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James Check, we meet here in the bottom fifth of the spare market, of this capitulation.

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Where are we?

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It's time for the eulogies, mate.

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It's Bitcoin obituaries are going to be flying left, right, and center.

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Peter Schiff's having the best day of his life.

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Bitcoin has died once again.

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Yeah, mate, here we are.

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It's amazing watching.

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I mean, socials.

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Socials are just a cesspool at the moment.

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It's just noise, everything.

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But yeah, look, it's a hell of a sell-off.

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I think a lot of people are probably caught by surprise.

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At a minimum, getting down to 70K wasn't too much of a surprise.

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I think a lot of people are now shocked that we're back in the 2024 chop solidation range.

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We're trading at like 63K as we speak.

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But as you said, if you look at things from a mean reversion perspective, I know you had

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Matthew Mazinskas on recently.

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You can look at a power law.

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You look at realized price.

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You can look at 200-day moving average.

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and the 200-day moving average,

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in terms of the deviation we are below it,

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only 4% of all days in Bitcoin's history

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have ever been further below the 200-day moving average.

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All these mean reversion models,

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I checked a bunch of them this morning,

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we're in like 18% of days or lower,

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15% of days or lower, 20% of days or lower.

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So we're like in that bottom 20%

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of a lot of these long-term mean reversion models.

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And I mean, look, my general framework

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is a lot of people, my inbox is just absolute chaos.

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I've got people coming at me from all angles, terrified, scared, DMs are going crazy.

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That's usually a good sign that we're at the real fear part, right?

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People are now questioning their thesis.

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Bear markets are a horrible thing because they just keep going until we run out of sellers.

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You just got to exhaust the sellers.

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And there's some combination of price down, time pain, and also just people watching their

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unrealized profits get eviscerated.

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Some combination of those.

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and I want to add in another one.

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We could probably talk about this,

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but Parabola Envy.

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I think the thing that actually,

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like I know crypto mince people.

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I know treasury companies mince people,

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but you know what really just like caused

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a mental rift is watching gold go up.

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People just got smoked by watching gold go up

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because there was this expectation

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that the world was going to choose Bitcoin on round one.

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The Romans used gold, guys.

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I'm sorry,

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they weren't going to choose Bitcoin round one.

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but I've just got this like simple framework. Look at a decision tree. If Bitcoin is dead,

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this is a fundamental question. If you truly believe that Bitcoin is now dead and the path

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is towards zero, then this bear market has no flaw. And therefore, turn it all off. Walk away.

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You know, it's over. Who cares? None of this matters. If on the other hand, and I would wager

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that pretty much everyone listening to this, except for you, Peter Schiff, everyone listening

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to this believes the other path, which is it's probably not dead. Then you go, well, where are we

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in the bear. We're in the bottom 20% based on every mean reversion model you can possibly imagine,

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technical, on-chain, the whole thing. Are we at the bottom? Who knows? This is probably likely to

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inspire some capitulation based on the fear that we've got. So we've got a lot of the recipes in

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there and the ingredients for creating that capitulation. It'll take time. It'll probably

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go down more. It'll be choppy. It'll be painful. You get bear market rallies. They get the hope

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back in. You'll buy that rally and then it will sell back off again. It's going to be a process.

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but unless your decision tree is that Bitcoin is dead,

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this bear market has an end.

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And we've done a lot of the work.

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In my view, we've done a lot of the work.

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I used in my piece recently, I used two analogies.

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One, I like the idea of like the bison.

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Bison, when the storm comes, a snowstorm or a storm,

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they turn and face it and they basically go through it

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because it's the fastest way to get to the other side.

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Everything else runs away from the storm

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and gets rinsed the whole way.

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And the other one is you've got your mate

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on a desert island and he swims 80% of the way back to shore,

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gets tired, decides to turn back around.

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It's like, go the last 20%, push through.

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Yeah.

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I think, what are you seeing on chain

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in terms of the archetype of seller out there?

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Because I think there's a lot of speculation.

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Obviously, I'm sure you've seen on X over the last couple of days,

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many are saying Bybit and Binance are blowing up.

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There's bodies that are about to surface on top of the water, dead bodies at that.

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Is there any validity to these theories in your mind?

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Look, I've not done enough of a deep dive to give you like a I'm very confident what I have.

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Like I had a quick check.

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Finance had like a 0.5% outflow of their Bitcoin.

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Like.

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Doesn't look insolvent to me again.

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You know, I'm not going to make a claim about what's going on the inside of buying it.

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but I'm pretty sure they have a regulator sitting in the office,

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you know, tracking all this stuff.

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So, you know, this to me feels like people looking for a reason

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for why we're down.

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Lots of people want to know what's the news?

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Why is price down?

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Price is down because it's a bear market.

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So from just like a big picture perspective,

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for the last couple of probably months since I would say

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at least November, I've been talking about this thing like air pockets.

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How many times have you and I talked about air pockets?

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And for those who don't know what I mean by that,

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In the on-chain world, you can also see in the technical world, if you look like a volume profile, where you've got long periods of price history, lots of coins change hands, lots of demand has been there.

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People have traded the coin, people have traded the asset, true for all assets.

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In the on-chain world, we can then see, well, where do people still have a cost basis?

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Where do they buy their coin and still hold them?

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80% of all the dollars that are invested are well and truly underwater, probably more than that now, actually.

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and then there's a chunk of about 10% of the supply

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in the 2024 chop solidation range between like 50 and 70.

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Between 70 and 80, which we just broke through,

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and I think this is actually an important element

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for people to get head around.

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Breaking through that 80 floor,

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you probably noticed there was a shift.

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People now accept that it's a bear market.

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We got to that final stage of grief where people now accept.

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Why was 80K important?

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First, it was obviously the low set in November

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and people were hoping it was like a one and done sell-off.

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printed a bear flag, bear flag, send a break lower. But the other thing is there's an on-chain

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model called the true market mean, which is really, statistically speaking, the middle of

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the Bitcoin cycle. It is the long-term cost base of active investors. It gets rid of Satoshi and

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lost coins. And the more dormant a coin is, the less it's considered active. Coins that are moving

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around and transacting, all those hodlers who sold, that's what's beautiful about this stuff.

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it will auto correct because those old coins that were previously discounted come back to life and

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we now know they're alive. So 80K is about 81, but 80K was that average cost basis for everyone.

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And it was also 82 and a half is the average cost basis for the ETFs. So breaking below that level,

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suddenly everyone realizes that everyone's underwater. It's like a common knowledge event.

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Everyone now accepts it's a bear market. And that supply air pocket between 70 and 80,

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which had no price history. It just shot straight through in November last year, no, 24,

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just shot straight through. We never really tested it during the tariff tantrum.

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And these things, I don't know why it is, same as CME gaps, these supply air pockets,

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they just want to get backfilled. Back in 2022, the air pocket that we had back then went from

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30K down to 10K. Where do we backfill? 15, right? We backfilled the vast majority of it.

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so from my perspective the move down to at least 70 was very predictable um just because it's

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bitcoin just does these things you're in a bearish trend bear flag supply air pocket

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and i described in my piece yesterday i think the easy part of forecasting this bear is now over

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and what i mean by that as we were breaking down from 110 i think we spoke when we broke through

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110 i said if we go below there the risk just compounds exponentially until you get to 95

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once you're at 95 you're probably going straight to 80 and you know your framework becomes bear

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market before that that part was easy enough to at least have a framework for the air pocket down

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to 70 also easy enough to have a framework for we're now in that last again that last fifth of

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the price action i would i mean based on mean reversion stats whatever we're in that last fifth

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of the price action where you've got to hammer out a floor. You've got to find where that bottom is.

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It's a process. It sucks. Everyone now believes it's going lower. Everyone's now lowering their

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price targets. Everyone's now pulling their bids. Everyone's gone. And what will happen,

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this is what I've been waiting for for a long time. You want to see the capitulation by on-chain,

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on the on-chain side of things. You'll see a massive week, couple of days, whatever it is,

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the ETFs will just be flushed.

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You will see so much panic and fear when this happens.

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Realize losses are going through the roof.

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We're already seeing right now long-term holders

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who bought the top and have huddled through this whole thing.

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They're now starting to capitulate.

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Their losses are starting to spike higher as well.

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All this stuff, it sucks, but this is how bear markets end.

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It's a process.

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Just push through to the other side

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because unless your decision tree is Bitcoin is dead,

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things going to end and it's a journey between here and there

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yeah now if you look at the the backdrop of

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the macro landscape as well particularly here in the united states you're looking at case

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shiller pe ratios near.com bubble levels you're

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seeing a bunch of deleveraging with this geopolitical uncertainty that's

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out there and it just seems like a chaotic time and you

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get the epstein files you get the ice stuff going on here you've got greenland

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Venezuela, Russia, Ukraine.

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Very uncertain time out there.

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What's not to love?

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Why wouldn't everything be going straight up in a vertical line?

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Yeah.

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And it is a crazy time in markets and Bitcoin.

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And that's what I think really riles up the animal spirits too.

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Because you have not only the uncertainty of where Bitcoin is going to find its floor,

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but you have this external uncertainty that only seems to be building as well.

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It seems like a big get risk off the table moment globally.

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Yeah.

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And I mean, there's a very reasonable and rational interpretation that Bitcoin was just telling

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the world that this was coming for months.

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Been saying there's something wrong out there.

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It just ain't going all well.

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And it was kind of masked by there's a bunch of CapEx spend in AI.

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Precious metals are doing well.

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There was like, you know, stock markets kind of hovering around all time highs.

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And a lot of people just, you know, the human condition is people want to be optimistic and

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long.

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That's the default position.

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So when you see Bitcoin doing something, you're like, oh, it's just Bitcoin.

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It's like, no, but what if it's actually information?

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What if it's actually telling you what's going on?

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Likewise, we've got this bear flag.

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How many folks and just markets are a psychological journey.

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Something that I have learned and I think is really valuable is just like a market lesson.

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The only thing you can control in markets is your decision.

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So whenever you're feeling something, it's generally because of a decision that you did

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or didn't make.

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You can only control your decisions, right?

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markets are just purely information and your emotional response to it is a function of the

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decisions that you made up until this point so when it broke 80k and you get this like sinking

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gut feeling is that because you never thought 80k could possibly go there was some reason it couldn't

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go and people ignore that it looks like a bear flag retested the short-term cost basis and failed

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at 98 there's all these things like it kind of looks like it's not going higher anytime soon

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so then when it goes below 80 you know this is how i like to think about things

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sure my net worth goes down but i'm prepared for it i'm just like i'm mentally getting ready and

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i'm not doing anything stupid so i don't regret my decisions of just buying a fat stack thinking

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80 is the bottom and then it goes lower you know having that plan in place and just saying what

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could happen um there's this story about this we did i was at the um uh conference here in

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Australia and would have been after the 80k sell-off and uh this I did my talk and there's

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a bunch of people around me asking questions and this bloke comes up to me and he goes uh

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I've done something stupid I said oh yeah and he goes yeah I started leverage trading I said oh

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that is stupid right a bit of a chuckle and he goes um yeah I kind of put my like house money

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into a perp at 110 or 105 or something and like liquidation level at 70 and I was like

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I can't give you a tip for that,

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but all I can say is 70K is in play.

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If you're going to regret something going to 70K,

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you just go on for whatever you got to do.

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Go through the motions,

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but got to prepare for these things even if they suck.

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Get out of that trade.

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I hope he got out of that trade.

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Well, he's out now.

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Yeah.

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So if we're in a bear market,

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I think a lot of the discussion is,

231
00:12:52,480 --> 00:12:55,260
are the four-year cycles just replaying?

232
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Was it a gotcha moment, getting to 125,

233
00:12:59,140 --> 00:13:00,640
not going as high as many people thought,

234
00:13:01,180 --> 00:13:02,900
people thinking the institutions are here,

235
00:13:03,220 --> 00:13:05,880
we've got the green light from the US government,

236
00:13:06,100 --> 00:13:07,060
Bitcoin is here to stay,

237
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it's going to be implemented into the financial system,

238
00:13:10,620 --> 00:13:12,660
there's no way we're going to have these four-year

239
00:13:12,660 --> 00:13:14,780
regimented cycles like we've had in the past.

240
00:13:14,780 --> 00:13:17,420
It seems like that may be playing out

241
00:13:17,420 --> 00:13:21,040
in terms of finding a bear market bottom

242
00:13:21,040 --> 00:13:22,900
and crawling through that bottom,

243
00:13:23,340 --> 00:13:26,000
do you expect it to be similar to cycles past

244
00:13:26,000 --> 00:13:27,320
where we make it to the next halving

245
00:13:27,320 --> 00:13:28,900
and then six months later,

246
00:13:29,020 --> 00:13:30,080
things start creeping up again?

247
00:13:30,460 --> 00:13:31,920
Yes, I mean, my general framework.

248
00:13:32,040 --> 00:13:32,620
So first things first,

249
00:13:32,720 --> 00:13:35,980
I do not like actively look at the four-year cycle

250
00:13:35,980 --> 00:13:38,320
and say, this is how I'm going to design my analysis.

251
00:13:38,320 --> 00:13:43,120
Because in my view, it's, I think it's anomalous.

252
00:13:43,500 --> 00:13:44,700
I think we've got a bunch of series,

253
00:13:44,800 --> 00:13:46,060
a series of beautiful coincidences.

254
00:13:46,380 --> 00:13:48,720
You can explain just about everything

255
00:13:48,720 --> 00:13:50,700
in the Bitcoin market structure, right?

256
00:13:50,700 --> 00:13:54,900
Some cliff notes, 2017 was just a pure organic market.

257
00:13:55,500 --> 00:13:58,160
People are speculating on everything under the sun, like pure parabola.

258
00:13:58,660 --> 00:14:01,320
Barely had a trading view chart at that point in time.

259
00:14:02,040 --> 00:14:03,100
You can look at 2018.

260
00:14:03,460 --> 00:14:09,340
We've got an overhang from a 100x move and many 100xs and everything else was in that cycle.

261
00:14:09,700 --> 00:14:12,200
And also no one really knew what Bitcoin crypto was going to be.

262
00:14:12,780 --> 00:14:18,520
2019, you've got the plus token Ponzi, followed by the distribution by the Chinese government of those plus token tokens.

263
00:14:19,040 --> 00:14:20,420
Then you've got COVID and the stimulus.

264
00:14:20,900 --> 00:14:25,540
Then you've got rate hikes and FTX and just a complete evisceration

265
00:14:25,540 --> 00:14:26,440
of the lending markets.

266
00:14:27,900 --> 00:14:31,160
Choose your weapon, economy doing good, economy not doing good.

267
00:14:31,520 --> 00:14:33,100
I think you can explain just about everything.

268
00:14:33,240 --> 00:14:35,380
2025, why we stopped going up, a bunch of people sold.

269
00:14:35,580 --> 00:14:36,120
Why'd they sell?

270
00:14:36,240 --> 00:14:36,720
Doesn't really matter.

271
00:14:36,800 --> 00:14:37,160
They sold.

272
00:14:37,300 --> 00:14:42,840
So from my perspective, we're looking for whether it's on a four-year timeline.

273
00:14:43,440 --> 00:14:46,260
Honestly, I think people get lost in the source just saying,

274
00:14:46,360 --> 00:14:47,660
oh, it has to bottom in October.

275
00:14:47,660 --> 00:14:54,100
must bottom in October, November, always bottoms in November. Maybe, but if you take away,

276
00:14:54,220 --> 00:15:04,574
it must do this thing Don impose your expectations that it must do this thing What we looking for is that capitulation event where there are no sellers left The only people left in the

277
00:15:04,574 --> 00:15:08,634
trenches are people who actually want to own and hold Bitcoin. And we'll get there. Again,

278
00:15:08,674 --> 00:15:12,574
unless your decision tree is Bitcoin is dead, you've probably turned off the pod. If it's not,

279
00:15:12,914 --> 00:15:16,374
then at some point we're going to flush out all the long-term holders who bought the top,

280
00:15:16,834 --> 00:15:21,434
huddle the bear, and they all sell at a loss at the same time. Short-term holders get washed out.

281
00:15:21,434 --> 00:15:23,794
And really, I don't know if we'll see this.

282
00:15:23,954 --> 00:15:28,034
We may, but I don't think it's as likely, but it's nice to have.

283
00:15:28,734 --> 00:15:34,274
The third thing that happens at the bottom is you get long-term holders in profit sell

284
00:15:34,274 --> 00:15:36,754
because they're afraid it's going to go lower and they're cutting their losses.

285
00:15:37,114 --> 00:15:42,754
They're afraid that their $20,000 Bitcoin is going to hit that level as well.

286
00:15:42,874 --> 00:15:45,214
So you see people take profit at the bottom as well.

287
00:15:45,294 --> 00:15:47,494
That's like your perfect capitulation signal.

288
00:15:47,974 --> 00:15:51,174
I need to check the data this afternoon to see whether we've got something like that.

289
00:15:51,174 --> 00:15:57,054
I don't think so, but that would be a good signal that the low is truly in.

290
00:15:58,294 --> 00:16:01,194
Do you think there's any treasury company overhang as well?

291
00:16:01,614 --> 00:16:02,554
Oh, no question.

292
00:16:02,774 --> 00:16:07,174
Now, I mean, I don't think, and again, going into the deep dive of like, you got to study

293
00:16:07,174 --> 00:16:08,334
each one of these things in depth.

294
00:16:08,434 --> 00:16:09,974
And frankly, I just don't care enough to do that.

295
00:16:10,994 --> 00:16:11,814
Strategy is going to be fine.

296
00:16:11,994 --> 00:16:15,314
They've got billions of dollars of cash that can service all the dividends.

297
00:16:15,314 --> 00:16:16,434
So I think strategy is fine.

298
00:16:16,914 --> 00:16:18,334
You made a plan, it's the like, they're going to be fine.

299
00:16:18,334 --> 00:16:21,454
that once you go down the list and you get beyond the big ones,

300
00:16:22,294 --> 00:16:24,954
not like the market to the best of my knowledge,

301
00:16:25,454 --> 00:16:28,194
the market just didn't really give these companies any leverage.

302
00:16:28,474 --> 00:16:31,394
There's a bunch of pipe deals, which means a bunch of insiders got cooked.

303
00:16:31,974 --> 00:16:35,734
There's a bunch of like the initial hype cycle and equity sales.

304
00:16:36,194 --> 00:16:39,034
But a lot of it is just like it's going to come out in the share price,

305
00:16:39,174 --> 00:16:43,214
less so in the fact that like the company has to sell all the Bitcoin,

306
00:16:43,314 --> 00:16:43,994
even if they do.

307
00:16:44,434 --> 00:16:47,694
I don't think there's that much coin there to be sold.

308
00:16:47,694 --> 00:16:52,234
And you know what this reminds me of? This is just your 2026 version of the miner capitulation

309
00:16:52,234 --> 00:16:56,894
that happens every cycle, right? The miners huddle all the way into the top. Now the miners are fine

310
00:16:56,894 --> 00:17:00,954
because they've got AI revenue and stuff ticking over in the background. We'll see if some of these

311
00:17:00,954 --> 00:17:04,774
treasury companies consolidate. I mean, let's face it. It was a silly idea. I think everyone's

312
00:17:04,774 --> 00:17:08,914
kind of aware of that. There'll be some phoenixes that rise from the ashes. But this idea of thousands

313
00:17:08,914 --> 00:17:14,034
of treasury companies, I just don't think it makes any sense. So we'll see some consolidation.

314
00:17:14,034 --> 00:17:15,694
we'll see a bunch of them capitulate,

315
00:17:15,994 --> 00:17:20,394
but I'm not too concerned about that being like a FTX grade,

316
00:17:20,674 --> 00:17:22,554
you know, send it all to zero type event.

317
00:17:23,494 --> 00:17:23,754
Yeah.

318
00:17:25,134 --> 00:17:28,754
Yeah, I mean, they have the ability to be a bison

319
00:17:28,754 --> 00:17:32,054
and run through the storm and just hold tight to their Bitcoin.

320
00:17:32,054 --> 00:17:33,114
Yeah, as long as you don't have any debt

321
00:17:33,114 --> 00:17:34,954
and you've got no leverage creeping up,

322
00:17:34,994 --> 00:17:37,554
you just need to run whatever zombie company you had before

323
00:17:37,554 --> 00:17:39,234
and just, you know, keep treading water.

324
00:17:40,154 --> 00:17:42,214
I've seen you go back and forth on Twitter

325
00:17:42,214 --> 00:17:45,134
are asking critical questions about the quantum FUD out there.

326
00:17:45,294 --> 00:17:45,794
Oh, yes.

327
00:17:46,674 --> 00:17:48,854
And I saw a thread of yours, I think it was a few weeks ago

328
00:17:48,854 --> 00:17:51,374
or a couple months ago, about it.

329
00:17:52,114 --> 00:17:56,194
And obviously there's opportunists out there

330
00:17:56,194 --> 00:17:57,514
who are looking at the price going down.

331
00:17:57,614 --> 00:17:59,894
See, I told you, we've got to be worried about this quantum risk.

332
00:17:59,954 --> 00:18:00,754
We need to change Bitcoin.

333
00:18:00,914 --> 00:18:01,974
That's why the price is going down.

334
00:18:02,534 --> 00:18:07,994
What would you say to the people attributing this price drop

335
00:18:07,994 --> 00:18:10,814
to fears of quantum at the institutional level?

336
00:18:10,814 --> 00:18:27,594
Yeah. No, it's not like, so my general view, let's just start with like my general view on quantum. So I've spent meaningful time. Again, quantum is one of those things where if you know what's going on with quantum, I think you're lying because no one knows what the hell is going on with quantum. No one understands this.

337
00:18:27,594 --> 00:18:33,854
I've done enough research to at least satisfy where my current thinking is at

338
00:18:33,854 --> 00:18:37,474
I do not believe that quantum is coming in the next two years

339
00:18:37,474 --> 00:18:39,554
I think that's not happening

340
00:18:39,554 --> 00:18:45,014
I also understand that there's been meaningful developments in the field

341
00:18:45,014 --> 00:18:48,814
they talk about logical qubits and error correction

342
00:18:48,814 --> 00:18:49,774
all this kind of stuff

343
00:18:49,774 --> 00:18:52,114
different fidelities of these things

344
00:18:52,114 --> 00:18:54,694
again, if anyone pretends to understand this stuff

345
00:18:54,694 --> 00:18:56,434
I think you're lying because no one understands any of it

346
00:18:56,434 --> 00:18:59,254
I think there is a credible case.

347
00:18:59,434 --> 00:19:00,654
So first of all, there is no question.

348
00:19:00,774 --> 00:19:02,334
Some people are not allocating to Bitcoin.

349
00:19:02,894 --> 00:19:04,974
Some of these big TradFi guys will probably sell

350
00:19:04,974 --> 00:19:07,454
because very simply, if you don't understand something,

351
00:19:07,534 --> 00:19:08,074
you should know that.

352
00:19:08,274 --> 00:19:10,834
And if people don't understand the risk of it to their portfolio,

353
00:19:11,434 --> 00:19:12,294
they're probably not going to own it.

354
00:19:12,374 --> 00:19:14,374
So there's going to be capital on the sidelines

355
00:19:14,374 --> 00:19:17,014
and capital that's selling, no question because of quantum.

356
00:19:17,794 --> 00:19:20,874
There is no chance in my mind that it is the thing

357
00:19:20,874 --> 00:19:23,314
that has caused us to go down to 63K, right?

358
00:19:23,834 --> 00:19:26,694
I just do not believe that that is the reason.

359
00:19:26,794 --> 00:19:27,794
We're in a bear market.

360
00:19:28,154 --> 00:19:29,874
We saw a tremendous amount of sell size.

361
00:19:29,954 --> 00:19:32,654
It's going to take months for all of those coins.

362
00:19:32,734 --> 00:19:35,654
Because remember, when a long-term holder sells, right,

363
00:19:35,694 --> 00:19:39,394
they've sold to some new guy, he's probably not going to huddle it.

364
00:19:39,654 --> 00:19:42,394
It's going to go to the next guy, and then he's going to capitulate lower.

365
00:19:42,654 --> 00:19:45,114
He's going to buy the dip, not the dip, not the dip, keeps going.

366
00:19:45,474 --> 00:19:47,254
Eventually, those coins will find a cold card.

367
00:19:47,834 --> 00:19:51,254
So my general view is that it's just going to take time to absorb that,

368
00:19:51,254 --> 00:19:56,394
like digest all of the sell side. So, you know, again, more than, I have to check the numbers,

369
00:19:56,554 --> 00:20:01,134
more than 80% of the dollars invested in Bitcoin are underwater. That's a lot of people. It's a lot

370
00:20:01,134 --> 00:20:05,574
of capital. Like it's nasty. There's a lot of people who are going to be panicking. I've got

371
00:20:05,574 --> 00:20:12,394
multiple messages this morning saying I'm terrified. So that's where we're at. So let's go back to

372
00:20:12,394 --> 00:20:17,274
quantum. I'm of the view, there's obviously two issues when it comes to Bitcoin and quantum.

373
00:20:17,274 --> 00:20:21,714
There's what to do with the lost coins and what do you do with quantum secure algorithms.

374
00:20:22,334 --> 00:20:28,754
Lost coins, if I can just put one like, let's actually think about this rationally, the lost

375
00:20:28,754 --> 00:20:35,614
coins debate is going to be the least productive, most destructive. We will never, ever reach

376
00:20:35,614 --> 00:20:41,754
consensus on that. All breath spent on that before we have solved the other part, which is the

377
00:20:41,754 --> 00:20:47,814
quantum secure address concept is just people arguing on Twitter, and it's just going to be a

378
00:20:47,814 --> 00:20:52,834
distraction. So on the probably more important issue, we have to, as Bitcoin, be able to give

379
00:20:52,834 --> 00:20:57,374
people an option. And this is where you get to a fork in the road. There's many folks, credibly,

380
00:20:57,374 --> 00:21:03,974
who say there has been no progress in quantum. And for a measurable, like, what are the problems

381
00:21:03,974 --> 00:21:11,254
that they're solving? Has Shure's algorithm been run? The answer is no. But could it be run if they

382
00:21:11,254 --> 00:21:16,934
get there yes and this one of these ideas that if because right now with the quantum the qubits and

383
00:21:16,934 --> 00:21:21,814
all this stuff there's too much error to actually run shaw's algorithm in the first place so they

384
00:21:21,814 --> 00:21:26,314
kind of got a when they do factor 15 or 21 they kind of have to like give it the answer and be

385
00:21:26,314 --> 00:21:31,294
like oh look it solved it so but once you get to a certain if if and once you get to a certain level

386
00:21:31,294 --> 00:21:36,654
of fidelity and noise reduction suddenly shaw's algorithm can start doing stuff now i would suspect

387
00:21:36,654 --> 00:21:39,274
that we will see that incremental progress.

388
00:21:39,774 --> 00:21:42,334
But then you have the problem of it takes time to upgrade Bitcoin.

389
00:21:42,594 --> 00:21:44,034
It takes time for us to argue online.

390
00:21:44,154 --> 00:21:46,074
It takes time for us to move the coins.

391
00:21:47,134 --> 00:21:52,214
So from my view, the most sensible thing truly is to look at what they do.

392
00:21:52,274 --> 00:21:57,434
I think BIP360 is very sound because even if you pretend quantum isn't a thing,

393
00:21:57,974 --> 00:22:02,214
just pretend quantum isn't a thing, BIP360 actually makes Taproot better.

394
00:22:02,214 --> 00:22:11,394
so bit 360 purely as a sensible update to taproot makes a lot of sense and for the raid to leos out

395
00:22:11,394 --> 00:22:15,614
there who don't understand it in the first place you can now say it's quantum secure because they're

396
00:22:15,614 --> 00:22:19,054
gonna like that don't care like that's you've done something you've shown that we've done something

397
00:22:19,054 --> 00:22:24,674
i actually think that supporting bit 360 makes a lot of sense because it's totally benign from like

398
00:22:24,674 --> 00:22:30,274
a bitcoin without quantum perspective um it makes a lot of sense because it just like makes taproot

399
00:22:30,274 --> 00:22:34,474
a bit better. And you're then going to waylay a lot of these fears by the folks who don't

400
00:22:34,474 --> 00:22:38,714
understand and still won't understand, but they'll believe it's solved. So you're going to solve that

401
00:22:38,714 --> 00:22:44,634
element just by actually doing a sensible upgrade that is useful even without quantum.

402
00:22:45,354 --> 00:22:50,114
And then you argue about what happens when quantum comes live. Now, from my perspective,

403
00:22:50,574 --> 00:22:53,494
first and foremost, do not reuse addresses. Because if you want to be quantum secure,

404
00:22:53,594 --> 00:22:58,914
don't reuse addresses. As long as you're using Segwit, modern wallets, you're not using legacy,

405
00:22:58,914 --> 00:23:05,134
paid a pub key your coins are safe the only place they're not safe is if you do address reuse and in

406
00:23:05,134 --> 00:23:13,134
theory short range attacks in the mempool but let's let's be real here is google going to invent a

407
00:23:13,134 --> 00:23:20,494
quantum computer and hack my thousand dollars i'm trying to send from my dca into my wallet no no

408
00:23:20,494 --> 00:23:26,734
they might go after like binance moving their massive hot wallet but like binance has got

409
00:23:26,734 --> 00:23:30,834
engineers that are going to be aware of this. I think they're going to solve for it. If we see

410
00:23:30,834 --> 00:23:34,514
the incremental steps, then you go down the path of saying, do we actually need like quantum secure

411
00:23:34,514 --> 00:23:38,994
signatures? Let's just start with something like Bit360. Makes a lot of sense to me.

412
00:23:39,434 --> 00:23:45,734
Makes Tappery better even without quantum. Waylay the fears. Keep working on and preparing for and

413
00:23:45,734 --> 00:23:51,314
planning for. So even for the quantum naysayers, I think it actually makes a lot of sense to have

414
00:23:51,314 --> 00:23:57,534
a plan, have a credible plan. There are people working on it. This is great. I disagree with a

415
00:23:57,534 --> 00:24:00,894
lot of this rhetoric that the developers are just completely asleep at the wheel. It's like they

416
00:24:00,894 --> 00:24:06,074
literally had a quantum conference, like they're writing quantum papers. Sure, some people don't

417
00:24:06,074 --> 00:24:10,714
believe it. Frankly, I don't believe it. I don't know how anyone can. It sounds all a bit fantastical.

418
00:24:11,194 --> 00:24:16,034
However, we should at least account for the threat. If we think about things in terms of a

419
00:24:16,034 --> 00:24:17,254
Risk matrix, what is risk?

420
00:24:17,514 --> 00:24:18,794
Consequence times probability.

421
00:24:19,294 --> 00:24:21,714
Probability, I'd say, is almost nothing,

422
00:24:21,874 --> 00:24:24,054
but the consequences is really bad.

423
00:24:24,294 --> 00:24:26,034
So therefore, you have to weight that thing

424
00:24:26,034 --> 00:24:27,994
and say we at least need a credible plan.

425
00:24:28,594 --> 00:24:30,154
Nothing wrong with having a credible plan

426
00:24:30,154 --> 00:24:31,734
in motion on the table, ready to go.

427
00:24:31,814 --> 00:24:33,154
And there will be people that want to work on this.

428
00:24:33,194 --> 00:24:34,534
So that's my angle.

429
00:24:35,574 --> 00:24:39,134
Yeah, I think the big if thing around quantum specifically,

430
00:24:39,134 --> 00:24:41,194
to your point, I was following a thread

431
00:24:41,194 --> 00:24:45,774
that you were in with Charles earlier today.

432
00:24:46,034 --> 00:24:51,634
And it's just like, he was, I mean, my observation seemed like it was given like roundabout,

433
00:24:51,754 --> 00:24:52,754
like beating around the bush.

434
00:24:52,754 --> 00:24:58,694
But it's like, if you're handing the sort of quantum researchers, like a hard coded

435
00:24:58,694 --> 00:25:05,994
variable that gets them to solve a logical qubit or factor 21, like it's like you're

436
00:25:05,994 --> 00:25:06,254
cheating.

437
00:25:06,394 --> 00:25:08,234
So you don't actually have actual quantum.

438
00:25:08,394 --> 00:25:14,234
But to your point, if it is a worry, I think BIP 360 is the best way to do it, right?

439
00:25:14,254 --> 00:25:15,014
Because it's opt in.

440
00:25:15,014 --> 00:25:17,134
so for those who are unaware

441
00:25:17,134 --> 00:25:18,014
BIP 360

442
00:25:18,014 --> 00:25:20,754
put forward by Hunter Beast

443
00:25:20,754 --> 00:25:22,314
would basically allow you to

444
00:25:22,314 --> 00:25:24,654
manipulate a script in the Tapleaf that

445
00:25:24,654 --> 00:25:26,814
creates an address that you can put Bitcoin in

446
00:25:26,814 --> 00:25:28,574
that is quantum resistant

447
00:25:28,574 --> 00:25:30,434
yeah because Taproot by default

448
00:25:30,434 --> 00:25:33,094
exposes the public key I think they undo that

449
00:25:33,094 --> 00:25:34,734
and makes Taproot quantum secure

450
00:25:34,734 --> 00:25:36,294
great and remember

451
00:25:36,294 --> 00:25:38,654
I think what's really important

452
00:25:38,654 --> 00:25:40,774
the fear merchant side

453
00:25:40,774 --> 00:25:41,594
of this whole thing

454
00:25:41,594 --> 00:25:44,534
credit to it it has sparked the conversation

455
00:25:44,954 --> 00:25:45,174
Good.

456
00:25:45,374 --> 00:25:45,794
That's excellent.

457
00:25:46,474 --> 00:25:48,814
It is now, in my opinion, well over its skates.

458
00:25:48,954 --> 00:25:53,214
We're now at the level where it's like the coins are going to get market dumped and it's

459
00:25:53,214 --> 00:25:54,434
happening in two years.

460
00:25:54,694 --> 00:25:58,694
And 15 researchers who are paid by quantum firms believe quantum is coming.

461
00:25:59,134 --> 00:26:00,674
That's one of my big issues with it.

462
00:26:00,694 --> 00:26:05,274
And I spent a lot of time with Gemini and Grok because how else are you going to bloody

463
00:26:05,274 --> 00:26:05,894
search this stuff?

464
00:26:05,934 --> 00:26:06,814
I'm not going through all the paper.

465
00:26:06,814 --> 00:26:09,174
People seem to like, you know, Arvix research papers.

466
00:26:09,274 --> 00:26:10,534
You're like, I'm not reading that.

467
00:26:10,654 --> 00:26:11,314
Get out of here.

468
00:26:11,534 --> 00:26:12,414
I'm a quantum physicist.

469
00:26:13,054 --> 00:26:15,794
So I basically just talk to the LLMs, test them against each other,

470
00:26:15,874 --> 00:26:16,714
see what they come back with.

471
00:26:17,074 --> 00:26:19,454
The general framework, and I've read a number of articles

472
00:26:19,454 --> 00:26:21,694
just saying like, you know, quantum is bullshit.

473
00:26:22,274 --> 00:26:26,274
And the consistent feedback that I got from the LLMs, both of them,

474
00:26:26,354 --> 00:26:28,594
and they kind of checked and said, no, I generally agree with each other.

475
00:26:29,294 --> 00:26:31,834
The general feedback was up until like 2025,

476
00:26:32,614 --> 00:26:36,094
pretty much all the critique saying it's all horse shit was true

477
00:26:36,094 --> 00:26:38,054
and very credibly defensive.

478
00:26:38,054 --> 00:26:44,514
there's apparently been some updates in late 25 about error correction and all these things which

479
00:26:44,514 --> 00:26:49,434
starts to look like maybe that's now an engineering problem rather than a can't be done problem so

480
00:26:49,434 --> 00:26:55,754
that's why i think at the minimum even if you are skeptical spend half an hour just pinging

481
00:26:55,754 --> 00:27:00,034
these llms and just like see what it comes back with because i actually found it quite useful in

482
00:27:00,034 --> 00:27:07,194
exercise a good use case for ai i suppose um but again like i think this doom merchant side of like

483
00:27:07,194 --> 00:27:10,994
everything's going to get markets sold and Bitcoin's dead because of quantum. And I actually

484
00:27:10,994 --> 00:27:14,814
think we're now well and truly into the counterproductive stage because a lot of the

485
00:27:14,814 --> 00:27:20,254
evidence, a lot of the evidence that is proposed is quantum company says quantum is coming. Quantum

486
00:27:20,254 --> 00:27:24,614
expert who works for quantum company says quantum is coming. We surveyed seven of them. So they all

487
00:27:24,614 --> 00:27:29,914
think it's coming. They're also paid by a quantum company. You can look at some government bureaucracy

488
00:27:29,914 --> 00:27:34,334
agency committee says quantum is coming. Who's probably advised by those same experts who work

489
00:27:34,334 --> 00:27:35,054
for the quantum company.

490
00:27:35,394 --> 00:27:37,394
There's like a whole lot of things with like this guy,

491
00:27:37,494 --> 00:27:39,414
this smart dude over here said it's coming.

492
00:27:40,134 --> 00:27:44,154
And the skeptics go, well, I understand that there's a bunch

493
00:27:44,154 --> 00:27:45,174
of people who say it's coming.

494
00:27:46,174 --> 00:27:49,114
Can you factor a number bigger than the fingers on my hand?

495
00:27:49,174 --> 00:27:49,754
Can you do this?

496
00:27:50,254 --> 00:27:53,014
And, you know, maybe there's breakthroughs that need to happen,

497
00:27:53,014 --> 00:27:57,094
but the gap between where we're currently at and what is needed

498
00:27:57,094 --> 00:28:01,834
for breaking ECDSA is quite large.

499
00:28:01,834 --> 00:28:06,774
there's assumed growth rates and expansion rates and again i'm not smart enough or deep enough in

500
00:28:06,774 --> 00:28:11,034
this stuff to properly handicap it but if i just think about this from like a pragmatic if i was

501
00:28:11,034 --> 00:28:18,434
an engineer and i was going to just solve this social problem have the plan this bit 360 looks

502
00:28:18,434 --> 00:28:24,074
pretty benign solve some stuff that we need to do anyway waylay the fears and get the conversation

503
00:28:24,074 --> 00:28:28,814
moving and just keep an eye on this thing and once we get developments we should already have

504
00:28:28,814 --> 00:28:33,434
a quantum secure signature scheme planned out, mapped out, Bitcoiners are going to upgrade.

505
00:28:33,934 --> 00:28:38,254
You know, like, I mean, if it really comes to fruition and they start cracking keys,

506
00:28:38,814 --> 00:28:43,294
yes, I will support giving people an option to have secure Bitcoin. Like, I'm not going to nuke

507
00:28:43,294 --> 00:28:46,894
my own net worth. And I'm sure there's a lot of Bitcoins listening who would do the same,

508
00:28:46,974 --> 00:28:51,514
even if you're skeptical. The moment you see a key start getting cracked and then the next one

509
00:28:51,514 --> 00:28:56,274
getting cracked, you know you're on that journey. And if you want to have the plan ready to go

510
00:28:56,274 --> 00:29:00,834
before that happens, because then there is no capital that can say, I shouldn't invest in this

511
00:29:00,834 --> 00:29:09,534
thing because of quantum. Just the whole thing goes away. Yeah. It's exhausting because it has

512
00:29:09,534 --> 00:29:14,314
been FUD for quite some time. People have been focused on it within Bitcoin, within the development

513
00:29:14,314 --> 00:29:18,874
community, as you mentioned. There was a whole conference about it last year, but then to your

514
00:29:18,874 --> 00:29:25,174
point, it's like 99.8% of climate scientists agree that cataclysmic climate change is right around

515
00:29:25,174 --> 00:29:30,534
the corner nine out of ten dentists say you should use this toothpaste it's like okay what are the

516
00:29:30,534 --> 00:29:35,854
incentives behind all that but yeah correct so look i mean i think risk consequence times

517
00:29:35,854 --> 00:29:41,814
probability consequences dire probability is not large some will argue about that's where people

518
00:29:41,814 --> 00:29:47,234
can debate the end of the day what's the correct solution in my view start the process have the

519
00:29:47,234 --> 00:29:52,694
plan be ready waylay all the fears show that bitcoin's going to be fine and what what what

520
00:29:52,694 --> 00:29:53,694
cases there against it.

521
00:29:53,694 --> 00:30:04,408
Just nuke the FUD with really you don even have to probably change Bitcoin Bit360 sure we can debate whether whether we do that But you don have to roll out quantum secure signatures until there a known threat

522
00:30:04,468 --> 00:30:05,888
We just need to have the plan ready.

523
00:30:06,828 --> 00:30:17,888
Well, I mean, that's having talked to Jonas Nick and Mikhail Kudinov, who wrote the hash-based quantum resistant or hash-based signatures for Bitcoin,

524
00:30:17,888 --> 00:30:23,888
which is a way to bring quantum-resistant addresses to Bitcoiners.

525
00:30:24,648 --> 00:30:28,548
You think about all the standardization that's been built around hardware wallets

526
00:30:28,548 --> 00:30:31,768
and coordination via multi-sig lightning channels.

527
00:30:32,488 --> 00:30:33,508
Oh, it's a huge job.

528
00:30:34,328 --> 00:30:36,328
It's not an easy lift.

529
00:30:36,628 --> 00:30:36,788
No.

530
00:30:37,648 --> 00:30:42,248
The people funding Bitcoin because of the quantum risk

531
00:30:42,248 --> 00:30:48,848
and under appreciating that sort of massive lift of standardization

532
00:30:48,848 --> 00:30:52,828
and transition that will be necessary on the other side

533
00:30:52,828 --> 00:30:58,468
if you sort of rush toward a quantum resistant address structure

534
00:30:58,468 --> 00:31:03,408
is not in anybody's best interest at the end of the day.

535
00:31:03,428 --> 00:31:05,248
Because that's the other risk too if you rush something

536
00:31:05,248 --> 00:31:10,768
and it's not as big of a threat as we thought it was.

537
00:31:10,768 --> 00:31:17,588
maybe we have 30 years, 50 years, maybe it never comes. And you make all these rash changes that

538
00:31:17,588 --> 00:31:22,208
severely deprecate Caesar experience of Bitcoiners. You have to factor that in as well.

539
00:31:22,668 --> 00:31:27,268
Yeah, exactly. And at the highest level, you segway coins unless you're reusing addresses

540
00:31:27,268 --> 00:31:31,648
and you don't expose your X. And this is the other thing. There's a whole series of things that

541
00:31:31,648 --> 00:31:36,328
just from a user experience, right? Xpubs. Pete McCormack had his whole thing where he's like,

542
00:31:36,328 --> 00:31:42,488
xpubs the hell's an xpub and rightfully so no human alive should really need like a just a

543
00:31:42,488 --> 00:31:48,368
typical user should ever need to know what an xpub is how many people have put your xpub into a

544
00:31:48,368 --> 00:31:53,988
tax accounting software that just tracks your bitcoin wallet guess what if that tax accounting

545
00:31:53,988 --> 00:31:59,108
software gets hacked and quantum comes to fruition all of your coins are now exposed right public

546
00:31:59,108 --> 00:32:03,888
keys exposed so there's stuff like that that just completely nukes the user experience of this whole

547
00:32:03,888 --> 00:32:11,248
thing. So consequence, massive, probability, up for debate, solutions, going to take a long time

548
00:32:11,248 --> 00:32:17,328
to roll out. And I think to the credit of the folks who are pointing this thing out, because

549
00:32:17,328 --> 00:32:22,508
of how big the lift is, that's why you need a significant lead time, which is also why you

550
00:32:22,508 --> 00:32:28,728
probably don't want to wait for it to start cracking keys close to Bitcoin to do something.

551
00:32:28,828 --> 00:32:32,668
It's going to take a long time to do this. But I also think a lot of the, in my view,

552
00:32:32,668 --> 00:32:34,948
The rhetoric around we should do absolutely nothing is wrong.

553
00:32:35,288 --> 00:32:37,728
The rhetoric that we need to do everything tomorrow is wrong.

554
00:32:38,348 --> 00:32:40,508
The answer is somewhere in the middle, as it usually is.

555
00:32:40,868 --> 00:32:43,088
That gray zone is really what we should be talking about.

556
00:32:43,168 --> 00:32:46,748
Even if you're skeptical of quantum, just consider the magnitude of the risk.

557
00:32:47,328 --> 00:32:51,768
And then even if you are for quantum, telling people that Satoshi's coins are going to get

558
00:32:51,768 --> 00:32:55,628
market dumped on a Tuesday next week is completely and totally counterproductive.

559
00:32:56,008 --> 00:32:59,808
You're actually wasting everyone's time by making people dislike you.

560
00:33:00,228 --> 00:33:01,508
Therefore, your message stops getting heard.

561
00:33:01,508 --> 00:33:05,208
work within the middle here because that's how you actually get to a solution.

562
00:33:06,608 --> 00:33:09,448
Yeah, and I think that developers focused on this

563
00:33:09,448 --> 00:33:13,548
problem have been operating in that middle path

564
00:33:13,548 --> 00:33:17,488
that you're describing. Yeah, that's the engineering path. You've got to find the optimal solution given the

565
00:33:17,488 --> 00:33:21,428
constraints that you have in front of you. Yeah. Speaking of constraints that we have

566
00:33:21,428 --> 00:33:25,528
in front of us, what are the price levels that you're looking at? I read your newsletter

567
00:33:25,528 --> 00:33:29,208
from this morning, last night for you.

568
00:33:29,208 --> 00:33:39,028
uh 55k was that the long-term yeah so yeah so give a bit of a roadmap of where we are um so

569
00:33:39,028 --> 00:33:47,188
uh we're in the 2024 chop zone we're at 63 almost 64k now uh this is underneath the 2025

570
00:33:47,188 --> 00:33:55,448
zone uh this is the next biggest supply cluster transfer volume trade volume like this is this is

571
00:33:55,448 --> 00:34:00,428
where Bitcoin spent eight months, every time it went below 50K, which is about a trillion dollar

572
00:34:00,428 --> 00:34:06,248
market cap, the market bid it, right? So on the downside, we've got the realized price. This is

573
00:34:06,248 --> 00:34:14,508
the average cost basis for all coins, everyone, Satoshi, the whole lot. So the realized price is

574
00:34:14,508 --> 00:34:18,188
derived from the realized cap. And I'll explain what these things are for folks in the audience.

575
00:34:18,728 --> 00:34:21,648
The realized cap is actually, in my opinion, the most important metric in Bitcoin,

576
00:34:21,648 --> 00:34:25,528
because it is a measure of how much people have saved,

577
00:34:25,728 --> 00:34:27,968
actually dollar value saved in Bitcoin.

578
00:34:28,588 --> 00:34:31,748
The coins you bought back in 2019 at 8K,

579
00:34:31,948 --> 00:34:33,048
they're saved at 8K.

580
00:34:33,168 --> 00:34:36,068
They're saved at the price when they were last moved on chain.

581
00:34:36,368 --> 00:34:37,188
Not a perfect measure,

582
00:34:37,508 --> 00:34:41,408
but even if you run the most magical entity adjustments

583
00:34:41,408 --> 00:34:42,548
and all that kind of stuff,

584
00:34:42,728 --> 00:34:44,728
the realized cap never deviates for more than 5%.

585
00:34:44,728 --> 00:34:46,668
It's one of those things where like at an individual level,

586
00:34:46,668 --> 00:34:47,868
there's error bars around it,

587
00:34:48,268 --> 00:34:48,908
but in aggregate,

588
00:34:49,508 --> 00:34:51,468
it doesn't matter if finance is consolidating stuff,

589
00:34:51,468 --> 00:34:57,048
doesn't matter if you're moving from a cold card to a ledger or back. The overall aggregate doesn't

590
00:34:57,048 --> 00:35:02,808
move by more than 5% over all its history. So that number, the amount of capital that Bitcoiners

591
00:35:02,808 --> 00:35:12,068
have saved in Bitcoin measurably is $1.1 trillion. That is about a 52, oh no, sorry, it'd be 55,

592
00:35:12,148 --> 00:35:18,188
55K. So if we go down to 55K, you've got the 200 week moving average of like 57. That's like

593
00:35:18,188 --> 00:35:22,508
every bear market wicks on that level. And by the way, there's no reason that every bear market of

594
00:35:22,508 --> 00:35:26,768
the past is indicative of the future. Bear, right? This is one of those classic things in markets.

595
00:35:27,168 --> 00:35:31,528
But if you just think about this from a core fundamental standpoint, it's kind of nice,

596
00:35:31,628 --> 00:35:35,008
the 200-week moving average. So all the technical boffins out there are going to look at that and

597
00:35:35,008 --> 00:35:39,508
say, that's where it's going to bottom. The realized price at 55, that is where everyone

598
00:35:39,508 --> 00:35:45,268
has invested their capital. Let's think about this from a value investor perspective. A company like

599
00:35:45,268 --> 00:35:53,308
ExxonMobil is trading at an MNAV, an equivalent book value of 0.9. They've spent all this money

600
00:35:53,308 --> 00:35:58,348
building all of the infrastructure to pump oil. They've got all the smarts, all the people,

601
00:35:58,508 --> 00:36:03,868
all the hardware, all the drilling rigs, all the pumps, everything. And you're going to sell that

602
00:36:03,868 --> 00:36:10,288
for less than what people paid for it. That's where Bitcoin is at 55K. We as Bitcoiners have

603
00:36:10,288 --> 00:36:17,268
invested $1.1 trillion into this thing. At 55K, you are buying Bitcoin at its all-time book value.

604
00:36:17,888 --> 00:36:23,528
The actual book value for people who are real, like not Satoshi, who doesn't transact and move

605
00:36:23,528 --> 00:36:28,468
and lost miner coins and all that stuff, that's the true market mean at 80K. So we're already below

606
00:36:28,468 --> 00:36:33,448
the average cost basis for normal people who are actually alive in the cycle and active.

607
00:36:34,128 --> 00:36:39,348
So we're in that, I would say, I mean, in my opinion, personally, I think we're in the deep

608
00:36:39,348 --> 00:36:45,508
value zone. Below 70, I deem to be deep value because we're in that bottom 20% of all price

609
00:36:45,508 --> 00:36:51,788
history across all models. Once you get down to the low 50s, you're now the territory where it's like,

610
00:36:52,788 --> 00:37:00,028
please make me a case that isn't a bottom. You have to actually really go down the first path

611
00:37:00,028 --> 00:37:05,908
and say, no, Bitcoin is dead. Once you get down to those low 50s, you're now saying something is

612
00:37:05,908 --> 00:37:11,528
wrong with Bitcoin and we are truly going to zero. So that's kind of, that's the framework here. Now,

613
00:37:11,688 --> 00:37:15,808
if we go below 50, imagine the capitulation week, but you're still going to ask yourself that

614
00:37:15,808 --> 00:37:22,568
question. Am I buying an asset that's truly going to zero or are people just kind of overselling

615
00:37:22,568 --> 00:37:28,468
this thing and it comes back and I didn't stay humble at this point? What am I doing?

616
00:37:28,468 --> 00:37:35,948
what would need to be the conditions for the answer to the question of is this thing going

617
00:37:35,948 --> 00:37:41,728
to zero what would what would it take for that to be yes in your mind yeah it's a very good question

618
00:37:41,728 --> 00:37:48,748
i mean like you i mean you could argue that the the quantum thing if suddenly there's a quantum

619
00:37:48,748 --> 00:37:55,128
break tomorrow yeah we're in trouble no question no doubt so if quantum does manifest tomorrow

620
00:37:55,588 --> 00:37:57,508
Yeah, it's probably over, right?

621
00:37:57,588 --> 00:37:58,928
That's hard to come back from.

622
00:38:01,008 --> 00:38:02,728
I mean, I've been staring at this thing.

623
00:38:02,948 --> 00:38:05,128
I mean, I dedicated my career to this thing,

624
00:38:05,208 --> 00:38:06,608
not because I'm like, oh yeah,

625
00:38:06,628 --> 00:38:07,848
I want to just jump on the Bitcoin train.

626
00:38:07,948 --> 00:38:10,928
It's like I spent hours and hours and hours

627
00:38:10,928 --> 00:38:12,968
and I still spend hours and hours and hours

628
00:38:12,968 --> 00:38:13,828
studying this thing.

629
00:38:13,888 --> 00:38:15,548
I'm like, you know, really?

630
00:38:15,648 --> 00:38:17,188
What are the two things that kill Bitcoin?

631
00:38:17,588 --> 00:38:18,648
Well, let's say three.

632
00:38:18,788 --> 00:38:19,528
There's one overarching.

633
00:38:20,128 --> 00:38:21,928
There's something like a quantum.

634
00:38:22,348 --> 00:38:23,708
Could be a cryptography break.

635
00:38:23,708 --> 00:38:24,988
Could just be like a code bug.

636
00:38:25,128 --> 00:38:26,208
You import that same thing.

637
00:38:26,268 --> 00:38:27,288
I put that in the same bucket.

638
00:38:27,788 --> 00:38:29,088
Developers go and rush something.

639
00:38:29,208 --> 00:38:31,728
They put something in the code, truly just kills it.

640
00:38:32,408 --> 00:38:34,008
That's probably a zero mode, right?

641
00:38:34,028 --> 00:38:34,508
That's not good.

642
00:38:34,708 --> 00:38:35,288
No one wants that.

643
00:38:35,708 --> 00:38:39,668
So something where like the fundamental properties of Bitcoin are eviscerated.

644
00:38:39,888 --> 00:38:40,568
That's a problem.

645
00:38:41,848 --> 00:38:46,148
I would also say that like, I mean, apathy is kind of the parent of a lot of this stuff

646
00:38:46,148 --> 00:38:47,968
in terms of just like people just don't care.

647
00:38:47,968 --> 00:38:51,888
And that's maybe where we can start talking about where gold fits into this picture.

648
00:38:51,888 --> 00:38:55,788
because I think a lot of people have this parabola envy over gold.

649
00:38:55,908 --> 00:38:59,088
I really think the gold rally cooked people because they thought,

650
00:38:59,208 --> 00:39:00,448
but they didn't choose my coin.

651
00:39:00,568 --> 00:39:02,248
They chose the old coin, right?

652
00:39:02,648 --> 00:39:05,168
Assuming that we're going to choose the new coin first time.

653
00:39:06,008 --> 00:39:08,468
And we're never going to choose Bitcoin first time.

654
00:39:09,368 --> 00:39:10,788
Again, Roman money.

655
00:39:11,308 --> 00:39:12,548
So it's pre-Roman money.

656
00:39:12,848 --> 00:39:16,308
So I think from that perspective, I think there's a lot of people

657
00:39:16,308 --> 00:39:20,208
who are saying, has the Bitcoin macro thesis broken down?

658
00:39:20,208 --> 00:39:25,168
And my simple answer to that question is, maybe.

659
00:39:25,668 --> 00:39:30,208
However, if Bitcoin bottoms and starts rallying,

660
00:39:30,728 --> 00:39:33,688
how quickly do you think that narrative will drop off the map?

661
00:39:34,008 --> 00:39:35,308
Just like it does every time.

662
00:39:35,388 --> 00:39:38,048
Bitcoin was dead for a decade in November 2022.

663
00:39:38,448 --> 00:39:39,108
That was the narrative.

664
00:39:39,488 --> 00:39:39,728
It's over.

665
00:39:39,888 --> 00:39:40,168
Finished.

666
00:39:40,668 --> 00:39:43,408
FTX has completely nuked every reason why anyone would own this thing.

667
00:39:45,148 --> 00:39:49,088
It's like, in my view, we're going to find a flaw.

668
00:39:49,808 --> 00:39:52,808
We're going to look back at this period and go, oh, yeah.

669
00:39:53,208 --> 00:39:53,888
Yeah, it didn't die.

670
00:39:54,228 --> 00:39:55,248
How interesting, right?

671
00:39:55,348 --> 00:39:59,068
Security budget's one, but like, no one's selling Bitcoin

672
00:39:59,068 --> 00:40:00,188
because of security budget.

673
00:40:00,708 --> 00:40:01,028
You know what I mean?

674
00:40:01,068 --> 00:40:03,528
Like, that's years and years in the future, right?

675
00:40:03,608 --> 00:40:05,828
Miners, as we found, miners are mining.

676
00:40:06,448 --> 00:40:07,248
They're making a ton of money.

677
00:40:07,408 --> 00:40:08,468
Some of their stocks are at all-time high.

678
00:40:08,928 --> 00:40:11,988
So, you know, this is part of the industry.

679
00:40:11,988 --> 00:40:20,068
that and it's funny that we're going through this uh this capitulation i mean i think we're

680
00:40:20,068 --> 00:40:26,468
in the process of capitulation right now and i know we've talked about this in the past about

681
00:40:26,468 --> 00:40:30,168
ai you were just mentioning going back with the models but i've been playing around with open

682
00:40:30,168 --> 00:40:38,268
claw for the last two weeks and uh have had my my little agent spin up a phoenix d server i've got

683
00:40:38,268 --> 00:40:45,908
at trading, just play money just to see. I really wanted to see if it could LNURL auth into LN

684
00:40:45,908 --> 00:40:51,948
markets without me having to set up any credentials. And it can. And the point being, it's

685
00:40:51,948 --> 00:40:58,148
fascinating to me that we're in this capitulation process where we have something emerging that

686
00:40:58,148 --> 00:41:02,588
could be this incredible demand driver for Bitcoin, which is the machine payable web that

687
00:41:02,588 --> 00:41:09,388
we've been talking about for over a decade finally manifesting because the the tooling and the

688
00:41:09,388 --> 00:41:14,888
infrastructure is finally there to make it viable can you um would you mind giving it some of my

689
00:41:14,888 --> 00:41:19,128
silver coins and seeing if it can you know make some money out of that or have we got a problem

690
00:41:19,128 --> 00:41:26,308
there yeah exactly like hey maybe tether will will launch uh the equivalent of tether gold and

691
00:41:26,308 --> 00:41:31,868
tether silver it could use that it could choose that maybe i'll prefer maybe we'll prefer tokenized

692
00:41:31,868 --> 00:41:34,148
shares of stretch.

693
00:41:34,408 --> 00:41:34,708
Who knows?

694
00:41:35,168 --> 00:41:35,568
Yeah, maybe.

695
00:41:35,848 --> 00:41:36,068
Maybe.

696
00:41:36,268 --> 00:41:36,388
Yeah.

697
00:41:36,788 --> 00:41:37,828
I mean, that's awesome.

698
00:41:38,108 --> 00:41:39,208
That's one of those things

699
00:41:39,208 --> 00:41:39,588
where like,

700
00:41:40,168 --> 00:41:40,828
and, you know,

701
00:41:40,928 --> 00:41:42,448
having held precious metals,

702
00:41:42,548 --> 00:41:43,348
still hold precious metals.

703
00:41:43,988 --> 00:41:45,428
I know that Bitcoin is better

704
00:41:45,428 --> 00:41:46,548
in every possible way.

705
00:41:46,808 --> 00:41:48,188
You know, like it's 2026.

706
00:41:48,688 --> 00:41:50,128
You know, like gold has its place.

707
00:41:50,248 --> 00:41:50,708
It's important.

708
00:41:50,908 --> 00:41:51,888
It's going to continue to be

709
00:41:51,888 --> 00:41:53,828
an important bedrock of the world

710
00:41:53,828 --> 00:41:55,288
and the financial system.

711
00:41:55,288 --> 00:41:56,468
But like Bitcoin is just better

712
00:41:56,468 --> 00:41:57,248
in every way.

713
00:41:57,688 --> 00:41:58,248
You know, you can teleport

714
00:41:58,248 --> 00:41:59,028
around the world.

715
00:41:59,168 --> 00:42:00,428
It's no storage cost.

716
00:42:00,648 --> 00:42:01,308
It's, you know,

717
00:42:01,308 --> 00:42:06,368
it has trade-offs there's user experience challenges but like you know i think about

718
00:42:06,368 --> 00:42:10,868
my son is he gonna have a you know what's a bad user experience going to the gold bullion dealer

719
00:42:10,868 --> 00:42:15,468
that's a bad experience like you know i don't mind it you get a cup of coffee it's part of a

720
00:42:15,468 --> 00:42:20,048
process i don't mind it but like it's it's a job it took my whole morning it was it was it was a

721
00:42:20,048 --> 00:42:26,008
bit of a process bitcoin is trivial is he going to be able to use uh a bitcoin wallet on a on a

722
00:42:26,008 --> 00:42:30,448
mobile app yes of course it's gonna be second nature to him he's not even gonna think about it

723
00:42:30,448 --> 00:42:34,448
So user experience is a process and it gets solved over time,

724
00:42:34,528 --> 00:42:36,988
but don't bet against the young because they're going to outlive you.

725
00:42:37,868 --> 00:42:40,208
Yeah, my five-year-old knows how to use a Bitcoin wallet already.

726
00:42:40,548 --> 00:42:41,288
He's got any cash wallet.

727
00:42:41,348 --> 00:42:41,488
Yeah.

728
00:42:41,488 --> 00:42:41,948
Cash or money.

729
00:42:42,888 --> 00:42:44,468
Has he bought any silver coins yet?

730
00:42:44,628 --> 00:42:44,888
No.

731
00:42:45,088 --> 00:42:45,588
Oh, really?

732
00:42:45,668 --> 00:42:46,068
Why not?

733
00:42:46,408 --> 00:42:46,588
Yeah.

734
00:42:46,808 --> 00:42:47,168
Not yet.

735
00:42:47,488 --> 00:42:47,848
Not yet.

736
00:42:48,048 --> 00:42:50,308
But I mean, speaking of this, the bullion dealer,

737
00:42:50,868 --> 00:42:52,808
I mean, you had a great anecdote on Twitter.

738
00:42:53,408 --> 00:42:54,288
I think it was last week,

739
00:42:54,288 --> 00:42:57,248
but you experienced the animal spirits for yourself in life.

740
00:42:57,248 --> 00:42:57,488
I did.

741
00:42:57,488 --> 00:42:58,448
Waiting for themselves.

742
00:42:59,088 --> 00:43:00,108
Some of your physical silver.

743
00:43:00,108 --> 00:43:04,768
let's walk through that experience and your your view of the animal spirits around that market

744
00:43:04,768 --> 00:43:08,788
particularly yeah it was i mean it was some time back i'm pretty sure it was uh we had a pod and i

745
00:43:08,788 --> 00:43:12,868
was saying like i think platinum platinum was my like speculative play but i ended up adding a bit

746
00:43:12,868 --> 00:43:17,908
of silver and again we're talking about a small like five percent of my precious metals which is

747
00:43:17,908 --> 00:43:22,928
like ten percent so that's yeah it's we're not talking about serious money here um but i wanted

748
00:43:22,928 --> 00:43:26,468
to just like have a couple silver bars i got a something couple silver coins i've got a little

749
00:43:26,468 --> 00:43:31,348
kangaroo here that i have next to me yeah i like it i think precious metals are great however

750
00:43:31,348 --> 00:43:35,988
silver was an industrial metal i'm not i'm under no illusions here so it's platinum

751
00:43:35,988 --> 00:43:42,068
precious metal but also industrial metal uh and my simple thesis was gold's gonna go up

752
00:43:42,068 --> 00:43:46,888
for all the reasons that make sense people are gonna just go and buy poor man's gold because

753
00:43:46,888 --> 00:43:50,988
that's what they do people love to trade shit coins just how it works so i was like silver's

754
00:43:50,988 --> 00:43:55,728
at some point gonna run and my thesis was fairly simple i didn't know the exact kind of frameworks

755
00:43:55,728 --> 00:44:03,668
like gold silver ratio goes down to like 40 45 50 it's kind of the lowest level it gets to in my

756
00:44:03,668 --> 00:44:11,608
lifetime it was lower back when it was pegged has been pegged for a long time uh in the post

757
00:44:11,608 --> 00:44:20,028
1970s gold standard era getting down to a gold silver ratio of like 50 is unlikely and if it does

758
00:44:20,028 --> 00:44:25,208
stick the landing it's for a couple of days and then it's over so my view was i'll trade a little

759
00:44:25,208 --> 00:44:29,888
bit of it, sell some of the bars and just get out of it. Anyway, I started seeing every community on

760
00:44:29,888 --> 00:44:35,368
Twitter was just becoming a silver bug community. You just see froth, the price is going parabolic.

761
00:44:36,048 --> 00:44:41,528
And for a bit of context, it was on the Friday, the Monday was Australia Day, 26th of January.

762
00:44:41,968 --> 00:44:46,008
And obviously everything's closed on a public holiday. There's nothing open. And I'm watching

763
00:44:46,008 --> 00:44:49,428
it on Friday. I'm like, I made the decision over the weekend. I'm probably going to go and sell.

764
00:44:49,428 --> 00:44:53,488
I'm up 3X. I'm going to go and sell a third of my silver. And then I'm just risk neutral. I'm

765
00:44:53,488 --> 00:45:09,982
totally clear never have to care I can hang onto the shiny coins that I like And I got a couple of bars that i flog off later on australia day comes and that when silver had like the full parabolic like vertical move you know adds two and a half trillion dollars in a day um slv the

766
00:45:09,982 --> 00:45:15,742
etf traded like 36 billion more than the stock market did so like i was like oh my god this is

767
00:45:15,742 --> 00:45:19,442
just chaos i was like this thing's gonna top but i can't do anything about it because it's australia

768
00:45:19,442 --> 00:45:25,082
right american markets are open but i can't do anything because australia isn't um so then i was

769
00:45:25,082 --> 00:45:29,622
like okay i'm gonna go in first thing on the morning because the people in the comments of

770
00:45:29,622 --> 00:45:34,162
my anecdote of my thread all the gold bugs and silver bugs like oh dude you should have like

771
00:45:34,162 --> 00:45:38,762
called your dealer and just negotiated a better deal it's like yeah on what day on what day it's

772
00:45:38,762 --> 00:45:44,622
a public holiday everyone's closed like what do i do go on ebay um so my my view was i'll go in

773
00:45:44,622 --> 00:45:48,822
there first thing in the morning my mate who uses the same bullying deal that i do he's like there's

774
00:45:48,822 --> 00:45:53,722
just lines out the door all the time i was like okay i'll go in they open at nine i'll go in at

775
00:45:53,722 --> 00:45:59,902
eight get a coffee stand there uh 8 30 i'm standing in the line i'm the first one there i was like

776
00:45:59,902 --> 00:46:05,302
kind of surprising but very soon after i got there the line starts forming and it's wrapping

777
00:46:05,302 --> 00:46:10,402
down the stairs and all the rest of it fairly close-knit place and i'm just listening to the

778
00:46:10,402 --> 00:46:14,742
banter just listen to people talk there's like a dude who's telling him oh i've been telling all my

779
00:46:14,742 --> 00:46:19,542
friends no one's been buying in they didn't get it you know i'm like are you a bitcoiner talking

780
00:46:19,542 --> 00:46:23,922
about silver um oh yeah i just bought you know the lady next to him i just bought you know these

781
00:46:23,922 --> 00:46:27,022
silver coins the other day i'm already up four thousand dollars like i'm making so much money

782
00:46:27,022 --> 00:46:32,562
it's great i'm like oh my god and it's just like confirming why i was here um and actually i should

783
00:46:32,562 --> 00:46:37,682
add another point as i was counting out and working out which of the silver i was going to sell i got

784
00:46:37,682 --> 00:46:42,142
a message from one of my other mates who's very attuned with markets and he goes so uranium is

785
00:46:42,142 --> 00:46:48,462
doing well he's like my uranium group is just all all silver and i was like oh i'm getting another

786
00:46:48,462 --> 00:46:53,622
bar out because like it just something's wrong here anyway so i've got this chatter going on

787
00:46:53,622 --> 00:46:58,842
behind me i finally go in um and i'm watching the spot prize again tuesday morning australia time

788
00:46:58,842 --> 00:47:04,602
and in the line i'm waiting there i can see them setting up the shop and like i'm i lost like a

789
00:47:04,602 --> 00:47:11,202
thousand bucks on the just waiting in the line uh for this thing to happen uh go in uh go to start

790
00:47:11,202 --> 00:47:14,502
you know, counting out all the coins and selling them. And there was one other bloke who was in

791
00:47:14,502 --> 00:47:20,082
there to sell. And he pulls up this just massive bag, thumps it on the table. And he's just

792
00:47:20,082 --> 00:47:24,322
counting out bar after bar after bar. Dude was a pretty, it was a pretty serious looking dude.

793
00:47:24,322 --> 00:47:29,422
So like, I know he's been stacking for a long time. And the lady next to me was saying, I want

794
00:47:29,422 --> 00:47:33,462
new coins. I want new coins. And they said, we're completely out. We've only got these ones

795
00:47:33,462 --> 00:47:38,602
secondhand. She goes, no, I want new ones. Anyway, they go and find some other brand that they've

796
00:47:38,602 --> 00:47:45,202
got and she's like oh i like these um i sold like two percent below spot like 150 aussie um and she

797
00:47:45,202 --> 00:47:50,522
was buying about like 220 aussie so the premium on the coins right next to me i'm looking at this

798
00:47:50,522 --> 00:47:55,862
thing i'm i'm two percent below spot she's paying a huge premium and she said more more more and

799
00:47:55,862 --> 00:47:59,422
she's pointing over to my coin saying i want those ones i said we can't sell those ones

800
00:47:59,422 --> 00:48:04,302
porn broke a license we're gonna hold them for 14 days so you can't actually sell in case they're

801
00:48:04,302 --> 00:48:10,162
stolen, you know, stuff like that. So my like thesis was froth gold, silver ratio, parabolic

802
00:48:10,162 --> 00:48:15,862
move. I'm standing in line. I've got people saying they're making a ton of money of the coins they

803
00:48:15,862 --> 00:48:21,622
bought like two days ago. The person next to me after that lady, the next one didn't know what a

804
00:48:21,622 --> 00:48:25,882
troy ounce was. So I'm like, I've got people who don't know what a troy ounce is willing to pay a

805
00:48:25,882 --> 00:48:32,522
$70 premium. My cost basis was $50. Like I was buying silver at $50 Aussie. She's paying a $70

806
00:48:32,522 --> 00:48:34,562
premium on coins today.

807
00:48:34,702 --> 00:48:35,982
It's more than my original cost basis.

808
00:48:36,462 --> 00:48:37,942
And the only other guy selling

809
00:48:37,942 --> 00:48:40,102
looks like he has 10 shotguns

810
00:48:40,102 --> 00:48:40,962
and a big safe at home.

811
00:48:41,662 --> 00:48:42,942
I think I'm in the right place.

812
00:48:42,982 --> 00:48:43,982
I think I'm making the right move.

813
00:48:46,282 --> 00:48:47,422
Well, you highlight the

814
00:48:47,422 --> 00:48:52,982
benefit of Bitcoin's fungibility there.

815
00:48:53,422 --> 00:48:54,562
You're sitting there right at the dealer.

816
00:48:55,322 --> 00:48:56,362
So you can't buy these coins.

817
00:48:56,362 --> 00:48:57,762
This coin is 70% more,

818
00:48:57,922 --> 00:48:58,142
$70,

819
00:48:58,742 --> 00:49:00,542
70 Aussie dollars more.

820
00:49:00,542 --> 00:49:05,022
and that was another thing i don't know if brent johnson was trolling people but uh

821
00:49:05,822 --> 00:49:09,862
i saw he sent out he sent out a tweet like i nobody's gonna buy my silver like does anybody

822
00:49:09,862 --> 00:49:15,202
have a or somebody wants it to sell me 10 10 below spot does somebody have a better deal so

823
00:49:15,202 --> 00:49:20,802
it was like 20 kilos like a massive amount like 200 kilos or something right some big chunk of

824
00:49:20,802 --> 00:49:27,742
silver yeah for bitcoin you have these liquid markets 3 24 7 365 sent over the internet you

825
00:49:27,742 --> 00:49:28,882
all these fungibility problems.

826
00:49:29,302 --> 00:49:31,302
Yeah, the only problem is it's down 50% when you want to sell it.

827
00:49:31,522 --> 00:49:32,342
But, you know, who's counting?

828
00:49:33,042 --> 00:49:33,262
Yeah.

829
00:49:35,402 --> 00:49:36,802
What should we tell the freaks out there?

830
00:49:37,322 --> 00:49:39,162
How long do you see this persisting?

831
00:49:40,582 --> 00:49:41,722
Look, bear markets come to,

832
00:49:41,782 --> 00:49:43,782
unless you can come through that decision tree

833
00:49:43,782 --> 00:49:47,022
and say that Bitcoin is dead and choose,

834
00:49:47,262 --> 00:49:48,962
there's no shortage of fun, right?

835
00:49:48,962 --> 00:49:50,802
Apparently Epstein wrote something in,

836
00:49:51,222 --> 00:49:55,382
I just, the moment that I saw people associating Epstein with Bitcoin,

837
00:49:55,522 --> 00:49:56,582
I literally muted Epstein.

838
00:49:56,722 --> 00:49:57,462
I don't want to hear that shit.

839
00:49:57,462 --> 00:49:58,722
It's pedoquin now.

840
00:49:58,962 --> 00:50:00,622
I could not care less.

841
00:50:00,622 --> 00:50:01,322
It's medically powerful.

842
00:50:01,862 --> 00:50:05,462
I was just like, this is a political distraction if I've ever seen it.

843
00:50:05,922 --> 00:50:10,302
So there are going to be FUD narratives oozing out the walls.

844
00:50:10,602 --> 00:50:13,522
It's going to be a shit show.

845
00:50:14,702 --> 00:50:17,222
Unless you can really, and I come back to this all the time.

846
00:50:18,002 --> 00:50:20,402
There's two things that really anchor me around Bitcoin.

847
00:50:20,902 --> 00:50:24,202
The first one is having spent a considerable amount of time

848
00:50:24,202 --> 00:50:32,402
analyzing how us as Bitcoiners behave as shown by the Bitcoin ledger, nothing that I'm seeing

849
00:50:32,402 --> 00:50:37,062
right now is abnormal in any way, shape or form. It looks like every bear market of the past.

850
00:50:37,942 --> 00:50:41,442
I find very, like as an anchor, when I look at how people behave in Bitcoin,

851
00:50:42,782 --> 00:50:46,162
I'm sorry, but there's people with extraordinarily high conviction. I mean,

852
00:50:46,162 --> 00:50:51,982
long-term hold of supply right now, it's like 14 point something million, 72% of the supply.

853
00:50:51,982 --> 00:50:57,622
it's almost at 2020 levels before the bull. So if we just think about like all the coins that

854
00:50:57,622 --> 00:51:01,982
aren't moving, there's a ton of them that are just static. People are hanging onto their supply.

855
00:51:03,782 --> 00:51:08,002
Bear markets are a process, but the first one, when I look at all of the data that we see,

856
00:51:08,122 --> 00:51:13,562
it's so organic, it's so human, it's so real, it's natural, it looks normal, it looks like

857
00:51:13,562 --> 00:51:18,502
people doing what people do, just following their emotions. So I find that just the fact

858
00:51:18,502 --> 00:51:24,362
that on-chain data is such a clean, crisp signal of humans being humans, to me, just tells me

859
00:51:24,362 --> 00:51:28,222
there's something about Bitcoin that attracts, that it just feels very real. It feels like a

860
00:51:28,222 --> 00:51:33,882
real thing. It's a reminder consistently. And the other one, how many Bitcoiners have you met where

861
00:51:33,882 --> 00:51:39,262
you're like, well, that guy's a moron. No, you meet Bitcoiners, you're like, you did what? You're

862
00:51:39,262 --> 00:51:44,442
an astrophysicist or you're a doctor or whatever. Some of the smartest people I've ever met. I'll

863
00:51:44,442 --> 00:51:50,702
never forget at the uh the uh chico conference last year and we're at the football the men's game

864
00:51:50,702 --> 00:51:56,802
and there was like i don't know 15 of us left over and uh you know we're fairly sourced but

865
00:51:56,802 --> 00:52:01,282
we were talking about how the moon was like really weird like there's just weird things about the moon

866
00:52:01,282 --> 00:52:05,882
and anyway there's this bus of like 15 of us going back to uh back to bedford and people just like

867
00:52:05,882 --> 00:52:10,802
lean over and go oh boy um you know about this you're a physicist like just tap some dude on the

868
00:52:10,802 --> 00:52:13,602
shoulder you're a physicist what do you think about the moon's oh yeah no the moon's really

869
00:52:13,602 --> 00:52:18,282
weird. And you just like have this conversation with people who are all super interesting,

870
00:52:18,982 --> 00:52:22,442
right? And you just look at the macro minds, like the Lynn Aldens that come into the space.

871
00:52:22,502 --> 00:52:27,302
You're like, you're telling me that all of these engineer types who are super bright in their own

872
00:52:27,302 --> 00:52:31,982
field, in an environment, by the way, where the whole world was telling them that Bitcoin's a

873
00:52:31,982 --> 00:52:36,482
scam, it's wrong, the media, the government, your weird uncle, everyone is telling you that Bitcoin

874
00:52:36,482 --> 00:52:42,262
is just going to zero and that you're an idiot. All of these super smart engineer type people

875
00:52:42,262 --> 00:52:48,202
came to a conviction to say, no, I think you're wrong and I'm going to keep buying this thing.

876
00:52:48,462 --> 00:52:51,302
You're telling me they're all wrong. They were just like suddenly wrong and they all just like

877
00:52:51,302 --> 00:52:58,602
missed something. The people in Bitcoin is the most bullish thing about it. So unless you can

878
00:52:58,602 --> 00:53:03,122
convince me that all of those people are wrong and therefore the decision tree is that Bitcoin is dead,

879
00:53:03,902 --> 00:53:07,722
then the decision tree is at some point this bear market is going to bottom out.

880
00:53:07,722 --> 00:53:11,802
and then it's just a journey of where are we in that process, right?

881
00:53:11,922 --> 00:53:15,082
And the only thing you can control is your decisions.

882
00:53:15,582 --> 00:53:16,262
That's the only thing.

883
00:53:16,342 --> 00:53:18,862
So if you're feeling emotions based on the price,

884
00:53:19,602 --> 00:53:21,302
go and think about why that is.

885
00:53:21,482 --> 00:53:22,582
Is it because of the buys?

886
00:53:22,922 --> 00:53:24,042
Is it because your net worth is down?

887
00:53:24,102 --> 00:53:25,182
Is it because you allocated too much?

888
00:53:25,262 --> 00:53:26,782
These are lessons that you learn.

889
00:53:27,282 --> 00:53:29,842
But once you can expunge those feelings from your life

890
00:53:29,842 --> 00:53:31,362
and just look at the price as information,

891
00:53:31,922 --> 00:53:34,082
where is it in this overall cycle?

892
00:53:34,362 --> 00:53:37,622
Based on my current assessment, we're somewhere in that bottom fifth.

893
00:53:37,722 --> 00:53:42,522
what do I want to do in the bottom fifth of every single previous bear market? Do I regret buying

894
00:53:42,522 --> 00:53:51,462
at 8K, 6K, 4K in 2018, 2019? No. Do I care about if it's 20K, 22, 21, 17, 15? No, I don't care

895
00:53:51,462 --> 00:53:56,982
because over that long arc of time, they were extremely high value, high probability,

896
00:53:57,602 --> 00:54:02,202
highly stretched to the downside. Yeah, it's months. It could be months of just chopping around.

897
00:54:02,202 --> 00:54:03,282
There could be further downside.

898
00:54:04,222 --> 00:54:11,322
For another piece of context, from my perspective in an on-chain view, June, I think it was,

899
00:54:11,422 --> 00:54:13,622
2022, when three arrows blew up.

900
00:54:13,702 --> 00:54:15,322
We hit 17.6K.

901
00:54:15,962 --> 00:54:16,742
We went down.

902
00:54:16,842 --> 00:54:18,462
It was like the minor cost basis was down there.

903
00:54:18,502 --> 00:54:19,122
There was a bunch of things.

904
00:54:19,702 --> 00:54:25,002
That process from June through to November, pre-FTX, had bottom formation characteristics

905
00:54:25,002 --> 00:54:25,622
in every way.

906
00:54:25,742 --> 00:54:26,622
Looks like a bottom.

907
00:54:27,362 --> 00:54:29,762
Then FTX showed up and took us down to 15, right?

908
00:54:29,782 --> 00:54:31,182
We stuck down there for another two months.

909
00:54:32,202 --> 00:54:34,002
It was like a hyper extension type event.

910
00:54:35,222 --> 00:54:36,302
Do I really care?

911
00:54:36,822 --> 00:54:39,482
Like now, do I really care about that process?

912
00:54:39,682 --> 00:54:40,622
It sucks at the time.

913
00:54:41,122 --> 00:54:41,902
It sucks at the time.

914
00:54:42,522 --> 00:54:44,122
Be the bison, go through the storm.

915
00:54:44,542 --> 00:54:45,862
We're in the value zone.

916
00:54:46,342 --> 00:54:47,162
Probably going to go lower.

917
00:54:47,682 --> 00:54:48,942
Probably going to take a long time.

918
00:54:49,182 --> 00:54:49,822
Probably going to suck.

919
00:54:50,202 --> 00:54:51,442
There'll be narratives out everywhere.

920
00:54:52,362 --> 00:54:53,702
Come back to your original conviction and say,

921
00:54:53,762 --> 00:54:54,842
why am I here in the first place?

922
00:54:55,122 --> 00:54:56,482
And are all these people around me wrong?

923
00:54:56,582 --> 00:54:59,102
Because if they're not wrong, stay humble.

924
00:54:59,102 --> 00:55:04,922
what is the other what is the other option on the table to get through this too gold silver could

925
00:55:04,922 --> 00:55:11,702
fall back on that doesn't seem very i'm a big advocate for a lot of bitcoiners probably should

926
00:55:11,702 --> 00:55:16,702
have bought more gold they probably have none uh and here's the rationale like and again this is my

927
00:55:16,702 --> 00:55:20,602
personal circumstance but i think it's a nice illustrative reason for why i started buying gold

928
00:55:20,602 --> 00:55:24,422
platinum and silver purely speculative i'm just there to play them play the price their numbers

929
00:55:24,422 --> 00:55:31,922
on a screen. Gold has a very particular role. Most of my holdings is an ETF. And I mean, for me,

930
00:55:31,982 --> 00:55:36,422
I'm an Australian, I'm saving for a house. Our housing market is like many places, but particularly

931
00:55:36,422 --> 00:55:41,442
bad. It's just an asset that just keeps running. The number is too big. The number to buy a house

932
00:55:41,442 --> 00:55:47,622
is just too big. The gold, what happens if I did happen to find a place that I did want to buy?

933
00:55:47,942 --> 00:55:54,242
Like now, I would kick myself forever for having to sell Bitcoin to pay for that deposit.

934
00:55:54,422 --> 00:55:56,782
It would just kill me because I know it's a terrible trade.

935
00:55:57,882 --> 00:56:01,982
Gold is doing exactly what I need it to do, not be down 50% when I might need it.

936
00:56:02,462 --> 00:56:04,322
So gold is ballast in my portfolio.

937
00:56:04,602 --> 00:56:06,822
Its job is the exact same trade as Bitcoin.

938
00:56:07,342 --> 00:56:09,422
It's going to go up sometimes when Bitcoin doesn't.

939
00:56:09,502 --> 00:56:11,402
It's going to go down sometimes when Bitcoin doesn't.

940
00:56:11,402 --> 00:56:14,122
But I know it's not going to be down horrifically.

941
00:56:15,122 --> 00:56:19,842
I don't mind selling gold down 20% because its job is to be the house deposit when I need it.

942
00:56:19,842 --> 00:56:26,622
So I think a lot of Bitcoiners would have benefited this cycle from having some ballast in your portfolio.

943
00:56:27,842 --> 00:56:32,162
In many ways, having ballast allows you to not sell your Bitcoin.

944
00:56:32,722 --> 00:56:36,702
When gold goes through a tear, I'm happy because gold's gone through a tear.

945
00:56:37,002 --> 00:56:39,222
Bitcoin wasn't doing so great, but gold was doing fantastically.

946
00:56:39,762 --> 00:56:42,862
And when I think about diversification is one of these things,

947
00:56:42,862 --> 00:56:47,922
but I'm also of an age where concentrated bets are also generally the framework,

948
00:56:47,922 --> 00:56:51,002
which is why I'm like, just give me sound money assets and let me just sit tight.

949
00:56:51,722 --> 00:56:54,322
But I'm increasingly interested in commodity markets.

950
00:56:54,702 --> 00:56:56,522
Just, again, replacement value.

951
00:56:56,722 --> 00:56:59,322
How much does it cost to replace an oil producing company?

952
00:56:59,462 --> 00:56:59,942
A lot.

953
00:57:00,362 --> 00:57:00,902
Do we need oil?

954
00:57:01,142 --> 00:57:01,402
Yes.

955
00:57:02,182 --> 00:57:04,682
Is there going to be value there in a commodity cycle?

956
00:57:04,782 --> 00:57:04,982
Yes.

957
00:57:05,342 --> 00:57:06,702
Are they a dominant part of my portfolio?

958
00:57:06,842 --> 00:57:07,162
Not yet.

959
00:57:07,402 --> 00:57:07,842
Probably not.

960
00:57:08,582 --> 00:57:11,482
But just having that extra ballast that allows you to hodl,

961
00:57:11,482 --> 00:57:16,922
to actually not be completely 100% emotionally anchored

962
00:57:16,922 --> 00:57:18,222
to the Bitcoin price

963
00:57:18,222 --> 00:57:20,682
is going to help you actually hodl through it.

964
00:57:21,022 --> 00:57:22,462
It's just an easier strategy.

965
00:57:22,662 --> 00:57:23,542
So have some ballast.

966
00:57:23,582 --> 00:57:24,182
I think it's important.

967
00:57:25,082 --> 00:57:26,062
Have some ballast, freaks.

968
00:57:27,142 --> 00:57:29,022
Make sure you subscribe to James's newsletter.

969
00:57:30,022 --> 00:57:30,722
Call it a lot of this.

970
00:57:30,802 --> 00:57:31,382
Call these levels.

971
00:57:32,502 --> 00:57:33,582
Tell people to watch out for them.

972
00:57:33,942 --> 00:57:34,542
We're here now.

973
00:57:34,822 --> 00:57:37,062
If you're reading the newsletter, you're not shocked.

974
00:57:37,402 --> 00:57:38,982
So go check it out.

975
00:57:39,062 --> 00:57:41,422
Highly recommend doing the paid subscription.

976
00:57:41,482 --> 00:57:43,222
I've got my little agent

977
00:57:43,222 --> 00:57:44,742
I hope you don't mind

978
00:57:44,742 --> 00:57:45,382
I'm forwarding it

979
00:57:45,382 --> 00:57:47,362
I'm forwarding it to him again

980
00:57:47,362 --> 00:57:47,922
like alright

981
00:57:47,922 --> 00:57:49,482
what's James saying

982
00:57:49,482 --> 00:57:50,462
what do I need to look out for

983
00:57:50,462 --> 00:57:52,122
he's done a pretty good job

984
00:57:52,122 --> 00:57:53,002
yeah

985
00:57:53,002 --> 00:57:54,082
and like you know

986
00:57:54,082 --> 00:57:55,062
I often think about

987
00:57:55,062 --> 00:57:56,582
sometimes I'm a Bitcoin therapist

988
00:57:56,582 --> 00:57:57,062
right

989
00:57:57,062 --> 00:57:58,342
you know just helping people

990
00:57:58,342 --> 00:57:59,562
like rationalize stuff

991
00:57:59,562 --> 00:58:01,262
but what I love about Bitcoin

992
00:58:01,262 --> 00:58:02,822
and all the data that we have

993
00:58:02,822 --> 00:58:03,662
whether it's futures

994
00:58:03,662 --> 00:58:04,922
ETFs, options, on-chain

995
00:58:04,922 --> 00:58:06,942
it just tells us

996
00:58:06,942 --> 00:58:07,682
what everyone else is doing

997
00:58:07,682 --> 00:58:09,142
we're all sitting at the big

998
00:58:09,142 --> 00:58:10,222
poker table of life

999
00:58:10,222 --> 00:58:15,542
you can't see all the cards but you can see how many people are bluffing you can see how many

1000
00:58:15,542 --> 00:58:19,182
people have been playing for a long time you can see how many people who are brand new to the game

1001
00:58:19,182 --> 00:58:24,142
are really really bad at bluffing you just get this like big picture view of like what are the

1002
00:58:24,142 --> 00:58:29,022
different cohorts doing i don't need perfect precision you just don't need it you just need

1003
00:58:29,022 --> 00:58:34,302
to get enough of an ebb and flow and say here's where things are likely um and you know a lot of

1004
00:58:34,302 --> 00:58:38,902
folks think like oh do you trade i'm like no i don't trade trading's terrible trading's a horrible

1005
00:58:38,902 --> 00:58:43,262
experience. Everyone who's done it knows. It's just like it melts your mind in terms of how much

1006
00:58:43,262 --> 00:58:48,222
stress it induces. I very much write for HODLers because at the end of the day, like this is why

1007
00:58:48,222 --> 00:58:52,902
our catchphrase is your Bitcoin personal trainer. You've got to go to the gym, do the reps, and

1008
00:58:52,902 --> 00:58:57,782
then none of this stuff should surprise you. And ultimately, what I'm trying to help people do

1009
00:58:57,782 --> 00:59:03,122
is eliminate the uncertainty component. If you can get rid of uncertainty, whether the price

1010
00:59:03,122 --> 00:59:08,262
moons to 100K tomorrow or goes to 55K tomorrow, doesn't matter which way it goes, you're going to

1011
00:59:08,262 --> 00:59:12,982
have a level of uncertainty, but if you've thought about why that might take place before,

1012
00:59:13,182 --> 00:59:16,642
when it happens, you're like, okay, cool. Now I just focus on my decisions. And I've probably

1013
00:59:16,642 --> 00:59:21,782
already made those decisions, right? Either sit tight, stack, whatever, whatever it is,

1014
00:59:22,202 --> 00:59:26,482
your decisions are the only thing you can control. Make them before the move. It doesn't matter if

1015
00:59:26,482 --> 00:59:32,302
the move doesn't happen, but you prepared for it. Be prepared for exchange. Thank you for starting

1016
00:59:32,302 --> 00:59:36,042
your morning with us here. Happy Friday to you. Hope you enjoy your weekend. Thank you. Good on

1017
00:59:36,042 --> 00:59:41,982
and uh we'll do this again hopefully uh hopefully we're in the uh the ninth inning bottom of the

1018
00:59:41,982 --> 00:59:47,042
ninth of the bear market the next time we talk but we'll see stay humble stack sets a job wisdom

1019
00:59:47,042 --> 00:59:50,942
there is there is never a better time for that to apply than right now be the bison go through

1020
00:59:50,942 --> 00:59:57,062
the snob cash flow according cold storage stay humble stack sets peace and love freaks