1 00:00:00,000 --> 00:00:09,920 You've had a dynamic where money has become freer than free. 2 00:00:10,780 --> 00:00:13,040 You talk about a Fed just gone nuts. 3 00:00:13,500 --> 00:00:15,700 All the central banks going nuts. 4 00:00:16,380 --> 00:00:17,880 So it's all acting like safe haven. 5 00:00:18,360 --> 00:00:23,920 I believe that in a world where central bankers are tripping over themselves to devalue their currency, 6 00:00:24,440 --> 00:00:25,260 Bitcoin wins. 7 00:00:25,340 --> 00:00:28,460 In the world of fiat currencies, Bitcoin is the victor. 8 00:00:28,460 --> 00:00:31,380 I mean, that's part of the bull case for Bitcoin. 9 00:00:31,800 --> 00:00:34,240 If you're not paying attention, you probably should be. 10 00:00:37,320 --> 00:00:38,400 Bill, it's all over. 11 00:00:38,660 --> 00:00:42,440 The price of Bitcoin has crashed to $117,943. 12 00:00:43,840 --> 00:00:45,100 Yeah, amazing, right? 13 00:00:45,580 --> 00:00:48,000 Again, it's all over. 14 00:00:48,820 --> 00:00:53,900 I literally just read a tweet from like a ThreatFi guy who actually came up with that 15 00:00:53,900 --> 00:00:56,840 because Bitcoin crashed by another four or whatever percent. 16 00:00:56,840 --> 00:01:05,020 and and he claimed that bitcoin still doesn't keep his promises yeah it's ridiculous but 17 00:01:05,020 --> 00:01:12,360 okay it's down from uh the high price of 123 000 but uh it's been a week it's been a fun week 18 00:01:12,360 --> 00:01:19,440 and i think the timing of this interview is very timely number one it's it's swiss week 19 00:01:19,440 --> 00:01:26,820 here on tftc unintentionally we we recorded with pascal wakley yesterday we've got you on today 20 00:01:26,820 --> 00:01:31,300 and we're going to get the Swiss perspective on Bitcoin. 21 00:01:31,440 --> 00:01:33,040 But your personal perspective, I think, 22 00:01:33,600 --> 00:01:35,860 considering what's going on with the price action today 23 00:01:35,860 --> 00:01:41,640 is particularly pertinent because of the big themes 24 00:01:41,640 --> 00:01:43,480 that have been talked about in Bitcoin this year, 25 00:01:43,540 --> 00:01:45,100 which is institutional adoption. 26 00:01:45,100 --> 00:01:47,680 And more importantly, traditional finance, 27 00:01:47,960 --> 00:01:52,580 really beginning to give Bitcoin a light mark of approval. 28 00:01:52,880 --> 00:01:54,520 And you sit at the intersection of Bitcoin 29 00:01:54,520 --> 00:01:58,720 in the traditional financial sector over in Europe. 30 00:01:59,340 --> 00:02:01,620 And we were talking about it before we hit record, 31 00:02:01,700 --> 00:02:04,860 but really interested to get the inside scoop 32 00:02:04,860 --> 00:02:10,000 on how these traditional banks and financial institutions react 33 00:02:10,000 --> 00:02:12,500 when the price of Bitcoin runs up like it did this week. 34 00:02:13,880 --> 00:02:17,380 Yeah, I mean, it was quite interesting already last year. 35 00:02:17,380 --> 00:02:24,260 I mean, when you had a lot of critiques in 2022 or even earlier, 36 00:02:24,520 --> 00:02:26,940 But they said, well, there's no substance, no nothing. 37 00:02:26,940 --> 00:02:36,920 But then all of a sudden, the biggest asset managers of this world came up with ETFs and everything was approved by the most powerful economy in the world. 38 00:02:37,280 --> 00:02:41,040 So obviously, that changed quite a bit already last year. 39 00:02:41,160 --> 00:02:49,920 I mean, it was very difficult for somebody to claim that Bitcoin is a Ponzi scheme and there's nothing behind. 40 00:02:49,920 --> 00:02:57,000 and all these claims when the most powerful entities in the world are actively supporting it. 41 00:02:57,000 --> 00:03:00,820 So I think the story changed already last year. 42 00:03:02,100 --> 00:03:04,540 Also, the price developed nicely last year. 43 00:03:04,620 --> 00:03:05,220 I mean, fair enough. 44 00:03:05,320 --> 00:03:08,960 But then you clearly saw the success of all the ETFs. 45 00:03:09,000 --> 00:03:11,760 And then you saw the success of MicroStrategy. 46 00:03:12,180 --> 00:03:17,720 And now, in the more recent weeks, all these Bitcoin treasury companies. 47 00:03:17,720 --> 00:03:24,440 So, I mean, the critiques, they are a bit in shambles, let's put it that way. 48 00:03:24,680 --> 00:03:34,340 It's very hard to say something fundamentally wrong, which was the case before all the ETFs launched. 49 00:03:34,600 --> 00:03:42,100 So, and now, obviously, if the price rips, that's the same probably in every industry. 50 00:03:42,220 --> 00:03:43,480 That's not Bitcoin specific. 51 00:03:43,480 --> 00:04:00,100 Everybody is suddenly it's in the media again. And then and then people say, I mean, now we also had the latest the latest point, which which was brought up quite a bit was that, OK, Bitcoin price only develops nicely in a low interest rate environment. 52 00:04:00,100 --> 00:04:08,200 Now, that's clearly also wrong. So, I mean, we suddenly push through all the points that were wrongfully brought up. 53 00:04:08,400 --> 00:04:13,140 And what you can see in the ThreatFi world is basically a bit of both. 54 00:04:13,500 --> 00:04:19,360 You have, in the meanwhile, you have quite a few who are interested and are actually invested as well. 55 00:04:19,880 --> 00:04:25,480 But then you still have this very strong Bitcoin derangement syndrome. 56 00:04:25,480 --> 00:04:36,520 So you can, as I mentioned just before, I mean, now the price went up in USD terms to 122K and then it dropped slightly. 57 00:04:37,120 --> 00:04:42,800 And then you see these people coming out of the woods again, claiming that it doesn't work, which is obviously stupid. 58 00:04:43,560 --> 00:04:46,940 But yeah, I mean, there is a very good dynamic in the market. 59 00:04:47,140 --> 00:04:52,520 There's a lot of interest from banks, from asset managers, wealth managers. 60 00:04:52,520 --> 00:05:19,920 I would also expect that a lot of the wealth managers especially they have to answer quite some difficult questions by their clients because I mean I had just in two or three years ago I had so many conversations about that and then they claimed well Bitcoin is still not proven it doesn't work blah blah blah and now it's again the best performing asset by far. 61 00:05:19,920 --> 00:05:23,860 So obviously, as a client, you start to ask questions. 62 00:05:24,020 --> 00:05:27,880 And now these questions are asked within the industry, which is great. 63 00:05:27,980 --> 00:05:30,860 So there's a good dynamic and I'm looking forward to what comes next. 64 00:05:32,200 --> 00:05:41,780 Yeah, I guess it probably makes sense to take a step back and to educate the audience about what you're doing at Berglund and how you came to start this. 65 00:05:41,780 --> 00:05:46,180 I was actually listening to a podcast. 66 00:05:46,560 --> 00:05:50,900 I don't know if it was in German or Swiss. 67 00:05:50,900 --> 00:06:00,160 I was translating it, but you were talking about how you decided to start this company, how you view becoming a founder. 68 00:06:00,300 --> 00:06:02,400 And it's not really going to market with an idea. 69 00:06:02,540 --> 00:06:08,620 It's really understanding your customer base and then building the solution that they're looking for, which is what you're doing right now. 70 00:06:09,060 --> 00:06:09,860 Yes, absolutely. 71 00:06:09,860 --> 00:06:12,620 Well, maybe I can give you a quick background. 72 00:06:12,920 --> 00:06:16,560 So I founded my first company about 12 years ago. 73 00:06:16,660 --> 00:06:20,740 It was a peer-to-peer lending platform in traditional lending, 74 00:06:20,880 --> 00:06:22,900 so working capital lending for SMEs. 75 00:06:23,440 --> 00:06:26,440 I led that company for six years, and we were active in Switzerland 76 00:06:26,440 --> 00:06:27,280 and in Germany. 77 00:06:28,760 --> 00:06:31,400 And we basically, well, we did a bunch of the mistakes 78 00:06:31,400 --> 00:06:33,360 that a lot of startups do. 79 00:06:33,920 --> 00:06:35,540 So we invested too much. 80 00:06:35,600 --> 00:06:41,180 We had too high costs on a too, well, very limited base. 81 00:06:41,260 --> 00:06:42,080 Let's put it that way. 82 00:06:42,820 --> 00:06:48,300 We didn't really hit product market fit before we scaled the cost, which was a mistake. 83 00:06:48,920 --> 00:06:55,920 And then I saw a lot of the financing issues, like the lending issues in the traditional world. 84 00:06:56,500 --> 00:06:58,640 Nevertheless, I led the company for six years. 85 00:06:58,640 --> 00:07:02,860 We sold it in 2020, shortly before the COVID lockdown. 86 00:07:03,360 --> 00:07:08,780 And then I became CEO of another of a joint venture between a large bank and an insurance. 87 00:07:09,520 --> 00:07:16,880 But always wanted to go back into entrepreneurship, first of all, but then also focus on Bitcoin full time. 88 00:07:17,080 --> 00:07:22,460 I mean, the Bitcoin space are interested in it since about 10 years, I would say. 89 00:07:22,460 --> 00:07:29,700 and basically wrote the whole ICO wave with a bunch of stupid crypto decisions 90 00:07:29,700 --> 00:07:33,460 and then really started to dig into it from 2018 onwards. 91 00:07:34,560 --> 00:07:39,600 And therefore, it was very clear to me that I want to focus full time on Bitcoin. 92 00:07:39,600 --> 00:07:44,200 And then I thought, OK, so I'm involved in one or two or three other startups 93 00:07:44,200 --> 00:07:48,760 and I see the same mistake everywhere, like the same mistake I did as well, 94 00:07:48,760 --> 00:07:52,920 That we got too much money too early on. 95 00:07:53,020 --> 00:07:54,700 We invested it in the wrong things. 96 00:07:54,880 --> 00:08:04,320 We built a product that turned out that the market doesn't really need and doesn't want it as much as we believe they wanted. 97 00:08:05,080 --> 00:08:08,340 And so I thought, OK, let's do that differently this time. 98 00:08:08,860 --> 00:08:10,460 I just start by myself. 99 00:08:10,540 --> 00:08:11,820 I will finance it myself. 100 00:08:12,160 --> 00:08:13,620 No external capital. 101 00:08:13,620 --> 00:08:18,420 And I will try to really find a way on what the market really needs. 102 00:08:18,760 --> 00:08:25,140 So that's why I decided in the beginning of last year, I will just start with education and consulting. 103 00:08:25,740 --> 00:08:30,040 And the other thing that was clear to me was that I want to build a B2B business. 104 00:08:30,300 --> 00:08:41,240 But that was just a personal choice because I feel like I'm better in long-term relationship building rather than large-scale growth strategies. 105 00:08:41,240 --> 00:08:54,160 So that was basically very simple how I started and then said, OK, I'm reaching out to my network and within European banks and asset managers and financial institutions. 106 00:08:54,780 --> 00:09:10,500 And it helped definitely that I had a network from my previous startup, but I also wrote a Bitcoin newsletter since five years and therefore had a bit of a reach within the German speaking Europe. 107 00:09:10,500 --> 00:09:17,340 and that clearly helped me to get into a few banks and pension funds, etc. 108 00:09:17,340 --> 00:09:25,060 And then it ranged from simple workshops about what is Bitcoin, how does it work, what self-custody, da-da-da. 109 00:09:25,140 --> 00:09:29,380 All these things, very basic, but then also to some strategic projects. 110 00:09:29,740 --> 00:09:37,380 Especially one was with the bank where I said, well, look, there is clearly a big need within the Bitcoin industry, 111 00:09:37,380 --> 00:09:43,940 which is that Bitcoiners do not want to sell, but they need liquidity in one way or the other. 112 00:09:44,260 --> 00:09:45,980 So clearly there is demand for that. 113 00:09:46,100 --> 00:09:49,420 And you guys at the bank, you have access to the cheapest capital. 114 00:09:50,640 --> 00:09:52,100 So fiat capital, that is. 115 00:09:52,600 --> 00:09:55,860 So and then therefore they should go into Bitcoin-backed lending. 116 00:09:56,440 --> 00:09:59,720 And they say, well, I understand that or they understand it. 117 00:09:59,780 --> 00:10:02,960 That makes a lot of sense, but it takes a while until we get there. 118 00:10:02,960 --> 00:10:10,700 It takes like two to three years until we can actually push it through all our compliance and risk departments. 119 00:10:11,560 --> 00:10:14,740 And in parallel, I had a workshop with a pension fund. 120 00:10:14,980 --> 00:10:21,700 And there we really had to start on round zero, basically, because they are still nowhere. 121 00:10:21,900 --> 00:10:25,740 Pension funds are, in my opinion, still way, way behind. 122 00:10:26,580 --> 00:10:30,700 And there was a lot of skepticism, a lot of questions still. 123 00:10:30,700 --> 00:10:33,900 And then at one point I said, OK, let's do it differently. 124 00:10:34,440 --> 00:10:36,300 Let's leave the term Bitcoin aside. 125 00:10:37,240 --> 00:10:42,620 I'll tell you, I'll give you the opportunity to invest in Swiss franc, euro, USD. 126 00:10:43,220 --> 00:10:46,200 You get Swiss franc, euro, USD back. 127 00:10:47,140 --> 00:10:47,860 It's credit. 128 00:10:48,440 --> 00:10:55,760 You earn about 6% to 8% on the Swiss franc, about 8% to 10% on the euro, about 10% to 14% even on the USD. 129 00:10:56,100 --> 00:11:00,420 The collateral is always available 24-7, tradable. 130 00:11:00,420 --> 00:11:01,640 It's highly liquid. 131 00:11:02,440 --> 00:11:04,760 And the credits are always over collateralized. 132 00:11:04,820 --> 00:11:05,840 So how does that sound? 133 00:11:06,040 --> 00:11:08,560 And then they were like, oh, that sounds more interesting. 134 00:11:08,720 --> 00:11:09,920 That's more our home turf. 135 00:11:10,260 --> 00:11:17,920 So that was then basically those two situations led to the fact that I said, okay, so then let's build that ourselves. 136 00:11:18,880 --> 00:11:21,780 That was then when I found the co-founder. 137 00:11:22,060 --> 00:11:30,120 So we are now two, still relatively small, but decided to focus on that asset management solutions. 138 00:11:30,420 --> 00:11:35,560 with the overall goal to basically fuel the Bitcoin economy. 139 00:11:35,780 --> 00:11:38,160 And the first product is just Bitcoin-backed lending, 140 00:11:38,420 --> 00:11:43,080 where we want to allow institutional and qualified investors 141 00:11:43,080 --> 00:11:48,420 to invest through the different platforms like Debitify, like Firefish, 142 00:11:48,420 --> 00:11:52,540 but also through regulated custodians like BitGo, Signum, 143 00:11:52,620 --> 00:11:54,140 and all the banks that we have, 144 00:11:54,240 --> 00:11:58,380 because they have another challenge with capital requirements. 145 00:11:58,380 --> 00:12:05,560 So we want to build that solution to allow institutional investors to invest in these products. 146 00:12:06,100 --> 00:12:07,080 That's what we do. 147 00:12:08,180 --> 00:12:12,240 Yeah, I think there's many sort of points to touch on there. 148 00:12:12,240 --> 00:12:26,060 I mean, the first of which jumps out to me is somebody who's been following the space, leveraging these products, pun intended, and investing in companies offering Bitcoin collateralized lending solutions. 149 00:12:26,060 --> 00:12:30,560 is that it seems like the most mispriced credit instrument in the world 150 00:12:30,560 --> 00:12:36,060 in the sense that you described the collateral sits in a wallet 151 00:12:36,060 --> 00:12:39,340 if the custody arrangement's done the right way. 152 00:12:39,500 --> 00:12:40,680 It's not rehypothecated. 153 00:12:40,900 --> 00:12:41,780 It's extremely liquid. 154 00:12:42,620 --> 00:12:47,800 And the risk of a liquidity provider losing their principles 155 00:12:47,800 --> 00:12:50,780 is extremely low when you consider those factors. 156 00:12:51,340 --> 00:12:53,520 And you mentioned the interest rates that exist, 157 00:12:53,520 --> 00:13:05,320 They're, at least here in the United States, way higher than traditional sort of lending products, even though I would consider the risk to be significantly lower. 158 00:13:05,320 --> 00:13:18,400 And then on top of that, you have this sort of environment over the last, let's call it five to 10 years, where the rush to private credit and search for yield has been a big trend, particularly here in the United States. 159 00:13:18,400 --> 00:13:34,260 And I imagine globally, and I think these Bitcoin collateralized lending solutions provide an incredible risk adjusted profile for investors looking to get exposure to credit markets, private credit markets specifically. 160 00:13:35,580 --> 00:13:37,480 It's I mean, I couldn't agree more. 161 00:13:37,620 --> 00:13:38,800 It's insane, to be honest. 162 00:13:38,920 --> 00:13:43,160 I still can't get my head around the actual costs. 163 00:13:43,160 --> 00:13:50,420 But the thing is, the market dynamics are right now, they are as such that there's not enough fiat capital. 164 00:13:50,600 --> 00:13:52,860 So that's what defines the rates at the moment. 165 00:13:53,020 --> 00:13:55,380 There's still not enough, not enough interest. 166 00:13:55,600 --> 00:13:59,480 And that's also why we exist, because we want to change that. 167 00:13:59,660 --> 00:14:00,540 It's a lot of work. 168 00:14:00,880 --> 00:14:04,100 But I mean, I fully agree on just a risk reward perspective. 169 00:14:05,020 --> 00:14:09,640 I couldn't find anything that comes even close. 170 00:14:09,640 --> 00:14:12,760 It's really remarkable. 171 00:14:12,960 --> 00:14:19,700 And especially if you look into the area that you just mentioned with all the private debt funds and alternative credit funds. 172 00:14:19,840 --> 00:14:22,680 I mean, there is so much money lying around there. 173 00:14:23,240 --> 00:14:29,180 And they are chasing returns of, let's say, 10% on the USD. 174 00:14:29,700 --> 00:14:32,660 But I mean, they take considerable risk there. 175 00:14:33,280 --> 00:14:38,440 And growth companies, pre-IPO companies or whatever. 176 00:14:38,440 --> 00:14:40,400 But there's a lot of risk in there. 177 00:14:40,720 --> 00:14:46,540 While with Bitcoin back lending, I mean, you have a collateral, highly liquid, tradable 24-7. 178 00:14:47,240 --> 00:14:49,600 All the loans are over collateralized. 179 00:14:49,720 --> 00:14:51,180 They are not rehypothecated. 180 00:14:51,940 --> 00:14:53,720 It's really quite something. 181 00:14:54,100 --> 00:15:05,580 But I mean, on the positive side, especially speaking as a Bitcoiner now, I mean, I personally think the product that we are focusing right now on 182 00:15:05,580 --> 00:15:09,180 has an end date. 183 00:15:09,180 --> 00:15:17,080 I mean, there is, especially now also in Switzerland, I mean, our leading rate, 184 00:15:17,080 --> 00:15:37,763 interest rate is 0 right now from our national bank So the banks are looking into ways on how they can lend money And we are working with banks also with one that I hopefully can announce pretty soon which will provide liquidity for Bitcoin lending 185 00:15:38,082 --> 00:15:41,082 And then we are talking about way lower rates. 186 00:15:41,263 --> 00:15:45,403 Like then we are talking about 3% to 3.5% on the Swiss franc. 187 00:15:45,923 --> 00:15:47,503 And that's going to happen. 188 00:15:47,923 --> 00:15:49,842 So it just takes time. 189 00:15:49,842 --> 00:15:52,602 It's unfortunately not as fast. 190 00:15:52,783 --> 00:16:01,143 And then, yeah, speaking as a Bitcoiner, I would love it to be faster and to be more efficient so that the whole economy can grow faster. 191 00:16:01,322 --> 00:16:04,702 I mean, there's a lot of value for a product like that. 192 00:16:04,702 --> 00:16:21,442 Yeah, and based off our last conversation from last month, you made me aware of something that I was completely unaware of, which was the relationship that Swiss regulators have with interest rates and how high they're willing to go. 193 00:16:21,442 --> 00:16:35,862 Yeah, it's quite interesting at the moment, especially when you look at it, the National Bank decreased the interest rates to 0%, as I mentioned. 194 00:16:35,862 --> 00:16:46,202 And so for banks now, they have an issue because their main business is, how do you say that? It's like interest rates differences. 195 00:16:46,202 --> 00:17:15,703 Yeah. So they need to find ways to allocate the capital. And so that will have a very positive effect. But then I don't know if that's also what you were talking about. Our regulator gives or limits the banks on Bitcoin backed lending and crypto lending, if you want to say so, with regards to that they still consider it as uncollateralized lending. 196 00:17:16,203 --> 00:17:20,283 And so that comes with very strict capital requirements. 197 00:17:21,162 --> 00:17:33,582 So that means that the bank, especially, let's say, younger banks with more like a crypto Bitcoin focus, they have a problem because their balance sheet is not as strong. 198 00:17:33,582 --> 00:17:43,922 And so because they would need to underlie all these loans with tier one capital, tier one capital is essentially in simpler terms, it's just equity capital. 199 00:17:43,922 --> 00:17:46,883 It's the most expensive capital for a bank. 200 00:17:47,483 --> 00:17:50,443 And so that means they are quite limited still. 201 00:17:51,243 --> 00:17:59,023 But the margins that they can generate right now especially are still attractive for that. 202 00:17:59,703 --> 00:18:03,342 And I think those are two important factors. 203 00:18:03,502 --> 00:18:05,783 We have the regulation, which will change. 204 00:18:06,142 --> 00:18:09,682 And then we have the interest rate pressure, which is already there. 205 00:18:09,682 --> 00:18:18,283 So you have banks that are looking into and say, OK, so we do have a couple of hundred millions that we can allocate to that, to Bitcoin-backed lending. 206 00:18:18,763 --> 00:18:22,422 And then we would need to find a solution that is outside of our balance sheet. 207 00:18:23,502 --> 00:18:25,763 And that's where we still come in. 208 00:18:25,902 --> 00:18:29,123 And then at one point, the regulation will also change. 209 00:18:29,623 --> 00:18:31,483 I'm 100% sure about that. 210 00:18:31,483 --> 00:18:42,002 And then it's basically the banking model, the traditional banks who provide capital for Bitcoin back lending, which is OK. 211 00:18:42,862 --> 00:18:47,623 And isn't there an upper limit to the interest rate banks in charge as well? 212 00:18:48,623 --> 00:18:49,662 It depends. 213 00:18:49,842 --> 00:18:56,142 So in Switzerland, it's like to private individuals, there are like consumer credit limits that's at 9.9%. 214 00:18:56,142 --> 00:18:59,002 So they are not allowed to go higher. 215 00:18:59,002 --> 00:19:04,822 But for SMEs and companies, that limit is not in place. 216 00:19:05,842 --> 00:19:18,102 Yeah, I'm just trying to get a well-rounded perspective on just the path to lowering the cost of capital for these Bitcoin-backed lending products. 217 00:19:18,243 --> 00:19:26,082 I think you said it perfectly, which is just the lack of liquidity that exists for these products specifically right now. 218 00:19:26,082 --> 00:19:34,043 that there's relatively little euros, francs, dollars competing for these loans 219 00:19:34,043 --> 00:19:35,483 that are able to charge a higher rate. 220 00:19:35,483 --> 00:19:40,742 And bringing this back to the juxtaposition of Bitcoin collateralized lending 221 00:19:40,742 --> 00:19:44,443 versus the private debt markets that have exploded in recent years 222 00:19:44,443 --> 00:19:48,883 that are taking what I would deem to be an insane risk, 223 00:19:48,883 --> 00:20:03,783 is when is that tipping point of banks and credit funds recognizing the relatively low risk provided by these collateralized Bitcoin products that floods the capital into the space? 224 00:20:04,922 --> 00:20:11,862 I mean, there are very likely there are multiple pieces of puzzle that fall into place, I would say, at the very moment. 225 00:20:11,862 --> 00:20:17,123 I mean, you see the Bitcoin treasury companies outperforming pretty much every other stock. 226 00:20:17,123 --> 00:20:23,002 and obviously private debt funds are also looking at the stock markets. 227 00:20:24,383 --> 00:20:29,963 So and then they see, well, there is clearly value in that weird coin. 228 00:20:31,643 --> 00:20:37,563 And so then they will realize, okay, so there is something that is way more transparent 229 00:20:37,563 --> 00:20:42,123 that is the same price all over the world and this is highly liquid. 230 00:20:42,303 --> 00:20:43,502 So that makes a lot of sense. 231 00:20:43,502 --> 00:20:54,422 And at the moment, and I would give it like 12 months, maybe max, they can still generate excessive returns, I would say, as compared to anything else that they would invest. 232 00:20:55,703 --> 00:20:55,803 Yeah. 233 00:20:56,502 --> 00:21:01,963 And how do you see the evolution of Bitcoin collateralized lending? 234 00:21:01,963 --> 00:21:05,963 Because obviously, to date, it's been pretty vanilla. 235 00:21:06,402 --> 00:21:10,342 You put Bitcoin up in a wallet, typically over collateralized. 236 00:21:10,703 --> 00:21:12,862 LTV is around 50%, depending on. 237 00:21:13,502 --> 00:21:21,223 The individual lender that you're interacting with and you get cash back. 238 00:21:21,223 --> 00:21:28,182 But there's been the emergence of, as you mentioned, micro strategy like convertible bonds. 239 00:21:28,682 --> 00:21:32,463 There are different type of Bitcoin collateralized debt instrument to an extent. 240 00:21:32,463 --> 00:21:45,203 And we've seen over here in the United States, the emergence of companies like Battery Finance are doing dual collateralized sort of grade A credit in commercial real estate. 241 00:21:45,203 --> 00:21:56,703 Do you think Bitcoin, the meme of Bitcoin is super collateral, sort of getting injected into every nook and cranny of debt markets has legs? 242 00:21:56,703 --> 00:22:16,342 This is something that I've been talking about on this show for probably the better part of a year and a half now is I think this is the cycle of Bitcoin is super collateral, really shining and beginning to expand beyond the vanilla, put up Bitcoin as collateral, get dollars back and get more. 243 00:22:16,502 --> 00:22:22,763 I don't want to say exotic, but get into more more complex structure credit products. 244 00:22:23,643 --> 00:22:24,582 Yeah, 100%. 245 00:22:24,582 --> 00:22:26,763 I mean, that's clearly happening. 246 00:22:26,922 --> 00:22:31,443 And as usual, the U.S. is probably about two or three years ahead of Europe. 247 00:22:32,742 --> 00:22:39,963 But I mean, that's basically the reason why we then said, OK, we start with just plain vanilla Bitcoin-backed lending. 248 00:22:40,563 --> 00:22:42,502 Because it's the easiest to explain. 249 00:22:42,502 --> 00:22:50,383 And how we believe we can crack the knot of getting fiat capital into the Bitcoin economy in the easiest way. 250 00:22:50,662 --> 00:22:51,902 But that's just the first step. 251 00:22:51,902 --> 00:22:58,963 I mean, then clearly, I mean, injecting it into real estate like battery does is great. 252 00:22:59,483 --> 00:23:01,342 I mean, that has a lot of potential. 253 00:23:02,162 --> 00:23:05,342 We talked to a few real estate developers over here as well. 254 00:23:05,383 --> 00:23:07,943 And I mean, they are struggling with that as well. 255 00:23:08,043 --> 00:23:13,682 I mean, on mortgages, the rates that you pay for debt, etc. are phenomenal. 256 00:23:13,682 --> 00:23:23,283 But then the bigger problem is for commercial real estate or bigger real estate projects when they have to calculate over the next 20, 30, 40 years. 257 00:23:23,443 --> 00:23:35,162 And then it's more on the on the CapEx side of things when suddenly all renovations cost 20, 30, 40 percent more because fiat just devalues all the time. 258 00:23:35,162 --> 00:23:39,182 And that's that's very hard to to calculate in advance. 259 00:23:39,182 --> 00:23:43,963 So what they say is that, okay, so let's run the amortization part. 260 00:23:44,223 --> 00:23:51,682 We put a bit in Bitcoin and we basically benefit from the acceleration of the price. 261 00:23:52,123 --> 00:23:57,703 And hence, we can make sure that our properties, they keep the value over time. 262 00:23:58,222 --> 00:24:02,182 And so that's also an easy to understand product. 263 00:24:02,182 --> 00:24:10,383 But then also, I would say, especially here in Switzerland, we have this, I don't know if it's a speciality, but it's quite interesting. 264 00:24:10,543 --> 00:24:16,822 So if you buy an apartment in a bigger building, then you own, it's called Stockwerk Eigentum. 265 00:24:16,903 --> 00:24:18,982 You basically own part of a floor, right? 266 00:24:19,043 --> 00:24:20,043 You own the apartment. 267 00:24:20,222 --> 00:24:26,422 But what you do is you pay in constantly every year, you pay in a so-called amortization fund. 268 00:24:26,422 --> 00:24:35,623 And what you can see there, which is also in the ThreatFi world, quite spectacular, I must say, it just lies around. 269 00:24:35,742 --> 00:24:37,682 It's just on an account. It doesn't work. 270 00:24:38,143 --> 00:24:46,383 And so suddenly you have, in the meanwhile, we have multiple hundred billions of dollars sitting in these funds. 271 00:24:47,162 --> 00:24:49,883 And they do nothing. They don't work. 272 00:24:49,883 --> 00:24:55,862 And it's so easy to actually get them to plan. 273 00:24:55,862 --> 00:25:05,963 For instance, I talked to a couple of friends of mine recently, and they bought a vacation home up in the mountains, and that is in one of these buildings. 274 00:25:06,862 --> 00:25:11,883 And then there were just about 250,000 Swiss francs lying around. 275 00:25:12,143 --> 00:25:17,862 And they already know that in 2030, there will be a bigger renovation project. 276 00:25:18,403 --> 00:25:23,043 And it will cost roughly at current prices about 400,000. 277 00:25:23,043 --> 00:25:30,563 realistically it will be 450 or something and they just calculate it as such that they just 278 00:25:30,563 --> 00:25:39,322 need to save until there and so bitcoin would be the ideal uh the ideal asset to save that part 279 00:25:39,322 --> 00:25:47,203 that that capital um to to actually get this renovations done um and so so i fully agree with 280 00:25:47,203 --> 00:25:59,063 I mean, this is just one example that's where Bitcoin will come into place and make sure that we can actually revolutionize the financial financial industry, the traditional financial industry. 281 00:25:59,063 --> 00:26:18,982 Well, on that note, it's a perfect toss up to what I wanted to talk about next is, I mean, you're partnered with Debitify, Firefish, BitGo, all three of which, correct me if I'm wrong, do leverage some sort of multi-sig escrow for the Bitcoin when it's used as collateral. 282 00:26:18,982 --> 00:26:29,883 And so I think that's been a big topic of discussion here in the United States is the centralization of custodian risk with a lot of the ETFs flooding their Bitcoin to Coinbase. 283 00:26:29,883 --> 00:26:48,922 And I've long been an advocate of if the banking system and traditional finance is going to step into Bitcoin in earnest, that we really need to take a step back and think about the optimal sort of custody and how to custody the collateral when it's being used in the system. 284 00:26:48,922 --> 00:27:04,963 And I think multi-institution, multi-sig makes the most sense to me because you really create an incentive structure that really disincentivizes against rehypothecation and concentrated third-party risk. 285 00:27:05,803 --> 00:27:06,662 Yeah, definitely. 286 00:27:06,662 --> 00:27:20,182 Definitely. I mean, I started with Berglin and basically had the ideologue Bitcoin image in mind and thought, OK, so it's going to be multi-sig above all. 287 00:27:21,523 --> 00:27:24,162 And this is where we focus on and we still do. 288 00:27:24,422 --> 00:27:29,422 I think it is a good way, but it also comes with limitations. 289 00:27:29,422 --> 00:27:46,023 And so now looking at the exact processes of all the platform, I mean, sometimes it's hard to argue why a regulated custodian isn't safer, so to say. 290 00:27:46,023 --> 00:27:58,722 Because then you have, I mean, when you look at processes of regulated banks, we have two in Switzerland who are fully focused on Bitcoin or unfortunately crypto as a whole. 291 00:27:58,722 --> 00:28:14,162 And I mean, when you look at their risk policies, at their risk processes, then sometimes it's hard to argue why this should be less secure than the multi-sec setups of some startups, so to say. 292 00:28:14,162 --> 00:28:34,222 And so there is still a way to go, I would say. And then I also think the right way to tackle it is multi-institution, but professional institutions, not some random one single or one key holder or so somewhere. 293 00:28:34,222 --> 00:28:38,023 But yes, I mean, this is also going to be built up, I would say. 294 00:28:38,662 --> 00:28:40,463 And I don't know how it is in the US. 295 00:28:40,643 --> 00:28:44,903 I mean, you clearly have a few players who are already working on that. 296 00:28:45,482 --> 00:28:50,742 I think in Europe, this is something that we have to tackle over the next two years or so. 297 00:28:51,662 --> 00:29:04,063 Yeah, I think the dream scenario here in the United States is Fidelity, who's been in Bitcoin for over a decade now at this point in a century-old. 298 00:29:04,222 --> 00:29:10,403 institution here in the United States really stepping out on the ledge. And I think an entity 299 00:29:10,403 --> 00:29:17,662 like Fidelity needs to be the one to push multi-institution, multi-sig to get that seal of 300 00:29:17,662 --> 00:29:24,482 approval from not only regulators, but traditional financial players who really respect the prestige 301 00:29:24,482 --> 00:29:30,763 and the century-long track record of Fidelity. I think somebody like them stepping out and saying, 302 00:29:30,763 --> 00:29:35,403 all right, we're going to be a key agent in a quorum of a multi-institution, multi-sig 303 00:29:35,403 --> 00:29:37,082 would be a massive step forward. 304 00:29:37,703 --> 00:29:38,963 Yeah, that would be amazing. 305 00:29:39,303 --> 00:29:46,023 I mean, something like that would really change the way people look at custody is also on 306 00:29:46,023 --> 00:29:47,002 the institutional level. 307 00:29:47,143 --> 00:29:55,623 Because I mean, so far when we talk to more institutional type of clients, I mean, either 308 00:29:55,623 --> 00:30:02,803 either corporate corporations who are looking for a for a loan then the multi-sig setup doesn't work 309 00:30:02,803 --> 00:30:11,082 it's always it's always a regulated custodian and and if so if a player like fidelity or i mean the 310 00:30:11,082 --> 00:30:17,283 equivalent in europe it doesn't really matter um could come up with something i mean even even 311 00:30:17,283 --> 00:30:23,082 better would be some sort of like a global uh global consortium of uh multiple institutions 312 00:30:23,082 --> 00:30:29,662 That would be great because then we can really scale it to the institutional level as well. 313 00:30:31,242 --> 00:30:36,922 So shifting gears towards Europe's specific perspective on Bitcoin. 314 00:30:37,342 --> 00:30:38,922 I mean, you've mentioned it a couple of times. 315 00:30:39,063 --> 00:30:45,943 Seems like European regulators are two to three years behind what's happening here in the United States. 316 00:30:46,582 --> 00:30:58,165 Obviously you have the micro regulations that have gone live this year in Europe and there are many people that are worried about the state of the broader Eurozone economy 317 00:30:58,865 --> 00:31:05,025 What are your thoughts about Europe as it pertains to Bitcoin regulation? 318 00:31:06,145 --> 00:31:14,145 And can the success of Bitcoin be a catalyst to force more free market operations within Europe? 319 00:31:14,145 --> 00:31:21,025 Yeah, I mean, Europe as a whole is a difficult topic at the moment, I would say, not only 320 00:31:21,025 --> 00:31:28,705 financial regulation-wise, but also general macroeconomic-wise. It's quite challenging. 321 00:31:28,705 --> 00:31:38,225 I mean, the European Union, their primary strength is regulation, which is a bad thing in the first 322 00:31:38,225 --> 00:31:43,425 place. I mean, luckily, I'm based in Switzerland, so we are not in the European Union, and it's also 323 00:31:43,425 --> 00:31:50,225 one of the main reasons why we are doing much better than every country surrounding us. 324 00:31:51,185 --> 00:31:57,825 So this is also my personal primary motive these days. I just try to do everything I can to 325 00:31:57,825 --> 00:32:03,665 so that we are not getting too close to this regulatory monster that surrounds us. 326 00:32:04,785 --> 00:32:09,745 Right now it is, I mean, but also in Switzerland, I mean, you've seen an interesting development. 327 00:32:09,745 --> 00:32:29,785 We pushed forward quite good in 2017, 2018 under a different financial minister, but then kind of slapped in, so to say, and then a lot of countries bypassed us. 328 00:32:30,425 --> 00:32:32,325 And hopefully we can change that again. 329 00:32:32,325 --> 00:32:40,125 I mean, now our regulator is a bit scared given the downfall of Credit Suisse two years ago. 330 00:32:40,265 --> 00:32:42,945 So they really try to avoid any risk. 331 00:32:43,525 --> 00:32:44,805 But this will hopefully change. 332 00:32:44,905 --> 00:32:53,545 I mean, we're pushing on all fronts that they are a bit less risk averse, especially on the Bitcoin scene. 333 00:32:53,905 --> 00:32:56,745 There's clearly a lot of interest right now from the industry. 334 00:32:56,745 --> 00:33:06,585 So I'm positive that we can change at least the Swiss regulator's perspective over the next few months. 335 00:33:07,285 --> 00:33:15,545 On Europe as a whole, I mean, it's really difficult for me to understand how these processes work. 336 00:33:15,665 --> 00:33:16,905 I mean, it's heavily centralized. 337 00:33:16,905 --> 00:33:28,225 Europe gets more and more centralized and the problems that they are dealing with these days are much broader than just financial problems, right? 338 00:33:28,325 --> 00:33:31,825 It's especially energy is a big issue in Europe. 339 00:33:31,825 --> 00:33:48,905 I mean, the whole industry or Germany, one of the powerhouses of Europe in the past, is just strangled by insane energy prices and ludicrous policies around that. 340 00:33:49,165 --> 00:33:55,605 So, I mean, this is, in my opinion, probably even more important than the regulation around Bitcoin for them. 341 00:33:55,925 --> 00:33:58,785 And I really hope they can change the direction there. 342 00:33:58,785 --> 00:34:07,745 Other than that, I mean, can Bitcoin be a catalyst for sovereignty? 343 00:34:07,745 --> 00:34:08,345 For sure. 344 00:34:09,145 --> 00:34:11,485 Will it be a catalyst for growing economy? 345 00:34:12,105 --> 00:34:12,885 I hope so. 346 00:34:13,005 --> 00:34:17,365 But I mean, you cannot get like institutions or corporations if they are not allowed to 347 00:34:17,365 --> 00:34:17,685 do that. 348 00:34:17,745 --> 00:34:19,105 You won't get them to do that. 349 00:34:19,165 --> 00:34:19,345 Right. 350 00:34:19,385 --> 00:34:21,045 It's different on the individual level. 351 00:34:21,045 --> 00:34:23,645 But for corporates, it's tricky. 352 00:34:23,645 --> 00:34:34,965 So, but so far, unfortunately, it still looks like in Europe, the pain is not big enough so that the politicians really change. 353 00:34:35,525 --> 00:34:37,465 So we will see, I hope. 354 00:34:37,645 --> 00:34:43,565 But I'm quite skeptical on the European Union and the way they handle pretty much everything. 355 00:34:44,325 --> 00:34:46,825 What is going to be the catalyst? 356 00:34:46,825 --> 00:34:56,745 Do you imagine it like Bitcoin has another very successful cycle throughout the rest of this year, potentially into next year? 357 00:34:56,745 --> 00:35:09,625 And you see a lot of the activity happening here in the United States, Southeast Asia, other parts of the world where people are really embracing it and leveraging the sort of monetization and adoption of Bitcoin to their benefit. 358 00:35:09,625 --> 00:35:15,305 and sort of people sitting in corporations in Europe looking out at the world, 359 00:35:15,965 --> 00:35:20,785 basically embracing this technology and succeeding massively because of that 360 00:35:20,785 --> 00:35:23,505 and pushing back against the regulator saying, 361 00:35:23,725 --> 00:35:26,365 look what's happening around us, we're completely missing out on this. 362 00:35:26,445 --> 00:35:27,305 Is that what it's going to take? 363 00:35:27,825 --> 00:35:29,005 Yeah, most probably. 364 00:35:29,385 --> 00:35:34,625 But usually it has to start with quite a bit policy change 365 00:35:34,625 --> 00:35:39,605 and then the politicians will force the regulator to act. 366 00:35:40,505 --> 00:35:43,745 And I mean, there we can see some effects. 367 00:35:44,025 --> 00:35:50,245 So one example is in Norway, they started with an insane wealth tax, 368 00:35:50,905 --> 00:35:55,445 just another socialist experiment that failed massively. 369 00:35:55,725 --> 00:35:58,025 So they installed this wealth tax. 370 00:35:58,025 --> 00:36:02,065 And as a result, a lot of the Norwegian billionaires, 371 00:36:02,065 --> 00:36:07,585 they move to Switzerland, which is great for us when it's terrible for the country. 372 00:36:07,585 --> 00:36:14,385 And also, obviously, the net result is that they lost tax revenues at a significant scale. 373 00:36:14,945 --> 00:36:17,785 And you see that in many different places now as well. 374 00:36:17,905 --> 00:36:25,105 And in Germany, they also tried to increase taxes again or increase debt, which will cause 375 00:36:25,105 --> 00:36:28,325 inflation that they already saw. 376 00:36:28,325 --> 00:36:33,645 I mean, the euro had so heavy inflation over the last few years already. 377 00:36:34,285 --> 00:36:40,605 So and I think there needs to be like people see start to realize that more and more. 378 00:36:40,725 --> 00:36:44,985 They realize, hey, we are like we're being cheated on here. 379 00:36:45,165 --> 00:36:46,105 So that doesn't work. 380 00:36:46,205 --> 00:36:56,185 Like suddenly suddenly we have 10 percent and higher inflation and things are not getting any better while our country has record tax revenues. 381 00:36:56,185 --> 00:36:59,385 but the infrastructure is bad. 382 00:36:59,825 --> 00:37:01,505 So a lot of these things come together 383 00:37:01,505 --> 00:37:02,805 and then they see in parallel, 384 00:37:03,805 --> 00:37:05,305 Bitcoin appreciates a lot. 385 00:37:05,485 --> 00:37:10,445 And then you see the Arab countries 386 00:37:10,445 --> 00:37:11,845 and a lot of Asian countries 387 00:37:11,845 --> 00:37:15,125 and the US, especially under the new administration, 388 00:37:15,685 --> 00:37:18,565 really pushes forward on the Bitcoin side. 389 00:37:18,565 --> 00:37:22,125 And clearly they see these successful examples. 390 00:37:22,445 --> 00:37:24,485 And I think this will help. 391 00:37:24,485 --> 00:37:27,205 And then hopefully that's going to be the catalyst. 392 00:37:27,425 --> 00:37:32,685 In the end, I personally believe it's always going to be price action in one way or the other. 393 00:37:33,965 --> 00:37:37,805 I need to spice your conversations. 394 00:37:38,045 --> 00:37:49,565 Do you think discussions about whether or not the European Union, the economic agreement between some European states is a failure after 30 years? 395 00:37:50,845 --> 00:37:54,205 I think the European Union is a massive failure. 396 00:37:54,485 --> 00:37:56,985 It's on pretty much all fronts. 397 00:37:57,225 --> 00:38:03,785 I mean, it's a centralizing experiment and it just doesn't work. 398 00:38:05,105 --> 00:38:12,945 I mean, it consolidates power on unelected bureaucrats, which is pretty much the worst thing you can do. 399 00:38:13,585 --> 00:38:14,965 Nevertheless, they still tried. 400 00:38:15,545 --> 00:38:17,805 So and it clearly doesn't work. 401 00:38:17,805 --> 00:38:18,405 Clearly. 402 00:38:18,405 --> 00:38:24,905 I mean, like all the countries are struggling economically. 403 00:38:25,585 --> 00:38:31,805 It doesn't like all the policies around immigration don't work. 404 00:38:31,905 --> 00:38:33,805 They do not collaborate properly. 405 00:38:34,465 --> 00:38:36,705 So, yeah, I think it's a matter of time. 406 00:38:37,985 --> 00:38:44,285 Either, and that's going to be the big discussion or the big surprise, unfortunately, 407 00:38:44,285 --> 00:38:58,245 It's either going to be that they will clearly push for like a United States of Europe, which could be an outcome because they're especially in the southern part of Europe. 408 00:38:58,545 --> 00:39:04,345 There are still a lot of countries who are somewhat benefiting from it, at least on the outside. 409 00:39:04,485 --> 00:39:07,145 They don't really, but they feel like they benefit from it. 410 00:39:09,005 --> 00:39:11,925 Or the European Union will fall apart. 411 00:39:11,925 --> 00:39:17,745 It's either or in the next three years, three to five years, I would say. 412 00:39:18,365 --> 00:39:19,705 That's crazy. 413 00:39:19,845 --> 00:39:36,465 I'm having flashbacks to reading Boomerang by Michael Lewis, where he sort of describes that dynamic between Northern Europe and Southern Europe, where you had Greece and Italy essentially being completely subsidized by the German economy in the early 2010s. 414 00:39:37,425 --> 00:39:39,285 Yeah, absolutely. 415 00:39:39,285 --> 00:39:44,245 But now you can see it in a different way almost. 416 00:39:44,425 --> 00:39:50,365 I mean, Italy now, okay, it's not perfect, but it's one of the more stable countries. 417 00:39:50,745 --> 00:39:53,085 And also economically, they're not doing that bad. 418 00:39:53,185 --> 00:39:59,565 I mean, now suddenly, and that's always what happens in these centralized structures. 419 00:39:59,925 --> 00:40:03,265 It's like there is an orientation downwards. 420 00:40:03,265 --> 00:40:09,205 So Germany will go lower instead of everybody else goes up. 421 00:40:09,345 --> 00:40:10,385 That's just how it is. 422 00:40:10,505 --> 00:40:12,705 That's why socialism never works, right? 423 00:40:13,285 --> 00:40:19,485 And it's just because of the distance from the government structure to the actual people is too big. 424 00:40:19,825 --> 00:40:21,465 It doesn't make any sense. 425 00:40:21,545 --> 00:40:24,025 And there's a lot of corruption in this whole process. 426 00:40:24,345 --> 00:40:27,325 And yeah, so we will see. 427 00:40:27,605 --> 00:40:30,385 But it's going to be interesting. 428 00:40:30,385 --> 00:40:32,325 But I mean, people realize it more and more. 429 00:40:32,325 --> 00:40:34,865 And you see it in elections all over the place. 430 00:40:35,605 --> 00:40:42,645 There's still some forces trying to push against it, but I don't think it will be successful. 431 00:40:43,985 --> 00:40:57,285 Yeah, the information, I say this a lot in the context of how politics here in the United States, particularly in D.C., at the federal government level, is completely disconnected. 432 00:40:57,285 --> 00:41:01,905 And it's basically what you described from an information system perspective. 433 00:41:01,905 --> 00:41:05,165 They're so far away from the raw input data. 434 00:41:05,365 --> 00:41:09,605 It's like impossible for them to make rational decisions on behalf of people thousands of miles away. 435 00:41:10,385 --> 00:41:10,525 Absolutely. 436 00:41:10,845 --> 00:41:11,265 Absolutely. 437 00:41:11,385 --> 00:41:12,185 They don't feel it. 438 00:41:12,305 --> 00:41:21,485 And it's not, it's always, sometimes when I talk about these topics, it's like you start claiming like, yeah, they cannot do it. 439 00:41:21,525 --> 00:41:22,205 But it's human. 440 00:41:22,325 --> 00:41:23,085 It's human nature. 441 00:41:23,245 --> 00:41:25,025 I mean, this is just how it is. 442 00:41:25,085 --> 00:41:28,165 If it's not your money, then you spend it differently. 443 00:41:28,165 --> 00:41:31,965 If you don't feel the consequences of your actions, then you act. 444 00:41:32,865 --> 00:41:34,485 That's how it is. 445 00:41:34,545 --> 00:41:35,145 That's natural. 446 00:41:35,345 --> 00:41:41,165 That's, by the way, one of the key advantages of our political system in Switzerland, how I look at it at least. 447 00:41:42,105 --> 00:41:46,165 Because we have this direct democracy and it's very fragmented. 448 00:41:47,265 --> 00:41:51,225 It's a very small country, but fragmented in 26 cantons. 449 00:41:51,225 --> 00:41:57,825 And everybody has a vote and can vote against pretty much every decision anybody takes. 450 00:41:57,825 --> 00:42:01,225 So that's correct me if I'm wrong. 451 00:42:01,305 --> 00:42:03,485 They compete on sort of tax preference to it. 452 00:42:03,485 --> 00:42:03,625 Right. 453 00:42:03,685 --> 00:42:04,165 Trying to. 454 00:42:04,285 --> 00:42:04,505 Yes. 455 00:42:04,585 --> 00:42:06,765 Well, tax preferences, education. 456 00:42:07,085 --> 00:42:11,745 I mean, the overall system is quite similar to the to the U.S. 457 00:42:11,785 --> 00:42:12,085 system. 458 00:42:12,225 --> 00:42:13,465 It's a republic in the end. 459 00:42:14,205 --> 00:42:21,125 But we changed our our constitution in 1848 based on the American Constitution. 460 00:42:21,125 --> 00:42:30,305 One thing that we added is that our constitution is not like such a sacred document. 461 00:42:31,205 --> 00:42:34,105 It's quite dynamic, actually. 462 00:42:34,325 --> 00:42:36,665 So everybody can pretty much change it. 463 00:42:36,965 --> 00:42:43,325 So you just need, compared to our size, obviously, that's like when you need 100,000 signatures, 464 00:42:43,325 --> 00:42:45,105 and then it comes to a public vote. 465 00:42:45,105 --> 00:42:51,065 So we can have referendums against pretty much every decision any politician takes. 466 00:42:51,125 --> 00:42:57,345 And that's on the federal level, on the cantonal, which is your state level and on the municipality level as well. 467 00:42:58,245 --> 00:43:02,445 And so that's why we have like 300 referendums every year. 468 00:43:02,445 --> 00:43:05,545 But it keeps politicians in check. 469 00:43:05,705 --> 00:43:13,865 And also, given the tax competition that we have, you can see the impact much, much faster, much closer. 470 00:43:13,865 --> 00:43:24,765 And if you had a magic wand to fix the European Union problems, I know you're separated in Switzerland, but what would you do? 471 00:43:25,085 --> 00:43:35,965 What is the optimal path to untangling the centralized control that the European Union has over member states? 472 00:43:36,825 --> 00:43:41,045 Break it down to a free trade agreement and then split it apart. 473 00:43:41,045 --> 00:43:43,805 just say 474 00:43:43,805 --> 00:43:45,865 okay so there's going to be 475 00:43:45,865 --> 00:43:47,945 free trade so economical freedom 476 00:43:47,945 --> 00:43:49,785 so to say which is good 477 00:43:49,785 --> 00:43:51,345 I mean people trade that's good 478 00:43:51,345 --> 00:43:53,685 that helps but then 479 00:43:53,685 --> 00:43:55,185 pretty much 480 00:43:55,185 --> 00:43:57,745 pretty much get rid of the European 481 00:43:57,745 --> 00:43:59,585 Union and build a Europe of 482 00:43:59,585 --> 00:44:01,625 a thousand Liechtensteins or 483 00:44:01,625 --> 00:44:03,685 a thousand Switzerland 484 00:44:03,685 --> 00:44:05,905 so just go back to country 485 00:44:05,905 --> 00:44:06,165 level 486 00:44:06,165 --> 00:44:09,445 and compete 487 00:44:09,445 --> 00:44:38,525 I mean, that's the thing, right? It's this weird image that some politicians have is that it's better when you centralize and everything bigger is better. That's not true. It's just way better if we build on a smaller scale and we compete against each other. We compete with ideas, with structures, with governance. And that really helps. And I mean, you can see it. It's just for me, that's also sometimes quite frustrating. 488 00:44:38,525 --> 00:44:47,005 I mean, our relationship to the European Union comes back every five years, pretty much, and some sort of an election. 489 00:44:47,185 --> 00:45:03,945 And we will have a very important election soon, which basically, because some people want to be much closer to the European Union and basically automatically take over regulation from Europe just to get access to the European market, which we already have, by the way. 490 00:45:04,025 --> 00:45:06,105 But apparently that should be easier. 491 00:45:06,105 --> 00:45:09,965 And now a lot of people are fighting against it. 492 00:45:10,125 --> 00:45:24,765 And to me, this is just, I can't get my head around how people can just look at the simple facts, like on every economical KPI, we're doing better than the European Union. 493 00:45:25,185 --> 00:45:27,085 And you can clearly see it. 494 00:45:27,145 --> 00:45:34,345 I mean, 20 years ago, the European Union had the same GDP per capita as the U.S. 495 00:45:34,345 --> 00:45:37,605 Now the US is, what, 40% higher or something. 496 00:45:38,745 --> 00:45:41,805 And so on every KPI, it failed. 497 00:45:42,265 --> 00:45:46,725 Nevertheless, there are still people who think it's a good idea to go for it. 498 00:45:47,945 --> 00:45:47,985 Yeah. 499 00:45:49,825 --> 00:45:53,525 It's mind-boggling to me watching from afar, particularly the energy, 500 00:45:53,845 --> 00:45:59,505 like how Germany completely shot itself in the foot over the last 20 years 501 00:45:59,505 --> 00:46:00,565 with this energy policy. 502 00:46:01,865 --> 00:46:03,145 No, it's unbelievable. 503 00:46:03,145 --> 00:46:04,145 It's really unbelievable. 504 00:46:04,145 --> 00:46:10,145 And I mean, now they're being deindustrialized in real time. 505 00:46:12,145 --> 00:46:22,808 And they had a super strong economy right Super strong industry And now all the companies are struggling And obviously that trickles down 506 00:46:22,808 --> 00:46:28,768 If Volkswagen struggles, then thousands of smaller companies struggle as well. 507 00:46:30,148 --> 00:46:34,988 And yeah, it's just the primary reason is energy prices. 508 00:46:35,207 --> 00:46:40,568 And there seemed to be some sort of reluctance on the political elite, so to say, 509 00:46:40,568 --> 00:46:42,968 to change their mind 510 00:46:42,968 --> 00:46:44,448 because it was clearly a mistake. 511 00:46:45,088 --> 00:46:46,528 It was such a big mistake. 512 00:46:46,668 --> 00:46:48,108 I mean, you can now... 513 00:46:48,108 --> 00:46:52,227 I mean, they got rid of their nuclear reactors, right? 514 00:46:52,288 --> 00:46:53,368 Or they stopped it 515 00:46:53,368 --> 00:46:57,707 because of Fukushima in Japan. 516 00:46:58,308 --> 00:47:01,088 And now even Japan started building 517 00:47:01,088 --> 00:47:03,407 new nuclear reactors again. 518 00:47:03,968 --> 00:47:06,028 And Germany doesn't. 519 00:47:06,808 --> 00:47:08,608 Yeah, it's a nightmare. 520 00:47:08,608 --> 00:47:18,528 You had the instance in, I forget if it was 2022 or 2023, when after they decommissioned a couple of their nuclear power plants, they were forced to ship coal up the Rhine. 521 00:47:18,927 --> 00:47:22,407 And then the Rhine ran dry and they couldn't get the coal to the power facilities. 522 00:47:22,568 --> 00:47:23,668 So they had like power outages. 523 00:47:24,568 --> 00:47:29,887 No, it's really, it's the stupidity of it all is mind boggling. 524 00:47:29,887 --> 00:47:39,808 I mean, with that, I think transitioning this back to Bitcoin, I think you gave a keynote presentation in Prague last month. 525 00:47:39,988 --> 00:47:43,848 It was titled Bitcoin, a political force reshaping global governance. 526 00:47:43,848 --> 00:48:02,588 And I am a strong believer that Bitcoin can be a vehicle, a mechanism, a rallying cry that people rally around and basically leverage to effectuate the political change they want to see in the world. 527 00:48:03,248 --> 00:48:07,548 And so I think you believe this, too, based off your keynote. 528 00:48:07,707 --> 00:48:11,427 And I think just diving into some of the topics you covered there would be great. 529 00:48:11,427 --> 00:48:13,207 Yeah, I mean, yeah, definitely. 530 00:48:13,207 --> 00:48:16,048 I see it in a multi-dimensional. 531 00:48:16,268 --> 00:48:23,707 I mean, the first part is clearly the buying power and the monetary things. 532 00:48:24,368 --> 00:48:28,868 Obviously, that will have effect on politics in one way or the other. 533 00:48:29,688 --> 00:48:37,207 Pretty soon, you saw it already in the US, clearly the last election was also influenced 534 00:48:37,207 --> 00:48:42,248 by probably pretty strong donations coming from people 535 00:48:42,248 --> 00:48:46,248 who made good money with Bitcoin, I would say. 536 00:48:46,368 --> 00:48:49,048 And clearly that has some sort of an impact, probably. 537 00:48:49,568 --> 00:48:51,508 But then it goes much further, right? 538 00:48:51,588 --> 00:48:55,268 I mean, this is where I hope that with education, 539 00:48:55,448 --> 00:48:58,127 we can also do our part. 540 00:48:58,288 --> 00:49:04,448 I mean, the effects on weak currencies are just so bad 541 00:49:04,448 --> 00:49:07,048 and everybody in Bitcoin knows it. 542 00:49:07,207 --> 00:49:11,528 A lot of the people are not in Bitcoin, unfortunately, so they don't know it. 543 00:49:11,648 --> 00:49:14,868 And I hope that was also part of my of my keynote. 544 00:49:15,268 --> 00:49:20,468 It's I mean, Switzerland was the last country who got rid of the gold standard. 545 00:49:20,608 --> 00:49:22,608 It was only by the end of the 90s. 546 00:49:22,608 --> 00:49:24,468 So it was relatively recently. 547 00:49:25,388 --> 00:49:34,108 And for some weird reason, I mean, it's not not the gold standard fixed in a way that every Swiss franc was backed by by gold. 548 00:49:34,108 --> 00:49:35,368 That that wasn't the case. 549 00:49:35,368 --> 00:49:42,668 but the national bank was required to have a certain percentage in gold when they printed money. 550 00:49:43,188 --> 00:49:44,668 So that hindered them as well. 551 00:49:44,848 --> 00:49:49,407 It was also diluted over 70 years, but not as bad. 552 00:49:49,968 --> 00:49:55,988 And so that was the primary reason why the Swiss franc remains so strong. 553 00:49:55,988 --> 00:50:04,608 And for some reason, international investors still believe that because every time when the dollar drops, 554 00:50:04,608 --> 00:50:06,407 Swiss franc goes up. 555 00:50:06,988 --> 00:50:21,888 And I really hope that given everything we see and given the success of Bitcoin, we can educate people as well that sound money makes a lot of sense for society. 556 00:50:22,748 --> 00:50:32,528 And that people see that, that there is a reason why we have, in Switzerland, we have a much more dynamic industry as compared to every other country surrounding us. 557 00:50:32,528 --> 00:50:40,648 And that's the primary reason was that these companies, they had to remain dynamic, innovative, lean. 558 00:50:40,927 --> 00:50:52,068 They had to push things forward while in the country surrounding us, they had access to very cheap capital and they got lazy and therefore things didn't work. 559 00:50:52,308 --> 00:50:57,288 And that's just one effect of weak currency. 560 00:50:57,288 --> 00:51:06,888 So I hope that with the success of Bitcoin, we can educate society as a whole more about the hard money in general. 561 00:51:07,627 --> 00:51:10,368 But then that's also what I realized. 562 00:51:10,627 --> 00:51:19,968 It's that because about five years ago, I wrote a blog about what Bitcoin in Switzerland has in common. 563 00:51:20,407 --> 00:51:24,748 And it's essentially what I just tried to explain before. 564 00:51:24,748 --> 00:51:27,068 So Switzerland is very, very decentralized. 565 00:51:28,207 --> 00:51:33,948 The people are on top and politicians are servants to the people. 566 00:51:33,948 --> 00:51:40,768 And that works like that, that there's nobody who can decide about pretty much anything. 567 00:51:40,968 --> 00:51:45,808 It's always the people who decide in one way or the other. 568 00:51:45,888 --> 00:51:48,948 And that's quite comparable to the Bitcoin system. 569 00:51:49,227 --> 00:51:51,207 That's basically the notes. 570 00:51:51,668 --> 00:51:53,048 Notes are the masters, right? 571 00:51:53,048 --> 00:52:00,768 So obviously, miners are very important, but in the end, they're servants. 572 00:52:01,848 --> 00:52:09,008 And also, there's not some superpower who can just decide and change monetary policy, which is great. 573 00:52:09,288 --> 00:52:11,888 So there are a lot of common factors. 574 00:52:13,188 --> 00:52:18,227 And I also believe that's the reason, because we have direct democracy here. 575 00:52:18,828 --> 00:52:20,348 So we can vote. 576 00:52:20,348 --> 00:52:23,627 Every single individual has a vote about pretty much everything. 577 00:52:24,127 --> 00:52:24,828 And that helps. 578 00:52:25,248 --> 00:52:29,808 It pushes, like it makes us slow, but it makes us very stable. 579 00:52:30,168 --> 00:52:33,308 And that rings a bell when you look at how Bitcoin works. 580 00:52:34,028 --> 00:52:36,988 So slower is better than faster. 581 00:52:37,808 --> 00:52:41,608 Politicians with less power is better than more power. 582 00:52:42,688 --> 00:52:45,788 And yeah, and sometimes doing less is more. 583 00:52:45,788 --> 00:52:51,588 And that's also how I look at it in the Bitcoin world. 584 00:52:52,588 --> 00:52:53,148 Yeah. 585 00:52:54,008 --> 00:52:57,828 And something I don't think is talked about enough, 586 00:52:58,268 --> 00:52:59,588 like honing in on Switzerland too, 587 00:52:59,788 --> 00:53:01,568 I'm sure you see me typing back here, 588 00:53:01,608 --> 00:53:04,927 I was just doing some quick research and chat GPT, 589 00:53:05,048 --> 00:53:10,548 but the Swiss National Bank has a considerable position in microstrategy, 590 00:53:10,548 --> 00:53:18,048 which is a signal to me that they sort of know what they're doing to a certain extent, 591 00:53:18,148 --> 00:53:22,608 that they're trying to get proxy exposure to this rapidly appreciating asset. 592 00:53:23,528 --> 00:53:25,148 Yeah, this is an interesting debate. 593 00:53:25,308 --> 00:53:31,368 I mean, we have two or three people who go to the General Assembly of the National Bank every year 594 00:53:31,368 --> 00:53:38,468 and then basically have a short speech and they calculate how much money the Space National Bank lost 595 00:53:38,468 --> 00:53:41,368 because they didn't invest in Bitcoin since a while. 596 00:53:41,727 --> 00:53:43,108 And it's constantly the same thing. 597 00:53:43,288 --> 00:53:45,627 And then I think their claim was a couple of years ago 598 00:53:45,627 --> 00:53:51,948 was that instead of buying all these worthless government bonds 599 00:53:51,948 --> 00:53:56,648 from countries surrounding us, you should buy like 5% in Bitcoin. 600 00:53:56,648 --> 00:54:00,948 And then they go back every year and calculate and explain to them 601 00:54:00,948 --> 00:54:02,748 how much money they lost so far. 602 00:54:03,207 --> 00:54:05,788 So there is a bit of pressure around that, 603 00:54:05,788 --> 00:54:09,348 that they should focus on it more. 604 00:54:09,868 --> 00:54:12,207 So far, the National Bank always said, 605 00:54:12,448 --> 00:54:15,448 well, they feel like it's not big enough yet, 606 00:54:16,207 --> 00:54:18,048 but they are monitoring it. 607 00:54:18,768 --> 00:54:20,528 When it comes to micro strategy, 608 00:54:20,688 --> 00:54:22,488 I mean, this is also an interesting debate 609 00:54:22,488 --> 00:54:24,328 because I also thought so in the beginning. 610 00:54:24,448 --> 00:54:27,008 And then I saw an interesting presentation 611 00:54:27,008 --> 00:54:29,948 by one of the, I think it was even the president 612 00:54:29,948 --> 00:54:30,948 of the National Bank. 613 00:54:30,948 --> 00:54:33,948 And they said, well, just in general, 614 00:54:33,948 --> 00:54:37,468 they just need to push down the Swiss franc. 615 00:54:37,688 --> 00:54:41,328 Otherwise, it appreciates too much against all other fiat currencies. 616 00:54:41,907 --> 00:54:50,068 And therefore, they print Swiss franc and then they buy all sorts of assets in different other currencies. 617 00:54:50,648 --> 00:55:01,188 And so speaking about micro strategy, they say they basically just buy whatever USD denominated asset they can get their hands on. 618 00:55:01,188 --> 00:55:03,168 And it's less about the actual asset. 619 00:55:03,368 --> 00:55:05,348 It's just that they want USD exposure. 620 00:55:06,448 --> 00:55:10,168 So I was quite happy when I saw that the first time. 621 00:55:10,308 --> 00:55:16,808 And then I was a bit like, man, OK, that's not as exciting as I thought it is. 622 00:55:17,688 --> 00:55:20,348 I thought the Swiss National Bank was speculative attacking itself. 623 00:55:21,707 --> 00:55:22,188 Probably. 624 00:55:22,748 --> 00:55:28,388 I mean, the good thing, there are two points to that, right? 625 00:55:28,388 --> 00:55:31,088 It's like the balance sheet of the Swiss National Bank is massive. 626 00:55:31,188 --> 00:55:35,927 They printed a lot of Swiss francs recently over the last five years as well. 627 00:55:36,927 --> 00:55:40,468 The good thing about Switzerland is it doesn't finance the state. 628 00:55:40,468 --> 00:55:44,328 It just suddenly became basically a massive hedge fund. 629 00:55:45,368 --> 00:55:50,927 And it's then almost some sort of a sovereign wealth fund just sitting with the national bank. 630 00:55:51,207 --> 00:55:58,688 So the money doesn't trickle down in the economy and dilutes everything and creates all sorts of wrong incentives. 631 00:55:58,688 --> 00:56:05,748 but it's also it's generally wrong that we that that the national bank has a big balance sheet in 632 00:56:05,748 --> 00:56:14,227 the first place so yeah that'll be i've had discussions about this um with a couple of 633 00:56:14,227 --> 00:56:19,788 friends in the past the fact that they own microstrategy and based off of our discussion 634 00:56:19,788 --> 00:56:23,828 over the last hour like there's a lot of talk here in the united states of 635 00:56:23,828 --> 00:56:27,268 putting Bitcoin in the treasury. 636 00:56:28,308 --> 00:56:29,268 I think we're pretty, 637 00:56:30,448 --> 00:56:33,127 at least this administration is ardent about, 638 00:56:33,207 --> 00:56:34,427 we don't want it to sit at the Fed. 639 00:56:34,548 --> 00:56:36,127 We'd rather sit at the treasury. 640 00:56:36,127 --> 00:56:38,568 But if you think about 641 00:56:38,568 --> 00:56:42,028 sort of this idea of free banking 642 00:56:42,028 --> 00:56:44,448 and a lot of the ideas in the Bitcoin standard, 643 00:56:44,627 --> 00:56:45,548 particularly towards the end, 644 00:56:45,627 --> 00:56:45,968 we're safe. 645 00:56:46,107 --> 00:56:48,408 It's like Bitcoin's greatest success 646 00:56:48,408 --> 00:56:50,888 would be forcing central banks 647 00:56:50,888 --> 00:56:59,528 to have sort of better monetary policy or stricter monetary policy to remove the opportunity 648 00:56:59,528 --> 00:57:02,008 costs and the misallocation of capital. 649 00:57:02,508 --> 00:57:05,707 And I don't know the answer to this, but I go back and forth. 650 00:57:05,908 --> 00:57:10,988 Like, is it worthwhile or should we be pushing, it's probably the better framing, central 651 00:57:10,988 --> 00:57:13,868 banks to hold Bitcoin as an asset on their balance sheet? 652 00:57:13,868 --> 00:57:16,668 And if so, who's going to move first? 653 00:57:16,668 --> 00:57:30,588 And based off of this conversation, I think Switzerland has proven to be sort of forward thinking when it comes to Bitcoin, even though it's had some some lulls since 2017. 654 00:57:30,968 --> 00:57:44,088 But could you see the Swiss National Bank if these if this contingency of Bitcoiners going year in and year out and highlighting the losses for not allocating Bitcoin, actually making the decision to get some Bitcoin? 655 00:57:44,088 --> 00:57:58,727 Yeah, I could see. I hope so, to be honest. I mean, this is another interesting topic because there's currently an initiative ongoing on people who want to force the National Bank to put Bitcoin on the balance sheet. 656 00:57:58,727 --> 00:58:05,828 They have another year to collect these 100,000 signatures, and then it's going to be a vote in three to four years from now. 657 00:58:05,908 --> 00:58:07,508 So it's a longer project. 658 00:58:08,427 --> 00:58:13,528 And especially within the local Bitcoin community, that is heavily debated. 659 00:58:13,948 --> 00:58:27,107 There are a lot of people who say, well, Bitcoin cannot be enforced on anyone or any institution, and they don't want the national bank to hold Bitcoin. 660 00:58:27,107 --> 00:58:31,748 I see that argument. 661 00:58:32,707 --> 00:58:38,088 In my opinion, in the end, it's also a bit of geopolitical competition. 662 00:58:38,548 --> 00:58:45,328 So do I generally want to see the national banks to own Bitcoin? 663 00:58:45,648 --> 00:58:47,288 I think there's no way around it. 664 00:58:47,627 --> 00:58:49,328 So at one point, this will happen. 665 00:58:49,328 --> 00:59:05,268 And then I would much rather see us gaining that buying power, that economical power over the next few years other than any other country in general. 666 00:59:05,268 --> 00:59:10,508 Obviously, there are more friendly countries than others, but I think there's no way around it. 667 00:59:10,568 --> 00:59:20,848 So I do think over the next, give it four years, there's a good chance that at least a small portion will be allocated in Bitcoin. 668 00:59:27,348 --> 00:59:29,008 I don't hear you anymore. 669 00:59:30,368 --> 00:59:34,127 Sorry, I was on mute there to mute out the background noise. 670 00:59:34,127 --> 00:59:44,127 But what I was saying is, do you think we're reaching a critical tipping point in terms of adoption and event horizon, if you will, about Bitcoin? 671 00:59:45,488 --> 00:59:47,748 Yeah, yeah, for sure. 672 00:59:47,927 --> 00:59:54,848 I mean, now you can clearly see it with all these treasury companies coming out of the woods. 673 00:59:54,848 --> 01:00:06,727 I mean, obviously, that's kind of the adoption curve comes from cypherpunks, software developers, and then individuals in general. 674 01:00:07,107 --> 01:00:12,548 And then it goes up the curve and then it goes to more to companies, to institutions. 675 01:00:12,548 --> 01:00:16,588 And then at one point, it will be countries. 676 01:00:16,588 --> 01:00:25,828 And right now, we can clearly see the critical point in the private markets or with companies. 677 01:00:26,227 --> 01:00:31,207 And there are so many companies now putting Bitcoin on their own treasury. 678 01:00:31,648 --> 01:00:36,648 There are now a lot of strategies to accumulate as many Bitcoin as somewhat possible. 679 01:00:37,748 --> 01:00:43,127 And clearly, that's a path towards more countries. 680 01:00:43,127 --> 01:00:50,627 And let's see who's first from the actual, let's say, G20 or something countries. 681 01:00:51,268 --> 01:00:52,468 But yeah, definitely. 682 01:00:52,788 --> 01:00:57,028 I would bet a lot of money that that's going to happen over the next two years. 683 01:00:57,308 --> 01:00:58,268 And let's see. 684 01:00:59,268 --> 01:01:00,127 It's a brave new world. 685 01:01:01,028 --> 01:01:03,828 And I appreciate you taking some time. 686 01:01:03,908 --> 01:01:09,948 Hopefully, this is the first of many conversations because I think your perspective is incredibly valuable from Switzerland. 687 01:01:09,948 --> 01:01:14,948 And as you can tell in the background, my father-in-law has decided to start mowing the lawn. 688 01:01:15,568 --> 01:01:21,148 So we may have to wrap up here. 689 01:01:21,268 --> 01:01:32,668 But where can anybody who's interested about what you're doing at Berglinda contact you and helping your efforts to get better Bitcoin collateralized products to market? 690 01:01:33,868 --> 01:01:36,148 Yeah, you find me on X and on Noster. 691 01:01:36,148 --> 01:01:40,448 always, always open for interesting conversations. 692 01:01:40,448 --> 01:01:41,968 Always you also find 693 01:01:42,024 --> 01:01:47,724 email address online. So feel free to reach out and let's discuss on what we can build together 694 01:01:47,724 --> 01:01:53,264 for the Bitcoin economy. Very much looking forward to it. All right. We'll link to all that in the 695 01:01:53,264 --> 01:01:59,964 show notes. Phil, sorry for the noise here at the end, but we'll do this another time. Peace and 696 01:01:59,964 --> 01:02:02,804 love, freaks. Thank you very much. Bye-bye. Thank you.