01:31:35,589
well I think too

1104
01:31:35,589 --> 01:31:36,009
the

1105
01:31:36,009 --> 01:31:39,689
sailor specifically

1106
01:31:39,689 --> 01:31:41,069
say never sell your bitcoin

1107
01:31:41,069 --> 01:31:42,269
I'm going to burn my keys

1108
01:31:42,269 --> 01:31:42,849
when I die

1109
01:31:42,849 --> 01:31:43,609
I mean

1110
01:31:43,609 --> 01:31:43,969
it

1111
01:31:43,969 --> 01:31:45,709
is this

1112
01:31:45,709 --> 01:31:47,789
I don't know if it's intentional

1113
01:31:47,789 --> 01:31:48,269
or

1114
01:31:48,269 --> 01:31:53,449
naive or ignorant, but I mean, the tech

1115
01:31:53,449 --> 01:31:56,729
around the payments use case is only getting better.

1116
01:31:57,869 --> 01:32:00,529
And I was thinking that today, like right before we hopped on,

1117
01:32:00,529 --> 01:32:04,109
it's December 1st, ran Bitcoin payroll

1118
01:32:04,109 --> 01:32:06,869
for the employees here at TFTC.

1119
01:32:07,889 --> 01:32:10,429
Except Bitcoin for part of their

1120
01:32:10,429 --> 01:32:14,849
part of their salary. And it's always a beautiful experience. It's like, hey,

1121
01:32:14,849 --> 01:32:19,969
you wake up, I get a ZapRite invoice.

1122
01:32:20,689 --> 01:32:24,069
Obviously, there's some UX and automation

1123
01:32:24,069 --> 01:32:26,429
that can be built around this particular use case.

1124
01:32:26,569 --> 01:32:27,869
I don't know, there's companies working on there,

1125
01:32:27,929 --> 01:32:29,649
but the way it works here, I get the ZapRite invoice.

1126
01:32:29,909 --> 01:32:34,409
I pay it, and that person gets that part of their paycheck

1127
01:32:34,409 --> 01:32:36,449
in Bitcoin within an hour.

1128
01:32:37,789 --> 01:32:48,331
Is that monthly or biweekly It depends on the particular employee Some are biweekly It a good day for that for them Yeah In terms of stats

1129
01:32:48,631 --> 01:32:50,032
Bad day for the business, good day for them.

1130
01:32:50,231 --> 01:32:51,371
No, it's a good day for the business.

1131
01:32:51,792 --> 01:32:52,752
They're happy.

1132
01:32:53,731 --> 01:32:53,851
Yeah.

1133
01:32:54,151 --> 01:32:56,272
But no, it's always,

1134
01:32:56,631 --> 01:33:02,151
and we've got contractors who do some miscellaneous work.

1135
01:33:02,151 --> 01:33:06,792
and that's one of the stats

1136
01:33:06,792 --> 01:33:11,131
or anecdotal data points that has really encouraged me

1137
01:33:11,131 --> 01:33:13,272
this year is the amount of contractors that

1138
01:33:13,272 --> 01:33:18,411
know that we're a Bitcoin company and just send us invoices in Bitcoin.

1139
01:33:19,252 --> 01:33:20,331
It's like, okay, this is cool.

1140
01:33:21,811 --> 01:33:26,032
So your point about it's going to take retail adoption, I think it's happening.

1141
01:33:27,311 --> 01:33:28,492
I think it's only going to accelerate.

1142
01:33:28,931 --> 01:33:31,731
I'm not sure if you've been paying attention to developments around ARK

1143
01:33:31,731 --> 01:33:35,492
and Spark and what's happening with the

1144
01:33:35,492 --> 01:33:38,691
Xiaomi events, but the payments UX

1145
01:33:38,691 --> 01:33:43,551
pertains to speed and cost.

1146
01:33:44,071 --> 01:33:47,351
And then on top of that, privacy benefits. It's only getting better.

1147
01:33:47,651 --> 01:33:51,752
And if AI really is taking over, which I think

1148
01:33:51,752 --> 01:33:55,631
not taking over, but is a thing, I think it's real. I think there's a there there.

1149
01:33:55,631 --> 01:33:58,532
We were talking about it before we started recording

1150
01:33:58,532 --> 01:34:14,211
We're both using Claude pretty extensively in our businesses, and it is making us more efficient and allowing us to do more than we could by ourselves and without having to hire full-time employees.

1151
01:34:15,971 --> 01:34:26,512
If the agentic future materializes, when it materializes, these agents are going to need money, and it doesn't make sense for them to use fiat rails.

1152
01:34:27,111 --> 01:34:28,272
Yep, not at all.

1153
01:34:28,532 --> 01:34:33,911
This is a chart of Japanese yen.

1154
01:34:34,111 --> 01:34:36,252
We talked about JGBs at the top of the show.

1155
01:34:36,411 --> 01:34:38,571
This is Japanese yen in Bitcoin.

1156
01:34:39,012 --> 01:34:40,032
This is not from an exchange.

1157
01:34:40,131 --> 01:34:42,931
It's triangulated from the dollar with official exchange rates.

1158
01:34:42,931 --> 01:34:52,492
But also a power curve, 97% R-squared, and 13 million yen for Bitcoin.

1159
01:34:52,492 --> 01:34:56,331
even a little bit below trend now,

1160
01:34:57,351 --> 01:34:58,252
four years ago,

1161
01:34:59,671 --> 01:35:04,351
5.9 million yen at the peak.

1162
01:35:05,691 --> 01:35:07,512
So that is a higher

1163
01:35:07,512 --> 01:35:12,752
multiple ahead for the Japanese four years ago holding Bitcoin

1164
01:35:12,752 --> 01:35:16,992
than it is for us or those who are dollar oriented.

1165
01:35:17,292 --> 01:35:20,931
Say 85K versus 60K four years ago, right?

1166
01:35:20,931 --> 01:35:27,012
so any way you slice this it's going to be better to hold bitcoin and also to transact

1167
01:35:27,012 --> 01:35:31,831
in bitcoin get paid in bitcoin you know this is the the old message from andreas right

1168
01:35:31,831 --> 01:35:41,911
so yeah i mean i anything that that that can bolster that uh story i'm i'm like 100 percent

1169
01:35:41,911 --> 01:35:45,512
behind i know wall street's like very exciting and price and everything but

1170
01:35:45,512 --> 01:35:49,231
you got to think about what's going to be

1171
01:35:49,231 --> 01:35:51,131
behind

1172
01:35:51,131 --> 01:35:52,671
that story.

1173
01:35:52,671 --> 01:35:54,911
If you really want Wall Street to be there

1174
01:35:54,911 --> 01:35:57,091
and that's

1175
01:35:57,091 --> 01:35:58,951
the main driver and everything, the only thing that's going to

1176
01:35:58,951 --> 01:36:01,032
be behind that story is a lot

1177
01:36:01,032 --> 01:36:02,831
of fiat interest.

1178
01:36:03,231 --> 01:36:03,631
Like a lot.

1179
01:36:07,651 --> 01:36:08,451
This chart

1180
01:36:08,451 --> 01:36:10,492
is basically

1181
01:36:10,492 --> 01:36:13,231
telling that story.

1182
01:36:13,611 --> 01:36:14,012
It's like

1183
01:36:15,512 --> 01:36:23,851
at some point we're going to start thinking in terms of satoshis i know but basically with you

1184
01:36:23,851 --> 01:36:29,831
know without showing you too many charts in 20 years in 20 years for sure we're going to be at

1185
01:36:29,831 --> 01:36:34,252
the level of the monetary base which i haven't talked about this show yet but that's uh probably

1186
01:36:34,252 --> 01:36:40,292
when this drops there'll be a another update for people to see the third quarter of base money uh

1187
01:36:40,292 --> 01:36:43,851
which is really basically flat, you know, even all things considered.

1188
01:36:44,272 --> 01:36:45,752
Still about $26 trillion.

1189
01:36:46,331 --> 01:36:49,931
So Bitcoin is, you know, less than 10% right now, just like it is.

1190
01:36:50,091 --> 01:36:52,911
It's actually about the same level of those top eight tech stocks, by the way.

1191
01:36:53,651 --> 01:37:06,191
But anyway, the world where we certainly understand Bitcoin a lot more in five years,

1192
01:37:06,191 --> 01:37:08,572
a lot more than that in 10 years, 15, 20.

1193
01:37:08,572 --> 01:37:11,811
like it is a compounding technology.

1194
01:37:13,651 --> 01:37:16,111
But if you want to think about this

1195
01:37:16,111 --> 01:37:18,752
in terms of like the old traditional TradFi model

1196
01:37:18,752 --> 01:37:21,311
and sort of model it out a straight line on log scale

1197
01:37:21,311 --> 01:37:23,351
and do all these ABC Elliott wave stuff,

1198
01:37:23,772 --> 01:37:25,371
I'm just telling you,

1199
01:37:25,492 --> 01:37:26,631
I've been following this for a long time.

1200
01:37:26,711 --> 01:37:27,831
It does not follow that pattern.

1201
01:37:27,992 --> 01:37:30,072
It follows a nice sustainable growth rate.

1202
01:37:30,252 --> 01:37:33,311
And if you want it to follow those sort of old school

1203
01:37:33,311 --> 01:37:36,911
Wall Street models with a lot of interest baked in,

1204
01:37:37,791 --> 01:37:37,992
right?

1205
01:37:38,572 --> 01:37:42,431
there's going to be consequences to that and probably more booms and busts.

1206
01:37:42,512 --> 01:37:44,272
So I would say that's not, it's still okay.

1207
01:37:44,411 --> 01:37:45,272
I mean, if you're holding Bitcoin,

1208
01:37:45,391 --> 01:37:47,091
Bitcoin is going to do well in either scenario,

1209
01:37:47,231 --> 01:37:51,951
but it's one of these things like, you know, gold bugs, right?

1210
01:37:52,012 --> 01:37:55,171
And how many gold newsletters I've read, I just can't tell you.

1211
01:37:55,171 --> 01:37:57,331
And I talk about this on my show all the time.

1212
01:37:57,431 --> 01:38:00,532
It's like, they sell fear, they sell doom, they sell gloom,

1213
01:38:00,591 --> 01:38:01,272
they don't really sell hope.

1214
01:38:01,451 --> 01:38:03,091
And gold miners don't hold the gold.

1215
01:38:04,111 --> 01:38:05,631
We just talked about this, you know,

1216
01:38:05,691 --> 01:38:08,012
how it's just going to be a golden Christmas for these guys.

1217
01:38:08,012 --> 01:38:12,291
they don't care about the gold they want to get it off their books as quick as they can

1218
01:38:12,291 --> 01:38:22,211
you know sell it lock in the profits move on to the next thing it's not a it's not part of their

1219
01:38:22,211 --> 01:38:27,831
underlying you know worldview but that's not the case for bitcoin so there's just so many different

1220
01:38:27,831 --> 01:38:37,532
things in bitcoin that are going to affect uh the relative growth of the network you know so many

1221
01:38:37,532 --> 01:38:43,191
political things, geopolitical things, technological things, privacy things

1222
01:38:43,191 --> 01:38:45,891
that just no other asset can compete with.

1223
01:38:46,391 --> 01:38:51,691
I really think people got to be thinking about those things more.

1224
01:38:51,911 --> 01:38:55,231
And yeah, it all comes back to the sort of, as you were talking about,

1225
01:38:55,451 --> 01:38:57,331
using this on a day-to-day basis.

1226
01:38:58,051 --> 01:39:01,471
If you're only about number go up or thinking about this as like some

1227
01:39:01,471 --> 01:39:06,532
exponential asset that's going to do better than whatever,

1228
01:39:06,532 --> 01:39:12,811
there's going to be a lot there's going to be a real big consequence to that if like wall street

1229
01:39:12,811 --> 01:39:17,512
comes in and just loads up a ton of debt and fiat interest behind it it's just that's the

1230
01:39:17,512 --> 01:39:25,171
exponential growth for bitcoin would be based on the numbers it would start to look rough it would

1231
01:39:25,171 --> 01:39:31,551
start to look unsustainable and so that's what what i'm trying to show with these charts is like

1232
01:39:31,551 --> 01:39:37,992
Bitcoin, by its nature, very interestingly, is not following the growth trajectory of any other

1233
01:39:37,992 --> 01:39:42,772
asset. And that's a good thing. People should try to understand that, pay attention to that.

1234
01:39:44,791 --> 01:39:51,631
And, you know, take comfort in that. Because, you know, 20 years up, 10 years up for a gold bear,

1235
01:39:51,631 --> 01:39:56,131
then 20 years down, then 10 years sideways. That's not a future.

1236
01:39:56,131 --> 01:39:57,231
It's no way to go through life.

1237
01:39:57,231 --> 01:40:00,532
it's no way to go through life. And, and, you know, just,

1238
01:40:00,772 --> 01:40:06,451
it's so fascinating to go back and, and read some of these gold newsletters,

1239
01:40:06,451 --> 01:40:07,512
like these old ones.

1240
01:40:07,651 --> 01:40:11,171
And then don't even get me started about some of the types of people that some

1241
01:40:11,171 --> 01:40:15,851
of these people are. And, uh, you know, there's just some crazy,

1242
01:40:15,951 --> 01:40:19,492
like just crazies out there in this, in a lot of this, uh, you know,

1243
01:40:20,091 --> 01:40:25,091
speculative political space and a hard, hard asset space.

1244
01:40:25,091 --> 01:40:27,891
and a lot of them have just been wrong about gold,

1245
01:40:27,992 --> 01:40:28,851
like completely wrong.

1246
01:40:30,032 --> 01:40:32,012
So don't hit your wagon to Wall Street

1247
01:40:32,012 --> 01:40:35,931
or I don't know, just a lot of the hype around that.

1248
01:40:36,012 --> 01:40:37,451
Yeah, it's going to drive demand, sure.

1249
01:40:38,072 --> 01:40:43,931
But I would highly caution about too much debt

1250
01:40:43,931 --> 01:40:46,971
for you personally around your Bitcoin or in anything.

1251
01:40:47,811 --> 01:40:52,051
But Bitcoin, if it all goes according to the power curve,

1252
01:40:52,971 --> 01:40:54,831
debt is going to look completely different in the future.

1253
01:40:55,091 --> 01:40:58,091
It's just not...

1254
01:40:58,091 --> 01:41:00,091
There's just too...

1255
01:41:00,091 --> 01:41:02,091
This is not oxymoron sort of...

1256
01:41:02,091 --> 01:41:11,091
There is so little Satoshis to back more and more and more fiat interest.

1257
01:41:11,091 --> 01:41:24,091
You'll just have to have a different concept of future value and giving up those Satoshis for rates of interest, which probably aren't going to pay.

1258
01:41:24,091 --> 01:41:24,492
Yeah.

1259
01:41:26,032 --> 01:41:26,431
Bitcoin.

1260
01:41:26,651 --> 01:41:27,772
It's a better way to go through life.

1261
01:41:28,871 --> 01:41:29,731
That is funny.

1262
01:41:31,951 --> 01:41:32,891
Thinking about this side,

1263
01:41:32,971 --> 01:41:33,512
that's again,

1264
01:41:33,851 --> 01:41:35,032
not blowing smoke up your ass.

1265
01:41:35,091 --> 01:41:39,131
I always love catching up with you quarterly because as you mentioned,

1266
01:41:39,231 --> 01:41:41,351
I find much more comfort in where we are.

1267
01:41:41,351 --> 01:41:47,731
I think it's inevitable to succumb to the animal spirits and the sentiment

1268
01:41:47,731 --> 01:41:52,731
that is a fire hose your way via social media.

1269
01:41:52,731 --> 01:42:00,752
and uh if you look at youtube thumbnails youtube thumbnails you gotta you gotta play the game it's

1270
01:42:00,752 --> 01:42:05,131
all ending this we'll have a good one for this it'll be a burning background and uh

1271
01:42:05,651 --> 01:42:15,291
the elmo yeah but honestly if you're out there relatively new or seasoned and haven't

1272
01:42:15,291 --> 01:42:22,772
yet internalized that Bitcoin is exhibiting power trend adoption.

1273
01:42:23,032 --> 01:42:24,371
It's riding this power curve.

1274
01:42:25,252 --> 01:42:30,331
And if you just look at the data, the back-tested data,

1275
01:42:30,711 --> 01:42:32,471
going back to Bitcoin's inception,

1276
01:42:33,231 --> 01:42:36,951
we are lower, we're below trend,

1277
01:42:37,111 --> 01:42:43,231
but we've been at this point for 30% of Bitcoin's life

1278
01:42:43,231 --> 01:42:45,651
in relation to where the trend actually is.

1279
01:42:46,072 --> 01:42:48,151
Yeah, and we're closer than other relationships.

1280
01:42:48,291 --> 01:42:49,551
Just quickly as we close it,

1281
01:42:51,291 --> 01:42:53,752
here's Plan B's 2019 model.

1282
01:42:54,051 --> 01:42:55,072
This might look kind of close,

1283
01:42:55,151 --> 01:42:55,871
but on log space,

1284
01:42:55,911 --> 01:42:57,551
if you actually look at the numbers, right?

1285
01:42:58,391 --> 01:43:01,591
So he's at 770,000 right now.

1286
01:43:02,131 --> 01:43:03,032
Power Curve's 120.

1287
01:43:03,532 --> 01:43:04,711
His is 770.

1288
01:43:05,611 --> 01:43:09,331
His 2020 model, more absurd, 6 million.

1289
01:43:09,331 --> 01:43:18,471
and then you can do a power trend so but again bottom line without going through the math

1290
01:43:18,471 --> 01:43:22,151
these are incorrect because they assume exponential there's an exponential component

1291
01:43:22,151 --> 01:43:25,492
to this he's using gold silver all sorts of other nonsensical things there's an exponential

1292
01:43:25,492 --> 01:43:31,211
component which bitcoin doesn't do so they're wrong bitcoin is a power curve you can uh

1293
01:43:31,211 --> 01:43:36,731
sort of shoehorn in a little bit a better one like i do not using these exponential components

1294
01:43:36,731 --> 01:43:44,012
again not to be too long-winded it's a little bit better but there's no predictability to it or

1295
01:43:44,012 --> 01:43:50,811
let's say stability comfort to it so for example if i you see my number here the the the sort of

1296
01:43:50,811 --> 01:43:57,091
lighter green shaded one power trend on stock to flow 350k that would be if you didn't assume any

1297
01:43:57,091 --> 01:44:04,371
other weird things like plan b did and just leave it at that but still if i had only taken the 2016

1298
01:44:04,371 --> 01:44:09,971
data and project it out on that way. Whoops. I got this red line. Let's look at the difference.

1299
01:44:10,272 --> 01:44:16,871
350 between 584. Again, you're still 200,000 off. So the 2016, the dotted line showed no

1300
01:44:16,871 --> 01:44:21,371
predictive. And when I say predictive, I don't mean like I can predict the future. It means

1301
01:44:21,371 --> 01:44:24,851
it's statistical. It's showing, you know, it's like, is this medicine going to work?

1302
01:44:25,331 --> 01:44:30,992
There's no sort of prescriptive predictive in a statistical turn sort of relationship there.

1303
01:44:30,992 --> 01:44:37,752
but now let's look at here's the power curve 120k what if we took the power curve from 2016

1304
01:44:37,752 --> 01:44:44,331
projected forward and didn't do anything else from 2017 18 19 2021 22 23 24 25

1305
01:44:44,331 --> 01:44:56,572
that is the 2016 number 128 000 so if you don't like if you're not on board with this again i

1306
01:44:56,572 --> 01:45:05,111
don't even care. I don't care if I found it first or if I didn't. It's just a formula. It's not a

1307
01:45:05,111 --> 01:45:14,911
big deal. But you need to look into what this actually means, how it's displaying the growth

1308
01:45:14,911 --> 01:45:20,492
of Bitcoin. And no other market looks like this. Other markets are these straight line on log scale

1309
01:45:20,492 --> 01:45:29,731
or bastardized stock to flow things, which are, they're just not, they're not jiving with the way

1310
01:45:29,731 --> 01:45:34,091
that Bitcoin grows. And so we can see power curves on address growth, hash rate growth,

1311
01:45:34,791 --> 01:45:40,851
nodes, a lot of different things with Bitcoin. It makes sense. It's a network. So it makes sense

1312
01:45:40,851 --> 01:45:44,871
that it's growing this way. So to understand how the thing grows, which it does in fact,

1313
01:45:44,931 --> 01:45:49,371
slow down a little bit every year, it grows sustainably. That's going to give you more

1314
01:45:49,371 --> 01:45:51,772
comfort, in my opinion, over the end.

1315
01:45:51,772 --> 01:45:57,591
And if it just becomes this savings asset, like you said, which is in some level naive

1316
01:45:57,648 --> 01:46:00,708
We're not good. Yeah, it might look good on a price level, but there's going to be a lot,

1317
01:46:01,328 --> 01:46:05,908
a lot, a lot of fiat units that are baked into this number eight here. And even though it might

1318
01:46:05,908 --> 01:46:10,368
look really, really good after 20 years, maybe $30 million Bitcoin, you're going to have like

1319
01:46:10,368 --> 01:46:15,148
$10,000 gasoline or whatever. I mean, it's just going to be, it's not going to be as future that

1320
01:46:15,148 --> 01:46:19,908
anybody's going to want. So that's the fight. That's the fight. And to do that, you need to

1321
01:46:19,908 --> 01:46:24,508
keep it decentralized. You need to use it, spend it, like you said, all the things we talked about.

1322
01:46:24,508 --> 01:46:26,528
So I'll leave it there with that, my friend.

1323
01:46:27,648 --> 01:46:31,208
Thank you for comforting us during this trying time.

1324
01:46:33,288 --> 01:46:34,428
I do what I can.

1325
01:46:35,048 --> 01:46:37,848
We have bigger issues over here.

1326
01:46:39,108 --> 01:46:42,948
I abstained from bringing those up during your show.

1327
01:46:43,108 --> 01:46:45,588
So I'm sure your listeners will appreciate that.

1328
01:46:47,168 --> 01:46:48,448
We'll catch up on it next time.

1329
01:46:48,928 --> 01:46:49,648
Yeah, I'm happy to.

1330
01:46:49,768 --> 01:46:52,288
Beginning in February next year.

1331
01:46:52,588 --> 01:47:09,453
It actually a timely turnaround It about time two months after Yeah it uh like you said there more stuff happening behind the scenes and i hoping to not just be quarterly after the end of

1332
01:47:09,453 --> 01:47:13,093
this year but maybe we'll get some more rolling better updates not that you and i have to do it

1333
01:47:13,093 --> 01:47:19,313
every month but uh but money supplies just it's a backward looking thing do not look at m2 retail

1334
01:47:19,313 --> 01:47:22,373
money supply in the united states and think it's going to predict the price of bitcoin 11 weeks

1335
01:47:22,373 --> 01:47:24,293
from now. That's not, it's just not doing that.

1336
01:47:26,033 --> 01:47:28,093
Not a good way. Have comfort in the power curve,

1337
01:47:28,413 --> 01:47:32,153
the network effect and spend time with your family.

1338
01:47:32,393 --> 01:47:34,453
Yeah. Spend time with your family. And if you're really worried about it,

1339
01:47:34,473 --> 01:47:38,313
do your part to expand the network effect by educating people about Bitcoin,

1340
01:47:38,453 --> 01:47:42,233
helping them download a Bitcoin wallet and teaching them how to receive

1341
01:47:42,233 --> 01:47:46,213
Bitcoin. Do your part.

1342
01:47:46,953 --> 01:47:49,973
Matthew. Nice. Enjoy your night. Enjoy

1343
01:47:49,973 --> 01:47:52,013
your Christmas and the New Year,

1344
01:47:52,353 --> 01:47:54,013
and we'll catch up in 2026.

1345
01:47:54,873 --> 01:47:55,633
Thank you, my friend.

1346
01:47:56,153 --> 01:47:56,793
Always a pleasure.

1347
01:47:57,693 --> 01:47:58,393
Peace and love, freaks.