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Tur, tur, tur. Oh, how the tables have turned. You're sitting in a seat that I dearly miss.

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Oh, yes. You're the one who's being grilled today.

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I don't know if I could take a grilling today. It's been a long travel day.

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It's a good week.

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Yeah, and I got Logan here in my corner, so he's going to slip me those questions, the uncomfortable questions to ask.

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You'll find that he's not very helpful in that regard. He just puts that... I'm kidding. Logan, I'm kidding.

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very helpful

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if you have hard hitting questions for me

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that you want to pass the term

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make sure you do it

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he's already doing it in sign language

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we got this thing going

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it's a great way to end the week

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I'm happy that

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I know my flight was a little delayed

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as I was telling you

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might as well tell the audience

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too I'm getting back from Georgia

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where Block's

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Proto team, their Proto mining team

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unveiled their

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Bitcoin mining rig called The Rig and their fleet software.

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It was a really good event, really good day for Bitcoin, I think,

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because somebody's been in the mining industry.

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And I think it's been a bullish week overall.

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Not only the proto-mining event, but we had Baltic Honey Badger Conference

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where the ARK second-layer protocol is being tested out

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with the BTC pay server merchants, went swimmingly.

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Wow, that's awesome.

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I've heard great things about ARK, so yeah, I'm curious to learn more.

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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.

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and not my bullish for those reasons,

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but you've done something that you haven't done.

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And how long have you been writing reports for Adamant?

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Did you start in 2012 or 2013?

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I chose the Adamant name back in early 2015.

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So the first report was like April 2015 or something.

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Okay.

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So it's 10 years.

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Yeah.

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And historically, whenever you've written a report,

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it's been in the depths of the bear market

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and you have a very phenomenal way of releasing your reports

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right when the price seems to hit a local bottom.

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Yeah, I'll start writing when I feel sick.

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And I usually publish right around the time when I'm starting to feel better.

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And that's worked out well.

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Sick in the sense that I feel like I'm so bullish

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and that the market is just so despondent and just doesn't care anymore.

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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.

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I'm just seeing a lot of people that are like, well, they're just not very bullish, you know?

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And I'm like, what's happening? Like, you guys, retail is like nowhere to be seen, I think.

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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.

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But but that's not a exuberance indicator to me.

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That's just the beginning of public participation to me.

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So felt like a good time to, you know, revise the report.

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Because it's been two years since my last report, which I think was like, what was it?

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April, April or May 2023.

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I think it was like $27,000 Bitcoin.

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And then one of the price targets was like,

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hey, we think this is going to go to $120,000 and beyond.

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So now we hit $120,000.

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So that also felt like a good time to just look at the report again and reissue it.

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It's not a complete rewrite, but significant parts.

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I just pulled out entire things and I plugged in new parts that were just completely updated.

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Yeah.

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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.

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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.

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And if you go back to May 2023, when you wrote the first version, we were hovering around 26,000.

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So up almost 5x from there, 6x, 6.5x from there.

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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.

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But you wrote a 23-page report, released it with Adamant and Unchained.

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And so, what did you feel was most necessary to revise and remind people of at this point in the cycle?

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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.

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So it means like, you know, we have a every year it's losing 10 to 15 percent in value.

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And at the same time, we have a lot more regulatory clarity.

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So we have a very kind of pro Bitcoin administration, which was not the case back when I wrote the report.

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I don't think the ETFs had even dropped yet.

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No, no, they hadn't when the report was published.

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And then I think the nation state adoption has changed as well.

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Like that picture looks different.

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And when I published it, MicroStrategy had, of course, already launched, but there were no copycats yet.

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We just had one treasury strategy company and that was it.

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Whereas now it's very clearly a trend and probably even an industry in the making.

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So those are some big changes.

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Yeah.

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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.

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one thing i love about bitcoin open source transparent ledger you can really glean a lot

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of sentiment and know what's happening uh with bitcoin by just look simply looking at the chain

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looking at coin days destroyed and seeing what long-term hodlers or short-term hodlers are doing

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and if you look at where we sit from a chain analysis perspective,

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chain analysis in the good way, just reading the ledger to see what's happening,

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it seems like things are pretty good right now.

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Yeah, I think you can see that we're in a bull market.

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It's not like back two years ago.

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For example, if you look at what the whales are doing,

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they are moving some coins.

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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.

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And whereas in the past, sometimes that number would go to like 400,000 coins that were just like moving on the chain.

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And I mean, it's not exactly that, but it's the equivalent of 400,000 coins.

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the metric I'm talking about is actually weighed by how long people are holding on to the coins.

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So if you have one coin that's held for a thousand days, that'll have more of an impact on the chart

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than if you have a hundred coins that were only held for 10 days. No, only held for like three

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days, you know, then those would be lighter, lighter weight in the chart. So yeah, that whale

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activity I always try to look at because I think whales are usually the smartest. They know what's

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up. They know when sentiment is just overheated and then they start reshuffling their coins and

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stuff. But yeah, I mean, we had 80,000 coins that were sold in a very short notice and it only moved

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the price 4%. I think that was a nice stress test just to see where we're at. And then another thing

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I looked at in the report is these drawdowns, just the price drawdown compared to the all-time high.

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And so in previous bull markets, that was a lot more aggressive, those drawdowns. Yeah, that's the

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one. So the fact that the drawdowns are lighter, like just not as deep, the corrections of maybe

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20, 30%, to me, that's showing that there is just very strong buying activity. Like if people are

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are gobbling up the coins as soon as they look a little cheaper.

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And so to me, that means that there's probably going to be a longer cycle.

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That's why I'm so bullish in the report saying like, hey, we could tack on another entire

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year or even a year and a half to this bull market.

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I think that's a big question on everybody's mind.

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Is this different?

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Because I think the first 13, 14 years of Bitcoin, let's just say 2009 to 2022, so 13

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years it was a pretty predictable four-year cycle you'd go up parabolic blow off top retail would

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rush in yeah yeah everybody would sell over the course of 18 months you fall you'd have a

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capitulation dump then you'd begin to consolidate at lows and some period after that three to six

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months later begin to climb up rinse and repeat but it definitely does seem different this time

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I know those are famous last words for many people throughout history.

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However, having been observing this for 12 years myself, it's just undeniable.

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In my mind, it's objectively different in many, many different regards.

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Like you mentioned, ETFs, treasury companies, nation states, maturation of the industry.

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It's certainly different.

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Yeah, and it would just logically make sense that as an asset class matures, it should

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get less volatile over time and we should have longer cycles, like real estate cycles are famously

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multi-decade cycles. And so, yeah, I don't understand why Bitcoin would have to somehow

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magically keep adhering to four-year cycles if none of the other asset classes have the same

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features, especially given that the effect of the halving is becoming almost negligible,

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with very little difference in actual supply every four years now.

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Yeah, and that actually brings up a good point,

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which earlier, before we hit record, I said it was the jumping off point.

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But I think a little pre-conversation and then touching on a conversation you had

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with a hedge fund investor, Mark Hart, recently,

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in which he sort of provided, what was it, six principles of what makes an asset really investable and appealing?

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Yeah, so I thought it was really refreshing to hear kind of, again, like a fundamental thesis as to, you know,

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why would someone be interested in Bitcoin in the first place, but also just like a universal framework.

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Um, and, um, so he, he just, he talked me through it, basically his thinking back in,

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I think it was late 2016 or early 2017 when he was thinking through this.

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Um, and so he, he told me that, you know, he just went through his own list of, uh, of

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these features, um, of what, what gives value to an asset or an asset class fundamentally.

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And so he said, first access, like people have to be able to access the, the, the investment.

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second they have to be made aware that it exists um also thirdly they have to have a sense that it

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gives them a feeling of security in some way it kind of makes them feel like they're hedged

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correctly or that it kind of covers some risks for them um even even when famously of course

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bitcoin like adding just a little bit of bitcoin all of a sudden changes the the behavior of your

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entire portfolio in a good way. And then he also said four, like obviously return on investment,

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like is it yielding? Is the past performance anything to speak of? And then fifth is interesting.

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He said patina, he calls it patina, which is like, I guess you could call it the vibe or I could call

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it the vibe or the, you know, whether it makes you feel good to own it or not. So for example,

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like something that has negative patina for the past decade or so is,

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is like,

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you know,

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coal miners,

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like,

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you know,

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and it's,

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so they're famously valued at a lower multiple compared to other assets,

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other,

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other industries,

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because it's just very kind of,

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you know,

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it's polluted,

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you feel like you're investing in polluting things and that.

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And so,

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and so,

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but also there's the other side,

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certain assets just have a very positive patina.

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And,

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and so it's,

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I think Bitcoin has made an,

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interesting trajectory in that sense where I've been saying this like in the, you know,

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two years ago in the report, I was like, hey, you know, this cycle, Bitcoin is going to have

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the reputation of being a conservative asset that protects you against all kinds of risk.

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And so it's going to get that more positive patina. But then the last one I thought was

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so interesting, what he mentioned, and he already thought about that back in 2016, 17, is the ability

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to use the asset as collateral. So if you have a high ability to be able to use it as collateral,

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that's going to give a lot of wind in the sails for future value appreciation.

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And so that was not the case for Bitcoin for a very long time. Like no bank would ever

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touch it. You couldn't get loans against it. And then gradually, I think back in 2017,

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maybe you could start to borrow a little bit against it. That started to happen.

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But now, of course, with the Bitcoin strategy companies, we're seeing that kind of on steroids.

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So all of a sudden, these publicly traded companies are very successfully using Bitcoin as collateral to grow and grow and grow.

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And so, you know, if you compare, you know, think about the real estate market.

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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

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And the only reason that was able to happen is that you get the best loans by giving your house

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as collateral, and then you can borrow, you know, mortgages are just the best loans in the world

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almost. So yeah, so I thought that framework was just super interesting to kind of, you know,

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maybe reassess Bitcoin and being like, okay, what's,

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what's been changing for those six factors.

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Yeah. And to really extend on the,

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the thoughts you have on the six principle, they were collateral.

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I've been saying this for years and it's something that we're pretty convicted

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behind at 1031 and have deployed capital into over the last few years is that I

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think this is a cycle where Bitcoin has pristine collateral really sees its day.

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You mentioned the treasury companies.

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They're obviously really leaning into it.

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You've got companies in private credit markets that are beginning to underwrite loans using Bitcoin as part of the collateral package.

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Obviously, Unchain, Strike, Ledin, Debify, HODLHODL.

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They've been around, but I think their products are becoming more popular.

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People are more aware of them.

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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.

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But I think ultimately, in the long run, it's definitely going to happen.

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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.

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And there's been a bunch that have made announcements that they're working to enable these products for their customers.

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Nothing's been launched yet.

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but famously spare bank in russia right they're issuing about are about to issue bitcoin bonds

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yes and what are what are the terms of those bonds too i i don't know that i only know that

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spare bank is a big deal it's like the biggest bank in russia yeah or the third biggest bank

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i'm not sure it's definitely top three yeah yeah but again going back to what we said before

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listing Mark's six principles. It definitely does feel like just the gravity and the

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tailwind, the gravity around the tailwinds behind Bitcoin have never been like this.

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Yeah. And because we were talking about the decoupling of Bitcoin and altcoins or crypto

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or shitcoins, whatever you call them. I think that's really, that's been happening the last

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six months for sure, last year probably. Of course, now we have Ethereum ETFs, but I still

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feel that there's something fundamental that that changed here where all of a sudden we see a lot

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of government officials that are saying the word bitcoin we uh we have uh famously um uh um

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i was going to say martin armstrong no uh the coinbase ceo brian armstrong brian armstrong

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who's using the word bitcoin again after years of not using it it's the best money we've ever

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discovered in his mind very interesting right right so so all the sudden we we see a clarity

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in people's thinking and i think that's that's that's what's helping to give it this positive

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patina like you it's being disassociated from all this murky cowboy like scammy uh you know

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behavior from from the crypto uh crypto world the the very centralized stuff but ethereum it's going

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to run the global markets. Tom Lee told me this, and it's like the biggest macro play

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of the next 10 to 15 years.

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No, I like Tom Lee, but time will tell.

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Time will tell. It really will.

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But so this is like what we're describing right now is what's happening endogenously

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within the Bitcoin ecosystem and the people trying to interact with it. But there's like

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exogenous factors as well in terms of what's happening in global macro, I think.

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You bet.

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the like you mentioned earlier inflation still high real inflation 10 15 i would not be surprised

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that's actually lower than actual real inflation particularly for core the core basket of goods

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that people depend on well but parker lewis did the the test with stake right i think he came up

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with uh 12 annualized inflation yeah just based on if you're if you're a stake eater yeah and

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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.

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But she bought 30 items from Walmart online in 2023, I believe.

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And she went back and bought the same 30 items.

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And the price went from $70 to, I believe, like $196.

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dollars so you had like 168 inflation or something if i'm recalling correctly the numbers and

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um i think that's one thing that's become very clear you can't trust bls yeah and of course you

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can be like yeah but it's the tariffs or is this or is that but but but but you have to take those

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things into account as well like it's like you know tariffs is a symptom of a deglobalizing world

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and in a delobalized world,

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prices are going to be higher,

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meaning everyday consumers,

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they don't really care where the price increases come from.

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It's just a reality and it's a structural reality.

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Yeah, it really is.

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And then on top of that,

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obviously we have Trump and Powell

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sort of in this very public boxing match.

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I wouldn't even call it a boxing match.

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It's really one side.

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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.

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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.

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And it seems like the money printing is only not going away.

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It's probably likely to increase from here.

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Yeah, it's the only way to save the furniture in the short term.

264
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I looked at the numbers and yeah, US deficits are over 6% now.

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Deficits in Europe are over 3.5%, I believe.

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And so those are numbers higher than the Great Depression.

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So that's saying something.

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That's really saying something.

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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.

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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.

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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.

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Yeah, especially gold is so interesting, right?

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Bitcoin expressed in gold.

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You know, you would think like, oh, we should be at new all time highs.

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But actually, we've barely broken out.

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Bitcoin has been trading at parity.

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Yeah, there it is.

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So Bitcoin has been trading at one kilo of gold for the last four or five years.

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And so this is one of the most interesting charts, I think, in the world.

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Just that psychological...

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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.

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That was a big deal.

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Like people thought psychologically, like, no, one Bitcoin can't be more than an ounce.

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And then interestingly, we had the 100 gram resistance, then one kilo.

285
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And then, well, what's next?

286
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Well, you would think 10 kilos, actually 11 kilos will be gold parity.

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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.

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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.

289
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And of course, you and I think, well, of course it can.

290
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And so I think that's why.

291
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And that's what I've suggested in my presentation about the macro outlook.

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I think that's the next magnet.

293
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And actually the term magnet I got from David Bailey, you know, from Beatsy Media.

294
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We had a dinner in Puerto Rico.

295
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What was it?

296
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Two years ago or something.

297
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And he was like, he just brought that up.

298
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I was like, hey, I think gold parity could be the next magnet.

299
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And I just thought, they just always stuck in my head.

300
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It's such a brilliant way of thinking about it.

301
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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.

302
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And I think that's, you know, Samsung now talks about $1 million as a magnet.

303
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Those are actually in the same range, you know, at least right now.

304
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If gold does a big rally, then it'll be higher.

305
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But it's so interesting that those levels, they're both psychological milestones.

306
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They're actually quite close if you think about them.

307
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Yeah, well, let's dig into that too, because I feel like gold's moving in a way very aggressively,

308
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particularly in the last year, that it hasn't since Bitcoin launched,

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maybe outside of one or two years, maybe, or two blips of an event.

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But it seems like the world, particularly post-2022 seizing of Russia's treasury assets by the U.S. government,

311
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and our allies has really forced international players specifically to think about diversifying

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away from U.S. treasury bonds. And gold's on a run. It doesn't look like it's slowing down

313
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anytime soon from what I can tell. I wonder if it's, and I don't mean like no disrespect,

314
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because people often use like boomers with like a kind of disdain or something, but

315
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I wonder if it's being rediscovered by boomers as a safe haven asset.

316
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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?

317
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What do you think of this thesis that we have military age Chinese men by the thousands roaming around in the US?

318
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What if at some point they are activated by the CCP and they start sabotaging electricity plants to create a blackout across the US?

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and and then his next the next part of his what do you think was you know what do you think of

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gold as an investment to to hedge against that and i was like wow you know like regardless of

321
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you know whether or not that you know scenario is realistic you know that that's new i five years

322
00:27:07,912 --> 00:27:13,932
ago i i would have none of my uber drivers would have ever you know come up with a scenario like

323
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that plus the gold answer so you know it's it's of course just one data point but i do i do feel

324
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that you know the boomers that already have gold they feel very much validated and so maybe why not

325
00:27:27,793 --> 00:27:34,693
sell if you have three houses whatever or a few condos why not sell one of them and buy more gold

326
00:27:34,693 --> 00:27:40,273
especially because you know maybe your kids it's pretty clear by now that they won't find work in

327
00:27:40,273 --> 00:27:47,013
that area where you happen to have a house so it's gonna have to go anyway yeah that's fascinating i

328
00:27:47,013 --> 00:27:56,672
I wonder if gold keeps drifting higher, does that perturb what seems to be a longstanding trend in the Bitcoin to gold ratio?

329
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Or does Bitcoin, to David, to use David's term, just still stay true to that magnet of the next order of magnitude?

330
00:28:05,432 --> 00:28:06,152
I think so.

331
00:28:06,912 --> 00:28:10,013
It's only $2 trillion.

332
00:28:11,432 --> 00:28:16,313
Because Bitcoin has the ability to be so much more than gold is today.

333
00:28:16,313 --> 00:28:36,693
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.

334
00:28:36,693 --> 00:28:43,332
yeah no and to that point too bringing it back to collateral i'm very interested to get your

335
00:28:43,332 --> 00:28:47,813
thoughts on this because that's one thing whether it's the treasury company it's like i think it's

336
00:28:47,813 --> 00:28:56,352
pretty clear i would be shocked if microstrategy um sells bitcoin anytime soon but in the private

337
00:28:56,352 --> 00:29:03,873
market uh for in the private credit markets like with these new sort of collateral packages

338
00:29:03,873 --> 00:29:11,013
in structured credit that include Bitcoin for commercial real estate and other types of longer

339
00:29:11,013 --> 00:29:17,013
duration loans. If you see that trend take off and they're successfully able to pull

340
00:29:17,013 --> 00:29:23,472
a material amount of Bitcoin off the market, put it in these longer duration structured credit

341
00:29:23,472 --> 00:29:28,313
products, like I've been talking to Andrew Hones about this for the better part of a year,

342
00:29:28,472 --> 00:29:33,633
more than a year, you begin to see like a forward looking duration curve of an amount of Bitcoin

343
00:29:33,633 --> 00:29:37,492
that you know is going to be off the market for X amount of years.

344
00:29:37,732 --> 00:29:42,432
Yeah, yeah, because if you're issuing securities against the Bitcoin collateral,

345
00:29:42,652 --> 00:29:47,912
then, well, you have to keep the collateral in place to be able to honor those promises.

346
00:29:48,793 --> 00:29:49,513
That's a good point.

347
00:29:49,572 --> 00:29:50,232
And it's true, right?

348
00:29:50,232 --> 00:29:53,152
We had announcements of, what is it?

349
00:29:53,393 --> 00:29:59,013
The Jack Mahler's Howard Lutnik, Blockstream as well.

350
00:29:59,313 --> 00:30:01,752
There's a significant amount of Bitcoin that we knew.

351
00:30:01,752 --> 00:30:13,252
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.

352
00:30:13,932 --> 00:30:18,352
Yeah. And it's actually fascinating, too, because I've been digging more into this.

353
00:30:18,633 --> 00:30:22,232
And I was actually talking to my brother about this earlier this week.

354
00:30:22,612 --> 00:30:26,133
We went golfing. He works at Unchained, so he's following the space very closely.

355
00:30:26,133 --> 00:30:28,873
He's like, why isn't the price going up with all these treasury companies?

356
00:30:28,873 --> 00:30:29,832
are buying so much.

357
00:30:29,832 --> 00:30:35,773
And we had a conversation about, to your point, like a lot of these whales sitting on large

358
00:30:35,773 --> 00:30:51,325
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

359
00:30:51,325 --> 00:30:56,685
from what i understand like it increases their cost basis to where bitcoin is today in the tax

360
00:30:56,685 --> 00:31:02,445
preferable way uh wait explain that like if you put your bitcoin in kind into one of these

361
00:31:02,445 --> 00:31:05,625
SPVs or pipes, whatever it may be,

362
00:31:05,765 --> 00:31:08,745
to help the treasury company develop.

363
00:31:09,365 --> 00:31:10,325
It's Bitcoin treasury.

364
00:31:10,865 --> 00:31:12,765
From what I understand, there's tax benefits.

365
00:31:13,225 --> 00:31:15,385
You don't get taxed and your cost basis gets bumped up.

366
00:31:15,385 --> 00:31:19,805
Oh, I guess I would have to look at it.

367
00:31:19,825 --> 00:31:20,805
But I believe you.

368
00:31:20,945 --> 00:31:21,845
I can see that.

369
00:31:22,505 --> 00:31:25,065
And then maybe you could withdraw in kind as well again,

370
00:31:25,125 --> 00:31:27,005
because then that would be not a taxable event

371
00:31:27,005 --> 00:31:28,285
if eventually you could withdraw.

372
00:31:28,805 --> 00:31:29,885
Yeah, I'm not sure.

373
00:31:29,905 --> 00:31:31,945
It's kind of like you're putting...

374
00:31:31,945 --> 00:31:47,185
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.

375
00:31:47,185 --> 00:31:55,125
If you add to that pool and then you get some income from whatever revenue they generate based on that.

376
00:31:55,445 --> 00:32:01,985
But then later, you could withdraw your collateral again and you've never sold it.

377
00:32:02,165 --> 00:32:03,485
So that's not a taxable event.

378
00:32:04,025 --> 00:32:04,165
Yeah.

379
00:32:05,425 --> 00:32:06,685
It's really fascinating.

380
00:32:07,965 --> 00:32:09,245
It'll be fun to see.

381
00:32:09,465 --> 00:32:14,925
Just broadly, before we get on to the next Bitcoin Express and Commodities chart, broadly speaking,

382
00:32:14,925 --> 00:32:22,165
how do you see the treasury's company theme playing out uh i've been saying publicly like

383
00:32:22,165 --> 00:32:27,225
to me it seems like a game where economies of scale are necessary to win if you're viewing

384
00:32:27,225 --> 00:32:31,245
these treasury companies as competitive with each other so i'm under the belief there's gonna be

385
00:32:31,245 --> 00:32:37,925
like a Pareto distribution of companies that are able to deploy the strategy execute and

386
00:32:37,925 --> 00:32:46,705
really stand out from the rest and basically soak up all the capital that is interested in

387
00:32:46,705 --> 00:32:52,225
this type of strategy. Yeah, that does make sense to me. I think there is probably some,

388
00:32:52,585 --> 00:33:00,945
maybe some unique risk to the very large ones, just geopolitically. If we get a hot war between

389
00:33:00,945 --> 00:33:07,125
major nations and all of a sudden somebody needs a lot of money to finance things in the short term,

390
00:33:07,125 --> 00:33:11,185
then you could nationalize one of these big companies.

391
00:33:11,645 --> 00:33:13,365
I don't think they would liquidate all the Bitcoin.

392
00:33:13,825 --> 00:33:15,745
They would probably nationalize it and then say,

393
00:33:15,885 --> 00:33:20,185
we're going to now issue our national Bitcoin bonds

394
00:33:20,185 --> 00:33:21,525
that are backed by this collateral.

395
00:33:21,865 --> 00:33:24,425
And we're doing it to protect shareholders.

396
00:33:24,785 --> 00:33:26,165
And like in Belgium, for example,

397
00:33:26,385 --> 00:33:29,965
the Central Bank of Belgium used to be entirely private.

398
00:33:30,245 --> 00:33:34,885
And then the government came in and started owning 40%, 50%, 60%.

399
00:33:34,885 --> 00:33:53,845
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.

400
00:33:53,845 --> 00:34:13,165
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.

401
00:34:13,405 --> 00:34:17,845
Everybody needs to put in, you know, do what they can.

402
00:34:17,905 --> 00:34:19,425
And so we're going to issue an order.

403
00:34:19,425 --> 00:34:23,045
But still, you know, I think that's not happening right now.

404
00:34:23,845 --> 00:34:25,285
And it could be a few years away.

405
00:34:26,025 --> 00:34:32,145
So yeah, if you kind of bracket that as a risk, I do agree with you that the large companies,

406
00:34:32,445 --> 00:34:36,665
probably they're going to have the best relationships with these Wall Street banks who then have

407
00:34:36,665 --> 00:34:39,465
the deepest liquidity when it comes to the bond market, et cetera.

408
00:34:40,885 --> 00:34:42,205
Yeah, that makes sense.

409
00:34:43,545 --> 00:34:46,345
In the short term, it seems, that was so interesting.

410
00:34:46,345 --> 00:34:51,005
It was actually also Mark Hart who tweeted about that, that it seems like in the last

411
00:34:51,005 --> 00:34:59,785
weeks, like four weeks or something, JP Morgan in particular has cranked up margin requirements

412
00:34:59,785 --> 00:35:06,845
for strategy stock in particular. So if you want to borrow against your strategy stock,

413
00:35:06,925 --> 00:35:11,685
say you've got a million or 10 million sitting in your brokerage account, and you want to borrow

414
00:35:11,685 --> 00:35:20,465
against that, you used to be able to borrow, I think, $40 for every $100 worth of MicroStrategy

415
00:35:20,465 --> 00:35:26,125
stock, well, now you can only borrow five bucks for every hundred dollars. Yeah. So that means that

416
00:35:26,125 --> 00:35:31,805
basically from being, you know, being able to borrow with two and a half, two and a half X

417
00:35:31,805 --> 00:35:36,405
over collateralization, now all of a sudden you have to put up 20 X over collateralization,

418
00:35:36,405 --> 00:35:42,485
uh, for what you're going to borrow. And so it's weird because that would somehow imply that the,

419
00:35:42,805 --> 00:35:47,965
you know, the micro strategies is something changed fundamentally. They're a lot weaker,

420
00:35:47,965 --> 00:35:53,585
But that doesn't make sense. So the question is, are we seeing some kind of concerted efforts

421
00:35:53,585 --> 00:36:00,285
to try and dampen activity in these Bitcoin strategy companies from Wall Street?

422
00:36:00,985 --> 00:36:05,285
There are many to be seen, but it seems like that is an underappreciated factor as to

423
00:36:05,285 --> 00:36:08,945
why these stocks are lagging currently compared to the Bitcoin price.

424
00:36:10,405 --> 00:36:14,465
I was not aware of that. 40% LTV to 5% is drastic.

425
00:36:14,465 --> 00:36:30,705
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.

426
00:36:30,705 --> 00:36:41,045
and because are people typically taking out these loans before the change getting forty dollars per

427
00:36:41,045 --> 00:36:46,585
hundred dollars they put up and then going and buying more micro strategy sometimes yeah right

428
00:36:46,585 --> 00:36:52,365
sometimes yeah if you're bullish you know why not be bullish 130 especially if you're thinking

429
00:36:52,365 --> 00:36:56,925
about hedge funds and you know and then they may be hedged in other ways you know they might have

430
00:36:56,925 --> 00:36:57,865
some downside protection.

431
00:36:58,205 --> 00:37:00,005
But if your ability to go

432
00:37:00,005 --> 00:37:02,225
to be bullish is curbed,

433
00:37:02,405 --> 00:37:03,725
then of course the price

434
00:37:03,725 --> 00:37:04,505
is going to reflect that.

435
00:37:04,705 --> 00:37:08,005
Also because like the six points earlier,

436
00:37:08,265 --> 00:37:12,885
if one share in micro strategy

437
00:37:12,885 --> 00:37:15,245
all of a sudden is less potent

438
00:37:15,245 --> 00:37:16,905
as a collateral in itself,

439
00:37:17,405 --> 00:37:19,025
well, then that's going to hurt the value.

440
00:37:19,965 --> 00:37:20,105
Yeah.

441
00:37:21,325 --> 00:37:22,285
That's fascinating.

442
00:37:23,325 --> 00:37:24,145
I wonder why JP Morgan,

443
00:37:24,145 --> 00:37:25,665
I was completely unaware of that.

444
00:37:26,925 --> 00:37:34,325
but moving back to the report and bitcoin being priced in different things this is interesting

445
00:37:34,325 --> 00:37:41,785
gold it seems like we're brushing up against this previous all-time high say it one kilo i love when

446
00:37:41,785 --> 00:37:47,985
americans have to use the one metric system one kilo gram is that yeah whatever people have said

447
00:37:47,985 --> 00:37:53,825
kg i hear that sometimes in the u.s one kg one kilo brushing up against that but if you look at

448
00:37:53,825 --> 00:37:57,265
Bitcoin expressed in just a broader basket of commodities.

449
00:37:57,565 --> 00:38:00,665
It's already broken out a little bit well over all time highs.

450
00:38:00,845 --> 00:38:05,665
We're looking at Bitcoin to the US dollar, Reuters, Jeffries, CRB index.

451
00:38:05,925 --> 00:38:07,305
What's in this basket?

452
00:38:08,745 --> 00:38:12,605
Yeah, so that one, I'm trying to make sure I get it right.

453
00:38:12,605 --> 00:38:20,445
I think it's like 20% metals, maybe 40% oil, and then 40% agricultural commodities.

454
00:38:20,765 --> 00:38:22,205
It's pretty intuitive.

455
00:38:23,205 --> 00:38:26,525
And the cool thing is they haven't changed it in 60, 70 years.

456
00:38:26,565 --> 00:38:28,225
So it's just the same index.

457
00:38:28,765 --> 00:38:30,445
I think they base it on futures prices.

458
00:38:31,165 --> 00:38:41,685
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.

459
00:38:42,825 --> 00:38:44,185
And, of course, Bitcoin has done that.

460
00:38:44,185 --> 00:38:52,305
And so, yeah, recently we've broken, especially in the last six months, we've broken north of the highs of that resistance.

461
00:38:52,625 --> 00:39:05,965
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.

462
00:39:05,965 --> 00:39:08,965
It's a very poor way to look at the markets.

463
00:39:10,165 --> 00:39:15,225
But expressing gold and commodities, all of a sudden we're seeing Bitcoin break out.

464
00:39:15,825 --> 00:39:18,105
To me, that's very hard to stay bearish then.

465
00:39:18,445 --> 00:39:23,265
All of a sudden we have to assume it just broke out, but it's somehow the end of a bull market.

466
00:39:23,465 --> 00:39:24,625
It just doesn't make sense.

467
00:39:25,205 --> 00:39:25,345
Yeah.

468
00:39:26,885 --> 00:39:28,305
So do you think people are...

469
00:39:28,305 --> 00:39:33,245
When you say people are bearish, for those that are bearish right now

470
00:39:33,245 --> 00:39:39,205
and think that we've seen the sort of cycle top or we're near it?

471
00:39:39,605 --> 00:39:42,345
How surprised or shocked do you think they'll be?

472
00:39:43,965 --> 00:39:50,945
Yeah, I mean, I think different people, I mean, of course, you know, people who are in Bitcoin,

473
00:39:51,065 --> 00:39:53,725
there's people who are just long Bitcoin and they might still be like,

474
00:39:53,785 --> 00:39:56,505
oh, you know, it's going to top out at 200,000 or something.

475
00:39:56,665 --> 00:39:59,005
Yeah, we might run a little more, but then it'll top out.

476
00:39:59,005 --> 00:40:05,145
maybe a lot of those people are afraid of just a general stock market crash you know like oh it

477
00:40:05,145 --> 00:40:10,705
feels like there's dark clouds on the horizon and so traditional interpretation is that oh it means

478
00:40:10,705 --> 00:40:17,645
a stock market crash it means a repeat of 2008 and then we get a huge um you know crash in bitcoin

479
00:40:17,645 --> 00:40:22,405
as well because it's you know it's the most liquid asset in the world it's the easiest to sell

480
00:40:22,405 --> 00:40:26,305
much easier than a house or something else so it might be the first thing that you sell

481
00:40:26,305 --> 00:40:33,165
and then there's the no coiners you know I think they are they're they're gonna hurt you know it's

482
00:40:33,165 --> 00:40:39,145
gonna be very painful for them to see it go to 150 200 000 and then then you start feeling FOMO

483
00:40:39,145 --> 00:40:49,885
and and so the thing is also that back in 2020 2021 all the crypto stuff that all was dilutive

484
00:40:49,885 --> 00:40:54,865
to bitcoin like it would the money that went to crypto was taking away value from bitcoin

485
00:40:54,865 --> 00:41:09,305
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.

486
00:41:09,305 --> 00:41:15,885
And then even imagine some of those treasury companies buying stock in other treasury companies and putting it on their own ballot.

487
00:41:16,145 --> 00:41:22,325
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.

488
00:41:22,465 --> 00:41:29,705
It would just kind of create this mania that stays, roughly speaking, in the same universe, the Bitcoin universe.

489
00:41:30,465 --> 00:41:37,985
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.

490
00:41:37,985 --> 00:41:38,425
Yeah.

491
00:41:39,305 --> 00:41:42,445
This is something I've been trying to wrap my head around because, again, going back to...

492
00:41:44,045 --> 00:41:46,705
If we crash, you guys can clip it.

493
00:41:46,765 --> 00:41:47,565
You can make fun of me.

494
00:41:47,665 --> 00:41:49,265
But going back to this time is different.

495
00:41:49,925 --> 00:41:54,225
The different archetypes of demand drivers are out there.

496
00:41:55,865 --> 00:42:00,965
Not only the amount of capital that they have behind them, but just the plurality of them.

497
00:42:00,965 --> 00:42:08,745
Just from a numbers perspective is unlike anything that's ever existed up to this point.

498
00:42:09,305 --> 00:42:30,305
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.

499
00:42:30,305 --> 00:42:35,505
But if we do get a big crash, I'm going to have another lesson in humility.

500
00:42:35,845 --> 00:42:37,305
And those are the best ones.

501
00:42:37,425 --> 00:42:44,265
It hurts, but it shows that you really can't know the future for sure.

502
00:42:44,505 --> 00:42:53,505
All you can do is share your best thoughts and accept that you'll never know better than the rest of the world.

503
00:42:53,845 --> 00:42:56,045
The price is going to be the price.

504
00:42:56,045 --> 00:42:58,645
but then again

505
00:42:58,645 --> 00:43:00,405
might as well

506
00:43:00,405 --> 00:43:03,585
it's something I'm thinking about

507
00:43:03,585 --> 00:43:05,625
privately anyway, you're thinking about it privately

508
00:43:05,625 --> 00:43:07,565
anyway, so why not just talk about it

509
00:43:07,565 --> 00:43:08,725
and share our thoughts

510
00:43:08,725 --> 00:43:11,605
Speaking of something that I'm thinking

511
00:43:11,605 --> 00:43:13,065
about, I mean you mentioned it

512
00:43:13,065 --> 00:43:15,145
Bitcoin's the most liquid asset

513
00:43:15,145 --> 00:43:17,105
if you have an equities downturn

514
00:43:17,105 --> 00:43:19,665
maybe it'll be the first

515
00:43:19,665 --> 00:43:21,425
to go because it's the most liquid, easiest

516
00:43:21,425 --> 00:43:23,105
to sell, but do you envision

517
00:43:23,105 --> 00:43:25,845
a scenario where

518
00:43:25,845 --> 00:43:28,325
Bitcoin is seen as this

519
00:43:28,325 --> 00:43:30,145
real flight to safety

520
00:43:30,145 --> 00:43:32,585
if there's trouble in the equity markets.

521
00:43:33,565 --> 00:43:34,385
Well, yeah, because

522
00:43:34,385 --> 00:43:36,525
especially if they paper everything over.

523
00:43:37,265 --> 00:43:40,365
To me, the context is

524
00:43:40,365 --> 00:43:42,205
back in 2008,

525
00:43:42,805 --> 00:43:44,285
we had a big crash

526
00:43:44,285 --> 00:43:46,125
and then there was

527
00:43:46,125 --> 00:43:48,325
complete disbelief when the numbers

528
00:43:48,325 --> 00:43:49,885
started coming out. We had these

529
00:43:49,885 --> 00:43:52,225
I think it was Timothy Geithner

530
00:43:52,225 --> 00:43:53,445
at the time who was like

531
00:43:53,445 --> 00:43:58,365
talking about bailouts and we're going to rescue these things. And it's going to be like 500

532
00:43:58,365 --> 00:44:05,525
billion, these enormous numbers. And people were like shocked, like what? You're going to bail out

533
00:44:05,525 --> 00:44:11,185
these banks like Fannie Mae, Freddie Mac, and then the big banks. And then of course we had a few

534
00:44:11,185 --> 00:44:16,305
bankruptcies, but, but, you know, Lehman and a few others, but they were just very limited.

535
00:44:16,305 --> 00:44:26,185
so that was like that was one phase then we had 2020 where it was assumed the question was just

536
00:44:26,185 --> 00:44:30,665
how much are we going to bail them out like you know how much are we going to print is it going to

537
00:44:30,665 --> 00:44:37,445
be a trillion is it going to be four trillion like what's the deal here and so and so now if

538
00:44:37,445 --> 00:44:45,125
we have another crash I think we have to keep in mind that everybody is assuming bailouts even more

539
00:44:45,125 --> 00:44:51,345
even sooner, even more aggressive, maybe even stimulus to prevent the crisis from happening in

540
00:44:51,345 --> 00:44:56,345
the first place, which is what Trump seems to be steering towards with wanting like a dovish Fed,

541
00:44:56,505 --> 00:45:01,785
et cetera, with the big, beautiful bill that's another 400 billion in spending.

542
00:45:03,785 --> 00:45:09,465
And of course, with all the interest payments that are just going crazy in the UK and Japan

543
00:45:09,465 --> 00:45:16,425
in the US, you know, the budget required to pay the interest on the debt is so massive that you

544
00:45:16,425 --> 00:45:22,045
kind of need a permanent stimulus anyway to stay afloat. So anyway, like to me, it's like,

545
00:45:22,385 --> 00:45:29,865
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

546
00:45:29,865 --> 00:45:34,585
expressed in commodities. Yes, of course. That's what's happening is that it's already happening.

547
00:45:34,585 --> 00:45:39,705
Like Apple stock is completely flatlining against commodities for the past four years.

548
00:45:40,305 --> 00:45:41,485
So stagnation is here.

549
00:45:41,865 --> 00:45:43,805
Stagflation, like that's the big word, right?

550
00:45:44,545 --> 00:45:47,005
Stagflation, that's the decade that we're in.

551
00:45:47,625 --> 00:45:51,345
Like sluggish economy combined with inflation.

552
00:45:53,065 --> 00:45:58,425
So that's why, like, you know, don't obsess about dollar denominated charts.

553
00:45:58,525 --> 00:46:11,597
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

554
00:46:11,597 --> 00:46:19,877
correction, more like a 30%, maybe 40% correction. And then the structural bull market could still

555
00:46:19,877 --> 00:46:25,778
resume, even if that happens like the next month or so. Yeah. I mean, on this note, Logan, pull up

556
00:46:25,778 --> 00:46:30,998
the real estate expressed in commodities. I think this really visually articulates what you're

557
00:46:30,998 --> 00:46:35,157
describing here and you have some notes here we're seeing diminishing returns to fed stimulus

558
00:46:35,157 --> 00:46:40,377
which beats up private banks ability to issue low interest mortgages once we get to a point

559
00:46:40,377 --> 00:46:44,918
where commodity prices consistently outpace real estate a trend reversal builders and landlords

560
00:46:44,918 --> 00:46:51,537
will very likely start facing negative cash flows so this is another thing this chart i had to look

561
00:46:51,537 --> 00:46:55,797
at it for a while to really and then like think about what's happening real estate happening in

562
00:46:55,797 --> 00:47:04,537
commodities to um to sort of understand what's happening here but since 2016 the net result of

563
00:47:04,537 --> 00:47:09,998
fed stimulus on housing is now flat so this is like a stagflation story yeah which is crazy because

564
00:47:09,998 --> 00:47:16,877
real estate prices seem to be going insane yeah it's like a dead horse like you know you can pump

565
00:47:16,877 --> 00:47:22,778
you can pump adrenaline into it all you want but it's dead and and because the problem is with real

566
00:47:22,778 --> 00:47:29,797
estate is that the commodities are part of your input costs. You need commodities to build houses.

567
00:47:30,477 --> 00:47:35,398
And so if those prices soar, and at the same time, interest rates are higher,

568
00:47:36,018 --> 00:47:42,518
so that means people can't easily renew their mortgages and the high interest rates affect

569
00:47:42,518 --> 00:47:51,037
insurance costs. All of a sudden, the price for home insurance is soaring. And then the cost to

570
00:47:51,037 --> 00:47:55,637
just repair your home. If you need a new roof or something, again, you're facing these high

571
00:47:55,637 --> 00:48:01,698
commodity prices. So from an investment point of view, all of a sudden, corrected for inflation,

572
00:48:02,057 --> 00:48:07,718
you're actually losing money. And that feeds on itself. That's why I totally expect this

573
00:48:07,718 --> 00:48:14,938
graph to just go down. We're going to see it slide over the next 10, 15 years, especially because

574
00:48:14,938 --> 00:48:20,898
baby boomers, I think they own 10 million homes in the US or something, like some huge

575
00:48:20,898 --> 00:48:30,477
amount. I think it's even more. And so baby boomers next year will be aged 62 to 80 years old.

576
00:48:31,518 --> 00:48:36,698
And so a lot of them, I believe, are going to be selling homes. And that's, of course,

577
00:48:36,877 --> 00:48:42,637
we can extrapolate for the rest of the world, I think. But yeah, so I think it's important to look

578
00:48:42,637 --> 00:48:50,038
at these general asset classes where investments have been traditionally parked. And the more those

579
00:48:50,038 --> 00:48:52,177
are impaired, the more

580
00:48:52,177 --> 00:48:53,957
bullish the case for Bitcoin becomes.

581
00:48:54,457 --> 00:48:55,938
Yeah, man. Well, I guess

582
00:48:55,938 --> 00:48:59,938
I don't know if this throws a wrench in that argument, but

583
00:48:59,938 --> 00:49:02,117
I think it does highlight sort of the

584
00:49:02,117 --> 00:49:03,177
very

585
00:49:03,177 --> 00:49:05,957
weird period of time that we find

586
00:49:05,957 --> 00:49:07,698
ourselves in. I'm not sure if you saw this stat

587
00:49:07,698 --> 00:49:09,777
yesterday from Fortune,

588
00:49:09,977 --> 00:49:11,877
but they reported that

589
00:49:11,877 --> 00:49:13,898
there are now more homebuyers over the

590
00:49:13,898 --> 00:49:16,117
age of 70 than under the age of 35.

591
00:49:17,317 --> 00:49:17,877
That's just

592
00:49:17,877 --> 00:49:18,498
so sad.

593
00:49:20,038 --> 00:49:26,698
Oh my God. And it's not like the 75-year-old is like, oh, it's a starter home. It's like, no,

594
00:49:26,837 --> 00:49:31,777
this is clearly an investment asset or something like that. That's just how they're programmed.

595
00:49:31,837 --> 00:49:37,677
I remember my granddad telling me, I think he was a little bit atypical, but still, he said

596
00:49:37,677 --> 00:49:45,337
bonds, gold, and real estate. That was how he built his wealth over the decades. And it's

597
00:49:45,337 --> 00:49:49,797
fantastic formula as long as it works. But I think especially the real estate and the bond part of

598
00:49:49,797 --> 00:49:55,857
that that's no longer true that's a different world now yeah no and i wonder if this sort of

599
00:49:55,857 --> 00:50:01,857
pricing out of millennials from the housing market could also be a tailwind for bitcoin it's like all

600
00:50:01,857 --> 00:50:06,857
right i can't go buy a 500 000 million dollar house don't have the down payment but i do have

601
00:50:06,857 --> 00:50:13,317
enough to buy five thousand dollars with the bitcoin this month or to put ten thousand dollars

602
00:50:13,317 --> 00:50:19,117
in well yeah and also if you just simply compare the the rent that you pay with the mortgage payment

603
00:50:19,117 --> 00:50:21,357
that you would face if you would buy the same home,

604
00:50:21,857 --> 00:50:24,998
if that's out of whack and it's much cheaper to rent

605
00:50:24,998 --> 00:50:28,398
than if you have a little inheritance from your parents or something,

606
00:50:29,097 --> 00:50:31,438
well, why not rent and own Bitcoin

607
00:50:31,438 --> 00:50:37,077
instead of putting it all in the same deteriorating asset that that's a house?

608
00:50:37,617 --> 00:50:37,817
Yeah.

609
00:50:39,738 --> 00:50:40,617
It's fascinating.

610
00:50:40,617 --> 00:50:48,797
I forget who was talking to somebody down in Georgia at the Proto event.

611
00:50:49,117 --> 00:50:50,498
I forget exactly who it was.

612
00:50:51,538 --> 00:50:52,637
Or maybe it was a tweet.

613
00:50:53,018 --> 00:50:54,597
I think it was a tweet somebody sent.

614
00:50:54,718 --> 00:50:57,018
But it was like, even though we're doing a podcast here,

615
00:50:57,238 --> 00:50:59,157
you have your podcast, we have this podcast.

616
00:50:59,797 --> 00:51:02,718
We've been educating people about Bitcoin via your reports

617
00:51:02,718 --> 00:51:04,617
for the better part of it for more than a decade.

618
00:51:05,177 --> 00:51:06,637
I've been doing the show for eight years.

619
00:51:06,898 --> 00:51:10,277
But I forget who sent the tweet.

620
00:51:10,277 --> 00:51:11,557
But it was essentially like, hey,

621
00:51:11,698 --> 00:51:14,898
these podcasts are obviously going to convince some people

622
00:51:14,898 --> 00:51:17,097
and help them educate themselves about Bitcoin.

623
00:51:17,097 --> 00:51:46,198
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.

624
00:51:46,198 --> 00:51:51,898
It seems like a lot of these themes are happening both here in the West and in other parts of the world.

625
00:51:52,018 --> 00:51:56,277
And LATAM, I was saying before, we hit record.

626
00:51:56,398 --> 00:52:04,617
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.

627
00:52:04,718 --> 00:52:13,657
And people are recognizing that it is an alternative to these oppressive financial systems that operate under oppressive regimes.

628
00:52:13,657 --> 00:52:17,198
So in Bolivia, where annual inflation has reached, this is like a triple whammy.

629
00:52:18,097 --> 00:52:25,097
Annual inflation has reached 25% and banks have been limiting withdrawals of U.S. dollars to $100 a week.

630
00:52:25,238 --> 00:52:29,857
Bloomberg reports that Bolivians are turning to Bitcoin and digital assets as alternatives to the Boliviano.

631
00:52:32,518 --> 00:52:33,538
I'll just read the whole thing.

632
00:52:33,597 --> 00:52:36,117
This is from the Human Rights Foundation Financial Freedom Report, by the way.

633
00:52:36,617 --> 00:52:38,137
I'm not the only one using Bitcoin.

634
00:52:38,137 --> 00:52:44,837
Christopher Salas, a coffee vendor in La Paz, said, there's a barbershop over there and a gym that also accepts Satoshi's.

635
00:52:44,877 --> 00:52:53,457
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.

636
00:52:53,677 --> 00:52:58,498
Bolivia's hybrid authoritarian regime lifted a decade-long ban on digital assets in 2024.

637
00:52:58,938 --> 00:52:59,377
Good to see.

638
00:52:59,758 --> 00:53:07,817
Since then, the volume of digital asset payments has grown more than five-fold to nearly $300 million in the first half of 2025.

639
00:53:08,137 --> 00:53:13,077
The University of San Andres allegedly pays its international faculty in Bitcoin.

640
00:53:13,738 --> 00:53:16,877
Carlos Nera, co-founder of Colombian wallet provider Miro.

641
00:53:17,438 --> 00:53:17,938
I read this.

642
00:53:17,977 --> 00:53:19,398
I read this chat yesterday.

643
00:53:20,258 --> 00:53:21,018
One rabbit hole recap.

644
00:53:21,117 --> 00:53:21,597
It blew my mind.

645
00:53:22,198 --> 00:53:27,577
Reports a staggering 6,600% increase in Bolivian users since the ban was lifted.

646
00:53:28,718 --> 00:53:29,317
Fantastic.

647
00:53:29,918 --> 00:53:31,137
Yeah, you're absolutely right.

648
00:53:31,238 --> 00:53:34,357
I mean, it's the complete package there.

649
00:53:34,357 --> 00:53:50,498
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.

650
00:53:50,498 --> 00:53:59,198
he had this executive order, I think, or I think it was an executive order about basically curbing

651
00:53:59,198 --> 00:54:08,317
banks' abilities to debank people in the US. And he was very adamant that, to give the example that

652
00:54:08,317 --> 00:54:14,077
he had been attacked and he had been debanked and he had lost bank accounts all over the US and he

653
00:54:14,077 --> 00:54:18,918
had to like, you know, move money around and all that. And I think those two are very closely linked.

654
00:54:18,918 --> 00:54:22,957
People, you know, just think about somebody's personal experience.

655
00:54:23,157 --> 00:54:32,317
Like, you know, you think your wealth is X and all of a sudden you lose your access to your own wealth.

656
00:54:32,457 --> 00:54:40,597
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.

657
00:54:41,097 --> 00:54:41,238
Yeah.

658
00:54:41,718 --> 00:54:46,077
I definitely think more people are beginning to question, like, what is a bank supposed to do?

659
00:54:46,337 --> 00:54:47,058
What is money?

660
00:54:47,058 --> 00:54:52,177
did you did you see richard werner on tucker carlson did you watch that interview at all

661
00:54:52,177 --> 00:54:57,337
oh that was great yes the guy who who who broke the story about what's happening in japan back

662
00:54:57,337 --> 00:55:05,538
in the 80s yeah that was that was if you're looking for like a a one shot like understand

663
00:55:05,538 --> 00:55:13,137
how the banking system works how the academic economists at the fed and in the in finance are

664
00:55:13,137 --> 00:55:21,117
sort of misdefining how money is created and really not telling people the truth about how

665
00:55:21,117 --> 00:55:26,797
money is created and how money creation via credit creation is corrupting the system,

666
00:55:26,898 --> 00:55:30,438
you have to go watch it. I learned a lot. I got to say, it doesn't, I mean, not to,

667
00:55:30,998 --> 00:55:34,477
of course not. It's just like, if, you know, I'm sure it's the same for you. Like if you've been

668
00:55:34,477 --> 00:55:41,918
looking at the history of banking and money and investing for 10, 15 years, it gets a little bit

669
00:55:41,918 --> 00:55:46,998
harder to be surprised by an interview and to learn a lot. But I was like, wow, a lot of stuff

670
00:55:46,998 --> 00:55:53,857
I did not know that he was talking about. Yeah. Same. And like, I don't know what thoughts are

671
00:55:53,857 --> 00:55:57,998
running through your head, but the whole time is that spoiler alert. Anybody's listening to this

672
00:55:57,998 --> 00:56:05,757
who hasn't listened to that yet. Basically, one of his theses is that like the economy and the

673
00:56:05,757 --> 00:56:10,038
financial system goes off the rails, the more the banking sector consolidates. So we've seen that

674
00:56:10,038 --> 00:56:12,677
here in the United States over the last four decades,

675
00:56:12,777 --> 00:56:16,018
going from tens of thousands of banks to, I believe, 7,000,

676
00:56:16,817 --> 00:56:18,418
if I recall correctly.

677
00:56:20,038 --> 00:56:23,377
But you use the example of how China post-Mao

678
00:56:23,377 --> 00:56:28,257
sort of broke out of that sort of atrocity

679
00:56:28,257 --> 00:56:31,058
that happened when Mao was in charge.

680
00:56:31,058 --> 00:56:36,558
And I forget the name of the Chinese dictator

681
00:56:36,558 --> 00:56:38,177
took over after Mao, but he went to Japan.

682
00:56:38,337 --> 00:56:39,718
He was like, hey, how'd you guys...

683
00:56:40,038 --> 00:56:41,757
how do you have a function economy?

684
00:56:41,877 --> 00:56:43,698
And they said, you need, how many banks?

685
00:56:43,777 --> 00:56:44,898
They asked him, how many banks do you have?

686
00:56:44,918 --> 00:56:45,837
He said, we have one bank.

687
00:56:46,018 --> 00:56:48,377
He's like, well, you need more than one.

688
00:56:48,438 --> 00:56:51,257
You need a lot of banks and you need heavy competition

689
00:56:51,257 --> 00:56:54,058
in the banking sector, particularly at different,

690
00:56:54,637 --> 00:56:58,817
for different types of banks serving different size companies,

691
00:56:58,957 --> 00:57:01,257
specifically, like so small businesses, medium businesses,

692
00:57:01,438 --> 00:57:03,637
large corporations, like you need banks to match

693
00:57:03,637 --> 00:57:07,998
these sort of balance sheets of their clients

694
00:57:07,998 --> 00:57:08,898
in these subsectors.

695
00:57:08,898 --> 00:57:14,117
And it's obvious here in the United States that the banking sector is consolidating.

696
00:57:14,277 --> 00:57:16,477
It's accelerating, particularly post 2008.

697
00:57:17,117 --> 00:57:23,538
But while he was describing this, I was like, Bitcoin backed Chalmian Mint banks make a lot of sense.

698
00:57:23,677 --> 00:57:31,238
If you actually want to create an environment where you make it easy for banks to pop out,

699
00:57:31,898 --> 00:57:34,597
why not leverage the open protocol that is Bitcoin?

700
00:57:34,597 --> 00:57:38,777
And then some second layers that are being built on top of it.

701
00:57:38,898 --> 00:57:47,998
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.

702
00:57:48,977 --> 00:57:49,977
Yeah, yeah, absolutely.

703
00:57:49,977 --> 00:58:03,058
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.

704
00:58:03,058 --> 00:58:31,637
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.

705
00:58:31,637 --> 00:58:48,137
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.

706
00:58:48,137 --> 00:59:00,097
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.

707
00:59:00,877 --> 00:59:05,097
And it can take the economy a long time to recover from something like that once it blows up.

708
00:59:05,757 --> 00:59:06,777
It was fascinating.

709
00:59:06,777 --> 00:59:20,377
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.

710
00:59:20,377 --> 00:59:22,738
at the time, for instance, the yen,

711
00:59:22,998 --> 00:59:24,538
Japan was...

712
00:59:26,337 --> 00:59:28,238
From what I understand, it wasn't alive,

713
00:59:28,418 --> 00:59:31,238
but having listened to podcasts,

714
00:59:31,357 --> 00:59:32,058
read books about it,

715
00:59:32,137 --> 00:59:33,617
in the 80s, people thought Japan

716
00:59:33,617 --> 00:59:35,817
was going to be the number one superpower in the world.

717
00:59:36,738 --> 00:59:38,257
All the electronics we were buying here

718
00:59:38,257 --> 00:59:39,637
in the US were from Japan.

719
00:59:39,817 --> 00:59:41,738
They were dominating industry.

720
00:59:42,637 --> 00:59:44,617
And Richard Werner,

721
00:59:45,337 --> 00:59:47,777
he basically said the US

722
00:59:47,777 --> 00:59:48,957
did not want that to happen,

723
00:59:48,957 --> 00:59:55,698
So they went and like gave intentionally bad advice to Japan to sort of slow that progression down, that dominance down.

724
00:59:56,018 --> 00:59:58,558
Well, I mean, there is implication potentially for the Bitcoin, right?

725
00:59:58,617 --> 01:00:06,238
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.

726
01:00:06,238 --> 01:00:34,157
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.

727
01:00:34,157 --> 01:00:51,038
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.

728
01:00:52,177 --> 01:00:54,898
So, so, yeah, it's just something to really monitor, I think.

729
01:00:55,518 --> 01:00:58,877
Sure. I was told Bitcoin strengthens the dollar because stable coins exist.

730
01:01:01,457 --> 01:01:01,977
Yeah.

731
01:01:01,977 --> 01:01:02,038
Yeah.

732
01:01:04,157 --> 01:01:08,238
That's like, there is, what are your thoughts on that?

733
01:01:08,317 --> 01:01:13,738
Like, there's like a very wrong direct conflation with Bitcoin and stable coins, because like

734
01:01:13,738 --> 01:01:15,218
they're somewhat tangentially related.

735
01:01:15,218 --> 01:01:16,018
Yeah, yeah.

736
01:01:16,137 --> 01:01:22,157
I mean, the assumption is, I mean, I guess the generous take is that everyone is going

737
01:01:22,157 --> 01:01:28,198
to copy the model of Tether, which is that, you know, you back your stable coin.

738
01:01:28,224 --> 01:01:32,564
with short dated US dollar treasuries, three month bonds,

739
01:01:32,824 --> 01:01:35,764
and then 15% of your profits are going to go to Bitcoin.

740
01:01:36,564 --> 01:01:39,744
So in that sense, there is a kind of a situation where,

741
01:01:41,124 --> 01:01:44,964
especially if then somehow Tether can start paying out dividends

742
01:01:44,964 --> 01:01:48,544
or something like that, where the dollar is kind of shored up.

743
01:01:49,404 --> 01:01:54,284
But those are a lot of assumptions that all that model is going to be copied.

744
01:01:54,464 --> 01:01:55,804
Everything is going to stay that way.

745
01:01:55,804 --> 01:02:01,784
nobody's going to just extract the bitcoin at some point uh i mean the other option is that

746
01:02:01,784 --> 01:02:07,664
you build up a reserve but it's kind of like how do you do that you know you have like a bitcoin

747
01:02:07,664 --> 01:02:13,944
reserve that then is backing the dollar and then but then it has to be redeemable so how do you

748
01:02:13,944 --> 01:02:19,164
how do you honor those those redemptions you know we could have another de gaulle just like that who

749
01:02:19,164 --> 01:02:21,944
who just pulls out all the Bitcoin as soon as they can.

750
01:02:22,464 --> 01:02:22,644
Yeah.

751
01:02:23,364 --> 01:02:27,664
Did you see safe's presentation in Vegas this year?

752
01:02:27,964 --> 01:02:29,124
I think I heard about it.

753
01:02:29,144 --> 01:02:29,824
I haven't seen it.

754
01:02:30,224 --> 01:02:30,444
Yeah.

755
01:02:30,584 --> 01:02:31,104
It was like,

756
01:02:31,164 --> 01:02:31,764
it was pretty,

757
01:02:32,044 --> 01:02:33,404
it convinced me.

758
01:02:33,484 --> 01:02:33,584
Like,

759
01:02:33,624 --> 01:02:35,244
I think here in the United States,

760
01:02:35,244 --> 01:02:39,584
there's this administration and everybody advising them and everybody

761
01:02:39,584 --> 01:02:44,264
involved with stable coins more broadly is like convinced that like stable

762
01:02:44,264 --> 01:02:45,884
coins are going to save the U S treasury market.

763
01:02:46,004 --> 01:02:47,184
We're going to drive from incredible demand.

764
01:02:47,184 --> 01:02:55,044
there's gonna be a ton of uh there's gonna be a ton of adoption and it's gonna go from

765
01:02:55,044 --> 01:03:01,784
500 billion uh treasury demand as it stands today to trillions and trillions of dollars

766
01:03:01,784 --> 01:03:06,644
of demand and safe basically just made the point like hey if you even if you map this out and you

767
01:03:06,644 --> 01:03:11,164
look at the deficits and the interest on the debt like it's not going to make a material dent

768
01:03:11,164 --> 01:03:16,584
demand for treasuries it is it feels a bit like a hell maria or like they're just trying

769
01:03:16,584 --> 01:03:39,384
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.

770
01:03:40,284 --> 01:03:44,684
Once that happens, that's the next huge step towards hyperinflation.

771
01:03:45,584 --> 01:03:53,484
And, you know, because the Assygnats, for example, in France, which was issued just on the, you know, that's why the hyperinflation happened.

772
01:03:53,844 --> 01:03:56,904
Those are short-dated treasury bonds that were just used as money.

773
01:03:57,224 --> 01:04:01,344
And so if you think about a stablecoin, it's like, well, it's almost that, right?

774
01:04:01,424 --> 01:04:08,764
It's like they're just shy of sharing the dividend with the owner of the stablecoin.

775
01:04:08,764 --> 01:04:10,504
Like that's, that's maybe still missing.

776
01:04:11,024 --> 01:04:11,424
Yeah.

777
01:04:11,924 --> 01:04:21,984
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.

778
01:04:21,984 --> 01:04:27,404
When implemented and everything, when integrated and everything, when a cross border payments, like you're going to have a stable coin wallet everywhere.

779
01:04:27,564 --> 01:04:28,304
It's going to be incredible.

780
01:04:28,964 --> 01:04:31,184
And I think it's just like missing the forest for the trees.

781
01:04:31,184 --> 01:04:38,324
And you're making the point in the piece of like Bitcoin becoming the TCP IP of money protocols.

782
01:04:38,764 --> 01:04:43,904
That is extremely profound from a competitive perspective.

783
01:04:44,764 --> 01:04:44,924
Yeah.

784
01:04:45,044 --> 01:04:45,644
I mean, yeah.

785
01:04:47,044 --> 01:04:48,484
How do you compete with Bitcoin?

786
01:04:48,724 --> 01:04:53,784
You know, it's just, that's why we have, what, how many?

787
01:04:54,024 --> 01:05:00,744
200,000 cryptos that are with arrows in their back laying in the ditch that have been tried over the past 10 years.

788
01:05:01,644 --> 01:05:03,104
How do you compete with Bitcoin?

789
01:05:03,104 --> 01:05:04,624
It's so elegant.

790
01:05:05,004 --> 01:05:07,204
It has that momentum.

791
01:05:07,204 --> 01:05:13,264
It has the biggest firewall in the whole world of any kind of digital network protecting it.

792
01:05:14,444 --> 01:05:15,004
Yeah.

793
01:05:15,244 --> 01:05:27,744
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.

794
01:05:27,744 --> 01:05:34,344
because that is kind of a shock absorber for the crash that's coming in bonds and real estate and

795
01:05:34,344 --> 01:05:41,844
the deterioration in stock market valuations. Bitcoin can kind of rescue some of that value

796
01:05:41,844 --> 01:05:46,824
so that pensioners aren't left with nothing or that insurance companies still have something to

797
01:05:46,824 --> 01:05:54,684
pay out debts. But yeah, I mean, let's just hope for a relatively smooth transition because

798
01:05:54,684 --> 01:05:58,784
Because people might accuse us of like, oh, we're talking our own book here.

799
01:05:58,784 --> 01:06:03,424
But yeah, I mean, time will tell.

800
01:06:03,904 --> 01:06:06,404
Let's see how this clip does 10 years from now.

801
01:06:06,484 --> 01:06:08,524
It's like, I just think it's superior technology.

802
01:06:08,724 --> 01:06:11,064
So we have to take into account it winning.

803
01:06:11,264 --> 01:06:18,404
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.

804
01:06:18,804 --> 01:06:20,744
Sorry, we just think it's better.

805
01:06:22,804 --> 01:06:24,024
You can say we think it's better.

806
01:06:24,024 --> 01:06:25,684
I think objectively it's better.

807
01:06:25,784 --> 01:06:31,104
I mean, you have Vijay's famous Bitcoin gold fiat comparison chart.

808
01:06:31,224 --> 01:06:31,984
That'll be timeless.

809
01:06:32,244 --> 01:06:35,524
That'll be in textbooks centuries from now.

810
01:06:36,164 --> 01:06:39,724
But it's like, objectively, all the properties are superior.

811
01:06:40,764 --> 01:06:43,424
Yeah, and the nice thing is that people don't have to take our word for it.

812
01:06:43,564 --> 01:06:47,444
You can kind of go through and do your own research and do your own work

813
01:06:47,444 --> 01:06:53,964
and analyze the logic and try to find flaws and then make your own decision.

814
01:06:54,024 --> 01:06:55,944
yeah when it comes to comparing

815
01:06:55,944 --> 01:06:58,624
bitcoins like ethereum solana

816
01:06:58,624 --> 01:07:00,124
name your shit coin

817
01:07:00,124 --> 01:07:04,844
harpening back hearkening back to

818
01:07:04,844 --> 01:07:05,664
what i was saying

819
01:07:05,664 --> 01:07:08,804
happened in riga last weekend

820
01:07:08,804 --> 01:07:10,124
with like arc payments

821
01:07:10,124 --> 01:07:12,724
in the wild nobody knew they were using arc

822
01:07:12,724 --> 01:07:15,044
those btc pay servers at the merchants

823
01:07:15,044 --> 01:07:16,184
you were presented

824
01:07:16,184 --> 01:07:18,724
a lightning invoice everybody thought

825
01:07:18,724 --> 01:07:20,544
they were paying to like a lightning

826
01:07:20,544 --> 01:07:22,324
wallet

827
01:07:22,324 --> 01:07:24,184
but lightning was just a connective tissue

828
01:07:24,184 --> 01:07:25,724
it was actually going to like an ARK wallet

829
01:07:25,724 --> 01:07:28,004
with VTXOs

830
01:07:28,004 --> 01:07:29,984
and like it highlights

831
01:07:29,984 --> 01:07:32,704
the interoperable

832
01:07:32,704 --> 01:07:34,564
nature of Bitcoin

833
01:07:34,564 --> 01:07:36,164
and the layers being built on top of it

834
01:07:36,164 --> 01:07:38,044
and not only protocol

835
01:07:38,044 --> 01:07:40,484
to an individual layer above it

836
01:07:40,484 --> 01:07:42,404
whether it's the lightning network, liquid, ARK

837
01:07:42,404 --> 01:07:44,084
taught me immense but like

838
01:07:44,084 --> 01:07:46,164
then on the second layers

839
01:07:46,164 --> 01:07:47,984
there's multiple second layers between each other

840
01:07:47,984 --> 01:07:49,144
because of the lightning network

841
01:07:49,144 --> 01:07:52,204
yeah and what we'll see the critics do

842
01:07:52,204 --> 01:07:55,304
is that now they're just going to move the goalposts.

843
01:07:55,364 --> 01:07:57,364
It's like before they would say like,

844
01:07:57,484 --> 01:08:01,324
oh, you know, lightning, ha ha, you guys were so bullish on it

845
01:08:01,324 --> 01:08:03,824
and look at all the limitations.

846
01:08:04,764 --> 01:08:06,224
And so now we're like, well, you know,

847
01:08:06,264 --> 01:08:09,344
now we have another second layer protocol that's interoperable

848
01:08:09,344 --> 01:08:13,484
and that's massively extending functionality.

849
01:08:14,384 --> 01:08:16,904
And of course, you know, they'll probably move the goalposts.

850
01:08:17,004 --> 01:08:18,144
But that doesn't matter.

851
01:08:18,144 --> 01:08:25,404
The fact is, Bitcoin is becoming more and more functional and effective in the real world as we've been expecting.

852
01:08:26,164 --> 01:08:28,424
Yeah. And it's so exciting to see.

853
01:08:28,604 --> 01:08:31,204
And there's so many people sleeping on it.

854
01:08:31,204 --> 01:08:41,204
And I think it bears leaning into the freedoms with which Bitcoiners,

855
01:08:41,204 --> 01:08:45,824
and particularly Bitcoin protocol engineers, have approached building out the protocol,

856
01:08:46,464 --> 01:08:51,564
particularly in comparison to altcoins that have arisen in its wake.

857
01:08:52,264 --> 01:09:00,204
It's like, make sure that the base layer protocol is sufficiently distributed, open, accessible, simple,

858
01:09:01,204 --> 01:09:06,284
easy to interact with and then do all the complex stuff on top of that and there was

859
01:09:06,284 --> 01:09:15,724
many there's been 16 years now of that very conservative methodical slow approach to

860
01:09:15,724 --> 01:09:19,824
protocol development that has enabled this flourishing of second layers we didn't even

861
01:09:19,824 --> 01:09:26,864
mention spark from light spark like that but i was in georgia at this proto event that was like

862
01:09:26,864 --> 01:09:34,204
one of the top, the two, like, second layer discussions are about ARC and Spark. And these

863
01:09:34,204 --> 01:09:45,054
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

864
01:09:46,174 --> 01:09:46,694
Yeah.

865
01:09:48,914 --> 01:09:52,674
Yeah, I mean, I was going to say second layers.

866
01:09:54,334 --> 01:10:04,254
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.

867
01:10:04,254 --> 01:10:10,994
is that basically if you want to leave a legacy and build something to be proud of,

868
01:10:10,994 --> 01:10:16,614
you want to be putting your shoulders behind Bitcoin as an engineer or something rather than

869
01:10:16,614 --> 01:10:24,714
these, I don't know, these like one-off projects that they're like fireworks, like they're bright

870
01:10:24,714 --> 01:10:29,254
for a year or two and then they just fade and everybody forgets about them. It's like,

871
01:10:29,254 --> 01:10:36,394
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?

872
01:10:36,734 --> 01:10:44,454
Or do you want to contribute just a little bit to a project that has the potential to last for centuries?

873
01:10:45,154 --> 01:10:45,374
Yeah.

874
01:10:46,154 --> 01:10:58,054
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.

875
01:10:58,054 --> 01:11:06,154
and they they uh support a bunch of crypto projects and crypto funds in the space and

876
01:11:06,154 --> 01:11:12,254
they wanted a bitcoin rationalist uh perspective i won't say maximalist i will not give uh

877
01:11:12,254 --> 01:11:18,394
vitalica's flowers there uh and it was crazy this is january 24 so last year

878
01:11:18,394 --> 01:11:22,614
and there was like we were i was on a panel with other

879
01:11:22,614 --> 01:11:27,894
these venture capitalists in the crypto world and two out of the three

880
01:11:27,894 --> 01:11:34,354
really leaned into pump.fund like pump.fund is like one of the most innovative

881
01:11:34,354 --> 01:11:40,294
projects that's ever existed like the ability for any individual to create any mean point is going to

882
01:11:40,294 --> 01:11:47,254
really enable the the uh the sort of digital economy to flourish and it was just like

883
01:11:47,254 --> 01:11:52,494
wow i'm very proud of it and we'll go find there's it's up on youtube somewhere but i was like

884
01:11:52,494 --> 01:11:58,094
you guys are number one insane number two like what you're doing is immoral like we've seen this

885
01:11:58,094 --> 01:12:03,094
play out again do you not understand the dilution effect that occurs when you give the ability

886
01:12:03,094 --> 01:12:09,394
of anybody to hit a button and create a token and how do you expect any of these things to sustain

887
01:12:09,394 --> 01:12:14,814
any material market cap for longer than we've seen it with beanie babies right like yeah

888
01:12:14,814 --> 01:12:20,354
no but to your point about like what mark do you want to leave i was

889
01:12:20,354 --> 01:12:22,254
very disappointed in.

890
01:12:23,594 --> 01:12:24,514
And that's

891
01:12:24,514 --> 01:12:26,534
been the way, you touched on it earlier,

892
01:12:26,594 --> 01:12:28,454
but I do think we are getting to this point where the

893
01:12:28,454 --> 01:12:30,394
broader market, particularly the

894
01:12:30,394 --> 01:12:32,614
smart money, the serious money

895
01:12:32,614 --> 01:12:33,694
is looking at

896
01:12:33,694 --> 01:12:36,354
a lot of the serious money, not all of it,

897
01:12:36,394 --> 01:12:38,394
but a lot of it is looking at Bitcoin and being like, oh, this is a

898
01:12:38,394 --> 01:12:39,934
serious project and looking at everything else.

899
01:12:40,034 --> 01:12:41,734
What is this? This is childish.

900
01:12:43,254 --> 01:12:44,414
Yeah, yeah, exactly.

901
01:12:44,814 --> 01:12:46,134
I mean, and there's also some

902
01:12:46,134 --> 01:12:48,374
poetic justice, of course. I mean, in terms

903
01:12:48,374 --> 01:12:49,634
of, you know,

904
01:12:49,634 --> 01:12:55,574
maybe and a lot of bitcoiners have said this like you know you start off and you get excited about

905
01:12:55,574 --> 01:13:02,154
these better than bitcoin projects and and then you kind of uh you know you you kind of uh you see

906
01:13:02,154 --> 01:13:08,394
some black snows you know you're like oh and then you get humbled and and uh and so then in a way

907
01:13:08,394 --> 01:13:14,194
it's an opportunity to to uh to course correct and and and talk to some other people yeah

908
01:13:14,194 --> 01:13:18,174
So I think our advice here is focus on Bitcoin.

909
01:13:19,674 --> 01:13:21,134
Yeah, that's what I believe.

910
01:13:21,354 --> 01:13:24,474
But at the same time, at least that's what I try to do.

911
01:13:24,854 --> 01:13:27,974
The hardest thing is to know whether you have survivor's bias,

912
01:13:28,174 --> 01:13:32,274
whether you're just so full of yourself because you were just lucky

913
01:13:32,274 --> 01:13:34,674
betting on the right horse for 10 years in a row.

914
01:13:35,714 --> 01:13:37,514
But then you never know.

915
01:13:37,714 --> 01:13:38,874
It's still man-made.

916
01:13:38,874 --> 01:13:40,554
We're talking about man-made technology.

917
01:13:40,814 --> 01:13:43,454
So at least theoretically, something better could come around.

918
01:13:43,454 --> 01:13:48,654
Or there could be some blind spots that we share about a vulnerability in Bitcoin.

919
01:13:49,514 --> 01:13:58,074
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?

920
01:13:59,094 --> 01:13:59,694
I think it is.

921
01:13:59,694 --> 01:14:08,634
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.

922
01:14:08,634 --> 01:14:16,254
this is turning into something i i did not join the movement for quote unquote do you feel that

923
01:14:16,254 --> 01:14:24,634
at all or is this an inevitable outcome of the like what what comes with the adoption of a better

924
01:14:24,634 --> 01:14:30,694
money yeah i mean bitcoin either it was always a winner take all like whether either it was going

925
01:14:30,694 --> 01:14:36,794
to become big and boring or it was just going to disappear and uh and of course there is a kind of a

926
01:14:36,794 --> 01:14:45,754
more dystopian scenario where Bitcoin does become big and boring and people neglect its amazing

927
01:14:45,754 --> 01:14:53,094
capabilities of allowing self-sovereignty and autonomous storage and collaborative custody and

928
01:14:53,094 --> 01:15:01,234
all those things. Yeah. And then you get a somewhat better fiat system where people might

929
01:15:01,234 --> 01:15:03,914
still be stuck in Bitcoin banks and things like that.

930
01:15:04,134 --> 01:15:06,714
That's not really happening, I think.

931
01:15:06,754 --> 01:15:10,354
I think we have a healthy culture, but it's one of the risks, I think.

932
01:15:10,354 --> 01:15:15,834
If we lose that vigilance, then we could use some of the actual tangible perks.

933
01:15:16,814 --> 01:15:16,974
Yeah.

934
01:15:17,594 --> 01:15:22,074
I think you have anything to report, but as it stands today, more than 50% of Bitcoin

935
01:15:22,074 --> 01:15:24,394
that has been distributed in the market is held in self-custody.

936
01:15:25,314 --> 01:15:28,294
Yeah, held by individuals in self-custody, I believe, yeah.

937
01:15:28,294 --> 01:15:30,394
that's something

938
01:15:30,394 --> 01:15:33,054
that I don't think many people

939
01:15:33,054 --> 01:15:35,694
don't want to understand or appreciate

940
01:15:35,694 --> 01:15:37,914
you can't appreciate if you don't understand it

941
01:15:37,914 --> 01:15:39,874
I think there's an assumption that everybody's holding

942
01:15:39,874 --> 01:15:41,714
their coins on the exchange

943
01:15:41,714 --> 01:15:43,754
also there's an assumption that all the

944
01:15:43,754 --> 01:15:45,754
Bitcoiners are somehow magically

945
01:15:45,754 --> 01:15:47,434
on crypto Twitter

946
01:15:47,434 --> 01:15:49,874
it's like nope there's huge wells

947
01:15:49,874 --> 01:15:51,954
out there that nobody's ever seen

948
01:15:51,954 --> 01:15:53,134
or met online

949
01:15:53,134 --> 01:15:57,874
and I think that's for the better

950
01:15:57,874 --> 01:16:06,094
People who just kind of quietly live their life and take their time to decide what to do with this legacy.

951
01:16:07,314 --> 01:16:21,074
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.

952
01:16:21,074 --> 01:16:28,374
yeah so i think there's a few ways this is i tried to just simplify it because of course you can go

953
01:16:28,374 --> 01:16:35,174
at it from 20 different angles but uh but one one simple approach that i think makes sense is just

954
01:16:35,174 --> 01:16:42,434
to think of bitcoin as an insurance policy for the rest of your your investment assets um similar

955
01:16:42,434 --> 01:16:47,174
to how if you own a home you're going to get homeowner's insurance and just in case it catches

956
01:16:47,174 --> 01:16:52,514
fire, you never know. And so I think for homeowners, historically, they would pay like

957
01:16:52,514 --> 01:16:59,794
0.25% of the value of the home per year to the insurance. And so when I published the report

958
01:16:59,794 --> 01:17:05,694
two years ago, I said, maybe 2.5%, take 2.5% of the value of all your assets,

959
01:17:06,234 --> 01:17:12,634
put that in Bitcoin as a kind of a lump sum insurance policy. But I think two years later,

960
01:17:12,634 --> 01:17:19,174
it's sort of like there's smoke coming out of your kitchen already. Like, you know, it's kind of

961
01:17:19,174 --> 01:17:24,614
your house is starting to catch fire. And so the cost of insurance has to go up then. And so that's

962
01:17:24,614 --> 01:17:30,594
why I'm suggesting like 5% of your assets in Bitcoin in order to really, you know, if there's

963
01:17:30,594 --> 01:17:36,034
a bond, because people, a lot of people have sort of the 60, 40 portfolio or, you know, maybe you

964
01:17:36,034 --> 01:17:42,414
have, I think it's actually, most people have 60% in stocks and maybe 40% in bonds.

965
01:17:42,634 --> 01:17:57,624
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

966
01:17:57,804 --> 01:18:04,704
And then the other way to think about Bitcoin is as a speculative asset.

967
01:18:05,524 --> 01:18:08,764
And so speculative, of course, that word has a negative ring to it.

968
01:18:08,764 --> 01:18:24,124
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.

969
01:18:24,804 --> 01:18:35,604
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.

970
01:18:35,604 --> 01:18:41,624
And then other parts of the economy are going to be artificially lower valued.

971
01:18:41,844 --> 01:18:43,344
They won't have caught up yet.

972
01:18:43,884 --> 01:18:49,324
And so that's why I've been so bearish about real estate, for example, is because it was

973
01:18:49,324 --> 01:18:51,604
so easy to borrow money to buy real estate.

974
01:18:51,764 --> 01:18:58,184
Whereas if you wanted to get involved in commodities and growing wheat or pulling oil out of the

975
01:18:58,184 --> 01:19:02,084
ground, well, credit was a lot harder to get for those type of companies.

976
01:19:02,164 --> 01:19:04,224
So that's why they were undervalued for so long.

977
01:19:04,224 --> 01:19:11,244
one of the reasons. So anyway, long story, but from that point of view, I think Bitcoin is still

978
01:19:11,244 --> 01:19:16,884
really undervalued. It's not like you could go to the bank and get a loan to then invest in Bitcoin.

979
01:19:17,084 --> 01:19:23,584
That has just never been the case. And so that's why I think from a speculative point of view,

980
01:19:23,584 --> 01:19:31,264
you could think about like 20%, put 20% of your... So basically allocate one entire basket

981
01:19:31,264 --> 01:19:35,884
of your diversified portfolio to Bitcoin as an asset class.

982
01:19:36,644 --> 01:19:37,984
So that's the other suggestion.

983
01:19:38,864 --> 01:19:40,424
And then the final suggestion is,

984
01:19:40,584 --> 01:19:42,404
okay, we'll say that you're a younger person

985
01:19:42,404 --> 01:19:46,284
and you're thinking about reducing the age of retirement

986
01:19:46,284 --> 01:19:49,624
and being more comfortable with your family,

987
01:19:50,004 --> 01:19:54,384
then I think you could consider 20% to 50% of your assets

988
01:19:54,384 --> 01:19:55,864
invested in Bitcoin.

989
01:19:56,524 --> 01:19:57,704
And that's, of course, aggressive,

990
01:19:57,944 --> 01:20:00,624
but the goal is, of course, an aggressive one as well,

991
01:20:00,624 --> 01:20:03,704
to really drastically reduce your retirement age.

992
01:20:04,704 --> 01:20:06,724
Or you could get on zero like some of us

993
01:20:06,724 --> 01:20:07,904
and go 100% all in.

994
01:20:09,304 --> 01:20:10,864
Yeah, but it's hard to defend that

995
01:20:10,864 --> 01:20:15,184
as trying to be a reasonable financial analyst.

996
01:20:15,584 --> 01:20:16,464
I'm being facetious.

997
01:20:16,584 --> 01:20:17,344
I'm being facetious.

998
01:20:18,544 --> 01:20:23,624
But you also have advice on weighing the decision

999
01:20:23,624 --> 01:20:27,464
to get in with a lump sum or dollar cost averaging.

1000
01:20:27,464 --> 01:20:31,204
How do you view those two different allocation strategies?

1001
01:20:31,544 --> 01:20:31,724
Yeah.

1002
01:20:31,804 --> 01:20:37,824
So over the years, it's become pretty clear that they both have their benefits.

1003
01:20:38,164 --> 01:20:45,424
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.

1004
01:20:47,124 --> 01:20:49,444
So that's just more accessible for younger people.

1005
01:20:50,304 --> 01:20:53,864
Have just a fixed amount, invest in Bitcoin every week or every month.

1006
01:20:54,864 --> 01:21:00,084
And the added benefit of that is that it's also psychologically easier to bear.

1007
01:21:00,564 --> 01:21:07,244
Because if Bitcoin crashes, what comes to mind for you is like, oh, now I get to buy more Bitcoin more cheaply.

1008
01:21:07,424 --> 01:21:09,344
And so you just steadily accumulate.

1009
01:21:10,744 --> 01:21:23,844
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.

1010
01:21:23,864 --> 01:21:45,964
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.

1011
01:21:45,964 --> 01:21:59,244
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.

1012
01:21:59,564 --> 01:22:06,064
It might take that long to actually see your investment be in the green expressed in dollars.

1013
01:22:06,184 --> 01:22:14,264
Sorry, I was on mute because I was screenshotting a visualization of these two different strategies juxtaposed.

1014
01:22:14,264 --> 01:22:23,344
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.

1015
01:22:23,844 --> 01:22:24,964
So number of analyzed.

1016
01:22:25,184 --> 01:22:27,484
So this was WS Bitcoin.

1017
01:22:29,644 --> 01:22:30,464
Wicked Bitcoin.

1018
01:22:30,724 --> 01:22:31,344
Is this Wicked Bitcoin?

1019
01:22:32,124 --> 01:22:32,624
Not sure.

1020
01:22:33,164 --> 01:22:33,524
Not sure.

1021
01:22:34,364 --> 01:22:35,524
Yeah, this is a good visualization.

1022
01:22:38,904 --> 01:22:43,344
Lump sum does seem to be superior, like you mentioned.

1023
01:22:43,344 --> 01:22:53,424
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.

1024
01:22:53,804 --> 01:22:54,944
They go, I'm never going to make it.

1025
01:22:55,204 --> 01:22:58,704
But I always like to advise, just start.

1026
01:22:59,524 --> 01:23:02,724
Like you said, every week, every two weeks, every month, whatever you can stomach.

1027
01:23:03,344 --> 01:23:05,044
Just start and don't stop.

1028
01:23:05,744 --> 01:23:07,804
Go at it for four years and look up.

1029
01:23:07,944 --> 01:23:09,064
And I think you'll be very happy.

1030
01:23:09,564 --> 01:23:10,484
Consistency is king.

1031
01:23:10,624 --> 01:23:10,984
Absolutely.

1032
01:23:10,984 --> 01:23:13,924
Absolutely. And it's the same thing with the lump sum.

1033
01:23:14,084 --> 01:23:20,124
Then, you know, the consistency there is that you have to commit to holding it for a certain period.

1034
01:23:20,884 --> 01:23:28,584
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.

1035
01:23:28,764 --> 01:23:35,484
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.

1036
01:23:35,864 --> 01:23:39,284
It crashes 80 percent, 90 percent. You're still going to hold it.

1037
01:23:39,284 --> 01:23:45,664
so what's the amount that you could do that with and that's going to be different for everyone yeah

1038
01:23:45,664 --> 01:23:51,624
get ready for hey who knows maybe we're in new cycle territory maybe we have elongated

1039
01:23:51,624 --> 01:23:59,684
cycles maybe no more 80 drawdowns who knows maybe it's easier stomach for people to lump some

1040
01:23:59,684 --> 01:24:06,024
i mean there's always the possibility of a panic you know where the market is just composed of

1041
01:24:06,024 --> 01:24:11,704
humans and so no matter what we can we saw oil go negative like who could have imagined that

1042
01:24:11,704 --> 01:24:16,524
right like a physical asset all of a sudden trading at a negative price in the world

1043
01:24:16,524 --> 01:24:21,944
then you had all the uh all the reddit traders who are taking futures not understanding that uh

1044
01:24:22,884 --> 01:24:25,884
if the futures contract comes up negative you actually have to deliver oil

1045
01:24:25,884 --> 01:24:34,824
to comex not an ideal situation to be in yep yeah and i guess last but not least

1046
01:24:34,824 --> 01:24:42,904
actually second to last but not least you get into bitcoin how do you think people should look

1047
01:24:42,904 --> 01:24:53,624
at custodying it yeah i think um i guess what i usually say is just buy a little bit first you

1048
01:24:53,624 --> 01:24:59,324
know before all the complicated stories about how to hold it and how to you know just you know just

1049
01:24:59,324 --> 01:25:04,684
try to get dip your toe in the water like get a little bit of exposure uh the chances that whatever

1050
01:25:04,684 --> 01:25:08,464
platform you use, especially, you know, there's a few suggestions that I have, these are companies

1051
01:25:08,464 --> 01:25:14,104
that have been around for a while, that have built up some good reputation. The chance that that

1052
01:25:14,104 --> 01:25:19,244
company is going to go away overnight is very low. So let's just get a little exposure first,

1053
01:25:19,824 --> 01:25:26,124
hold it on that platform. And then once you have it and you start, you know, starting to kind of

1054
01:25:26,124 --> 01:25:32,604
feel it more, then you can start looking at different ways to hold your Bitcoin. And so I

1055
01:25:32,604 --> 01:25:39,344
think that the one way that's described that's becoming probably the least popular now is just

1056
01:25:39,344 --> 01:25:47,344
simple, single signature self-custody. And that's not to poo-poo that entirely. I think that it

1057
01:25:47,344 --> 01:25:56,564
might work for people. But I think there's a pretty general consensus among Bitcoiners that

1058
01:25:56,564 --> 01:26:17,114
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

1059
01:26:18,394 --> 01:26:22,474
And based on that one, it's like the evil mate attack.

1060
01:26:22,634 --> 01:26:28,174
She finds your hardware wallet or your backup keys, and then she can just withdraw the whole wallet.

1061
01:26:28,174 --> 01:26:30,754
But that scenario pretty much goes away with multisig.

1062
01:26:32,294 --> 01:26:37,114
And so then I think the next question is like, okay, do you hold all your own keys in multisig?

1063
01:26:37,454 --> 01:26:43,954
Or do you work together with other people or other companies to help you manage those keys?

1064
01:26:44,234 --> 01:26:49,854
And then, of course, the last scenario is you don't bother with your own keys at all.

1065
01:26:50,254 --> 01:26:52,454
You just deposit it at a third party.

1066
01:26:53,154 --> 01:26:56,414
Like, I don't know, could be a Fidelity Digital Assess, could be a Kraken,

1067
01:26:56,414 --> 01:27:03,214
could be any of the centralized exchanges, and then you hold it there.

1068
01:27:03,774 --> 01:27:07,134
I guess there's one other option is that you buy the Bitcoin ETF

1069
01:27:07,134 --> 01:27:12,674
or you buy one of the Bitcoin strategy companies.

1070
01:27:12,914 --> 01:27:14,554
That would be the last option.

1071
01:27:15,194 --> 01:27:15,314
Yeah.

1072
01:27:16,334 --> 01:27:19,034
My recommendation would be if you're going to hold it on an exchange,

1073
01:27:20,054 --> 01:27:21,774
I typically, you mentioned Kraken.

1074
01:27:21,874 --> 01:27:23,074
Kraken has been around for a while,

1075
01:27:23,074 --> 01:27:27,074
but I tend to lean towards the Bitcoin-only exchanges.

1076
01:27:28,114 --> 01:27:30,834
So if you're doing on an exchange, like Strike, River,

1077
01:27:31,994 --> 01:27:35,234
are the two that I recommend, particularly for the US.

1078
01:27:35,874 --> 01:27:40,234
There's really something to be said for focused on Bitcoin only.

1079
01:27:41,654 --> 01:27:43,714
It's just less distraction for the engineers.

1080
01:27:44,254 --> 01:27:48,954
Less distraction means, on average, probably better execution.

1081
01:27:50,214 --> 01:27:52,734
Yeah, I think there's absolutely something to be said for that.

1082
01:27:53,074 --> 01:28:02,214
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.

1083
01:28:02,374 --> 01:28:03,554
It's just so devastating.

1084
01:28:03,554 --> 01:28:11,714
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.

1085
01:28:12,114 --> 01:28:16,954
That means whatever future you had imagined could be wiped out.

1086
01:28:16,954 --> 01:28:21,434
you know yeah so that's something that i do kind of tell people is like hey consider

1087
01:28:21,434 --> 01:28:28,194
some some some different places to hold it especially if it's a significant amount

1088
01:28:28,194 --> 01:28:35,734
yeah it could be catastrophic and the and a lot of people get complacent there was just a i'm not

1089
01:28:35,734 --> 01:28:40,834
sure if you saw but there was a big exchange account earlier this week at btc turk 48 million

1090
01:28:40,834 --> 01:28:42,954
worth of Bitcoin and other assets

1091
01:28:42,954 --> 01:28:45,234
just drained from the exchange.

1092
01:28:45,714 --> 01:28:46,094
Oh, wow.

1093
01:28:46,734 --> 01:28:46,974
Yeah.

1094
01:28:47,214 --> 01:28:47,654
Yeah, wow.

1095
01:28:47,794 --> 01:28:49,034
So it's a real risk.

1096
01:28:49,134 --> 01:28:49,634
I think people,

1097
01:28:50,454 --> 01:28:51,954
we've seen it time and time again.

1098
01:28:52,194 --> 01:28:53,254
And now also, you know,

1099
01:28:53,314 --> 01:28:53,774
with AI,

1100
01:28:53,974 --> 01:28:55,134
it's just getting a little scary,

1101
01:28:55,274 --> 01:28:55,494
you know,

1102
01:28:55,574 --> 01:28:56,554
the amount of,

1103
01:28:56,734 --> 01:28:58,314
the abilities that they have

1104
01:28:58,314 --> 01:29:00,834
to social hack your account,

1105
01:29:00,914 --> 01:29:02,134
to pretend to be you

1106
01:29:02,134 --> 01:29:03,234
towards the exchange

1107
01:29:03,234 --> 01:29:04,574
in order to, whatever,

1108
01:29:04,694 --> 01:29:05,454
change your password

1109
01:29:05,454 --> 01:29:07,634
or somehow get access

1110
01:29:07,634 --> 01:29:11,974
is increased by an order of magnitude

1111
01:29:11,974 --> 01:29:13,774
because of AI's abilities.

1112
01:29:15,334 --> 01:29:15,774
Yeah.

1113
01:29:16,474 --> 01:29:17,194
So be careful.

1114
01:29:17,314 --> 01:29:17,734
You get in.

1115
01:29:20,294 --> 01:29:21,334
Practice makes perfect.

1116
01:29:21,574 --> 01:29:22,754
I like to tell people,

1117
01:29:22,854 --> 01:29:23,734
spin up a mobile wallet,

1118
01:29:23,954 --> 01:29:24,794
write down the seed,

1119
01:29:25,454 --> 01:29:26,934
send a very little bit of Bitcoin,

1120
01:29:27,114 --> 01:29:27,854
$10, $20,

1121
01:29:29,214 --> 01:29:30,614
erase the wallet from your phone,

1122
01:29:30,754 --> 01:29:31,414
delete the app,

1123
01:29:31,494 --> 01:29:32,274
redownload it,

1124
01:29:32,394 --> 01:29:33,454
recover from your seed,

1125
01:29:33,454 --> 01:29:35,314
get comfortable sending and receiving,

1126
01:29:35,314 --> 01:29:39,594
and then seriously contemplate beefing up your security

1127
01:29:39,594 --> 01:29:40,394
because it's important.

1128
01:29:42,434 --> 01:29:42,574
Yeah.

1129
01:29:43,334 --> 01:29:45,034
Yeah, I mean, it's true.

1130
01:29:46,714 --> 01:29:50,834
There's no real shortcuts.

1131
01:29:52,374 --> 01:29:55,754
It's true because you have to put in some work.

1132
01:29:57,594 --> 01:29:59,014
Even when you're saying like,

1133
01:29:59,054 --> 01:30:00,174
oh, I'm going to work with companies,

1134
01:30:00,334 --> 01:30:01,994
well, then you've got to do some due diligence

1135
01:30:01,994 --> 01:30:03,974
on which companies are you going to work with

1136
01:30:03,974 --> 01:30:09,374
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

1137
01:30:09,374 --> 01:30:15,174
to trust some talking heads that recommend things. So then who are you going to trust? So you then

1138
01:30:15,174 --> 01:30:20,894
want to kind of at least put in some work thinking about, okay, what's going on here? Who am I

1139
01:30:20,894 --> 01:30:29,834
trusting to make these decisions? And is that based in reality? Yeah. Think about it, freaks.

1140
01:30:29,834 --> 01:30:36,194
I want to end it on this because I thought this was a great way to end the piece.

1141
01:30:36,274 --> 01:30:38,614
Logan, pull up the very last page of the report.

1142
01:30:39,434 --> 01:30:42,754
I just really like the commentary you put under this.

1143
01:30:43,374 --> 01:30:45,854
This work is titled The Power of the Peace.

1144
01:30:45,974 --> 01:30:52,854
It was created in 1577 to convey the hope of a young beleaguered nation to achieve peace in its territories,

1145
01:30:53,194 --> 01:30:58,714
which was eventually achieved in 1648 with the formal recognition of the independent Dutch Republic,

1146
01:30:58,714 --> 01:31:05,154
The etch by, sorry for butchering this, Wierks von Cleve is full of symbolism.

1147
01:31:05,734 --> 01:31:09,794
It shows how prudence, reason, force, and time can work together to control violence in society.

1148
01:31:10,354 --> 01:31:16,414
The swords and lances from the war are transformed into sickles and plowshares, retooling society for peace.

1149
01:31:16,954 --> 01:31:21,914
In the grand furnace displayed center stage, we see a display of technology as a force for good.

1150
01:31:22,414 --> 01:31:28,654
This is also our hope for an expectation of the Cypherpunk project and its current apex.

1151
01:31:28,714 --> 01:31:33,814
Bitcoin, channeling human effort in a way that encourages society to grow more orderly and

1152
01:31:33,814 --> 01:31:38,214
peaceful. Bitcoin contributes to a harmonious world by serving as a scarce, robust money

1153
01:31:38,214 --> 01:31:43,374
that protects families' wealth through space and time, by acting as an incorruptible tool

1154
01:31:43,374 --> 01:31:49,134
for builders, supporting them in creating honest and enduring institutions. And I thought this was

1155
01:31:49,134 --> 01:31:53,934
a perfect way to enter because it really anchors the reader back to why we're in this in the first

1156
01:31:53,934 --> 01:32:00,394
place and not to get a hopeful future. Exactly. To me, that piece is really helping me reflect

1157
01:32:00,394 --> 01:32:08,154
about, I think it's a fact that capital in itself isn't bad. Technology in itself isn't bad. It can

1158
01:32:08,154 --> 01:32:17,794
be used for bad things, but we can retool. We can retool things and start using them for better and

1159
01:32:17,794 --> 01:32:22,834
making like in the picture, right? I mean, you got swords and then you create plowshares out of

1160
01:32:22,834 --> 01:32:28,894
them. So all this monetary energy that is in the world, we don't have to delete it. We don't have

1161
01:32:28,894 --> 01:32:36,434
to destroy what's there. We're just working on retooling it and making it so that people's

1162
01:32:36,434 --> 01:32:42,494
ability to act in a fair way is enhanced. And then of course, we have to also build fair institutions

1163
01:32:42,494 --> 01:32:49,534
and networks to do that. So I think that's very important these days because there is this kind

1164
01:32:49,534 --> 01:32:55,754
of tendency towards maybe like Marxism or nihilism, or it's like, oh, you know, business

1165
01:32:55,754 --> 01:32:56,614
is bad.

1166
01:32:56,614 --> 01:33:03,074
And so we need to just kind of take the reins and, or like do the revolution and start from

1167
01:33:03,074 --> 01:33:04,654
scratch and delete everything.

1168
01:33:05,094 --> 01:33:05,894
I think that's terrible.

1169
01:33:06,074 --> 01:33:13,114
I think, you know, it's much better to, and it's harder to do, but it's the only way to

1170
01:33:13,114 --> 01:33:20,274
really get to where we want to come is is good to go through instead of uh trying to deny the

1171
01:33:20,274 --> 01:33:26,634
reality and uh and trying to start from scratch like nobody's ever achieved that i think no for

1172
01:33:26,634 --> 01:33:32,414
all you luigi populist out there um find god first and then find bitcoin there's we're gonna work

1173
01:33:32,414 --> 01:33:41,594
through this amen it's uh we're gonna do it tour you're a tour de force been writing these reports

1174
01:33:41,594 --> 01:33:42,594
for a decade now.

1175
01:33:42,994 --> 01:33:45,194
First mid-cycle update.

1176
01:33:45,614 --> 01:33:46,414
And I appreciate you

1177
01:33:46,414 --> 01:33:47,574
for spending your Friday afternoon

1178
01:33:47,574 --> 01:33:48,614
with me to go through it.

1179
01:33:49,254 --> 01:33:49,834
It was a blast.

1180
01:33:50,074 --> 01:33:50,574
Thanks, Marty.

1181
01:33:51,414 --> 01:33:52,474
You go enjoy your weekend.

1182
01:33:53,234 --> 01:33:54,414
And we'll link to this

1183
01:33:54,414 --> 01:33:55,294
in the show notes.

1184
01:33:55,374 --> 01:33:56,234
Freaks, go check it out.

1185
01:33:56,514 --> 01:33:57,874
Send it to anybody

1186
01:33:57,874 --> 01:34:00,294
in your extended network,

1187
01:34:00,434 --> 01:34:01,334
family, friends,

1188
01:34:01,894 --> 01:34:02,854
who you think is

1189
01:34:02,854 --> 01:34:04,434
sort of on the cusp

1190
01:34:04,434 --> 01:34:06,714
of either becoming Bitcoin curious

1191
01:34:06,714 --> 01:34:07,574
or already is

1192
01:34:07,574 --> 01:34:08,694
and needs a little push

1193
01:34:08,694 --> 01:34:09,214
over the ledge.

1194
01:34:09,214 --> 01:34:10,494
This report, I think,

1195
01:34:10,494 --> 01:34:12,154
is the push that could get him over there.

1196
01:34:14,214 --> 01:34:15,154
Peace and love, freaks.

1197
01:34:15,574 --> 01:34:15,774
Okay!