Tur, tur, tur. Oh, how the tables have turned. You're sitting in a seat that I dearly miss.
Oh, yes. You're the one who's being grilled today.
I don't know if I could take a grilling today. It's been a long travel day.
It's a good week.
Yeah, and I got Logan here in my corner, so he's going to slip me those questions, the uncomfortable questions to ask.
You'll find that he's not very helpful in that regard. He just puts that... I'm kidding. Logan, I'm kidding.
very helpful
if you have hard hitting questions for me
that you want to pass the term
make sure you do it
he's already doing it in sign language
we got this thing going
it's a great way to end the week
I'm happy that
I know my flight was a little delayed
as I was telling you
might as well tell the audience
too I'm getting back from Georgia
where Block's
Proto team, their Proto mining team
unveiled their
Bitcoin mining rig called The Rig and their fleet software.
It was a really good event, really good day for Bitcoin, I think,
because somebody's been in the mining industry.
And I think it's been a bullish week overall.
Not only the proto-mining event, but we had Baltic Honey Badger Conference
where the ARK second-layer protocol is being tested out
with the BTC pay server merchants, went swimmingly.
Wow, that's awesome.
I've heard great things about ARK, so yeah, I'm curious to learn more.
Yeah. This is like on the tech side. Obviously, a lot of people are focused on Bitcoin treasury companies, what's happening on Capitol Hill, which I'm sure we'll touch on in this discussion. But just like set up this discussion, like I'm incredibly bullish, particularly having seen what I saw this week in person and observing what was going on in other parts of the world.
and not my bullish for those reasons,
but you've done something that you haven't done.
And how long have you been writing reports for Adamant?
Did you start in 2012 or 2013?
I chose the Adamant name back in early 2015.
So the first report was like April 2015 or something.
Okay.
So it's 10 years.
Yeah.
And historically, whenever you've written a report,
it's been in the depths of the bear market
and you have a very phenomenal way of releasing your reports
right when the price seems to hit a local bottom.
Yeah, I'll start writing when I feel sick.
And I usually publish right around the time when I'm starting to feel better.
And that's worked out well.
Sick in the sense that I feel like I'm so bullish
and that the market is just so despondent and just doesn't care anymore.
And that's usually the motivation. But yeah, so this time around, it felt like it is a little bit similar only in the sense that I think I still I disagree with the market.
I'm just seeing a lot of people that are like, well, they're just not very bullish, you know?
And I'm like, what's happening? Like, you guys, retail is like nowhere to be seen, I think.
Like I'm starting to feel like some friends and family, like for the first time now that we're really at new all time highs.
But but that's not a exuberance indicator to me.
That's just the beginning of public participation to me.
So felt like a good time to, you know, revise the report.
Because it's been two years since my last report, which I think was like, what was it?
April, April or May 2023.
I think it was like $27,000 Bitcoin.
And then one of the price targets was like,
hey, we think this is going to go to $120,000 and beyond.
So now we hit $120,000.
So that also felt like a good time to just look at the report again and reissue it.
It's not a complete rewrite, but significant parts.
I just pulled out entire things and I plugged in new parts that were just completely updated.
Yeah.
Yeah, so let's jump into it because I feel like I have the same feeling where even though we're, what, $7,000, give or take, away from all-time highs, which were hit earlier this week, people are somewhat bearish in my mind.
I think despite the fact that Bitcoin's up massively over the last two years since you wrote the original version of this report, we're up 100%, 103% in the last year.
And if you go back to May 2023, when you wrote the first version, we were hovering around 26,000.
So up almost 5x from there, 6x, 6.5x from there.
So, but a six and a half return, and yet people are still bearish, which is fascinating, considering all the tailwinds that we have at our backs right now.
But you wrote a 23-page report, released it with Adamant and Unchained.
And so, what did you feel was most necessary to revise and remind people of at this point in the cycle?
Yeah, the revising, I felt like the global macro picture has changed, not fundamentally, but the numbers are different. I think it's more clear where we're going. I think inflation is really ahead. It's already happening. I think real inflation rates are somewhere between 10% and 15% for the dollar.
So it means like, you know, we have a every year it's losing 10 to 15 percent in value.
And at the same time, we have a lot more regulatory clarity.
So we have a very kind of pro Bitcoin administration, which was not the case back when I wrote the report.
I don't think the ETFs had even dropped yet.
No, no, they hadn't when the report was published.
And then I think the nation state adoption has changed as well.
Like that picture looks different.
And when I published it, MicroStrategy had, of course, already launched, but there were no copycats yet.
We just had one treasury strategy company and that was it.
Whereas now it's very clearly a trend and probably even an industry in the making.
So those are some big changes.
Yeah.
Yeah. And one thing I love about Bitcoin and which actually surprised me a bit when I was reading through your report on the plane earlier this week.
one thing i love about bitcoin open source transparent ledger you can really glean a lot
of sentiment and know what's happening uh with bitcoin by just look simply looking at the chain
looking at coin days destroyed and seeing what long-term hodlers or short-term hodlers are doing
and if you look at where we sit from a chain analysis perspective,
chain analysis in the good way, just reading the ledger to see what's happening,
it seems like things are pretty good right now.
Yeah, I think you can see that we're in a bull market.
It's not like back two years ago.
For example, if you look at what the whales are doing,
they are moving some coins.
But on a net basis, we're not really like I think this year we haven't passed any times where there were more than 100,000 coins at a time that are moving.
And whereas in the past, sometimes that number would go to like 400,000 coins that were just like moving on the chain.
And I mean, it's not exactly that, but it's the equivalent of 400,000 coins.
the metric I'm talking about is actually weighed by how long people are holding on to the coins.
So if you have one coin that's held for a thousand days, that'll have more of an impact on the chart
than if you have a hundred coins that were only held for 10 days. No, only held for like three
days, you know, then those would be lighter, lighter weight in the chart. So yeah, that whale
activity I always try to look at because I think whales are usually the smartest. They know what's
up. They know when sentiment is just overheated and then they start reshuffling their coins and
stuff. But yeah, I mean, we had 80,000 coins that were sold in a very short notice and it only moved
the price 4%. I think that was a nice stress test just to see where we're at. And then another thing
I looked at in the report is these drawdowns, just the price drawdown compared to the all-time high.
And so in previous bull markets, that was a lot more aggressive, those drawdowns. Yeah, that's the
one. So the fact that the drawdowns are lighter, like just not as deep, the corrections of maybe
20, 30%, to me, that's showing that there is just very strong buying activity. Like if people are
are gobbling up the coins as soon as they look a little cheaper.
And so to me, that means that there's probably going to be a longer cycle.
That's why I'm so bullish in the report saying like, hey, we could tack on another entire
year or even a year and a half to this bull market.
I think that's a big question on everybody's mind.
Is this different?
Because I think the first 13, 14 years of Bitcoin, let's just say 2009 to 2022, so 13
years it was a pretty predictable four-year cycle you'd go up parabolic blow off top retail would
rush in yeah yeah everybody would sell over the course of 18 months you fall you'd have a
capitulation dump then you'd begin to consolidate at lows and some period after that three to six
months later begin to climb up rinse and repeat but it definitely does seem different this time
I know those are famous last words for many people throughout history.
However, having been observing this for 12 years myself, it's just undeniable.
In my mind, it's objectively different in many, many different regards.
Like you mentioned, ETFs, treasury companies, nation states, maturation of the industry.
It's certainly different.
Yeah, and it would just logically make sense that as an asset class matures, it should
get less volatile over time and we should have longer cycles, like real estate cycles are famously
multi-decade cycles. And so, yeah, I don't understand why Bitcoin would have to somehow
magically keep adhering to four-year cycles if none of the other asset classes have the same
features, especially given that the effect of the halving is becoming almost negligible,
with very little difference in actual supply every four years now.
Yeah, and that actually brings up a good point,
which earlier, before we hit record, I said it was the jumping off point.
But I think a little pre-conversation and then touching on a conversation you had
with a hedge fund investor, Mark Hart, recently,
in which he sort of provided, what was it, six principles of what makes an asset really investable and appealing?
Yeah, so I thought it was really refreshing to hear kind of, again, like a fundamental thesis as to, you know,
why would someone be interested in Bitcoin in the first place, but also just like a universal framework.
Um, and, um, so he, he just, he talked me through it, basically his thinking back in,
I think it was late 2016 or early 2017 when he was thinking through this.
Um, and so he, he told me that, you know, he just went through his own list of, uh, of
these features, um, of what, what gives value to an asset or an asset class fundamentally.
And so he said, first access, like people have to be able to access the, the, the investment.
second they have to be made aware that it exists um also thirdly they have to have a sense that it
gives them a feeling of security in some way it kind of makes them feel like they're hedged
correctly or that it kind of covers some risks for them um even even when famously of course
bitcoin like adding just a little bit of bitcoin all of a sudden changes the the behavior of your
entire portfolio in a good way. And then he also said four, like obviously return on investment,
like is it yielding? Is the past performance anything to speak of? And then fifth is interesting.
He said patina, he calls it patina, which is like, I guess you could call it the vibe or I could call
it the vibe or the, you know, whether it makes you feel good to own it or not. So for example,
like something that has negative patina for the past decade or so is,
is like,
you know,
coal miners,
like,
you know,
and it's,
so they're famously valued at a lower multiple compared to other assets,
other,
other industries,
because it's just very kind of,
you know,
it's polluted,
you feel like you're investing in polluting things and that.
And so,
and so,
but also there's the other side,
certain assets just have a very positive patina.
And,
and so it's,
I think Bitcoin has made an,
interesting trajectory in that sense where I've been saying this like in the, you know,
two years ago in the report, I was like, hey, you know, this cycle, Bitcoin is going to have
the reputation of being a conservative asset that protects you against all kinds of risk.
And so it's going to get that more positive patina. But then the last one I thought was
so interesting, what he mentioned, and he already thought about that back in 2016, 17, is the ability
to use the asset as collateral. So if you have a high ability to be able to use it as collateral,
that's going to give a lot of wind in the sails for future value appreciation.
And so that was not the case for Bitcoin for a very long time. Like no bank would ever
touch it. You couldn't get loans against it. And then gradually, I think back in 2017,
maybe you could start to borrow a little bit against it. That started to happen.
But now, of course, with the Bitcoin strategy companies, we're seeing that kind of on steroids.
So all of a sudden, these publicly traded companies are very successfully using Bitcoin as collateral to grow and grow and grow.
And so, you know, if you compare, you know, think about the real estate market.
Like why is real estate grown into literally more than 50 of the value of all financial assets in the world is just real estate I don even know not even financial assets like you know just assets that people own half of it is real estate
And the only reason that was able to happen is that you get the best loans by giving your house
as collateral, and then you can borrow, you know, mortgages are just the best loans in the world
almost. So yeah, so I thought that framework was just super interesting to kind of, you know,
maybe reassess Bitcoin and being like, okay, what's,
what's been changing for those six factors.
Yeah. And to really extend on the,
the thoughts you have on the six principle, they were collateral.
I've been saying this for years and it's something that we're pretty convicted
behind at 1031 and have deployed capital into over the last few years is that I
think this is a cycle where Bitcoin has pristine collateral really sees its day.
You mentioned the treasury companies.
They're obviously really leaning into it.
You've got companies in private credit markets that are beginning to underwrite loans using Bitcoin as part of the collateral package.
Obviously, Unchain, Strike, Ledin, Debify, HODLHODL.
They've been around, but I think their products are becoming more popular.
People are more aware of them.
And then I think what many people are sleeping on, and I think it's yet to be determined how big of a theme it becomes this cycle.
But I think ultimately, in the long run, it's definitely going to happen.
But with the abolition of SAB-121 and the introduction of SAB-122, which enables banks, regulated banks to custody Bitcoin, that the banks may now be able to offer lending services to their clients using Bitcoin as collateral.
And there's been a bunch that have made announcements that they're working to enable these products for their customers.
Nothing's been launched yet.
but famously spare bank in russia right they're issuing about are about to issue bitcoin bonds
yes and what are what are the terms of those bonds too i i don't know that i only know that
spare bank is a big deal it's like the biggest bank in russia yeah or the third biggest bank
i'm not sure it's definitely top three yeah yeah but again going back to what we said before
listing Mark's six principles. It definitely does feel like just the gravity and the
tailwind, the gravity around the tailwinds behind Bitcoin have never been like this.
Yeah. And because we were talking about the decoupling of Bitcoin and altcoins or crypto
or shitcoins, whatever you call them. I think that's really, that's been happening the last
six months for sure, last year probably. Of course, now we have Ethereum ETFs, but I still
feel that there's something fundamental that that changed here where all of a sudden we see a lot
of government officials that are saying the word bitcoin we uh we have uh famously um uh um
i was going to say martin armstrong no uh the coinbase ceo brian armstrong brian armstrong
who's using the word bitcoin again after years of not using it it's the best money we've ever
discovered in his mind very interesting right right so so all the sudden we we see a clarity
in people's thinking and i think that's that's that's what's helping to give it this positive
patina like you it's being disassociated from all this murky cowboy like scammy uh you know
behavior from from the crypto uh crypto world the the very centralized stuff but ethereum it's going
to run the global markets. Tom Lee told me this, and it's like the biggest macro play
of the next 10 to 15 years.
No, I like Tom Lee, but time will tell.
Time will tell. It really will.
But so this is like what we're describing right now is what's happening endogenously
within the Bitcoin ecosystem and the people trying to interact with it. But there's like
exogenous factors as well in terms of what's happening in global macro, I think.
You bet.
the like you mentioned earlier inflation still high real inflation 10 15 i would not be surprised
that's actually lower than actual real inflation particularly for core the core basket of goods
that people depend on well but parker lewis did the the test with stake right i think he came up
with uh 12 annualized inflation yeah just based on if you're if you're a stake eater yeah and
I'm sure you saw it, but there was a woman who posted on Facebook and the screenshot was being shared on Twitter last week and the week before.
But she bought 30 items from Walmart online in 2023, I believe.
And she went back and bought the same 30 items.
And the price went from $70 to, I believe, like $196.
dollars so you had like 168 inflation or something if i'm recalling correctly the numbers and
um i think that's one thing that's become very clear you can't trust bls yeah and of course you
can be like yeah but it's the tariffs or is this or is that but but but but you have to take those
things into account as well like it's like you know tariffs is a symptom of a deglobalizing world
and in a delobalized world,
prices are going to be higher,
meaning everyday consumers,
they don't really care where the price increases come from.
It's just a reality and it's a structural reality.
Yeah, it really is.
And then on top of that,
obviously we have Trump and Powell
sort of in this very public boxing match.
I wouldn't even call it a boxing match.
It's really one side.
It's like Powell doesn't really respond to Trump's barbs, but it seems pretty clear that Trump is not happy with where interest rates are once them lower, assuming that that's going to create an economic boom.
But I think one thing's clear. If you look at the deficit, you look at the fiscal side of things, the theme of fiscal dominance that Lynn Alden's really been beating the drum about, Luke Grom has been beating the drum about for years is manifesting.
And it seems like the money printing is only not going away.
It's probably likely to increase from here.
Yeah, it's the only way to save the furniture in the short term.
I looked at the numbers and yeah, US deficits are over 6% now.
Deficits in Europe are over 3.5%, I believe.
And so those are numbers higher than the Great Depression.
So that's saying something.
That's really saying something.
Yeah. And I think one thing that you've done throughout the years, and you've been very consistent about this, which I really appreciate, is you've really anchored to mostly denominating Bitcoin in non-dollar terms, whether that's NASDAQ, commodities, gold specifically.
And you've been posting the charts for years, but like your recent analysis of where Bitcoin is trading versus these different goods or basket of goods.
It seems like if I'm a TA expert, it looks like it's brushing up against previous all time highs, getting ready to make a breakout.
Yeah, especially gold is so interesting, right?
Bitcoin expressed in gold.
You know, you would think like, oh, we should be at new all time highs.
But actually, we've barely broken out.
Bitcoin has been trading at parity.
Yeah, there it is.
So Bitcoin has been trading at one kilo of gold for the last four or five years.
And so this is one of the most interesting charts, I think, in the world.
Just that psychological...
I remember the one ounce, you know, when Bitcoin was trading at one ounce of gold in 2014, and then it took like three years to break above that.
That was a big deal.
Like people thought psychologically, like, no, one Bitcoin can't be more than an ounce.
And then interestingly, we had the 100 gram resistance, then one kilo.
And then, well, what's next?
Well, you would think 10 kilos, actually 11 kilos will be gold parity.
So, I mean, of course, we don't know exactly how much above ground gold exists, but based on the best estimates, around 11 kilos is gold parity.
So I think that's the obvious psychological barrier that people are like, no, Bitcoin couldn't be worth more than all the gold in the world.
And of course, you and I think, well, of course it can.
And so I think that's why.
And that's what I've suggested in my presentation about the macro outlook.
I think that's the next magnet.
And actually the term magnet I got from David Bailey, you know, from Beatsy Media.
We had a dinner in Puerto Rico.
What was it?
Two years ago or something.
And he was like, he just brought that up.
I was like, hey, I think gold parity could be the next magnet.
And I just thought, they just always stuck in my head.
It's such a brilliant way of thinking about it.
That it's like, it doesn't mean it's going to, you know, it's going to touch the magnet and stick there, but at least it'll be the psychological pull for this cycle.
And I think that's, you know, Samsung now talks about $1 million as a magnet.
Those are actually in the same range, you know, at least right now.
If gold does a big rally, then it'll be higher.
But it's so interesting that those levels, they're both psychological milestones.
They're actually quite close if you think about them.
Yeah, well, let's dig into that too, because I feel like gold's moving in a way very aggressively,
particularly in the last year, that it hasn't since Bitcoin launched,
maybe outside of one or two years, maybe, or two blips of an event.
But it seems like the world, particularly post-2022 seizing of Russia's treasury assets by the U.S. government,
and our allies has really forced international players specifically to think about diversifying
away from U.S. treasury bonds. And gold's on a run. It doesn't look like it's slowing down
anytime soon from what I can tell. I wonder if it's, and I don't mean like no disrespect,
because people often use like boomers with like a kind of disdain or something, but
I wonder if it's being rediscovered by boomers as a safe haven asset.
I actually pretty recently I was in a in an Uber and all of a sudden this this older gentleman who was the driver, he was like, hey, what do you think of this?
What do you think of this thesis that we have military age Chinese men by the thousands roaming around in the US?
What if at some point they are activated by the CCP and they start sabotaging electricity plants to create a blackout across the US?
and and then his next the next part of his what do you think was you know what do you think of
gold as an investment to to hedge against that and i was like wow you know like regardless of
you know whether or not that you know scenario is realistic you know that that's new i five years
ago i i would have none of my uber drivers would have ever you know come up with a scenario like
that plus the gold answer so you know it's it's of course just one data point but i do i do feel
that you know the boomers that already have gold they feel very much validated and so maybe why not
sell if you have three houses whatever or a few condos why not sell one of them and buy more gold
especially because you know maybe your kids it's pretty clear by now that they won't find work in
that area where you happen to have a house so it's gonna have to go anyway yeah that's fascinating i
I wonder if gold keeps drifting higher, does that perturb what seems to be a longstanding trend in the Bitcoin to gold ratio?
Or does Bitcoin, to David, to use David's term, just still stay true to that magnet of the next order of magnitude?
I think so.
It's only $2 trillion.
Because Bitcoin has the ability to be so much more than gold is today.
Like you said, the pristine collateral, you can move around the world. It's provably scarce. It's decentralized. It's highly auditable. You can issue assets on the Bitcoin chain. There's just so much going for it that, to me, it has to gain more market share against analog Bitcoin, which I think is gold.
yeah no and to that point too bringing it back to collateral i'm very interested to get your
thoughts on this because that's one thing whether it's the treasury company it's like i think it's
pretty clear i would be shocked if microstrategy um sells bitcoin anytime soon but in the private
market uh for in the private credit markets like with these new sort of collateral packages
in structured credit that include Bitcoin for commercial real estate and other types of longer
duration loans. If you see that trend take off and they're successfully able to pull
a material amount of Bitcoin off the market, put it in these longer duration structured credit
products, like I've been talking to Andrew Hones about this for the better part of a year,
more than a year, you begin to see like a forward looking duration curve of an amount of Bitcoin
that you know is going to be off the market for X amount of years.
Yeah, yeah, because if you're issuing securities against the Bitcoin collateral,
then, well, you have to keep the collateral in place to be able to honor those promises.
That's a good point.
And it's true, right?
We had announcements of, what is it?
The Jack Mahler's Howard Lutnik, Blockstream as well.
There's a significant amount of Bitcoin that we knew.
Of course, that Bitcoin was around before, but all of a sudden, it makes sense for these Bitcoin whales to be like, all right, let's pull some of this Bitcoin and put it to work like we've seen Michael Saylor do.
Yeah. And it's actually fascinating, too, because I've been digging more into this.
And I was actually talking to my brother about this earlier this week.
We went golfing. He works at Unchained, so he's following the space very closely.
He's like, why isn't the price going up with all these treasury companies?
are buying so much.
And we had a conversation about, to your point, like a lot of these whales sitting on large
amounts of Bitcoin for many years many over a decade now at this point And these treasury companies not only are the way to put bitcoin to work obviously there risk involved with that but they also provide like a tax benefit
from what i understand like it increases their cost basis to where bitcoin is today in the tax
preferable way uh wait explain that like if you put your bitcoin in kind into one of these
SPVs or pipes, whatever it may be,
to help the treasury company develop.
It's Bitcoin treasury.
From what I understand, there's tax benefits.
You don't get taxed and your cost basis gets bumped up.
Oh, I guess I would have to look at it.
But I believe you.
I can see that.
And then maybe you could withdraw in kind as well again,
because then that would be not a taxable event
if eventually you could withdraw.
Yeah, I'm not sure.
It's kind of like you're putting...
This is not a great way to put it, or at least not a perfect analogy, but imagine if there's a casino in Vegas and the house needs more collateral to be able to honor all the bets that are being paid out.
If you add to that pool and then you get some income from whatever revenue they generate based on that.
But then later, you could withdraw your collateral again and you've never sold it.
So that's not a taxable event.
Yeah.
It's really fascinating.
It'll be fun to see.
Just broadly, before we get on to the next Bitcoin Express and Commodities chart, broadly speaking,
how do you see the treasury's company theme playing out uh i've been saying publicly like
to me it seems like a game where economies of scale are necessary to win if you're viewing
these treasury companies as competitive with each other so i'm under the belief there's gonna be
like a Pareto distribution of companies that are able to deploy the strategy execute and
really stand out from the rest and basically soak up all the capital that is interested in
this type of strategy. Yeah, that does make sense to me. I think there is probably some,
maybe some unique risk to the very large ones, just geopolitically. If we get a hot war between
major nations and all of a sudden somebody needs a lot of money to finance things in the short term,
then you could nationalize one of these big companies.
I don't think they would liquidate all the Bitcoin.
They would probably nationalize it and then say,
we're going to now issue our national Bitcoin bonds
that are backed by this collateral.
And we're doing it to protect shareholders.
And like in Belgium, for example,
the Central Bank of Belgium used to be entirely private.
And then the government came in and started owning 40%, 50%, 60%.
So even today, you can own shares in the Belgian National Bank. But of course, you can never withdraw the gold. This goes back decades where there's shareholder meetings and the private shareholders clamoring like, hey, we want our gold and this stock is criminally undervalued.
And so, you know, I could imagine a similar scenario with the spark being some kind of crisis, like either a fiscal, huge fiscal crisis, very high inflation, devaluation of the dollar or something, or a military conflict that all of a sudden it's like, hey, you know, times are tough.
Everybody needs to put in, you know, do what they can.
And so we're going to issue an order.
But still, you know, I think that's not happening right now.
And it could be a few years away.
So yeah, if you kind of bracket that as a risk, I do agree with you that the large companies,
probably they're going to have the best relationships with these Wall Street banks who then have
the deepest liquidity when it comes to the bond market, et cetera.
Yeah, that makes sense.
In the short term, it seems, that was so interesting.
It was actually also Mark Hart who tweeted about that, that it seems like in the last
weeks, like four weeks or something, JP Morgan in particular has cranked up margin requirements
for strategy stock in particular. So if you want to borrow against your strategy stock,
say you've got a million or 10 million sitting in your brokerage account, and you want to borrow
against that, you used to be able to borrow, I think, $40 for every $100 worth of MicroStrategy
stock, well, now you can only borrow five bucks for every hundred dollars. Yeah. So that means that
basically from being, you know, being able to borrow with two and a half, two and a half X
over collateralization, now all of a sudden you have to put up 20 X over collateralization,
uh, for what you're going to borrow. And so it's weird because that would somehow imply that the,
you know, the micro strategies is something changed fundamentally. They're a lot weaker,
But that doesn't make sense. So the question is, are we seeing some kind of concerted efforts
to try and dampen activity in these Bitcoin strategy companies from Wall Street?
There are many to be seen, but it seems like that is an underappreciated factor as to
why these stocks are lagging currently compared to the Bitcoin price.
I was not aware of that. 40% LTV to 5% is drastic.
Yeah, super drastic. But then somebody tweeted that Fidelity has kept their rates the same. But then other people were confirming, definitely by JP Morgan, that they just mysteriously cranked it up massively, the requirement.
and because are people typically taking out these loans before the change getting forty dollars per
hundred dollars they put up and then going and buying more micro strategy sometimes yeah right
sometimes yeah if you're bullish you know why not be bullish 130 especially if you're thinking
about hedge funds and you know and then they may be hedged in other ways you know they might have
some downside protection.
But if your ability to go
to be bullish is curbed,
then of course the price
is going to reflect that.
Also because like the six points earlier,
if one share in micro strategy
all of a sudden is less potent
as a collateral in itself,
well, then that's going to hurt the value.
Yeah.
That's fascinating.
I wonder why JP Morgan,
I was completely unaware of that.
but moving back to the report and bitcoin being priced in different things this is interesting
gold it seems like we're brushing up against this previous all-time high say it one kilo i love when
americans have to use the one metric system one kilo gram is that yeah whatever people have said
kg i hear that sometimes in the u.s one kg one kilo brushing up against that but if you look at
Bitcoin expressed in just a broader basket of commodities.
It's already broken out a little bit well over all time highs.
We're looking at Bitcoin to the US dollar, Reuters, Jeffries, CRB index.
What's in this basket?
Yeah, so that one, I'm trying to make sure I get it right.
I think it's like 20% metals, maybe 40% oil, and then 40% agricultural commodities.
It's pretty intuitive.
And the cool thing is they haven't changed it in 60, 70 years.
So it's just the same index.
I think they base it on futures prices.
So, yeah, I mean, to me, that's kind of, you know, if you want to see if something is resistant to inflation, you want to see it go up expressed in these commodities.
And, of course, Bitcoin has done that.
And so, yeah, recently we've broken, especially in the last six months, we've broken north of the highs of that resistance.
So, again, it's, you know, if you're bearish on Bitcoin, well, because of the dollar, you know, a chart that's expressed in dollars, which we know is facing accelerating dilution and inflation.
It's a very poor way to look at the markets.
But expressing gold and commodities, all of a sudden we're seeing Bitcoin break out.
To me, that's very hard to stay bearish then.
All of a sudden we have to assume it just broke out, but it's somehow the end of a bull market.
It just doesn't make sense.
Yeah.
So do you think people are...
When you say people are bearish, for those that are bearish right now
and think that we've seen the sort of cycle top or we're near it?
How surprised or shocked do you think they'll be?
Yeah, I mean, I think different people, I mean, of course, you know, people who are in Bitcoin,
there's people who are just long Bitcoin and they might still be like,
oh, you know, it's going to top out at 200,000 or something.
Yeah, we might run a little more, but then it'll top out.
maybe a lot of those people are afraid of just a general stock market crash you know like oh it
feels like there's dark clouds on the horizon and so traditional interpretation is that oh it means
a stock market crash it means a repeat of 2008 and then we get a huge um you know crash in bitcoin
as well because it's you know it's the most liquid asset in the world it's the easiest to sell
much easier than a house or something else so it might be the first thing that you sell
and then there's the no coiners you know I think they are they're they're gonna hurt you know it's
gonna be very painful for them to see it go to 150 200 000 and then then you start feeling FOMO
and and so the thing is also that back in 2020 2021 all the crypto stuff that all was dilutive
to bitcoin like it would the money that went to crypto was taking away value from bitcoin
Whereas if you look at the market now, we have Bitcoin, but if you have more risk appetite, you can still stay in Bitcoin. You go to the treasury companies and then imagine if it turns into a mania and we have new treasury companies launching.
And then even imagine some of those treasury companies buying stock in other treasury companies and putting it on their own ballot.
Like, you know, that's all, I'm not saying that's healthy, but I do think it would push up the value of Bitcoin.
It would just kind of create this mania that stays, roughly speaking, in the same universe, the Bitcoin universe.
So I think it's very easy to imagine another 4X from here or even a 10X from here if that kind of mania happens.
Yeah.
This is something I've been trying to wrap my head around because, again, going back to...
If we crash, you guys can clip it.
You can make fun of me.
But going back to this time is different.
The different archetypes of demand drivers are out there.
Not only the amount of capital that they have behind them, but just the plurality of them.
Just from a numbers perspective is unlike anything that's ever existed up to this point.
Yeah. And the same for me, like, you know, I'm very happy to be, you know, featured as like, you know, this delusional guy, he put out a bullish report just before we crashed 75%. I feel like I can't lose because if, you know, the report turns out to be true, then it's nice, you know, it's kind of, that's kind of what I'm planning for. And that's great.
But if we do get a big crash, I'm going to have another lesson in humility.
And those are the best ones.
It hurts, but it shows that you really can't know the future for sure.
All you can do is share your best thoughts and accept that you'll never know better than the rest of the world.
The price is going to be the price.
but then again
might as well
it's something I'm thinking about
privately anyway, you're thinking about it privately
anyway, so why not just talk about it
and share our thoughts
Speaking of something that I'm thinking
about, I mean you mentioned it
Bitcoin's the most liquid asset
if you have an equities downturn
maybe it'll be the first
to go because it's the most liquid, easiest
to sell, but do you envision
a scenario where
Bitcoin is seen as this
real flight to safety
if there's trouble in the equity markets.
Well, yeah, because
especially if they paper everything over.
To me, the context is
back in 2008,
we had a big crash
and then there was
complete disbelief when the numbers
started coming out. We had these
I think it was Timothy Geithner
at the time who was like
talking about bailouts and we're going to rescue these things. And it's going to be like 500
billion, these enormous numbers. And people were like shocked, like what? You're going to bail out
these banks like Fannie Mae, Freddie Mac, and then the big banks. And then of course we had a few
bankruptcies, but, but, you know, Lehman and a few others, but they were just very limited.
so that was like that was one phase then we had 2020 where it was assumed the question was just
how much are we going to bail them out like you know how much are we going to print is it going to
be a trillion is it going to be four trillion like what's the deal here and so and so now if
we have another crash I think we have to keep in mind that everybody is assuming bailouts even more
even sooner, even more aggressive, maybe even stimulus to prevent the crisis from happening in
the first place, which is what Trump seems to be steering towards with wanting like a dovish Fed,
et cetera, with the big, beautiful bill that's another 400 billion in spending.
And of course, with all the interest payments that are just going crazy in the UK and Japan
in the US, you know, the budget required to pay the interest on the debt is so massive that you
kind of need a permanent stimulus anyway to stay afloat. So anyway, like to me, it's like,
if we're gonna see a crash, I just, I don't see it to, I don't see it to go as, I do think
expressed in commodities. Yes, of course. That's what's happening is that it's already happening.
Like Apple stock is completely flatlining against commodities for the past four years.
So stagnation is here.
Stagflation, like that's the big word, right?
Stagflation, that's the decade that we're in.
Like sluggish economy combined with inflation.
So that's why, like, you know, don't obsess about dollar denominated charts.
So if we get a crash then to me commodities are going to come down as well And so then if you look at Bitcoin expressed in commodities it might not be an 80 crash It might be like something that looks more like a
correction, more like a 30%, maybe 40% correction. And then the structural bull market could still
resume, even if that happens like the next month or so. Yeah. I mean, on this note, Logan, pull up
the real estate expressed in commodities. I think this really visually articulates what you're
describing here and you have some notes here we're seeing diminishing returns to fed stimulus
which beats up private banks ability to issue low interest mortgages once we get to a point
where commodity prices consistently outpace real estate a trend reversal builders and landlords
will very likely start facing negative cash flows so this is another thing this chart i had to look
at it for a while to really and then like think about what's happening real estate happening in
commodities to um to sort of understand what's happening here but since 2016 the net result of
fed stimulus on housing is now flat so this is like a stagflation story yeah which is crazy because
real estate prices seem to be going insane yeah it's like a dead horse like you know you can pump
you can pump adrenaline into it all you want but it's dead and and because the problem is with real
estate is that the commodities are part of your input costs. You need commodities to build houses.
And so if those prices soar, and at the same time, interest rates are higher,
so that means people can't easily renew their mortgages and the high interest rates affect
insurance costs. All of a sudden, the price for home insurance is soaring. And then the cost to
just repair your home. If you need a new roof or something, again, you're facing these high
commodity prices. So from an investment point of view, all of a sudden, corrected for inflation,
you're actually losing money. And that feeds on itself. That's why I totally expect this
graph to just go down. We're going to see it slide over the next 10, 15 years, especially because
baby boomers, I think they own 10 million homes in the US or something, like some huge
amount. I think it's even more. And so baby boomers next year will be aged 62 to 80 years old.
And so a lot of them, I believe, are going to be selling homes. And that's, of course,
we can extrapolate for the rest of the world, I think. But yeah, so I think it's important to look
at these general asset classes where investments have been traditionally parked. And the more those
are impaired, the more
bullish the case for Bitcoin becomes.
Yeah, man. Well, I guess
I don't know if this throws a wrench in that argument, but
I think it does highlight sort of the
very
weird period of time that we find
ourselves in. I'm not sure if you saw this stat
yesterday from Fortune,
but they reported that
there are now more homebuyers over the
age of 70 than under the age of 35.
That's just
so sad.
Oh my God. And it's not like the 75-year-old is like, oh, it's a starter home. It's like, no,
this is clearly an investment asset or something like that. That's just how they're programmed.
I remember my granddad telling me, I think he was a little bit atypical, but still, he said
bonds, gold, and real estate. That was how he built his wealth over the decades. And it's
fantastic formula as long as it works. But I think especially the real estate and the bond part of
that that's no longer true that's a different world now yeah no and i wonder if this sort of
pricing out of millennials from the housing market could also be a tailwind for bitcoin it's like all
right i can't go buy a 500 000 million dollar house don't have the down payment but i do have
enough to buy five thousand dollars with the bitcoin this month or to put ten thousand dollars
in well yeah and also if you just simply compare the the rent that you pay with the mortgage payment
that you would face if you would buy the same home,
if that's out of whack and it's much cheaper to rent
than if you have a little inheritance from your parents or something,
well, why not rent and own Bitcoin
instead of putting it all in the same deteriorating asset that that's a house?
Yeah.
It's fascinating.
I forget who was talking to somebody down in Georgia at the Proto event.
I forget exactly who it was.
Or maybe it was a tweet.
I think it was a tweet somebody sent.
But it was like, even though we're doing a podcast here,
you have your podcast, we have this podcast.
We've been educating people about Bitcoin via your reports
for the better part of it for more than a decade.
I've been doing the show for eight years.
But I forget who sent the tweet.
But it was essentially like, hey,
these podcasts are obviously going to convince some people
and help them educate themselves about Bitcoin.
But like in terms of like creating Bitcoiners and being like a sort of Bitcoin conversion mechanism, the biggest conversion mechanism is going to be like not being able to buy a house or having your bank account withdrawn by one dollar and you get charged thirty five or your country shutting down your access to the money in your bank account and limiting the amount that you can withdraw.
It seems like a lot of these themes are happening both here in the West and in other parts of the world.
And LATAM, I was saying before, we hit record.
Bolivia, I haven't told you what's happening there yet, but I think this is a really interesting indicator that Bitcoin is working as it was designed.
And people are recognizing that it is an alternative to these oppressive financial systems that operate under oppressive regimes.
So in Bolivia, where annual inflation has reached, this is like a triple whammy.
Annual inflation has reached 25% and banks have been limiting withdrawals of U.S. dollars to $100 a week.
Bloomberg reports that Bolivians are turning to Bitcoin and digital assets as alternatives to the Boliviano.
I'll just read the whole thing.
This is from the Human Rights Foundation Financial Freedom Report, by the way.
I'm not the only one using Bitcoin.
Christopher Salas, a coffee vendor in La Paz, said, there's a barbershop over there and a gym that also accepts Satoshi's.
For Salas, Bitcoin is both a hedge and a protest, a way to preserve the value of my savings, but also a way to go against the system against bureaucracy.
Bolivia's hybrid authoritarian regime lifted a decade-long ban on digital assets in 2024.
Good to see.
Since then, the volume of digital asset payments has grown more than five-fold to nearly $300 million in the first half of 2025.
The University of San Andres allegedly pays its international faculty in Bitcoin.
Carlos Nera, co-founder of Colombian wallet provider Miro.
I read this.
I read this chat yesterday.
One rabbit hole recap.
It blew my mind.
Reports a staggering 6,600% increase in Bolivian users since the ban was lifted.
Fantastic.
Yeah, you're absolutely right.
I mean, it's the complete package there.
Um, and, and, and, um, one example that came to mind as well, and it's a link I haven't heard a lot of people make is, um, you know, obviously Trump has been very pro Bitcoin the last couple of years, but he recently, I think it was the last couple of weeks.
he had this executive order, I think, or I think it was an executive order about basically curbing
banks' abilities to debank people in the US. And he was very adamant that, to give the example that
he had been attacked and he had been debanked and he had lost bank accounts all over the US and he
had to like, you know, move money around and all that. And I think those two are very closely linked.
People, you know, just think about somebody's personal experience.
Like, you know, you think your wealth is X and all of a sudden you lose your access to your own wealth.
Like that goes very deep, I think, to inform somebody's position on how they think about banking and just, you know, money in general.
Yeah.
I definitely think more people are beginning to question, like, what is a bank supposed to do?
What is money?
did you did you see richard werner on tucker carlson did you watch that interview at all
oh that was great yes the guy who who who broke the story about what's happening in japan back
in the 80s yeah that was that was if you're looking for like a a one shot like understand
how the banking system works how the academic economists at the fed and in the in finance are
sort of misdefining how money is created and really not telling people the truth about how
money is created and how money creation via credit creation is corrupting the system,
you have to go watch it. I learned a lot. I got to say, it doesn't, I mean, not to,
of course not. It's just like, if, you know, I'm sure it's the same for you. Like if you've been
looking at the history of banking and money and investing for 10, 15 years, it gets a little bit
harder to be surprised by an interview and to learn a lot. But I was like, wow, a lot of stuff
I did not know that he was talking about. Yeah. Same. And like, I don't know what thoughts are
running through your head, but the whole time is that spoiler alert. Anybody's listening to this
who hasn't listened to that yet. Basically, one of his theses is that like the economy and the
financial system goes off the rails, the more the banking sector consolidates. So we've seen that
here in the United States over the last four decades,
going from tens of thousands of banks to, I believe, 7,000,
if I recall correctly.
But you use the example of how China post-Mao
sort of broke out of that sort of atrocity
that happened when Mao was in charge.
And I forget the name of the Chinese dictator
took over after Mao, but he went to Japan.
He was like, hey, how'd you guys...
how do you have a function economy?
And they said, you need, how many banks?
They asked him, how many banks do you have?
He said, we have one bank.
He's like, well, you need more than one.
You need a lot of banks and you need heavy competition
in the banking sector, particularly at different,
for different types of banks serving different size companies,
specifically, like so small businesses, medium businesses,
large corporations, like you need banks to match
these sort of balance sheets of their clients
in these subsectors.
And it's obvious here in the United States that the banking sector is consolidating.
It's accelerating, particularly post 2008.
But while he was describing this, I was like, Bitcoin backed Chalmian Mint banks make a lot of sense.
If you actually want to create an environment where you make it easy for banks to pop out,
why not leverage the open protocol that is Bitcoin?
And then some second layers that are being built on top of it.
I'm leaning into Chomium Mintz specifically, but who's to say there's not other sort of designs that could enable a flourishing of new bank competition.
Yeah, yeah, absolutely.
And yeah, the other thing that surprised me about the interview was just his focus on credit creation out of thin air, specifically going towards asset purchases.
And his thesis is that actually some actors inside the US, US government probably are banking, central banking, they deliberately pushed Japan to be very generous, for their banks to be very generous with creating credit, real estate backed credit, mortgages, because they knew it was going to create a giant bubble and then pop the economy.
So it was kind of a way to blow it up, so to speak. And I hadn't considered that kind of situation that actually, they were just naive and dumb, but that it was actually kind of pushed from the outside.
And then if you think about what's happening in the West today, it was like, well, I'm not saying that it's outside actors that are trying to blow up the economy, but it's still concerning that real estate bubble is so huge.
And it can take the economy a long time to recover from something like that once it blows up.
It was fascinating.
We don't have to do a podcast about a podcast, but the, uh, yeah, it was like a sleight of hand by U.S. banks and the central bank and potentially the government saying, hey, maybe you guys should just like lean into this real estate because they were flourishing.
at the time, for instance, the yen,
Japan was...
From what I understand, it wasn't alive,
but having listened to podcasts,
read books about it,
in the 80s, people thought Japan
was going to be the number one superpower in the world.
All the electronics we were buying here
in the US were from Japan.
They were dominating industry.
And Richard Werner,
he basically said the US
did not want that to happen,
So they went and like gave intentionally bad advice to Japan to sort of slow that progression down, that dominance down.
Well, I mean, there is implication potentially for the Bitcoin, right?
I mean, just to kind of like kind of, you know, bring it back to Bitcoin is that if you I'm just thinking about this out loud for the moment.
But, you know, if dollar denominated banks are allowed to create credit out of thin air that allows then the international public to acquire more Bitcoin and extract value out of the dollar system using Bitcoin, you know, it could also undermine the whole structure, you know, that whole setup.
So I think that's something that, you know, that's why I'm a little hesitant to be long term bullish on, oh, yeah, the U.S. government is going to totally be supportive of Bitcoin, all activities, because there's clearly an element where Bitcoin can threaten the dollar big time.
So, so, yeah, it's just something to really monitor, I think.
Sure. I was told Bitcoin strengthens the dollar because stable coins exist.
Yeah.
That's like, there is, what are your thoughts on that?
Like, there's like a very wrong direct conflation with Bitcoin and stable coins, because like
they're somewhat tangentially related.
Yeah, yeah.
I mean, the assumption is, I mean, I guess the generous take is that everyone is going
to copy the model of Tether, which is that, you know, you back your stable coin.
with short dated US dollar treasuries, three month bonds,
and then 15% of your profits are going to go to Bitcoin.
So in that sense, there is a kind of a situation where,
especially if then somehow Tether can start paying out dividends
or something like that, where the dollar is kind of shored up.
But those are a lot of assumptions that all that model is going to be copied.
Everything is going to stay that way.
nobody's going to just extract the bitcoin at some point uh i mean the other option is that
you build up a reserve but it's kind of like how do you do that you know you have like a bitcoin
reserve that then is backing the dollar and then but then it has to be redeemable so how do you
how do you honor those those redemptions you know we could have another de gaulle just like that who
who just pulls out all the Bitcoin as soon as they can.
Yeah.
Did you see safe's presentation in Vegas this year?
I think I heard about it.
I haven't seen it.
Yeah.
It was like,
it was pretty,
it convinced me.
Like,
I think here in the United States,
there's this administration and everybody advising them and everybody
involved with stable coins more broadly is like convinced that like stable
coins are going to save the U S treasury market.
We're going to drive from incredible demand.
there's gonna be a ton of uh there's gonna be a ton of adoption and it's gonna go from
500 billion uh treasury demand as it stands today to trillions and trillions of dollars
of demand and safe basically just made the point like hey if you even if you map this out and you
look at the deficits and the interest on the debt like it's not going to make a material dent
demand for treasuries it is it feels a bit like a hell maria or like they're just trying
I mean, at least they're trying something, you know, that's good. But yeah, I mean, the thing that I've always heard, you know, kind of grizzled investors and, you know, real veteran economists say is that, you know, the moment a country starts monetizing their debt, you know, so the debt becomes money.
Once that happens, that's the next huge step towards hyperinflation.
And, you know, because the Assygnats, for example, in France, which was issued just on the, you know, that's why the hyperinflation happened.
Those are short-dated treasury bonds that were just used as money.
And so if you think about a stablecoin, it's like, well, it's almost that, right?
It's like they're just shy of sharing the dividend with the owner of the stablecoin.
Like that's, that's maybe still missing.
Yeah.
No, and this gets into a good point to jump back to the revised report is like there is, especially in Silicon Valley and Wall Street, it's like stable coins of the future.
When implemented and everything, when integrated and everything, when a cross border payments, like you're going to have a stable coin wallet everywhere.
It's going to be incredible.
And I think it's just like missing the forest for the trees.
And you're making the point in the piece of like Bitcoin becoming the TCP IP of money protocols.
That is extremely profound from a competitive perspective.
Yeah.
I mean, yeah.
How do you compete with Bitcoin?
You know, it's just, that's why we have, what, how many?
200,000 cryptos that are with arrows in their back laying in the ditch that have been tried over the past 10 years.
How do you compete with Bitcoin?
It's so elegant.
It has that momentum.
It has the biggest firewall in the whole world of any kind of digital network protecting it.
Yeah.
So, I mean, you can try and slow down, especially I think it's very heartening to see that more and more companies and increasingly pension funds and that they're starting to buy Bitcoin.
because that is kind of a shock absorber for the crash that's coming in bonds and real estate and
the deterioration in stock market valuations. Bitcoin can kind of rescue some of that value
so that pensioners aren't left with nothing or that insurance companies still have something to
pay out debts. But yeah, I mean, let's just hope for a relatively smooth transition because
Because people might accuse us of like, oh, we're talking our own book here.
But yeah, I mean, time will tell.
Let's see how this clip does 10 years from now.
It's like, I just think it's superior technology.
So we have to take into account it winning.
Just how if we were talking in the 1880s, we would have been talking about crude oil and how it's just better than whale oil.
Sorry, we just think it's better.
You can say we think it's better.
I think objectively it's better.
I mean, you have Vijay's famous Bitcoin gold fiat comparison chart.
That'll be timeless.
That'll be in textbooks centuries from now.
But it's like, objectively, all the properties are superior.
Yeah, and the nice thing is that people don't have to take our word for it.
You can kind of go through and do your own research and do your own work
and analyze the logic and try to find flaws and then make your own decision.
yeah when it comes to comparing
bitcoins like ethereum solana
name your shit coin
harpening back hearkening back to
what i was saying
happened in riga last weekend
with like arc payments
in the wild nobody knew they were using arc
those btc pay servers at the merchants
you were presented
a lightning invoice everybody thought
they were paying to like a lightning
wallet
but lightning was just a connective tissue
it was actually going to like an ARK wallet
with VTXOs
and like it highlights
the interoperable
nature of Bitcoin
and the layers being built on top of it
and not only protocol
to an individual layer above it
whether it's the lightning network, liquid, ARK
taught me immense but like
then on the second layers
there's multiple second layers between each other
because of the lightning network
yeah and what we'll see the critics do
is that now they're just going to move the goalposts.
It's like before they would say like,
oh, you know, lightning, ha ha, you guys were so bullish on it
and look at all the limitations.
And so now we're like, well, you know,
now we have another second layer protocol that's interoperable
and that's massively extending functionality.
And of course, you know, they'll probably move the goalposts.
But that doesn't matter.
The fact is, Bitcoin is becoming more and more functional and effective in the real world as we've been expecting.
Yeah. And it's so exciting to see.
And there's so many people sleeping on it.
And I think it bears leaning into the freedoms with which Bitcoiners,
and particularly Bitcoin protocol engineers, have approached building out the protocol,
particularly in comparison to altcoins that have arisen in its wake.
It's like, make sure that the base layer protocol is sufficiently distributed, open, accessible, simple,
easy to interact with and then do all the complex stuff on top of that and there was
many there's been 16 years now of that very conservative methodical slow approach to
protocol development that has enabled this flourishing of second layers we didn't even
mention spark from light spark like that but i was in georgia at this proto event that was like
one of the top, the two, like, second layer discussions are about ARC and Spark. And these
are relatively new I think both maintenance launched earlier this year and we already seeing people implementing them and others seeing what being implemented and getting very excited
Yeah.
Yeah, I mean, I was going to say second layers.
Well, yeah, I was going to say there's also a self-selection effect when you think about the human capital in this whole, you know, blockchain space, so to speak.
is that basically if you want to leave a legacy and build something to be proud of,
you want to be putting your shoulders behind Bitcoin as an engineer or something rather than
these, I don't know, these like one-off projects that they're like fireworks, like they're bright
for a year or two and then they just fade and everybody forgets about them. It's like,
Do you really want to spend years of your life to dedicate it to those kind of things that are going to be buried and forgotten?
Or do you want to contribute just a little bit to a project that has the potential to last for centuries?
Yeah.
That reminds me, I was on a panel and I was invited as the Bitcoiner to this event that was thrown by a law firm.
and they they uh support a bunch of crypto projects and crypto funds in the space and
they wanted a bitcoin rationalist uh perspective i won't say maximalist i will not give uh
vitalica's flowers there uh and it was crazy this is january 24 so last year
and there was like we were i was on a panel with other
these venture capitalists in the crypto world and two out of the three
really leaned into pump.fund like pump.fund is like one of the most innovative
projects that's ever existed like the ability for any individual to create any mean point is going to
really enable the the uh the sort of digital economy to flourish and it was just like
wow i'm very proud of it and we'll go find there's it's up on youtube somewhere but i was like
you guys are number one insane number two like what you're doing is immoral like we've seen this
play out again do you not understand the dilution effect that occurs when you give the ability
of anybody to hit a button and create a token and how do you expect any of these things to sustain
any material market cap for longer than we've seen it with beanie babies right like yeah
no but to your point about like what mark do you want to leave i was
very disappointed in.
And that's
been the way, you touched on it earlier,
but I do think we are getting to this point where the
broader market, particularly the
smart money, the serious money
is looking at
a lot of the serious money, not all of it,
but a lot of it is looking at Bitcoin and being like, oh, this is a
serious project and looking at everything else.
What is this? This is childish.
Yeah, yeah, exactly.
I mean, and there's also some
poetic justice, of course. I mean, in terms
of, you know,
maybe and a lot of bitcoiners have said this like you know you start off and you get excited about
these better than bitcoin projects and and then you kind of uh you know you you kind of uh you see
some black snows you know you're like oh and then you get humbled and and uh and so then in a way
it's an opportunity to to uh to course correct and and and talk to some other people yeah
So I think our advice here is focus on Bitcoin.
Yeah, that's what I believe.
But at the same time, at least that's what I try to do.
The hardest thing is to know whether you have survivor's bias,
whether you're just so full of yourself because you were just lucky
betting on the right horse for 10 years in a row.
But then you never know.
It's still man-made.
We're talking about man-made technology.
So at least theoretically, something better could come around.
Or there could be some blind spots that we share about a vulnerability in Bitcoin.
So I think that's why we keep having these conversations, just to kind of double check and have each other's back about, you know, is this still the thing we thought it was?
I think it is.
Do you think Bitcoin's, I mean, that's particularly with the emergence of the treasury companies, is we have a lot of long-time Bitcoiners saying, ah, we're getting away from our cypherpunk roots.
this is turning into something i i did not join the movement for quote unquote do you feel that
at all or is this an inevitable outcome of the like what what comes with the adoption of a better
money yeah i mean bitcoin either it was always a winner take all like whether either it was going
to become big and boring or it was just going to disappear and uh and of course there is a kind of a
more dystopian scenario where Bitcoin does become big and boring and people neglect its amazing
capabilities of allowing self-sovereignty and autonomous storage and collaborative custody and
all those things. Yeah. And then you get a somewhat better fiat system where people might
still be stuck in Bitcoin banks and things like that.
That's not really happening, I think.
I think we have a healthy culture, but it's one of the risks, I think.
If we lose that vigilance, then we could use some of the actual tangible perks.
Yeah.
I think you have anything to report, but as it stands today, more than 50% of Bitcoin
that has been distributed in the market is held in self-custody.
Yeah, held by individuals in self-custody, I believe, yeah.
that's something
that I don't think many people
don't want to understand or appreciate
you can't appreciate if you don't understand it
I think there's an assumption that everybody's holding
their coins on the exchange
also there's an assumption that all the
Bitcoiners are somehow magically
on crypto Twitter
it's like nope there's huge wells
out there that nobody's ever seen
or met online
and I think that's for the better
People who just kind of quietly live their life and take their time to decide what to do with this legacy.
Yeah. And for those who haven't decided to get in yet, but are maybe thinking about it, listening to this, reading your report, you have some recommendations for allocation strategies based on risk profile.
yeah so i think there's a few ways this is i tried to just simplify it because of course you can go
at it from 20 different angles but uh but one one simple approach that i think makes sense is just
to think of bitcoin as an insurance policy for the rest of your your investment assets um similar
to how if you own a home you're going to get homeowner's insurance and just in case it catches
fire, you never know. And so I think for homeowners, historically, they would pay like
0.25% of the value of the home per year to the insurance. And so when I published the report
two years ago, I said, maybe 2.5%, take 2.5% of the value of all your assets,
put that in Bitcoin as a kind of a lump sum insurance policy. But I think two years later,
it's sort of like there's smoke coming out of your kitchen already. Like, you know, it's kind of
your house is starting to catch fire. And so the cost of insurance has to go up then. And so that's
why I'm suggesting like 5% of your assets in Bitcoin in order to really, you know, if there's
a bond, because people, a lot of people have sort of the 60, 40 portfolio or, you know, maybe you
have, I think it's actually, most people have 60% in stocks and maybe 40% in bonds.
So that probably changing And there a bunch of real estate in there as well But yeah if one of those catch fire I think Bitcoin is going to compensate for those losses at least so that at least you can kind of maintain your purchasing power over time
And then the other way to think about Bitcoin is as a speculative asset.
And so speculative, of course, that word has a negative ring to it.
But really, if you try and define it objectively, I think a speculative bet is kind of a bet that you know a little bit better than most of the other participants, especially when it comes to government intervention.
And so specifically, because the government keeps printing money, certain parts of the economy at any given time are going to be way overinflated in value.
And then other parts of the economy are going to be artificially lower valued.
They won't have caught up yet.
And so that's why I've been so bearish about real estate, for example, is because it was
so easy to borrow money to buy real estate.
Whereas if you wanted to get involved in commodities and growing wheat or pulling oil out of the
ground, well, credit was a lot harder to get for those type of companies.
So that's why they were undervalued for so long.
one of the reasons. So anyway, long story, but from that point of view, I think Bitcoin is still
really undervalued. It's not like you could go to the bank and get a loan to then invest in Bitcoin.
That has just never been the case. And so that's why I think from a speculative point of view,
you could think about like 20%, put 20% of your... So basically allocate one entire basket
of your diversified portfolio to Bitcoin as an asset class.
So that's the other suggestion.
And then the final suggestion is,
okay, we'll say that you're a younger person
and you're thinking about reducing the age of retirement
and being more comfortable with your family,
then I think you could consider 20% to 50% of your assets
invested in Bitcoin.
And that's, of course, aggressive,
but the goal is, of course, an aggressive one as well,
to really drastically reduce your retirement age.
Or you could get on zero like some of us
and go 100% all in.
Yeah, but it's hard to defend that
as trying to be a reasonable financial analyst.
I'm being facetious.
But you also have advice on weighing the decision
to get in with a lump sum or dollar cost averaging.
How do you view those two different allocation strategies?
Yeah.
So over the years, it's become pretty clear that they both have their benefits.
If you do dollar cost averaging, that's easier for younger people that just don't have a lot of built up savings, but they do have steady income.
So that's just more accessible for younger people.
Have just a fixed amount, invest in Bitcoin every week or every month.
And the added benefit of that is that it's also psychologically easier to bear.
Because if Bitcoin crashes, what comes to mind for you is like, oh, now I get to buy more Bitcoin more cheaply.
And so you just steadily accumulate.
But over time, if you have the ability, if you have built up savings, which is usually more the case for older people, and you can invest a lump sum, just basically decide, look, I'm going to invest 10% of my portfolio in Bitcoin.
So why not just do it today instead of spreading that over one or two years very slowly, let it trickle? Historically, almost always you're going to get a better return. You're going to be able to have more Bitcoin if you do a lump sum versus spreading out the same amount over time, which is logical because of how Bitcoin has been moving up.
And then so additionally, it is a bit harder to weather such a decision psychologically because you might be underwater for one year or two years or for three years.
It might take that long to actually see your investment be in the green expressed in dollars.
Sorry, I was on mute because I was screenshotting a visualization of these two different strategies juxtaposed.
So look, if you want to pull that up, just get some data in front of people so they can see this if you're watching on YouTube or podcasting apps with video.
So number of analyzed.
So this was WS Bitcoin.
Wicked Bitcoin.
Is this Wicked Bitcoin?
Not sure.
Yeah, this is a good visualization.
Lump sum does seem to be superior, like you mentioned.
But like you also mentioned, I think, particularly for younger people, younger millennials, Gen Z, it's very daunting for them because they see Bitcoin at $117,000.
They go, I'm never going to make it.
But I always like to advise, just start.
Like you said, every week, every two weeks, every month, whatever you can stomach.
Just start and don't stop.
Go at it for four years and look up.
And I think you'll be very happy.
Consistency is king.
Absolutely.
Absolutely. And it's the same thing with the lump sum.
Then, you know, the consistency there is that you have to commit to holding it for a certain period.
And that's why I usually recommend, look, think about an amount that no matter what you can hold for four or five plus years.
So let's say five years, you lock it in for five years, no matter the price, even in your mind, run through the scenarios.
It crashes 80 percent, 90 percent. You're still going to hold it.
so what's the amount that you could do that with and that's going to be different for everyone yeah
get ready for hey who knows maybe we're in new cycle territory maybe we have elongated
cycles maybe no more 80 drawdowns who knows maybe it's easier stomach for people to lump some
i mean there's always the possibility of a panic you know where the market is just composed of
humans and so no matter what we can we saw oil go negative like who could have imagined that
right like a physical asset all of a sudden trading at a negative price in the world
then you had all the uh all the reddit traders who are taking futures not understanding that uh
if the futures contract comes up negative you actually have to deliver oil
to comex not an ideal situation to be in yep yeah and i guess last but not least
actually second to last but not least you get into bitcoin how do you think people should look
at custodying it yeah i think um i guess what i usually say is just buy a little bit first you
know before all the complicated stories about how to hold it and how to you know just you know just
try to get dip your toe in the water like get a little bit of exposure uh the chances that whatever
platform you use, especially, you know, there's a few suggestions that I have, these are companies
that have been around for a while, that have built up some good reputation. The chance that that
company is going to go away overnight is very low. So let's just get a little exposure first,
hold it on that platform. And then once you have it and you start, you know, starting to kind of
feel it more, then you can start looking at different ways to hold your Bitcoin. And so I
think that the one way that's described that's becoming probably the least popular now is just
simple, single signature self-custody. And that's not to poo-poo that entirely. I think that it
might work for people. But I think there's a pretty general consensus among Bitcoiners that
have been around for a bit longer that multi is superior Even if you going to hold all your own keys multi has just more features that make it more secure Especially you get rid of the situation where somebody compromises just a one location
And based on that one, it's like the evil mate attack.
She finds your hardware wallet or your backup keys, and then she can just withdraw the whole wallet.
But that scenario pretty much goes away with multisig.
And so then I think the next question is like, okay, do you hold all your own keys in multisig?
Or do you work together with other people or other companies to help you manage those keys?
And then, of course, the last scenario is you don't bother with your own keys at all.
You just deposit it at a third party.
Like, I don't know, could be a Fidelity Digital Assess, could be a Kraken,
could be any of the centralized exchanges, and then you hold it there.
I guess there's one other option is that you buy the Bitcoin ETF
or you buy one of the Bitcoin strategy companies.
That would be the last option.
Yeah.
My recommendation would be if you're going to hold it on an exchange,
I typically, you mentioned Kraken.
Kraken has been around for a while,
but I tend to lean towards the Bitcoin-only exchanges.
So if you're doing on an exchange, like Strike, River,
are the two that I recommend, particularly for the US.
There's really something to be said for focused on Bitcoin only.
It's just less distraction for the engineers.
Less distraction means, on average, probably better execution.
Yeah, I think there's absolutely something to be said for that.
I think also just based on the stories that I've heard over the years, maybe not hold all your Bitcoin in the same place.
It's just so devastating.
When people have all their Bitcoin in one little basket and then the basket falls and they get hacked or something and you lose everything.
That means whatever future you had imagined could be wiped out.
you know yeah so that's something that i do kind of tell people is like hey consider
some some some different places to hold it especially if it's a significant amount
yeah it could be catastrophic and the and a lot of people get complacent there was just a i'm not
sure if you saw but there was a big exchange account earlier this week at btc turk 48 million
worth of Bitcoin and other assets
just drained from the exchange.
Oh, wow.
Yeah.
Yeah, wow.
So it's a real risk.
I think people,
we've seen it time and time again.
And now also, you know,
with AI,
it's just getting a little scary,
you know,
the amount of,
the abilities that they have
to social hack your account,
to pretend to be you
towards the exchange
in order to, whatever,
change your password
or somehow get access
is increased by an order of magnitude
because of AI's abilities.
Yeah.
So be careful.
You get in.
Practice makes perfect.
I like to tell people,
spin up a mobile wallet,
write down the seed,
send a very little bit of Bitcoin,
$10, $20,
erase the wallet from your phone,
delete the app,
redownload it,
recover from your seed,
get comfortable sending and receiving,
and then seriously contemplate beefing up your security
because it's important.
Yeah.
Yeah, I mean, it's true.
There's no real shortcuts.
It's true because you have to put in some work.
Even when you're saying like,
oh, I'm going to work with companies,
well, then you've got to do some due diligence
on which companies are you going to work with
and how. Or even if it's like, well, I'm not going to do that. I don't know. Well, then you're going
to trust some talking heads that recommend things. So then who are you going to trust? So you then
want to kind of at least put in some work thinking about, okay, what's going on here? Who am I
trusting to make these decisions? And is that based in reality? Yeah. Think about it, freaks.
I want to end it on this because I thought this was a great way to end the piece.
Logan, pull up the very last page of the report.
I just really like the commentary you put under this.
This work is titled The Power of the Peace.
It was created in 1577 to convey the hope of a young beleaguered nation to achieve peace in its territories,
which was eventually achieved in 1648 with the formal recognition of the independent Dutch Republic,
The etch by, sorry for butchering this, Wierks von Cleve is full of symbolism.
It shows how prudence, reason, force, and time can work together to control violence in society.
The swords and lances from the war are transformed into sickles and plowshares, retooling society for peace.
In the grand furnace displayed center stage, we see a display of technology as a force for good.
This is also our hope for an expectation of the Cypherpunk project and its current apex.
Bitcoin, channeling human effort in a way that encourages society to grow more orderly and
peaceful. Bitcoin contributes to a harmonious world by serving as a scarce, robust money
that protects families' wealth through space and time, by acting as an incorruptible tool
for builders, supporting them in creating honest and enduring institutions. And I thought this was
a perfect way to enter because it really anchors the reader back to why we're in this in the first
place and not to get a hopeful future. Exactly. To me, that piece is really helping me reflect
about, I think it's a fact that capital in itself isn't bad. Technology in itself isn't bad. It can
be used for bad things, but we can retool. We can retool things and start using them for better and
making like in the picture, right? I mean, you got swords and then you create plowshares out of
them. So all this monetary energy that is in the world, we don't have to delete it. We don't have
to destroy what's there. We're just working on retooling it and making it so that people's
ability to act in a fair way is enhanced. And then of course, we have to also build fair institutions
and networks to do that. So I think that's very important these days because there is this kind
of tendency towards maybe like Marxism or nihilism, or it's like, oh, you know, business
is bad.
And so we need to just kind of take the reins and, or like do the revolution and start from
scratch and delete everything.
I think that's terrible.
I think, you know, it's much better to, and it's harder to do, but it's the only way to
really get to where we want to come is is good to go through instead of uh trying to deny the
reality and uh and trying to start from scratch like nobody's ever achieved that i think no for
all you luigi populist out there um find god first and then find bitcoin there's we're gonna work
through this amen it's uh we're gonna do it tour you're a tour de force been writing these reports
for a decade now.
First mid-cycle update.
And I appreciate you
for spending your Friday afternoon
with me to go through it.
It was a blast.
Thanks, Marty.
You go enjoy your weekend.
And we'll link to this
in the show notes.
Freaks, go check it out.
Send it to anybody
in your extended network,
family, friends,
who you think is
sort of on the cusp
of either becoming Bitcoin curious
or already is
and needs a little push
over the ledge.
This report, I think,
is the push that could get him over there.
Peace and love, freaks.
Okay!