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It's gone nuts. All the central banks going nuts.

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So it's all acting like safe haven.

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I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins.

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In the world of fiat currencies, Bitcoin is the victor.

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I mean, that's part of the bull case for Bitcoin.

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If you're not paying attention, you probably should be.

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Mr. Check, there's too much paper Bitcoin out there. The price is being suppressed.

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How do we get out of this? Doing well.

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Yeah, man, I'm just watching red candles and you know, the market makers, they keep pushing the price down. Coinbase has got nothing on their balance sheet. The whole thing's a scam.

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It's a scam. By the end of the year, there's going to be 2000 Bitcoin treasury companies in public markets. They're going to have 42 million Bitcoin and the price is going to be at 107k.

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Yeah. My favorite, I replied to you on a tweet just before I went to bed last night. You were

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talking about Canada's sovereign reserves and they've got like 350 billion. And you said,

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imagine having 350 billion of some other country's paper and not buying 3 million Bitcoin.

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And the first thing that struck me is, guys, we are so big that you can fit a G7 country's

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sovereign balance sheet into 15% of the circulating supply. And just let that sink in for a second.

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3 million Bitcoin is Canada's net worth.

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You know, it's an amazing stat that we're this big.

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So don't get caught up in all the price suppression.

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I mean, we're a stone's throw from all-time high.

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And, you know, the market's absorbing billions of dollars a day.

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It's bullish as anything.

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It really is.

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And as somebody who's been in it for a while, I like to see the coiling.

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I like to see the coiling.

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I like this whole year.

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Started right before we ended last year.

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All-time highs dipped down.

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came back up tariff tantrum back down now we're back to 107 you wrote a great newsletter

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last night uh my time i believe yesterday morning you were tired no last night your time last night

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this morning my time this morning my time i read on at a 6 a.m flight this morning so right on the

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flight and i think you highlighted a lot of good data on chain that really made me extremely bullish

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confirmed my bias towards the coiling seems like in the mid to high 90s range we've got a nice

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sort of strong base of people that's scooping up coins there and you're you're saying we we may be

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at p coddle or you're referencing the term p coddle the the metric p coddle yes i uh i tend to

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there's always this uh supply squeeze narrative that floats around and like you know i'm generally

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one of those folks is like, guys, supply squeezes, don't get too caught up on it.

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But the truth is there are periods of time where there is a supply tightness.

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So I'm not saying supply, same as paper Bitcoin. Paper Bitcoin exists in derivatives, in fraud.

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There's all sorts of reasons why paper Bitcoin exists. You don't need it as your core thesis

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to explain why the price isn't higher. You can easily explain it with sell side pressure.

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That sell side pressure, and this is, I think, what a lot of people miss,

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it's super bullish. The fact that we've had billions of dollars, tens of billions of dollars

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a day sometimes of serious sell-side pressure and the price is $107,000, that is the signal.

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So what you're referencing, you can look at, there's a few different ways we can look at it.

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You can look at like short-term, older cost basis, but also I've got these heat maps that

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basically just look at the UTXO set, give every single price, every single coin or UTXO a price

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when it last moved. And let's put a density heat map and see where all the coins last transacted.

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And in that 90 to 100K region, it's a massive, just an absolutely massive band. If you take that

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realized value, so all of the coins that have last moved, and again, some of them change hands,

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some of them are in exchange balance sheets, some of them are just some dude transacting,

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doesn't matter. Don't get too caught up in the details. It actually doesn't matter.

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when you look at where every coin transacted 55% of all dollars invested in bitcoin or held in

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bitcoin or saved however you want to frame it has a cost basis above 90k that's insane that's a

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super bullish scenario where the market is saying there's a flaw here right so the way that i look

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at that i don't really want to see the market go below 90k i don't think that would be a good sign

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i think it would take a lot you'd have to have a pretty major event happen i think i don't want to

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see that if it does go below 90k then i'll probably start saying you know something is wrong um and

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it's probably going to be a global thing not not a bitcoin thing uh but um in lieu of that if we

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stay above 90k it's just a huge amount of support there there's a huge amount of demand we're seeing

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demand come in and like that's that's where we're at don't worry about price suppression look at the

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fact that there is so much demand that we've built this very very stable floor at 90k you know 90k

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six months ago we're at 70k so you know it's just a whole different animal now yeah there's a few

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things here i think you mentioned it in the letter and i'm beginning to ask questions like people

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dming me like do you think there's paper bitcoin price suppression is black rock playing games and

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if you look at it just looking at hoddle waves it looks like long-term hodlers are selling and

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then if you mention that to people they'll be like oh why are the ogs getting out it's like

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they're not getting out it's like they've been holding bitcoin for so long their cost basis is

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so low and they want to treat themselves to say all right i'm going to take some off the top at 105k

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and you know why this is i think probably the most important thing because life is more valuable than

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your bitcoins your family is more valuable than your bitcoins the home that you want to raise

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your family and is more important than your bitcoins you know bitcoin's not there to die

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with it's you know just i think letting go of this idea that it's some like saintly spiritual

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thing that you can never sell and it's a sin like go and live your life not living your life is is

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far worse go and enjoy your life and there's but you know there's some guys you'd like they want to

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go and buy a house they want to pay off their debts the fact that they're debt free not everything

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is about financial returns and actually you can almost go the other way and say by being so fixated

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on the gains in bitcoin is a very fiat mindset bitcoin buys you opportunity and you know time

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It gives you time back with the things that really matter.

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That's what it's worth.

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That's what it's for.

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Like if you're not using it to improve your life and your family's life,

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what is the point of being here?

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Right?

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And people just can't rock that.

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So you got to hodl forever.

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Michael Saylor.

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We're going to 21 million.

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Why would you sell?

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If you can get past the hodl forever,

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that's actually the Bitcoin mentality.

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Don't get caught up in this fiat gains thing.

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You know, for example, I talk about this all the time.

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I don't own gold to outcompete Bitcoin.

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I own gold because I'm going to sell it in order to get into the housing market.

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Its job is to not be volatile, but be the same trade.

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I don't care about the financial gains.

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I'm not there to make money on it.

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It's a tool to give me life chips.

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So it has a very specific purpose.

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I view Bitcoin in the same way.

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Its job is that in the long arc of time,

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it's going to get my kids through a good education.

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It's going to pay off my debt at some point in time.

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I'll sit there and let it ride for the next decade.

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But it has a purpose to make my life and my family's life better.

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Yeah.

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And so this is talking about OG selling.

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And I don't know if you've written about this or been following along,

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but obviously last year post ETF launch,

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there was a bunch of 10K filings of institutions,

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head funds, others getting into Bitcoin.

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Like how much of any outflows of ETFs can be driven by rebalancing

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that could be affecting the sell pressure as well?

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Yes.

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So I have actually done a bit of a study on this.

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So there's a few elements.

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I ran through a lot of the, it was a couple of, probably a couple of quarters ago, but

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I looked at all of those 13F filings and basically looked at how much of the ETF flows were

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institutions.

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And it more or less aligned with Eric Balkunis and James Safer to talk about similar numbers.

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About 20%, and again, this is probably half a year ago, but about 20% of the ETFs appeared

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to be institutions.

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The rest was mostly retail.

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In my initial interpretation of the ETFs, I imagine there's a lot of hodlers out there

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who finally got a vehicle to put their 401ks in there.

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We call it superannuation in Australia.

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Whatever their retirement assets,

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ETFs are a very good vehicle for that

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because you've got to do audits

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and there's all sorts of,

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every country's got their own system.

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So I thought retail would naturally gravitate

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towards the ETFs with that pool of capital

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because much the same as what Sale is doing,

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going after trapped pools of capital,

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there's retirement funds that for the first time

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have now got access easily into Bitcoin.

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So I think that's a big component.

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when we look at the and I actually ran this study we're talking just before that I was in

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in Seoul for the Bitcoin Seoul conference and one of my talks at the industry day was all about the

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how Bitcoin's institutionalizing what's actually happening under the surface and one of the charts

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that I had in there was looking at the weekly inflows and outflows from the ETFs and what's

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quite interesting is if you look at the outflows an average outflow week is about 160 million

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which is not small money but the average inflow week is like 780 million so it's like a 5x multiple

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on the outflows so yeah we get an outflow of 160 million but then it's followed by an inflow of

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500 million 700 million a billion so the inflows are just so much bigger and then the other thing

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you can do is you can overlie CME open interest and what we've generally seen is that CME open

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interest will increase as the ETFs get inflows and it will decrease on the outflows. So of those

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outflows that are occurring, almost always it's matched almost one for one with CME open interest

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declining. Now, not all of that is going to be cash and carry, but a lot of it is. And I think

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just recognizing this is actually not people like there was a big thesis at the start of the ETFs.

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I think Jim Bianco was a big proponent of it. The ETFs are just an orange poker chip and all

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these TradFi guys are going to come and just like, you know, gamble on the market. What's actually

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happening is that when we get outflows, most of the time it's like structural. It's a hedge fund

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who's just degrossing and turning off their risk neutral position. So there's a whole lot of these

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things like actually it looks like the ECFs are just hodlers. People are just holding on to these

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things and we are not getting any sustained periods of outflows. One divergence I have seen,

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and I haven't fully passed it yet, but it does make sense, is the BlackRock ETF this year. So

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So through most 2024, BlackRock and Fidelity were always increasing at about the same rate.

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BlackRock was bigger, but Fidelity was kind of keeping track.

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Since the start of this year, however, BlackRock is just peeling away.

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And it has to do with the options, right?

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I can't think of any other reason why.

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There's this kind of centralization of liquidity.

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If you've got the most amount of liquidity in the underlying,

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then the options are going to be the most liquid.

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There's not really much reason to trade the second best option market.

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everyone wants to trade the best option market so it actually makes sense that blackrock's peeling

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away but uh every single other etf combined is pretty much flat since december in total flows

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and blackrock is just up and to the right it's more than double fidelity now it's like 55 billion

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versus um fidelity's uh i think they're like 20 billion in total inflows so what does that bring

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us to totally in in total aum it's 135 billion which is 35 for last i checked i asked rock a

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a little while back.

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I think we're 50% of the gold ETF.

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So you take all the gold ETFs

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and put them together

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and we're halfway.

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Yeah.

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That's insane.

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Yeah, 260 or something.

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I mean, it's historically

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the fastest to this AUM

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of any ETF launch ever.

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It's kicking ass.

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It's incredible.

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It's a signal in and of itself.

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Sup freaks.

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00:13:28,560 --> 00:13:30,660
People thought we were going to World War III two weeks ago.

223
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You had that crash down the high 97s, quickly bought up, and I think that was incredibly bullish for two reasons.

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One, it highlighted the fact that Bitcoin is a liquidity hedge when you need liquidity and nothing else is open.

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If you own Bitcoin, you have liquidity.

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This is a 24-hour.

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seven-day-a-week, 365-day-a-year market.

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And I think it proved that use case.

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Obviously, there was some risk off going on

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as the United States was bombing Iran,

231
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but Bitcoin was open.

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People were flying to cash for whatever reason

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and went to bolster their balances.

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And we crashed, but I wouldn't even call it a crash.

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We dipped, and it was quickly bought up.

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And interestingly, we haven't seen the bid

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for Treasury's U.S. dollar.

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Like generally speaking, if you were to wind this clock back two years, three years, and you had the exact same set of headlines, the DXY would be through the roof.

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And it's not.

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We're not seeing this like flight to US safe haven assets, which is quite interesting.

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And just as a simple heuristic, whenever your timeline is full of TradFi guys looking at the one minute chart for Bitcoin saying, look how it's not a hedge.

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it's usually a good time to actually step in and buy that dip because it's hilarious how they'll

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grab the one minute chart to look at literally the longest duration asset that exists which is

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bitcoin and gold and they'll look at these two and be like see how they're diverging on my charts

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like pro zoom out yeah and look at yeah look at u.s treasury debt still around like four and a half

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percent range for the 10 year and you think about if you're an international government or if you're

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foreign government looking at the united states treasury market as a safe haven assets like it's

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four and a half percent over 10 years enough for me i think you're going to need those yields to go

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up and and then you get some i saw trump tweeted yesterday you know in in uh in as many words

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nothing stops this train right basically saying like we're going to have to monetize this thing

251
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at the short end um we're going to put someone in in power in uh in the fed's chair when when

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power goes we're going to put someone in he's gonna be super dovish he'll lower rates then

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we'll just finance the short end it's like oh man they're just being really really explicit here

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that the uh the print the print's coming they have no choice they're going to grow their way

255
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out is a euphemism for uh number go up yeah there's uh i didn't dive too deep into this

256
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past the headline uh and the short clip that i watched but it seems like even scott percent

257
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has made like a phase shift in in perspective and i think this morning he was on cnbc or

258
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an interview was posted that he did yesterday or earlier this week where he was basically yeah well

259
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we don't have to term out the debt we can we can play on the short end and it was funny because as

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the trump administration came into power they were pointing and laughing and yelling for all the

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short-term debt that she issued and now they're like yeah we can we can play in the it just goes

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to show that they don't they don't have a choice and and i wrote a piece i think it would have been

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april i did a very big like i sat down i really this is when we're in bed for the fact it would

264
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been when we last spoke and i really tried to get my head around what was going on and i built this

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table and it was like these three different games of chicken there was the u.s versus china

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there was uh trump versus the republicans and then there was um beset versus uh jay pal and i was

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trying to work out all these different games because someone's going to have to blink in all

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three of these different games and like at some point in time i was like trump's going to come up

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against he may want to do all the most radical changes in the world at some point the republicans

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have to get reelected and it looks like we've just hit that point in time where he's like you

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know you guys have to get reelected but you know let's all get on the same page and let's go

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uh you know that the we still don't have really a trade deal between the u.s and china but i'm not

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convinced that the u.s has the strongest negotiating position because china is just

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the world's factory and i think there's a lot of challenges there as well and at some point in time

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i think jay powell just has to deal with the fact that his boss the government has to be financed

276
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and so he's holding out

277
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and I've got to give it to Jay Powell

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he has a very very difficult job

279
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I don't envy him in the least

280
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and look again

281
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we can rally all we want against central

282
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bankers given the role that he

283
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has and the job that he has to do

284
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he got rates to 5%

285
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no one thought he could do this and he's

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holding out against a president who's

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tweeting you're a numbskull every

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second day

289
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he's doing alright he's got a tough job

290
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I wouldn't want to be him that's for sure

291
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Yeah, and I wrote about this last week and was tweeting about it last week as well, but it's crazy the short-termism that exists these days and the amnesia that people have.

292
00:18:08,580 --> 00:18:14,000
like trump banging the drum to lower rates like to me it's like wait a second like if

293
00:18:14,000 --> 00:18:19,260
the economy is not completely imploding unemployment's not blowing out inflation is coming

294
00:18:19,260 --> 00:18:25,420
down but it's still higher than the historical target and interest rates are are relatively

295
00:18:25,420 --> 00:18:32,160
elevated like isn't lowering rates a signal that something's wrong and if you're a president or

296
00:18:32,160 --> 00:18:45,150
anybody just a citizen a consumer a business owner in the economy there like higher rates producing a more accurate opportunity cost and cost of capital throughout the economy

297
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A good thing that we should want to be able to sustain.

298
00:18:48,490 --> 00:18:49,290
Like, why is this?

299
00:18:50,090 --> 00:18:56,630
I know why, but I think it's just hilarious psychologically how Zerp, Zerp, Zerp was like a meme.

300
00:18:56,810 --> 00:19:00,950
Like, this is a bad thing for the better part of the last 20 years.

301
00:19:00,950 --> 00:19:02,970
And all of a sudden now it's like, no, we need Zerp.

302
00:19:03,030 --> 00:19:03,770
We need Zerp again.

303
00:19:03,770 --> 00:19:04,510
It's a good thing.

304
00:19:04,610 --> 00:19:06,130
It's being positioned as a good thing.

305
00:19:06,590 --> 00:19:06,750
Yeah.

306
00:19:06,830 --> 00:19:09,430
I mean, at the end of the day, the bond market is bigger than Trump.

307
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It's bigger than the government.

308
00:19:10,530 --> 00:19:11,570
It's the big thing, right?

309
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It's the one that calls time.

310
00:19:14,130 --> 00:19:17,170
And the bond market, like they can't finance themselves.

311
00:19:17,410 --> 00:19:20,870
The reason they need to lower rates is not because the economy is in a good or a bad shape.

312
00:19:20,930 --> 00:19:21,930
It's because the debt's too big.

313
00:19:22,290 --> 00:19:24,330
And the number just doesn't make sense.

314
00:19:24,490 --> 00:19:27,590
The math don't math when you've got, what is it, 37 trillion now.

315
00:19:28,050 --> 00:19:29,970
By the time we talk next, it'll be 38, 39.

316
00:19:31,410 --> 00:19:31,610
Yeah.

317
00:19:31,610 --> 00:19:38,830
and i don't think it's a foregone conclusion that if the fed lowers the fed fund rate target

318
00:19:38,830 --> 00:19:46,010
that 10-year and 30-year yields are going to go down the last time the 10-year went up yeah yeah

319
00:19:46,010 --> 00:19:52,050
totally it's i mean it's a it's a tough position as bitcoin is we've obviously talked about this

320
00:19:52,050 --> 00:19:56,830
for a long time and i mean i know for me i mean again my background civil engineering i knew

321
00:19:56,830 --> 00:20:02,290
nothing about the bond market three, four, five years ago. I had nothing. Now, again, I'm not going

322
00:20:02,290 --> 00:20:05,630
to pretend that I understand how it works, but I know a hell of a lot more than I used to.

323
00:20:06,230 --> 00:20:09,830
And I'm just looking at the situation where you're like, they're kind of stuffed, aren't they? And

324
00:20:09,830 --> 00:20:14,870
this is why Lynn's meme is just so effective because no matter which way you want to run

325
00:20:14,870 --> 00:20:19,810
this calculus, you're like, guys, it's just math. It just doesn't work anymore. You have to print

326
00:20:19,810 --> 00:20:24,050
the money. There's just no other way. And then once you reach that conclusion, you realize it's

327
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all jaw-burning.

328
00:20:25,210 --> 00:20:27,090
They just have to create narratives.

329
00:20:27,450 --> 00:20:29,190
And the thing I find so fascinating

330
00:20:29,190 --> 00:20:31,330
is that the market kind of has to go along

331
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with a lot of the time.

332
00:20:32,870 --> 00:20:35,350
It's a great example of shelling points.

333
00:20:35,870 --> 00:20:36,650
So for example,

334
00:20:37,730 --> 00:20:39,050
the bond market is supposed to be

335
00:20:39,050 --> 00:20:40,250
the smart man in the room.

336
00:20:40,390 --> 00:20:41,290
They're supposed to be the market

337
00:20:41,290 --> 00:20:43,570
that understands what's going on

338
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and they're trying to judge.

339
00:20:44,830 --> 00:20:45,750
It's the big one.

340
00:20:46,490 --> 00:20:48,950
And yet they still plug in CPI

341
00:20:48,950 --> 00:20:49,870
as their bond,

342
00:20:50,010 --> 00:20:51,230
as their inflation number.

343
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And we all know CPI is bullshit,

344
00:20:52,890 --> 00:20:57,990
but they have to plug it in because every bond trader knows that every other bond trader has

345
00:20:57,990 --> 00:21:02,510
their own they've got their own inflation metric but every other bond trader is also plugging that

346
00:21:02,510 --> 00:21:07,270
in so the shelling point is what other number are we going to reference so they all have to use the

347
00:21:07,270 --> 00:21:11,570
same number because they know that everyone else is using the same number and in order to go out

348
00:21:11,570 --> 00:21:15,510
on the risk curve and say well i actually think that number's wrong i'm going to bet against it

349
00:21:15,510 --> 00:21:20,230
you're betting against the mass and eventually the mass will get there but it's not an immediate

350
00:21:20,230 --> 00:21:24,050
thing and this is like you know not quite a perfect analogy but this is why in like the big

351
00:21:24,050 --> 00:21:29,970
short they knew the housing market was cooked but it took years between when they realized that it

352
00:21:29,970 --> 00:21:36,430
was cooked and it actually imploding that period of time that funding cost you you get you get

353
00:21:36,430 --> 00:21:40,910
wrecked in that middle period so it's a really interesting thing that like simple things like

354
00:21:40,910 --> 00:21:45,830
cpi is bogus and yet everyone has to use it because of the shelling point i find these dynamics in

355
00:21:45,830 --> 00:21:51,710
finance so fascinating all right it's a hard a hard-coded input into all these calculations that

356
00:21:51,710 --> 00:21:56,010
everybody knows it's a bad one but we got to use i'm having visions of michael berry going to the

357
00:21:56,010 --> 00:22:01,110
whiteboard or christian bale playing michael berry going to the the whiteboard and and writing the uh

358
00:22:01,110 --> 00:22:06,790
the losses he was stomaching during that period while he was waiting the carry yeah yeah and i'm

359
00:22:06,790 --> 00:22:12,630
happy you brought up lynn because i was there in vegas when she gave what i thought was the most

360
00:22:12,630 --> 00:22:18,530
succinct and clear and distilled version terrific wasn't it of her nothing stops this train and

361
00:22:18,530 --> 00:22:23,490
we'll stay we'll stay on like backward looking stuff for this point my other favorite presentation

362
00:22:23,490 --> 00:22:32,790
at that conference was safes safe adenomus's uh presentation on the tether and the u.s treasury

363
00:22:32,790 --> 00:22:37,250
market because here in the united states looks like we're going to pass the genius act which

364
00:22:37,250 --> 00:22:42,290
creates regulatory clarity for stable coin issuers and all the politicians and pundits

365
00:22:42,290 --> 00:22:48,670
and macro think fluencers are saying that we need stablecoin regulation.

366
00:22:48,670 --> 00:22:49,390
We need clarity.

367
00:22:49,730 --> 00:22:54,310
We need stablecoins to proliferate because they're going to create a lot of demand

368
00:22:54,310 --> 00:23:00,510
for our treasury market, which demand is waning right now from traditional buyers.

369
00:23:00,690 --> 00:23:03,050
And so we need to bolster up this new buyer.

370
00:23:03,210 --> 00:23:04,850
It'll drive significant demand.

371
00:23:04,930 --> 00:23:09,790
And I really loved SAFE's presentation because it was a real finger in the eye

372
00:23:09,790 --> 00:23:14,490
of the sort of the mainstream belief

373
00:23:14,490 --> 00:23:19,130
around stablecoin regulatory clarity

374
00:23:19,130 --> 00:23:21,310
and what it will do for the treasury market specifically.

375
00:23:21,470 --> 00:23:23,650
And he's basically just looking at Tether,

376
00:23:23,790 --> 00:23:27,990
the biggest stablecoin issuer on the planet by far

377
00:23:27,990 --> 00:23:29,290
and what they're doing.

378
00:23:29,490 --> 00:23:30,490
And he basically pointed out,

379
00:23:30,630 --> 00:23:32,770
like the math doesn't math here either.

380
00:23:34,290 --> 00:23:36,270
Very conservative assumptions too.

381
00:23:36,450 --> 00:23:38,330
Like it was like 10 X's or something.

382
00:23:38,330 --> 00:23:43,750
and yeah and and uh the reduction on interest rates is like very very it's a strong correlation

383
00:23:43,750 --> 00:23:48,570
like it's just still happening guys no they're and they're taking those yields and funneling them

384
00:23:48,570 --> 00:23:53,430
into bitcoin and i really when you're thinking about like creative thinking and thinking outside

385
00:23:53,430 --> 00:23:58,150
the box like tether becoming like a bitcoin stable coin at some point in the future because

386
00:23:58,150 --> 00:24:03,070
they'll be getting like their company reserves and i believe treasury reserves now maybe that

387
00:24:03,070 --> 00:24:09,050
will change with the genius act passing which i believe for u.s issuers specifically they can't

388
00:24:09,050 --> 00:24:13,970
have bitcoin as reserve backing the stable coins that they're issuing but we know tether the

389
00:24:13,970 --> 00:24:20,350
company is separate from tether's sort of uh the liquid backing of the tokens themselves yeah

390
00:24:20,350 --> 00:24:23,910
there's the backing of the stable coins and then there's tether the business who is generating

391
00:24:23,910 --> 00:24:30,070
profits from that product yeah exactly and stacking a ton of bitcoin yeah and gold what

392
00:24:30,070 --> 00:24:36,770
they got like 30 tons or something of gold it's crazy yeah all this is just to be said

393
00:24:36,770 --> 00:24:39,870
getting back to what we were saying earlier you can't stop this strain like it doesn't it seems

394
00:24:39,870 --> 00:24:44,790
like the big print has to come mathematically anyway you look and they just have to convince

395
00:24:44,790 --> 00:24:50,770
people to uh to you know in some narrative shape or form it's okay that's not what's happening

396
00:24:50,770 --> 00:24:56,390
don't don't believe your lying eyes they just have to convince enough people again that's why

397
00:24:56,390 --> 00:25:01,550
brought up the cpi thing you just have to convince them enough to just go along with it for another

398
00:25:01,550 --> 00:25:05,950
three months and then another six months and then just go along just just another three months which

399
00:25:05,950 --> 00:25:11,070
we're almost there just massage these people through the journeys you just debase them through

400
00:25:11,070 --> 00:25:15,710
this uh you know and it's gonna take a long time to do it but you know there's going to be a suddenly

401
00:25:15,710 --> 00:25:19,950
moment everyone just goes all right i'm sick i'm done with it i'm done with it i'm out yeah i think

402
00:25:19,950 --> 00:25:24,390
the holy grail narrative sort of framing that they're going with right now is that the productivity

403
00:25:24,390 --> 00:25:30,330
gains from ai proliferating are going to be such that we can stomach more inflation because

404
00:25:30,330 --> 00:25:36,490
productivity is going to explode exponentially don't worry it's good for you yes it'll be easier

405
00:25:36,490 --> 00:25:42,130
and it's like as somebody who's been playing with the tools and leveraging it myself like i can

406
00:25:42,130 --> 00:25:48,670
totally see that like we've done many things here at tftc that would not have been possible uh without

407
00:25:48,670 --> 00:25:54,870
going out and hiring somebody which um which we're typically conservative about doing but we've been

408
00:25:54,870 --> 00:26:01,690
able to do a lot more with the same team that we've had for the last year and it certainly has

409
00:26:01,690 --> 00:26:08,450
made us more productive but um does that you also didn't hire somebody else yes that's the trade-off

410
00:26:08,450 --> 00:26:14,990
right so yes you're more productive internally but you also didn't hire other people yeah so

411
00:26:14,990 --> 00:26:16,310
That's a big question, but that's what they're going to say.

412
00:26:16,530 --> 00:26:18,790
It's like productivity is going to be insane.

413
00:26:19,170 --> 00:26:21,450
You may not be hiring people, but more people are going to start more businesses.

414
00:26:21,950 --> 00:26:25,910
Little side gigs that they can make some money off of.

415
00:26:26,230 --> 00:26:26,570
That's it.

416
00:26:26,710 --> 00:26:29,670
Yeah, everyone's doing a vibe-coded side project.

417
00:26:30,250 --> 00:26:30,430
Yeah.

418
00:26:31,110 --> 00:26:31,710
Hey, vibe-coding.

419
00:26:31,950 --> 00:26:32,270
Try it.

420
00:26:32,430 --> 00:26:34,970
You may need it just to survive moving forward.

421
00:26:35,050 --> 00:26:35,690
They're going to print money.

422
00:26:36,430 --> 00:26:38,910
You have these massive productivity tools at your fingertips,

423
00:26:38,910 --> 00:26:41,970
and you just got to shoot your shot and try to make some money out there

424
00:26:41,970 --> 00:26:43,510
because AI is coming for your job.

425
00:26:43,510 --> 00:26:46,570
if you're an Excel monkey out there.

426
00:26:47,510 --> 00:26:47,870
Be aware.

427
00:26:48,590 --> 00:26:49,330
Well, it's funny, actually.

428
00:26:49,510 --> 00:26:51,570
I mean, like one of the many things

429
00:26:51,570 --> 00:26:53,390
that I'd like back in 2019

430
00:26:53,390 --> 00:26:55,130
where I was probably falling down

431
00:26:55,130 --> 00:26:55,890
the Bitcoin rabbit hole.

432
00:26:55,990 --> 00:26:57,390
Listen to plenty of your pods, by the way.

433
00:26:58,050 --> 00:26:59,210
Walking around Regent's Park,

434
00:26:59,290 --> 00:27:00,670
listening to you and Matt

435
00:27:00,670 --> 00:27:02,690
shill self-custody to me.

436
00:27:03,330 --> 00:27:04,610
But in that process,

437
00:27:06,030 --> 00:27:07,350
I used to download...

438
00:27:07,350 --> 00:27:08,630
Coinmetrics had this CSV

439
00:27:08,630 --> 00:27:10,090
with all the original on-chain data,

440
00:27:10,170 --> 00:27:11,170
like the very first time

441
00:27:11,170 --> 00:27:12,270
you could get data for this stuff.

442
00:27:12,270 --> 00:27:14,270
and I used to download it every day,

443
00:27:14,390 --> 00:27:15,170
plug it into my spreadsheet.

444
00:27:15,210 --> 00:27:16,150
I'm an engineer, right?

445
00:27:16,170 --> 00:27:17,250
So I use spreadsheets for everything.

446
00:27:17,710 --> 00:27:19,410
Plug it into my Excel sheet.

447
00:27:19,490 --> 00:27:21,670
And I was like, eventually, I can't keep doing this.

448
00:27:21,710 --> 00:27:22,770
This process sucks.

449
00:27:23,090 --> 00:27:24,470
Waiting for all your charts to update.

450
00:27:24,990 --> 00:27:27,750
So that's actually where CheckOnChain originated from

451
00:27:27,750 --> 00:27:30,070
is me going, okay, I've got to get off Excel.

452
00:27:30,270 --> 00:27:32,230
And it was my excuse to go and learn Python

453
00:27:32,230 --> 00:27:34,110
and learn how it all works.

454
00:27:34,450 --> 00:27:35,990
And it's still building today, right?

455
00:27:35,990 --> 00:27:36,710
It's still plugging away.

456
00:27:36,790 --> 00:27:39,250
I think it's 250,000 lines or something of code

457
00:27:39,250 --> 00:27:40,170
that prints out every day.

458
00:27:40,170 --> 00:27:45,050
and yeah that was my my job to get off excel and now like aside from the occasional little

459
00:27:45,050 --> 00:27:49,790
accounting thing here or there everything is python i don't touch excel anymore it's a beautiful

460
00:27:49,790 --> 00:27:56,530
product too anybody listening should go check it out it's check on chain.com correct check on

461
00:27:56,530 --> 00:28:01,730
chain.com oh i was talking about excel but yes no check on chain is beautiful as well yes serious

462
00:28:01,730 --> 00:28:06,650
about your bitcoin start acting like it unchained just launched the financial freedom bundle a

463
00:28:06,650 --> 00:28:12,050
curated pack that includes a premium bitcoin book a new hardware wallet guide and access to a private

464
00:28:12,050 --> 00:28:17,550
macro event with turd demister legend it's time to take control of your generational wealth go to

465
00:28:17,550 --> 00:28:25,550
unchained.com slash tftc to request yours that's unchained.com slash tftc pretty hot package freaks

466
00:28:25,550 --> 00:28:29,950
go pick it up all right moving forward you're pretty bullish if i if i read your newsletter

467
00:28:29,950 --> 00:28:34,890
correct this morning on the plane when i was a little groggy you're pretty excited about what

468
00:28:34,890 --> 00:28:42,830
stands before us here i mean i find it hard to look at the price being at 107k 108k a support

469
00:28:42,830 --> 00:28:47,390
floor below us at 90k which again can it fail yes do i expect it to no not my base case

470
00:28:47,390 --> 00:28:54,510
if it does then we flip around but we're in a very very healthy spot and uh you know even just

471
00:28:54,510 --> 00:28:58,550
simple things like funding rates funding rates are like neutral to negative and i spent a bunch

472
00:28:58,550 --> 00:29:02,210
of time last week trying to work out why that is and there's a few reasons why funding rates could

473
00:29:02,210 --> 00:29:07,270
be negative, lots of cash and carry trade. Generally speaking, if you cash and carry trade,

474
00:29:07,350 --> 00:29:13,090
which is where people long spot short the future, if the yield you get from that is at the moment,

475
00:29:13,130 --> 00:29:17,870
it's like two and a half percent annualized. Just buy a T-bill. What on earth are you doing a

476
00:29:17,870 --> 00:29:23,070
complex cash and carry trade to earn half the yield and a risk-free rate? It doesn't make any

477
00:29:23,070 --> 00:29:29,950
sense. I'd be very surprised if it's cash and carry. There's relative value trades where people

478
00:29:29,950 --> 00:29:33,310
would like go and, you know, short Bitcoin, long shit coin.

479
00:29:33,730 --> 00:29:35,470
I don't see any of that happening, right?

480
00:29:35,650 --> 00:29:37,530
I don't see that going on in the crypto world.

481
00:29:38,050 --> 00:29:40,550
So really, at the end of the day, there's just like people just short.

482
00:29:40,850 --> 00:29:42,610
People just like net short.

483
00:29:42,790 --> 00:29:44,370
And that appears to be what's going on.

484
00:29:44,410 --> 00:29:46,530
So there's a bunch of people who just net short Bitcoin.

485
00:29:47,050 --> 00:29:50,350
And I wrote a piece on, it was probably two weeks ago,

486
00:29:50,390 --> 00:29:52,210
a week and a half ago called Imagine Being Short.

487
00:29:52,690 --> 00:29:56,430
And I literally put myself in the shoes of options and futures traders

488
00:29:56,430 --> 00:29:58,370
and tried to work out why they were short.

489
00:29:58,370 --> 00:30:00,330
and in the options space

490
00:30:00,330 --> 00:30:02,030
it basically looked like

491
00:30:02,030 --> 00:30:02,590
I think it was out

492
00:30:02,590 --> 00:30:03,250
to the end of July

493
00:30:03,250 --> 00:30:03,990
it might have actually been

494
00:30:03,990 --> 00:30:05,050
to the end of June

495
00:30:05,050 --> 00:30:07,650
there was a lot of put options

496
00:30:07,650 --> 00:30:08,830
like people were just like

497
00:30:08,830 --> 00:30:09,930
very very hedged

498
00:30:09,930 --> 00:30:11,350
and someone in my comments

499
00:30:11,350 --> 00:30:12,090
actually reminded me

500
00:30:12,090 --> 00:30:12,910
that we've got tariffs

501
00:30:12,910 --> 00:30:14,130
that start to roll off

502
00:30:14,130 --> 00:30:15,570
or that 90 day pause comes off

503
00:30:15,570 --> 00:30:16,090
I was like oh yeah

504
00:30:16,090 --> 00:30:16,670
that makes sense

505
00:30:16,670 --> 00:30:17,970
so there's a bunch of people

506
00:30:17,970 --> 00:30:19,190
and again options

507
00:30:19,190 --> 00:30:20,790
are a more sophisticated instrument

508
00:30:20,790 --> 00:30:21,850
you're not going to get

509
00:30:21,850 --> 00:30:23,270
like your average DJ in there

510
00:30:23,270 --> 00:30:23,930
who just wants to like

511
00:30:23,930 --> 00:30:25,050
gamble poker chips

512
00:30:25,050 --> 00:30:26,070
they're going to be

513
00:30:26,070 --> 00:30:27,210
more sophisticated actors

514
00:30:27,210 --> 00:30:28,110
so you're telling me

515
00:30:28,110 --> 00:30:30,030
that the guys who are in the sophisticated market

516
00:30:30,030 --> 00:30:32,870
are hedged for downside for a very rational reason.

517
00:30:33,490 --> 00:30:34,590
When you're hedged for downside,

518
00:30:34,810 --> 00:30:36,050
you're not concerned about downside.

519
00:30:36,270 --> 00:30:37,410
That's the whole point of hedging.

520
00:30:38,030 --> 00:30:40,390
And then you've got in the more degenerate markets,

521
00:30:40,730 --> 00:30:42,570
funding rates are basically negative.

522
00:30:43,030 --> 00:30:44,270
There's a lot of short interest.

523
00:30:44,690 --> 00:30:46,750
When I look at which exchanges it's happening on,

524
00:30:47,430 --> 00:30:48,670
yeah, there's some on Binance,

525
00:30:48,770 --> 00:30:49,570
there's some on Bybit,

526
00:30:49,690 --> 00:30:50,710
there's some on CME,

527
00:30:50,850 --> 00:30:51,590
they're the big three.

528
00:30:52,350 --> 00:30:54,010
But a lot of it's on these like other,

529
00:30:54,090 --> 00:30:55,290
I just put them in the bucket of other.

530
00:30:55,290 --> 00:30:56,970
All these exchanges you've never heard of,

531
00:30:57,010 --> 00:30:57,850
you don't want to hear of.

532
00:30:58,110 --> 00:30:59,710
that's where all the people are short.

533
00:30:59,790 --> 00:31:00,410
So I'm like, okay,

534
00:31:00,410 --> 00:31:02,790
so I've got the most degenerate traders in the world

535
00:31:02,790 --> 00:31:03,650
who are net short.

536
00:31:04,170 --> 00:31:05,990
I've got a bunch of sophisticated guys

537
00:31:05,990 --> 00:31:07,510
who are hedged for downside

538
00:31:07,510 --> 00:31:09,170
because of a very rational reason,

539
00:31:10,030 --> 00:31:11,830
which where's the max pain here?

540
00:31:12,610 --> 00:31:14,170
Probably a down and up.

541
00:31:14,330 --> 00:31:15,150
And I wrote a piece called,

542
00:31:15,230 --> 00:31:16,410
we got to go down to go up.

543
00:31:16,550 --> 00:31:18,050
And that feels like how it goes.

544
00:31:18,130 --> 00:31:18,910
You just go and find this,

545
00:31:18,990 --> 00:31:20,070
like tap a little bit of liquidity.

546
00:31:20,650 --> 00:31:22,790
We went down to 98K, as you mentioned before,

547
00:31:22,950 --> 00:31:26,250
super strong bounce off the top of that support floor

548
00:31:26,250 --> 00:31:26,950
I was talking about.

549
00:31:26,950 --> 00:31:28,850
so everything makes sense to me.

550
00:31:29,510 --> 00:31:31,710
The next level is just go and tag all-time high

551
00:31:31,710 --> 00:31:33,270
and grab all those people who are short

552
00:31:33,270 --> 00:31:34,390
and going to get liquidated up there.

553
00:31:34,530 --> 00:31:36,550
That, to me, feels like where it wants to go.

554
00:31:37,250 --> 00:31:38,630
There's a whole bunch of other elements, right?

555
00:31:38,730 --> 00:31:40,210
I mean, long-term holders, they're still selling,

556
00:31:40,370 --> 00:31:42,970
but significantly less than usual.

557
00:31:43,750 --> 00:31:46,550
So at the peak in November, December,

558
00:31:46,730 --> 00:31:49,430
there was something like 40,000 Bitcoin per month.

559
00:31:50,450 --> 00:31:52,570
Sorry, per day, not per month, per day.

560
00:31:52,910 --> 00:31:55,850
So there's 40,000 Bitcoin that were older than six months

561
00:31:55,850 --> 00:31:56,990
coming back to life.

562
00:31:57,230 --> 00:31:59,870
And yes, I get this point all the time.

563
00:31:59,970 --> 00:32:02,970
Not every coin that transacts is being sold.

564
00:32:03,090 --> 00:32:03,550
That's true.

565
00:32:03,830 --> 00:32:06,410
But it's very funny that they all seem to transact

566
00:32:06,410 --> 00:32:07,870
when the market's ripping to the upside.

567
00:32:07,870 --> 00:32:10,730
So it actually doesn't matter where it's 40K or 35K or whatever.

568
00:32:11,050 --> 00:32:13,290
It's more than it was yesterday, significantly more.

569
00:32:13,390 --> 00:32:14,650
So look at the trend and the direction.

570
00:32:15,110 --> 00:32:17,730
There is a lot of old coin that comes back to market

571
00:32:17,730 --> 00:32:18,670
when the market rallies.

572
00:32:19,130 --> 00:32:20,770
We're not seeing anything quite like that.

573
00:32:20,970 --> 00:32:22,890
So really where I sit at the moment,

574
00:32:23,570 --> 00:32:25,710
I find it very hard to be bearish.

575
00:32:25,850 --> 00:32:31,370
The one thing actually that I think is notably bearish is just the on-chain activity.

576
00:32:31,930 --> 00:32:33,350
The blockchain is dead, right?

577
00:32:33,390 --> 00:32:33,950
Empty blocks.

578
00:32:34,350 --> 00:32:37,030
So that's the one thing I'm looking at going, I don't like that.

579
00:32:37,090 --> 00:32:38,590
I would much rather it be full.

580
00:32:39,470 --> 00:32:43,130
There's a case to be made that is because people are punting on treasury companies and

581
00:32:43,130 --> 00:32:43,390
all that.

582
00:32:43,430 --> 00:32:45,590
But even that is probably not a great sign.

583
00:32:45,670 --> 00:32:47,250
That's a speculative signal.

584
00:32:47,490 --> 00:32:51,130
So that's really the main area of like, let's be careful.

585
00:32:51,430 --> 00:32:53,290
But I just draw a very simple line in the sand.

586
00:32:53,290 --> 00:32:55,410
when we're above that short-term cost basis,

587
00:32:55,470 --> 00:32:56,390
which is like 98K,

588
00:32:57,090 --> 00:32:57,930
you're allowed to be bullish.

589
00:32:58,230 --> 00:33:00,610
For me, until we're below the short-term cost basis,

590
00:33:00,710 --> 00:33:01,490
you're allowed to be bullish

591
00:33:01,490 --> 00:33:02,910
because literally every time we're above it,

592
00:33:02,950 --> 00:33:03,590
it's generally bullish.

593
00:33:04,250 --> 00:33:05,270
Once you go below it,

594
00:33:05,270 --> 00:33:06,450
you've got to flip over

595
00:33:06,450 --> 00:33:08,890
and there's no reason I can see

596
00:33:08,890 --> 00:33:10,650
that we should go below that level.

597
00:33:11,190 --> 00:33:12,390
We bounced off it earlier.

598
00:33:12,590 --> 00:33:14,770
If it goes down to 90K, it's possible,

599
00:33:15,030 --> 00:33:16,690
but we need to bounce higher.

600
00:33:17,130 --> 00:33:18,590
If we go below 90K,

601
00:33:18,690 --> 00:33:19,430
then I've got to flip around

602
00:33:19,430 --> 00:33:20,870
and be like, something's very wrong here

603
00:33:20,870 --> 00:33:21,530
and I'm wrong.

604
00:33:21,930 --> 00:33:22,650
I'm now going to say,

605
00:33:22,650 --> 00:33:25,550
I think we might be in a fairly protracted bear market,

606
00:33:25,850 --> 00:33:27,890
but we're a long way from that.

607
00:33:28,070 --> 00:33:29,530
So there's a lot of reason to be bullish

608
00:33:29,530 --> 00:33:31,610
and until proven otherwise, I think be a bull.

609
00:33:32,550 --> 00:33:33,230
Be a bull.

610
00:33:33,630 --> 00:33:34,570
It's always a good advice.

611
00:33:35,530 --> 00:33:38,230
And as it pertains to on-chain activity,

612
00:33:38,330 --> 00:33:40,650
I agree, it's weird going to mempool.space

613
00:33:40,650 --> 00:33:42,410
and seeing all these empty blocks.

614
00:33:42,670 --> 00:33:43,590
It's very odd.

615
00:33:44,050 --> 00:33:46,650
The meme, the guy holding the stick, like do something.

616
00:33:46,770 --> 00:33:48,670
And then I think my own Bitcoin users,

617
00:33:48,850 --> 00:33:51,470
like I transact in Bitcoin almost every day.

618
00:33:51,470 --> 00:33:59,630
and if i'm uh and obviously i'm more of a hardcore user very well versed in the the different tools

619
00:33:59,630 --> 00:34:05,650
and ways of spending bitcoin but if i just look at my own usage uh it's probably like 90 to 10

620
00:34:05,650 --> 00:34:11,010
lightning to on-chain in terms of actually spending so you're 90 lightning 10 on-chain

621
00:34:11,010 --> 00:34:17,430
yes like you're paying contractors like when i look at my my footprint so both myself personally

622
00:34:17,430 --> 00:34:22,290
in the business, we're probably like three to five transactions a month, thereabouts.

623
00:34:23,010 --> 00:34:27,310
Depends if we're doing, if we have any sales or something, but like something in that ballpark.

624
00:34:27,950 --> 00:34:32,010
And that's why when I look at the chain, I'm like, okay, if just this one entity,

625
00:34:32,350 --> 00:34:38,910
we're a small entity and an individual in a business, if we're doing five to maybe 10

626
00:34:38,910 --> 00:34:43,330
in a month, that's like my chunk of the block space that I'm consuming.

627
00:34:43,330 --> 00:34:47,890
you're telling me that we don't have enough people to kind of fill up at least a couple of

628
00:34:47,890 --> 00:34:52,810
blocks here or there so that's the one area i'm like surprising so we're mostly on chain versus

629
00:34:52,810 --> 00:34:58,250
lightning yeah because i wonder if you think about like steak and shake big meme here in the united

630
00:34:58,250 --> 00:35:04,970
states they launched their point of sale lightning only if you think of the mobile wallets that most

631
00:35:04,970 --> 00:35:11,490
people are onboarding to wall to satoshi speed wallets climbing up the ranks after the steak and

632
00:35:11,490 --> 00:35:18,250
shake launch which they're running the back end obviously strike as custodial and even yeah like

633
00:35:18,250 --> 00:35:22,350
in the i'm thinking of like if i get a zap right invoice and i have the option to pay on-chain or

634
00:35:22,350 --> 00:35:27,310
lightning lightning automatically just because so here's the interesting thing right maybe this is a

635
00:35:27,310 --> 00:35:32,870
question that we can riff on long term lightning and any kind of system that scales there is the

636
00:35:32,870 --> 00:35:37,130
perverse incentive where it actually makes the on-chain security system because if you have a

637
00:35:37,130 --> 00:35:41,910
fee market, right? In a way they work at odds with each other, which is a very interesting dynamic.

638
00:35:42,590 --> 00:35:46,490
It's actually why I'm generally supportive of things like covenants, because I think that as

639
00:35:46,490 --> 00:35:52,010
you make the on-chain side more useful, and even actually just as a side note, something I was

640
00:35:52,010 --> 00:35:59,150
thinking about a lot of my walk yesterday, if you have things like covenants, thefts are actually

641
00:35:59,150 --> 00:36:03,410
harder. So if you're an exchange, the exchange can set up, so it has to transact to a specific

642
00:36:03,410 --> 00:36:09,410
way. So you actually make this paper Bitcoin thing. If you worry about entities being hacked

643
00:36:09,410 --> 00:36:14,330
or stolen or not having the coins or whatever, there's actually more clever ways to ensure that

644
00:36:14,330 --> 00:36:19,070
they can't be hacked as easily. So I think that's actually a very promising side to the equation.

645
00:36:19,070 --> 00:36:24,610
But as we make the base layer more effective at doing those types of transactions, you can actually

646
00:36:24,610 --> 00:36:30,410
start to see more stuff getting built on top. So you almost have to combat the scaling side of

647
00:36:30,410 --> 00:36:34,950
lightning with more functionality no and i'm not saying go and just you know plug everything into

648
00:36:34,950 --> 00:36:40,890
bitcoin but the more you make the bitcoin base layer useful to have those transactions go down

649
00:36:40,890 --> 00:36:46,030
to the base layer it actually tries to counteract that idea of people just transacting on lightning

650
00:36:46,030 --> 00:36:50,250
because when we're in seoul i think we went to two or three dinners and we settled by lightning

651
00:36:50,250 --> 00:36:56,490
and again there was probably like i don't know 15 people so say 15 transactions on lightning

652
00:36:56,490 --> 00:37:00,790
and i would say probably three or four of those had to do an on-chain to get onto lightning

653
00:37:00,790 --> 00:37:06,910
beforehand so you know it it definitely is going to be a factor in that regard yeah i've always

654
00:37:06,910 --> 00:37:24,300
been a believer this is that you can apply jevin paradox to yes txos in terms of you make them more efficient covenants a great example of making a utxo more efficient You can do more with it You get more optionality and therefore it should drive more demand

655
00:37:24,720 --> 00:37:25,020
Yes.

656
00:37:25,200 --> 00:37:25,900
No, I tend to agree.

657
00:37:25,900 --> 00:37:26,120
It should drive fees.

658
00:37:26,580 --> 00:37:26,700
Yeah.

659
00:37:27,540 --> 00:37:32,640
I'm actually quite keen to see how CTV plays out

660
00:37:32,640 --> 00:37:34,680
because obviously we've gone through this

661
00:37:34,680 --> 00:37:36,240
as Bitcoin is a couple of times.

662
00:37:36,660 --> 00:37:39,160
I wasn't around for the 2017 wars.

663
00:37:39,280 --> 00:37:40,920
I bought the top in that market cycle,

664
00:37:41,040 --> 00:37:42,200
so I've certainly read about it

665
00:37:42,200 --> 00:37:43,540
and understood what happened back then.

666
00:37:43,540 --> 00:37:46,300
But Speedy Trial was the first time I think,

667
00:37:46,560 --> 00:37:50,420
first time I saw like a full scale network wide software.

668
00:37:51,120 --> 00:37:54,320
It's gonna be very interesting to see how CTV plays out

669
00:37:54,320 --> 00:37:55,820
because there's obviously a lot of support for it.

670
00:37:55,840 --> 00:37:56,760
And I think rightfully so.

671
00:37:57,220 --> 00:37:58,640
It's a fairly simple upgrade.

672
00:37:58,760 --> 00:38:00,260
I'm not gonna pretend that I understand it fully

673
00:38:00,260 --> 00:38:01,100
on the technical side.

674
00:38:01,180 --> 00:38:03,020
I think a lot of this stuff is quite hard to reason about,

675
00:38:03,580 --> 00:38:04,820
but there's enough people out there

676
00:38:04,820 --> 00:38:06,560
who I'd certainly value their opinion.

677
00:38:06,700 --> 00:38:08,040
I've listened to their views on it.

678
00:38:08,520 --> 00:38:11,000
I'm gonna be very curious to see how we approach this

679
00:38:11,000 --> 00:38:12,040
as a Bitcoin network.

680
00:38:12,040 --> 00:38:13,640
because I think there's been a lot of movement

681
00:38:13,640 --> 00:38:15,580
towards the ossification side of the equation,

682
00:38:16,040 --> 00:38:16,980
which I think is incorrect.

683
00:38:18,060 --> 00:38:19,040
Everyone's allowed their own view,

684
00:38:19,120 --> 00:38:21,780
but I don't think ossification is the right outcome for now.

685
00:38:21,860 --> 00:38:22,940
But it's going to be curious to see

686
00:38:22,940 --> 00:38:25,240
how we actually attack this from a soft fork perspective.

687
00:38:25,680 --> 00:38:28,000
I think that's the biggest boogeyman in the room

688
00:38:28,000 --> 00:38:30,840
in terms of, I think if you ask most,

689
00:38:31,280 --> 00:38:32,740
actually, I won't speak for anybody else.

690
00:38:32,840 --> 00:38:34,560
I'll speak for my, I would love covenants.

691
00:38:34,840 --> 00:38:38,200
And CTV specifically, I think it's been out there.

692
00:38:38,300 --> 00:38:40,580
I mean, I remember funding lunches

693
00:38:40,580 --> 00:38:42,740
for CTV research back in 2018.

694
00:38:43,320 --> 00:38:46,860
This is an idea that's been around for quite a bit.

695
00:38:48,140 --> 00:38:51,140
The code base has been pretty rock solid

696
00:38:51,140 --> 00:38:52,760
in terms of it is what it is,

697
00:38:52,880 --> 00:38:54,200
not much changes to it,

698
00:38:54,240 --> 00:38:55,640
and there's been a five-bitcoin bounty

699
00:38:55,640 --> 00:38:58,780
to find bugs in CTV for, I think,

700
00:38:58,820 --> 00:39:01,120
two or three years now, maybe even longer,

701
00:39:01,580 --> 00:39:03,020
and nothing's been found.

702
00:39:03,020 --> 00:39:05,180
I think Covenant, to your point,

703
00:39:05,340 --> 00:39:07,740
making exchanges unhackable

704
00:39:07,740 --> 00:39:13,280
or individual cold storage somewhat unhackable is a massive benefit.

705
00:39:13,420 --> 00:39:20,960
And then when you compare it, I think people have PTSD from Taproot and Segwit,

706
00:39:21,320 --> 00:39:23,540
how big of changes they were, and not only that,

707
00:39:23,600 --> 00:39:25,720
but the unforeseen consequences of what they enabled

708
00:39:25,720 --> 00:39:28,880
when combined with urinals and inscriptions.

709
00:39:28,880 --> 00:39:34,480
And I had James O'Byrne on, who was one of the co-signers of the letter

710
00:39:34,480 --> 00:39:36,540
that went out to the core repository

711
00:39:36,540 --> 00:39:39,460
that were endorsing the implementation of Ops CTV

712
00:39:39,460 --> 00:39:42,180
and CheckSig from Stack together.

713
00:39:43,020 --> 00:39:45,640
And when you compare the lines of code,

714
00:39:45,720 --> 00:39:49,020
I think CTV is like 200 compared to Taproot and Segwit,

715
00:39:49,140 --> 00:39:50,760
which were almost like-

716
00:39:50,760 --> 00:39:51,140
Oh, no, Mammoth projects.

717
00:39:51,340 --> 00:39:52,440
They were massive.

718
00:39:53,740 --> 00:39:55,020
And so, yeah, but it is,

719
00:39:55,180 --> 00:39:57,060
I think the boogeyman in the room is like,

720
00:39:57,080 --> 00:40:00,020
how do you actually get it implemented if people want it?

721
00:40:00,300 --> 00:40:02,020
And when do you start that process?

722
00:40:02,020 --> 00:40:03,200
When do you end that process?

723
00:40:03,200 --> 00:40:11,940
and uh i i think i do agree with you i don't think i think it's pretty it's already certain

724
00:40:11,940 --> 00:40:16,240
like ossification is not an option there are things that need to be changed within bitcoin

725
00:40:16,240 --> 00:40:21,680
if we wanted to sustain itself for a century multiple centuries potentially millennia

726
00:40:21,680 --> 00:40:28,100
um so ossification is already a no-go out the door i think we need to i'm actually quite bullish

727
00:40:28,100 --> 00:40:31,820
like again i don't have any reason aside from just my bitcoin or instinct but i'm actually

728
00:40:31,820 --> 00:40:36,160
quite bullish that ctv will get activated i think we'll find out how we activate things

729
00:40:36,160 --> 00:40:41,720
and strangely enough i actually was quite encouraged because when they released that

730
00:40:41,720 --> 00:40:47,280
letter it was like at the height of the opera turn chaos right so everyone's at each other's

731
00:40:47,280 --> 00:40:51,460
throats we're all arguing over stuff and by the way i found that whole experience quite

732
00:40:51,460 --> 00:40:56,660
quite interesting intellectually stimulating in a way because again i don't really have a strong

733
00:40:56,660 --> 00:41:00,420
opinion either way like i would i would prefer the scammers would and the spammers would would

734
00:41:00,420 --> 00:41:05,460
piss off i fully agree with that at the same time i also see where the the tech side comes from it's

735
00:41:05,460 --> 00:41:08,920
like it's kind of hard to stop them so we can yell and scream at each other all we want but like

736
00:41:08,920 --> 00:41:15,500
probably unlikely stuff changes i actually kind of like that they launched this letter at the height

737
00:41:15,500 --> 00:41:21,040
of that feud because it was a bit of a we're not going to be deterred it was this is just a good

738
00:41:21,040 --> 00:41:26,580
idea and it's felt very meritocratic there's a bunch of smart people who've done the work they've

739
00:41:26,580 --> 00:41:30,720
thought about it they've done the process they're very confident they're enough to put a signature

740
00:41:30,720 --> 00:41:36,660
down to it and they launched it irrespective like if we had a bitcoin community that was like oh it's

741
00:41:36,660 --> 00:41:40,500
too contentious there's too many people yelling let's not do it it's like no fuck that let's go

742
00:41:40,500 --> 00:41:44,860
let's let's put this letter out there we think this is a good idea don't care what the environment

743
00:41:44,860 --> 00:41:49,640
is and i'm actually quite bullish because of the order of operations in which they uh they issued

744
00:41:49,640 --> 00:41:53,020
that letter i thought that was actually quite indicative that bitcoin is going to press on if

745
00:41:53,020 --> 00:41:56,960
it's a good idea let's do it yeah it's like i hope you guys are having fun with that op return battle

746
00:41:56,960 --> 00:42:02,860
here's another grenade ctv here we go yeah totally let's go but let the let the free market of ideas

747
00:42:02,860 --> 00:42:07,860
fight it out and that's it's it's a very bitcoin uh um uh dynamic so i was actually quite encouraged

748
00:42:07,860 --> 00:42:11,600
by the uh the order ops there yeah it'll be interesting to see how that plays out i think

749
00:42:11,600 --> 00:42:18,360
that that was the i i think i'm very much aligned with how you described your perspective on

750
00:42:18,360 --> 00:42:20,440
op return and that was

751
00:42:20,440 --> 00:42:22,780
the most disconcerting

752
00:42:22,780 --> 00:42:25,000
part of that whole kerfuffle

753
00:42:25,000 --> 00:42:26,080
that's still ongoing

754
00:42:26,080 --> 00:42:28,740
to a certain degree to me is that like the conversations

755
00:42:28,740 --> 00:42:30,720
around covenants particularly CTV were

756
00:42:30,720 --> 00:42:32,560
starting to gain momentum

757
00:42:32,560 --> 00:42:34,720
and then that sort of came out of left field

758
00:42:34,720 --> 00:42:36,760
and when it comes to op return

759
00:42:36,760 --> 00:42:37,480
I think there were

760
00:42:37,480 --> 00:42:40,460
people on both sides of the argument are being a bit

761
00:42:40,460 --> 00:42:42,480
childish and

762
00:42:42,480 --> 00:42:44,660
not pragmatic

763
00:42:44,660 --> 00:42:46,720
but it is what it is

764
00:42:46,720 --> 00:42:51,920
not ideal i don't like the spammers i don't like conscriptions i'm not big ordinals fan

765
00:42:51,920 --> 00:42:58,720
at all but to your point like they're gonna do it anyway they're gonna do it anyway and uh i mean

766
00:42:58,720 --> 00:43:03,800
my big takeaway and i had this opinion when they first came out in 2023 i was like it's kind of

767
00:43:03,800 --> 00:43:08,020
cool that no one could stop this i'm pretty sure most bitcoiners are like this that this is a scam

768
00:43:08,020 --> 00:43:11,840
this is a spam i don't like it i'm pretty sure most bitcoiners are there but i was also like

769
00:43:11,840 --> 00:43:15,900
pretty cool that you can't stop it kind of like that there's no like central authority they can

770
00:43:15,900 --> 00:43:18,360
So like, yeah, let's turn this off or let's amplify this.

771
00:43:18,560 --> 00:43:20,240
Like, you can't account do anything about it.

772
00:43:20,700 --> 00:43:20,860
Yeah.

773
00:43:21,080 --> 00:43:26,820
To anybody out there, I can hear you typing in the comments right now saying that I need to overthrow core.

774
00:43:27,040 --> 00:43:28,000
We need to replace them.

775
00:43:28,860 --> 00:43:29,500
Bitcoin is money.

776
00:43:29,640 --> 00:43:29,940
Okay.

777
00:43:30,520 --> 00:43:31,100
I don't like it.

778
00:43:31,660 --> 00:43:39,560
I think we all just got to be a little bit more pragmatic to understand the reality and the way people are using it, whether we like it or not.

779
00:43:40,060 --> 00:43:40,460
That's it.

780
00:43:40,620 --> 00:43:41,040
That's it.

781
00:43:41,340 --> 00:43:44,480
Bitcoin is money for enemies, including me and Mr. Reply Guy.

782
00:43:45,900 --> 00:43:53,140
um moving back to what's going to go on uh through the rest of the year what is sort of

783
00:43:53,140 --> 00:43:59,820
the demand drivers that you see really falling away picking up staying where they are moving

784
00:43:59,820 --> 00:44:07,500
forward as we sort of potentially go higher after consolidating at this level yeah so my general

785
00:44:07,500 --> 00:44:12,760
framework here is that and it's just a reality every bull market exhausts itself eventually

786
00:44:12,760 --> 00:44:15,580
just the same way that every bear market exhausts itself eventually.

787
00:44:16,060 --> 00:44:17,300
Eventually, you just run out of buyers.

788
00:44:18,000 --> 00:44:19,860
So how this plays out.

789
00:44:19,940 --> 00:44:22,700
So one thing I have documented quite a bit in recent editions,

790
00:44:23,640 --> 00:44:25,620
since April, so actually very recent,

791
00:44:25,800 --> 00:44:27,880
since April we've definitely transitioned

792
00:44:27,880 --> 00:44:30,300
from what I would call to be a healthy spot-driven market

793
00:44:30,300 --> 00:44:34,680
to a less spot-driven, more derivatives, more speculative market.

794
00:44:35,380 --> 00:44:38,140
As demonstrated by the fact that the on-chain market is quiet,

795
00:44:38,720 --> 00:44:41,580
the market's at $107K, stone story from all-time high,

796
00:44:41,580 --> 00:44:46,920
treasury companies are popping up like mushrooms uh we've got open interest in futures and options

797
00:44:46,920 --> 00:44:53,660
just ripping to all-time highs uh i've mentioned this on a few uh few pods um recently i don't know

798
00:44:53,660 --> 00:44:58,440
about you but i've received zero phone calls from normies being like hey should i buy bitcoin zero

799
00:44:58,440 --> 00:45:04,680
this whole cycle in the last like three months many many big existing bitcoiners have asked me

800
00:45:04,680 --> 00:45:10,960
how how would you recommend i lever up so make about what you will uh that's where we're at

801
00:45:10,960 --> 00:45:16,320
so we're definitely in a more speculative environment and the way i often look at these

802
00:45:16,320 --> 00:45:21,000
things and you can just look at the way these metrics trade we are entering the euphoric phase

803
00:45:21,000 --> 00:45:25,400
now this is the period in time where things get really exciting like stuff really starts to move

804
00:45:25,400 --> 00:45:29,560
we're going to get some of those omega candles that everyone's looking for there's gonna be some

805
00:45:29,560 --> 00:45:33,260
red ones there's gonna be some green ones there's gonna be some periods of time where the market

806
00:45:33,260 --> 00:45:38,580
really wants to move and the narrative will very quickly switch to there is no ceiling new paradigm

807
00:45:38,580 --> 00:45:40,300
going up forever, Laura.

808
00:45:40,560 --> 00:45:41,800
And yes, it is,

809
00:45:41,900 --> 00:45:44,220
but there's going to be roundabouts along the way.

810
00:45:44,800 --> 00:45:47,140
So how this plays out moving forward

811
00:45:47,140 --> 00:45:48,400
is likely to be more volatile.

812
00:45:48,560 --> 00:45:50,840
We've actually seen a fairly low volatility environment.

813
00:45:51,820 --> 00:45:54,800
My base case is that we actually see volatilities pick up

814
00:45:54,800 --> 00:45:56,020
because of liquidations,

815
00:45:56,660 --> 00:45:58,620
leverage is going to start creeping in.

816
00:45:59,620 --> 00:46:01,380
People buying all these treasury companies,

817
00:46:01,580 --> 00:46:02,680
it's speculation, right?

818
00:46:02,760 --> 00:46:05,300
So yes, I agree with the take

819
00:46:05,300 --> 00:46:08,180
that it's probably not fair to lump them in with shit coins

820
00:46:08,180 --> 00:46:09,680
and call them the shit coins of this cycle

821
00:46:09,680 --> 00:46:12,160
because, you know, I mean, our business,

822
00:46:12,380 --> 00:46:13,180
we're a treasury company.

823
00:46:13,340 --> 00:46:14,740
We have Bitcoin on the balance sheet,

824
00:46:14,840 --> 00:46:16,400
but, you know, we're a serious business

825
00:46:16,400 --> 00:46:18,680
and I'm not saying any of them aren't serious businesses.

826
00:46:19,000 --> 00:46:19,860
It makes sense.

827
00:46:19,980 --> 00:46:21,680
Why wouldn't you put Bitcoin on the balance sheet?

828
00:46:21,740 --> 00:46:23,180
It's the best asset that we have.

829
00:46:23,420 --> 00:46:25,100
So that part of it makes sense.

830
00:46:25,540 --> 00:46:29,140
But the behavior of people is a bit shit coiny

831
00:46:29,140 --> 00:46:31,980
where people want to go and find the next small,

832
00:46:32,120 --> 00:46:34,060
you know, you got to get in when they're a small asset

833
00:46:34,060 --> 00:46:36,200
and ride them on the 100X multiplier.

834
00:46:36,760 --> 00:46:37,900
So the behavior pattern.

835
00:46:38,180 --> 00:46:39,940
is shit coiny speculative.

836
00:46:40,600 --> 00:46:41,900
And really, there's nothing wrong with it.

837
00:46:41,960 --> 00:46:44,480
It just shows us where we are in the phase of the cycle.

838
00:46:45,080 --> 00:46:46,740
And if you think about market cycles

839
00:46:46,740 --> 00:46:50,140
and why do bulls eventually exhaust their demand?

840
00:46:50,620 --> 00:46:54,060
Because there's only so many people who are going to buy

841
00:46:54,060 --> 00:46:57,140
and there's only so much capital that's going to flow in

842
00:46:57,140 --> 00:46:59,200
over a defined period of time.

843
00:46:59,560 --> 00:47:02,920
And case in point, every single one of us

844
00:47:02,920 --> 00:47:04,800
who has a job and a salary,

845
00:47:05,060 --> 00:47:06,480
you've got a month worth of pay

846
00:47:06,480 --> 00:47:07,900
and then you've got to wait for the next month.

847
00:47:07,900 --> 00:47:09,760
You literally can't put infinite money in.

848
00:47:10,560 --> 00:47:11,600
Every entity has that.

849
00:47:11,800 --> 00:47:13,680
Someone only wants to put in a 1% allocation.

850
00:47:13,920 --> 00:47:15,780
Someone only wants to put in a 5% allocation.

851
00:47:16,220 --> 00:47:18,060
Once they've allocated 5%, they're in.

852
00:47:18,140 --> 00:47:18,760
They're in the market.

853
00:47:18,840 --> 00:47:19,120
That's it.

854
00:47:19,520 --> 00:47:22,340
So there is a limit to how much capital comes in.

855
00:47:23,020 --> 00:47:25,860
I'm also of the view that these treasury companies,

856
00:47:25,960 --> 00:47:27,100
they're going to have massive accelerant.

857
00:47:27,680 --> 00:47:29,840
It's clear that we've got a very, very large spot bid.

858
00:47:30,400 --> 00:47:32,760
The more that the market rewards these companies,

859
00:47:32,840 --> 00:47:33,880
the more are going to show up

860
00:47:33,880 --> 00:47:35,780
and the more the existing ones are going to buy more.

861
00:47:36,600 --> 00:47:39,720
They're as big as the ETFs now in terms of the demand side.

862
00:47:39,900 --> 00:47:41,960
So both of those are very, very significant factors.

863
00:47:42,440 --> 00:47:44,220
So we have a massive spot bid.

864
00:47:44,680 --> 00:47:47,940
We've got long-term holders who are generally speaking backing off.

865
00:47:48,460 --> 00:47:49,600
I call it the lead foot.

866
00:47:49,880 --> 00:47:52,420
When I talk about demand and supply just to simplify things,

867
00:47:52,880 --> 00:47:56,880
you've got the demand accelerator and you've got the break from sell-side pressure.

868
00:47:57,300 --> 00:48:00,880
The break is being backed off and the accelerator is going down.

869
00:48:01,140 --> 00:48:03,120
There's probably only one way the price wants to go.

870
00:48:03,120 --> 00:48:04,260
I only got a bunch of people who are short.

871
00:48:04,720 --> 00:48:05,080
Love it.

872
00:48:05,140 --> 00:48:05,620
Great combo.

873
00:48:05,780 --> 00:48:07,920
but at some point in time,

874
00:48:07,920 --> 00:48:10,220
we're going to hit a level where that sell side is going to ramp back up

875
00:48:10,220 --> 00:48:10,460
again.

876
00:48:11,280 --> 00:48:11,840
You know,

877
00:48:11,920 --> 00:48:14,780
125 is where I expected to start kicking back in.

878
00:48:15,040 --> 00:48:16,320
Once you get higher than that,

879
00:48:16,400 --> 00:48:16,840
150,

880
00:48:17,180 --> 00:48:17,660
160,

881
00:48:17,800 --> 00:48:18,200
170,

882
00:48:18,200 --> 00:48:18,940
you're in very,

883
00:48:19,040 --> 00:48:19,740
very thin air.

884
00:48:19,960 --> 00:48:21,060
We can go there,

885
00:48:21,400 --> 00:48:22,800
but historically speaking,

886
00:48:22,880 --> 00:48:24,840
the odds get slimmer and slimmer very quickly.

887
00:48:25,140 --> 00:48:27,340
The higher above 120 you go at the moment.

888
00:48:28,120 --> 00:48:30,220
What I think is going to be very interesting and what I,

889
00:48:30,400 --> 00:48:31,480
I have a view,

890
00:48:31,620 --> 00:48:32,080
but I'm not,

891
00:48:32,360 --> 00:48:32,700
again,

892
00:48:32,740 --> 00:48:33,600
I can't predict the future.

893
00:48:33,600 --> 00:48:39,820
my base case is that we actually have a cycle top that looks like every other cycle top no one's

894
00:48:39,820 --> 00:48:42,920
going to believe it because they're going to think it's a new paradigm but what i think is

895
00:48:42,920 --> 00:48:46,340
going to break people's head is that the bear market is going to be different and there's a

896
00:48:46,340 --> 00:48:51,320
lot of evidence to say that like we've already had two bear markets this cycle in 2024 and then

897
00:48:51,320 --> 00:48:56,140
more recently they kind of look like bears at the same time i think the next bear is going to be

898
00:48:56,140 --> 00:49:01,460
worse but we're in this kind of very strange environment where like bitcoin is just not giving

899
00:49:01,460 --> 00:49:05,740
back the the sell side we're not getting the depth of these drawdowns that we've seen in the

900
00:49:05,740 --> 00:49:10,860
past they take longer they take months not weeks um that's a very big difference and it leads to a

901
00:49:10,860 --> 00:49:15,200
lot of people getting bored and that boredom creates price suppression claims and paper bitcoin

902
00:49:15,200 --> 00:49:21,100
but like i think that's how this that's my current working thesis and we'll see how it plays out

903
00:49:21,100 --> 00:49:28,980
yeah i saw you responding to i'd like you to expand on this is some i guess altcoin trader

904
00:49:28,980 --> 00:49:36,860
who was likening the treasury companies to like ICOs and he was saying hey it seems

905
00:49:36,860 --> 00:49:41,860
euphoric right now but trust me it's only the beginning and you you responded him saying

906
00:49:41,860 --> 00:49:47,600
there is a difference like the thing they're holding is already about like I can't recall

907
00:49:47,600 --> 00:49:53,240
it verbatim off the top of my head but I'm sure you you remember the conversation you're having

908
00:49:53,240 --> 00:49:59,400
in that thread like i think that's one question myself included like i see what's going on with

909
00:49:59,400 --> 00:50:04,540
the treasury companies and just pattern recognition alarm bells going off like the seams rightfully so

910
00:50:04,540 --> 00:50:09,800
very familiar but there is a difference with the asset that's underlying the strategy and

911
00:50:09,800 --> 00:50:16,820
um it's a different pool of capital so what's your like yeah so it feels very frothy because

912
00:50:16,820 --> 00:50:20,320
a hundred i'm a hundred percent aligned with you where like i'm looking around being like

913
00:50:20,320 --> 00:50:27,320
guys, this is like topping behavior 101. But the difference is, and if you think about strategy,

914
00:50:27,660 --> 00:50:33,000
when strategy trades at a very big premium, I'm actually more bullish Bitcoin because strategy's

915
00:50:33,000 --> 00:50:40,220
incentive is to sell MSTR, capture the premium, buy BTC. So in theory, there is sell side on the

916
00:50:40,220 --> 00:50:46,280
stock, buy side on BTC. So in theory, all of these treasury companies, the bigger their premium,

917
00:50:46,280 --> 00:50:49,080
the more buy side for Bitcoin is incoming.

918
00:50:49,880 --> 00:50:51,360
Now, the challenge is going to be

919
00:50:51,360 --> 00:50:53,880
a lot of people are not going to understand

920
00:50:53,880 --> 00:50:55,060
how those premiums work.

921
00:50:55,180 --> 00:50:56,200
So let's just, for example,

922
00:50:56,320 --> 00:50:57,360
just for simple math,

923
00:50:57,920 --> 00:50:59,220
let's just say that strategy is trading

924
00:50:59,220 --> 00:51:00,920
at a 2x premium, MNAV of two.

925
00:51:01,400 --> 00:51:03,140
If someone buys MSTR,

926
00:51:03,900 --> 00:51:07,240
in theory, MSTR could literally double

927
00:51:07,240 --> 00:51:09,980
their treasury and you could make $0.

928
00:51:10,400 --> 00:51:11,540
The MNAV could go to one.

929
00:51:12,340 --> 00:51:15,040
And in theory, you bought the stock at 500 bucks

930
00:51:15,040 --> 00:51:18,040
and suddenly the Bitcoin balance is twice as big,

931
00:51:18,100 --> 00:51:19,760
but you are flat because the MNAV is one.

932
00:51:20,320 --> 00:51:21,340
So people have to remember

933
00:51:21,340 --> 00:51:24,160
that if you're buying a treasury company at a premium,

934
00:51:25,100 --> 00:51:27,260
you either need that premium to stay the same

935
00:51:27,260 --> 00:51:29,920
as a percent or as a component

936
00:51:29,920 --> 00:51:31,360
and the Bitcoin balance gets bigger.

937
00:51:31,520 --> 00:51:32,660
So it kind of pushes you up

938
00:51:32,660 --> 00:51:34,920
or you need the premium to expand.

939
00:51:35,480 --> 00:51:37,360
This is no different to people looking at

940
00:51:37,360 --> 00:51:39,400
like price to earnings multiples.

941
00:51:39,760 --> 00:51:42,540
For companies trading at a 20X price to earnings,

942
00:51:42,540 --> 00:51:45,360
you need the earnings to go up

943
00:51:45,360 --> 00:51:47,100
in order to push

944
00:51:47,100 --> 00:51:49,220
this underlying force

945
00:51:49,220 --> 00:51:51,500
or you need multiples to expand

946
00:51:51,500 --> 00:51:53,520
but if the multiples contract

947
00:51:53,520 --> 00:51:55,320
and the market is willing to pay less

948
00:51:55,320 --> 00:51:57,020
of a premium for future growth

949
00:51:57,020 --> 00:51:59,440
and this is what's going to happen in the next drawdown

950
00:51:59,440 --> 00:52:01,520
maybe not the next one, it could be the one after

951
00:52:01,520 --> 00:52:02,460
it could be the next one

952
00:52:02,460 --> 00:52:04,640
there is going to come a time

953
00:52:04,640 --> 00:52:07,020
so do not cloud your judgement and pretend

954
00:52:07,020 --> 00:52:08,340
that this is going to go on forever

955
00:52:08,340 --> 00:52:10,940
there will be points in time where people buy

956
00:52:10,940 --> 00:52:17,040
the hottest thing as these treasury companies, they'll pay a big premium because the market is

957
00:52:17,040 --> 00:52:21,600
growing and they're the only one in their jurisdiction or whatever else. And then what's

958
00:52:21,600 --> 00:52:24,940
going to happen is the market's just not going to perform the way that people thought it would

959
00:52:24,940 --> 00:52:30,540
and the premiums will come down. And I think a lot of people will experience 70 to 80% corrections

960
00:52:30,540 --> 00:52:35,040
in these treasury companies. I think that's going to be a normal thing. So the way I have been like

961
00:52:35,040 --> 00:52:40,320
mentally thinking about it and just explaining it, Bitcoin is trading like Bitcoin in 2025.

962
00:52:40,320 --> 00:52:41,360
It's a different animal.

963
00:52:41,700 --> 00:52:43,460
It's low volatility, low drawdown.

964
00:52:44,480 --> 00:52:46,660
Yes, Bitcoin, you can't lose.

965
00:52:46,800 --> 00:52:47,940
Like over any meaningful timeframe,

966
00:52:48,080 --> 00:52:48,880
Bitcoin is going to kick ass.

967
00:52:49,440 --> 00:52:51,120
If you're buying something like strategy,

968
00:52:51,640 --> 00:52:55,520
strategy lives in this like 2015, 16, 17

969
00:52:55,520 --> 00:52:56,880
type volatility environment.

970
00:52:57,020 --> 00:52:58,720
It's like 2X what Bitcoin is.

971
00:52:59,340 --> 00:53:01,220
Once you go down to these micro caps,

972
00:53:01,400 --> 00:53:03,220
these like brand new treasury companies,

973
00:53:03,760 --> 00:53:05,260
welcome to Bitcoin in 2011,

974
00:53:05,540 --> 00:53:07,780
where an 80% correction happens overnight

975
00:53:07,780 --> 00:53:09,620
and you have no idea why.

976
00:53:09,620 --> 00:53:10,860
There's no reason for it.

977
00:53:11,280 --> 00:53:13,120
There's just not enough liquidity, right?

978
00:53:13,160 --> 00:53:14,500
There's just people who come in and out.

979
00:53:14,600 --> 00:53:16,040
Big orders can move stuff around.

980
00:53:16,940 --> 00:53:18,840
There's going to be games where like,

981
00:53:19,340 --> 00:53:21,160
if you're not in the Telegram group

982
00:53:21,160 --> 00:53:24,000
that says that this company is about to go through a SPAC

983
00:53:24,000 --> 00:53:24,840
and turn into this.

984
00:53:24,980 --> 00:53:27,020
And if you're not aware of that in advance,

985
00:53:27,060 --> 00:53:28,500
you're not going to catch the initial pump,

986
00:53:28,600 --> 00:53:30,180
but it's going to be very, very exciting

987
00:53:30,180 --> 00:53:30,940
because you're going to think,

988
00:53:31,040 --> 00:53:32,560
oh shit, this one's going to be,

989
00:53:32,560 --> 00:53:33,780
this is going to be the next meta planet.

990
00:53:34,580 --> 00:53:36,460
There's going to be some meta planets.

991
00:53:36,580 --> 00:53:37,640
There's going to be some,

992
00:53:37,640 --> 00:53:40,800
that like there's going to be a Pareto distribution.

993
00:53:41,140 --> 00:53:43,680
So just be aware that a lot of these companies,

994
00:53:43,920 --> 00:53:46,040
like literally every business venture ever,

995
00:53:46,380 --> 00:53:47,400
every startup ever,

996
00:53:47,920 --> 00:53:49,920
they're not all run by a Michael Saylor.

997
00:53:50,300 --> 00:53:52,780
They're not all going to make it in the same way.

998
00:53:53,200 --> 00:53:55,360
And this is very retail money.

999
00:53:55,720 --> 00:53:57,760
I can't imagine serious institutions

1000
00:53:57,760 --> 00:54:00,980
going and buying the 35th or the 52nd treasury company.

1001
00:54:01,080 --> 00:54:02,040
I just don't think that's happening.

1002
00:54:02,660 --> 00:54:04,600
They're going to concentrate in the big pools of capital.

1003
00:54:04,780 --> 00:54:06,520
So I think there's going to be a handful

1004
00:54:06,520 --> 00:54:07,980
of standouts.

1005
00:54:08,560 --> 00:54:10,860
Strategy is just in a whole different world to itself.

1006
00:54:11,540 --> 00:54:14,200
I think MetaPlanet is clearly doing its own thing in Japan.

1007
00:54:15,340 --> 00:54:16,860
There's a couple of others out there,

1008
00:54:16,920 --> 00:54:18,740
but generally speaking,

1009
00:54:19,800 --> 00:54:23,000
my business, we just put Bitcoin in the balance sheet

1010
00:54:23,000 --> 00:54:23,820
as part of our equity.

1011
00:54:24,140 --> 00:54:24,680
That's all we do.

1012
00:54:25,060 --> 00:54:26,380
We keep it really, really simple.

1013
00:54:26,900 --> 00:54:29,340
A lot of these companies that try to do this growth mechanism,

1014
00:54:29,460 --> 00:54:30,100
it's good for Bitcoin,

1015
00:54:30,940 --> 00:54:33,300
but I can't help but feel that a lot of these companies

1016
00:54:33,300 --> 00:54:35,580
will spit out and puke their coins at the end of the cycle

1017
00:54:35,580 --> 00:54:38,860
just because they don't have the skill set,

1018
00:54:39,120 --> 00:54:40,360
the shareholder buy-in,

1019
00:54:40,740 --> 00:54:42,080
the stones that Saylor has,

1020
00:54:42,180 --> 00:54:42,820
whatever it is,

1021
00:54:43,140 --> 00:54:44,700
there'll be a bunch of these companies that do it.

1022
00:54:44,800 --> 00:54:46,060
Miners have done it every single cycle.

1023
00:54:46,180 --> 00:54:47,320
We all thought in 2021

1024
00:54:47,320 --> 00:54:49,700
that miners would have access to capital markets.

1025
00:54:50,180 --> 00:54:52,240
Therefore, they would never have to puke out their coins.

1026
00:54:52,340 --> 00:54:52,700
What happened?

1027
00:54:52,800 --> 00:54:54,480
They all puked out their coins at the bottom of the bear.

1028
00:54:54,860 --> 00:54:56,340
So I suspect this will happen again.

1029
00:54:57,260 --> 00:54:57,620
Yeah.

1030
00:54:58,560 --> 00:54:59,800
That's sort of my thinking too.

1031
00:55:00,340 --> 00:55:02,380
Like literally right before we hopped on an hour ago,

1032
00:55:03,560 --> 00:55:05,400
I had somebody DM me asking,

1033
00:55:05,580 --> 00:55:07,000
and I haven't responded yet

1034
00:55:07,000 --> 00:55:08,000
just if you're out there listening

1035
00:55:08,000 --> 00:55:09,160
here's my response

1036
00:55:09,160 --> 00:55:11,180
my text you response later

1037
00:55:11,180 --> 00:55:11,880
but they were like

1038
00:55:11,880 --> 00:55:13,320
I just got a lump sum of cash

1039
00:55:13,320 --> 00:55:14,180
what do I do

1040
00:55:14,180 --> 00:55:15,120
do I put it in MSTR

1041
00:55:15,120 --> 00:55:16,060
do I put it in Bitcoin

1042
00:55:16,060 --> 00:55:16,840
and I'm like

1043
00:55:16,840 --> 00:55:18,020
old school

1044
00:55:18,020 --> 00:55:19,360
like nothing better than

1045
00:55:19,360 --> 00:55:20,780
cold hard UTXO

1046
00:55:20,780 --> 00:55:21,440
some cold storage

1047
00:55:21,440 --> 00:55:22,380
that's it

1048
00:55:22,380 --> 00:55:22,680
like

1049
00:55:22,680 --> 00:55:23,540
I'm not

1050
00:55:23,540 --> 00:55:24,660
I'm not going to try and stop

1051
00:55:24,660 --> 00:55:26,160
the way I would frame it

1052
00:55:26,160 --> 00:55:28,140
if you have to ask that question

1053
00:55:28,140 --> 00:55:29,240
the answer is Bitcoin

1054
00:55:29,240 --> 00:55:31,380
if you know the answer to that question

1055
00:55:31,380 --> 00:55:32,180
go and speculate

1056
00:55:32,180 --> 00:55:33,340
if you like

1057
00:55:33,340 --> 00:55:34,000
if the fact

1058
00:55:34,000 --> 00:55:34,900
if you don't know

1059
00:55:34,900 --> 00:55:36,980
because like for me, I've only recently,

1060
00:55:37,060 --> 00:55:38,760
I've been in Bitcoin for, you know, as I mentioned,

1061
00:55:39,120 --> 00:55:41,360
finally fell down the rabbit hole properly in 2019.

1062
00:55:41,640 --> 00:55:42,660
I've seen a couple of cycles.

1063
00:55:42,800 --> 00:55:45,720
My whole job is analyzing market cycles and Bitcoin data.

1064
00:55:46,320 --> 00:55:50,280
I'm only in the last like three, four months starting to,

1065
00:55:50,380 --> 00:55:52,360
and I'm limiting myself to strategy, really.

1066
00:55:52,460 --> 00:56:02,270
I don really care to go that far out in the risk curve I actually think what strategy is doing is quite fascinating Going after the bond market I understand I can reason about the product

1067
00:56:02,910 --> 00:56:07,910
The product is bonds and they're tokenizing bonds more or less with a Bitcoin backing.

1068
00:56:08,630 --> 00:56:09,890
I think it's a fascinating strategy.

1069
00:56:10,030 --> 00:56:12,210
I did a podcast with Preston, which will be out soon enough,

1070
00:56:12,270 --> 00:56:14,170
where we just went deep down this rabbit hole.

1071
00:56:14,810 --> 00:56:15,410
I get it.

1072
00:56:15,490 --> 00:56:16,650
I understand what strategy is doing.

1073
00:56:16,730 --> 00:56:17,590
I think it's fascinating.

1074
00:56:17,590 --> 00:56:18,750
So I want to share in that.

1075
00:56:19,510 --> 00:56:21,730
Everything else, I'm like, go have fun.

1076
00:56:21,910 --> 00:56:22,170
Enjoy.

1077
00:56:22,170 --> 00:56:22,950
I'm going to watch it.

1078
00:56:23,030 --> 00:56:23,690
I'll analyze it.

1079
00:56:23,750 --> 00:56:24,650
I'll see them pop up.

1080
00:56:24,710 --> 00:56:25,690
I'll see them explode.

1081
00:56:26,670 --> 00:56:27,930
Personally, I'm not interested.

1082
00:56:28,170 --> 00:56:31,370
I'm very happy with my predominantly BTC.

1083
00:56:31,790 --> 00:56:35,050
And then, you know, I'll punt here or there because I've been around long enough.

1084
00:56:35,330 --> 00:56:38,670
If you're asking the question, how do I split this up?

1085
00:56:39,070 --> 00:56:39,790
The answer is Bitcoin.

1086
00:56:40,610 --> 00:56:40,970
Yeah.

1087
00:56:41,590 --> 00:56:42,450
Keep it simple, stupid.

1088
00:56:42,930 --> 00:56:43,250
Keep it simple.

1089
00:56:43,250 --> 00:56:43,990
Keep it simple, stupid.

1090
00:56:44,370 --> 00:56:46,550
Keep your income higher than your expenses.

1091
00:56:47,870 --> 00:56:48,970
Save some money in Bitcoin.

1092
00:56:48,970 --> 00:56:55,490
it's okay to be Squidward in that where he's watching Spongebob and Patrick playing outside

1093
00:56:55,490 --> 00:56:59,290
you know that meme it's okay to be sitting there watching everyone playing with their treasury

1094
00:56:59,290 --> 00:57:03,930
companies because I assure you it's going to be fantastic for them in this phase of the bull

1095
00:57:03,930 --> 00:57:08,150
it's going to suck it's going to suck for a lot of people because they're going to go

1096
00:57:08,150 --> 00:57:12,590
too much at the top they're not going to understand the premiums and a lot of these

1097
00:57:12,590 --> 00:57:17,290
companies just frankly don't deserve a premium because most companies don't yeah all right

1098
00:57:17,290 --> 00:57:21,890
another factor in this cycle that may be different it's not completely different but

1099
00:57:21,890 --> 00:57:27,270
i think with the launch of the lending product that strike and particularly jack's messaging

1100
00:57:27,270 --> 00:57:31,950
around it bringing the cost of capital down through their lending desk i mean that that's

1101
00:57:31,950 --> 00:57:38,490
another meme that's more predominant this cycle which is we are going to get lending products to

1102
00:57:38,490 --> 00:57:43,870
make it extremely easy for you not to have to sell your bitcoin obviously historically we've had

1103
00:57:43,870 --> 00:57:49,790
unchained just down the hall for me right now led in genesis famously with their blow-ups

1104
00:57:49,790 --> 00:57:58,350
last cycle but it seems like block fi celsius named the blow-ups but i i think the market's

1105
00:57:58,350 --> 00:58:05,370
lesson on re-hypothecation i know for sure the strike is very on top of making sure they're

1106
00:58:05,370 --> 00:58:08,930
taking people's bitcoin to lend against it they're not going to re-hypothecate it and

1107
00:58:08,930 --> 00:58:13,850
there are many people that are beginning to look at the depth of liquidity of the market above

1108
00:58:13,850 --> 00:58:21,430
two trillion and see it as an asset that can be used as collateral to get cash to fund a lifestyle

1109
00:58:21,430 --> 00:58:27,710
without having to sell spot is this a factor at all in your yeah it will become increasingly so

1110
00:58:27,710 --> 00:58:31,210
so i mean lending against your bitcoin makes all the sense in the world like it's pristine

1111
00:58:31,210 --> 00:58:36,170
collateral why why wouldn't you so um for me personally and again i'm going to speak for

1112
00:58:36,170 --> 00:58:43,630
myself i have definitely looked at it and right now as it stands a lot of them are fairly

1113
00:58:43,630 --> 00:58:50,510
hefty interest rates, 12%, something with that ballpark, and 12-month terms. Now, there's obviously

1114
00:58:50,510 --> 00:58:55,790
then another layer. And I think actually, I forget the name of the website, but Hugo from Nunchuck,

1115
00:58:55,870 --> 00:58:59,830
I think he was involved. They've got a 21-something. There's a website that shows where they've kind

1116
00:58:59,830 --> 00:59:04,710
of rated all these different entities. I thought that was quite useful. And I think for me,

1117
00:59:05,270 --> 00:59:09,430
I'm going to allow this to play out for one more cycle. I'm in no need to go and tap that liquidity

1118
00:59:09,430 --> 00:59:14,650
just yet. I'm actually okay to just allow the competition to build, allow the rates to come down.

1119
00:59:15,530 --> 00:59:20,570
I think what strategy is doing, we're seeing in the TradFi world, they're normalizing Bitcoin as

1120
00:59:20,570 --> 00:59:25,490
a collateral. So I think that once the market gets more comfortable, so this is what I would

1121
00:59:25,490 --> 00:59:29,530
call the early adopter phase. You're right. We had like the cowboy phase with Genesis and all

1122
00:59:29,530 --> 00:59:34,570
that last cycle. We're now in the early adopter phase. I kind of look at like, what am I going to

1123
00:59:34,570 --> 00:59:38,730
do to, you know, you borrow a hundred grand and you'd have to pay it back in 12 months. Like for

1124
00:59:38,730 --> 00:59:44,470
me, if I'm going to borrow money, it's to get into the housing market. And that's just not really a

1125
00:59:44,470 --> 00:59:49,430
feasible approach. So for me, I'm just going to allow the market to find its level. There'll be

1126
00:59:49,430 --> 00:59:53,170
a lot of people who do it. I've had this question actually from a lot of people saying, hey,

1127
00:59:53,710 --> 00:59:57,810
how do I risk manage these kinds of things? It's like, again, if you're asking those questions,

1128
00:59:58,130 --> 01:00:03,410
it's probably a bit early to be thinking about it, right? So you should be in the market long

1129
01:00:03,410 --> 01:00:07,870
enough and understand your financial position enough that you shouldn't be questioning what

1130
01:00:07,870 --> 01:00:09,970
LTVs and you should know

1131
01:00:09,970 --> 01:00:11,890
you should be able to work this out if you're still

1132
01:00:11,890 --> 01:00:13,570
again this stuff isn't easy

1133
01:00:13,570 --> 01:00:15,030
but

1134
01:00:15,030 --> 01:00:18,050
go through the loops of trying to work

1135
01:00:18,050 --> 01:00:20,110
it out yourself model it out

1136
01:00:20,110 --> 01:00:21,750
and never

1137
01:00:21,750 --> 01:00:23,950
ever assume the Bitcoin price cannot

1138
01:00:23,950 --> 01:00:26,110
go to a certain level and I'll tell my story

1139
01:00:26,110 --> 01:00:27,850
I learned this lesson trading options

1140
01:00:27,850 --> 01:00:29,310
back in 2019 2020

1141
01:00:29,310 --> 01:00:31,870
I thought I was hot shit I've

1142
01:00:31,870 --> 01:00:33,910
discovered the realized price I've worked

1143
01:00:33,910 --> 01:00:35,550
out how on chain data works I'm

1144
01:00:35,550 --> 01:00:37,830
teaching people about it I thought I was a genius

1145
01:00:37,830 --> 01:00:39,830
and I've learned about options.

1146
01:00:40,610 --> 01:00:44,690
And I was selling puts below the realized price of 6K.

1147
01:00:44,870 --> 01:00:47,310
And my thesis was, we're never going to go below 6K again.

1148
01:00:48,090 --> 01:00:50,950
March 2020 comes, straight through that level,

1149
01:00:51,410 --> 01:00:53,490
literally liquidated me by like 6%.

1150
01:00:53,490 --> 01:00:53,670
Six hours.

1151
01:00:54,090 --> 01:00:56,410
Took my whole account, straight back up.

1152
01:00:56,470 --> 01:00:57,910
And the next thing you know, we go to 60K.

1153
01:00:58,010 --> 01:00:59,230
So I would have made all my money.

1154
01:00:59,230 --> 01:01:01,590
I would have made it all if I just hadn't have thought

1155
01:01:01,590 --> 01:01:03,930
the price can never go back to this level.

1156
01:01:03,930 --> 01:01:13,410
So, you know, when you're thinking about LTVs on this stuff, never, ever believe anyone telling you the price cannot go to a certain level.

1157
01:01:13,650 --> 01:01:20,530
I often say the odds of it going back to 40K and undoing the ETFs, in my opinion, is like slim to none.

1158
01:01:20,650 --> 01:01:27,270
I do not factor in these, not even in my cases, but I would never, ever settle alone on the assumption that it can't happen.

1159
01:01:27,610 --> 01:01:29,070
So just be aware of that.

1160
01:01:29,130 --> 01:01:31,230
I think it's going to build up over time.

1161
01:01:31,230 --> 01:01:33,590
I think in two, three, four, five years time,

1162
01:01:34,190 --> 01:01:35,710
this industry is going to be booming

1163
01:01:35,710 --> 01:01:37,630
because it makes all the sense in the world.

1164
01:01:37,830 --> 01:01:39,650
And especially with like Saab 121,

1165
01:01:40,110 --> 01:01:41,430
once the banks get involved,

1166
01:01:41,590 --> 01:01:42,490
and I know this is another,

1167
01:01:42,730 --> 01:01:43,590
Bitcoin is going to say,

1168
01:01:43,650 --> 01:01:45,350
oh, don't give your Bitcoin to the bank.

1169
01:01:45,430 --> 01:01:48,690
It's like, you use Bitcoin to do whatever you need to do

1170
01:01:48,690 --> 01:01:49,670
to make your life better.

1171
01:01:49,990 --> 01:01:51,150
Don't listen to anyone else tell you

1172
01:01:51,150 --> 01:01:52,030
what to do with your savings.

1173
01:01:52,090 --> 01:01:53,330
You do whatever you want with your savings.

1174
01:01:53,990 --> 01:01:55,890
Certainly listen to heed the warnings, right?

1175
01:01:55,890 --> 01:01:57,230
If you're putting your coins in a bank,

1176
01:01:57,370 --> 01:01:59,370
you are giving up self-custody.

1177
01:01:59,370 --> 01:02:05,170
but for me i'm going to sit there with my utxos for now let this market play out find the level

1178
01:02:05,170 --> 01:02:10,770
wait for the rates to come down wait for the terms to go out wait for the market to get more accustomed

1179
01:02:10,770 --> 01:02:16,050
for bitcoin as a collateral asset it will happen i'm just gonna be patient and wait for it

1180
01:02:16,050 --> 01:02:23,070
yeah i'll add some other pieces of advice there if you're going to take out a loan do not put your

1181
01:02:23,070 --> 01:02:26,930
whole stack in a loan number two i'm gonna bring this up again i brought up in rabbit hole recap

1182
01:02:26,930 --> 01:02:32,430
a few weeks ago but it seems to be a question in people's minds i was at a meetup in philadelphia

1183
01:02:32,430 --> 01:02:36,690
and somebody asked when's a good time to take out a loan the price is low and the price is high the

1184
01:02:36,690 --> 01:02:41,050
price is low that's when you want to take out the loan if you're going to do it yes when it's scary

1185
01:02:41,050 --> 01:02:45,710
yes if it gets above a certain level and you're thinking about it maybe too late

1186
01:02:45,710 --> 01:02:50,850
that that 100 i mentioned before i've had a bunch of people saying hey what's the best way to lever

1187
01:02:50,850 --> 01:02:55,330
up i had some questions like what's the best price to like where should we lever up it's like

1188
01:02:55,330 --> 01:03:01,610
probably at 20k when ftx blew up that's probably the best time to have levered up 110k when like

1189
01:03:01,610 --> 01:03:07,050
there's speculation coming out everywhere and you know um futures open interest is at all-time high

1190
01:03:07,050 --> 01:03:13,970
and people are levering up not really that like you can do it but be prepared to ride the wave

1191
01:03:13,970 --> 01:03:20,230
because it's going to be a wave yes it is that said we're talking to check the analysts we have

1192
01:03:20,230 --> 01:03:27,990
been very level-headed sober says things that not many people want people want the moon juice

1193
01:03:27,990 --> 01:03:34,890
and to pull that out of you what would have to change from like a market structure sentiment

1194
01:03:34,890 --> 01:03:44,970
psychology sort of demand drivers in the market for this to get weird in your mind very good

1195
01:03:44,970 --> 01:03:49,210
question um so this is more from check the hodlers perspective right when when the things get a bit

1196
01:03:49,210 --> 01:03:53,970
a bit loony tunes i mean i just look at the price pattern like look at look at the monthly chart

1197
01:03:53,970 --> 01:04:00,230
it's just it's an incredible stair-stepping pattern where the hell are the drawdowns i like i

1198
01:04:00,230 --> 01:04:06,170
i can't for the life of me put myself in the mindset of someone who's saying this cycle sucks

1199
01:04:06,170 --> 01:04:13,330
i look at this cycle i'm like it is unbelievable how much capital is coming in how little the

1200
01:04:13,330 --> 01:04:18,450
drawdowns are and i've been using this this analogy or this kind of anecdote from my old man

1201
01:04:18,450 --> 01:04:24,050
my old man bought in 2020 which means he went through the up of 2021 and he went through the

1202
01:04:24,050 --> 01:04:31,150
down of 2022 and let me assure you i heard all about it all the time when number go up mate when

1203
01:04:31,150 --> 01:04:37,530
is my number going to go back up now he closes every sentence with number go up love it that's

1204
01:04:37,530 --> 01:04:42,870
where he's at so like think about the pools of capital who are now going to look at this price

1205
01:04:42,870 --> 01:04:47,630
chart and be like yeah i'll allocate why not i should actually take five percent it looks like

1206
01:04:47,630 --> 01:04:51,970
it's no longer volatile. It looks like it doesn't do those crazy things. And I don't see it going

1207
01:04:51,970 --> 01:04:56,950
down anymore. It seems to go up. Hey, I'm waiting for a dip and I'd love to buy in. All of these

1208
01:04:56,950 --> 01:05:01,770
things, you just got to think about the pools of money who the lower vol that we're seeing at the

1209
01:05:01,770 --> 01:05:07,450
moment is going to be much more tempting for. And I've heard this from many people. People are

1210
01:05:07,450 --> 01:05:13,330
getting calls from investment managers and retirement funds and family offices who are like,

1211
01:05:13,430 --> 01:05:17,410
all right, it's time. I want to put a 5%. You mentioned, I can't remember if it was on the air

1212
01:05:17,410 --> 01:05:21,450
or not, there was like an IRA bloke who come out and said like 20 to 40%.

1213
01:05:21,450 --> 01:05:25,450
Like, guys, the amount of money that is about to start allocating

1214
01:05:25,450 --> 01:05:28,970
to risk-free Bitcoin is astronomical.

1215
01:05:29,290 --> 01:05:33,130
Like we can't actually think about how big, the numbers are massive. And actually,

1216
01:05:33,210 --> 01:05:37,290
I ran a study a little while back. I was trying to just put things in perspective

1217
01:05:37,290 --> 01:05:41,390
of how big Bitcoin is. If you look at the

1218
01:05:41,390 --> 01:05:45,430
capital inflows into BTC, whether it's via ETFs or treasury

1219
01:05:45,430 --> 01:05:50,050
companies or whatever over the last 30 days, it's about $36 billion a month. That's the rate of

1220
01:05:50,050 --> 01:05:57,610
change. $36 billion. The Bitcoin market cap in May 2017 was $36 billion. So everything up until May

1221
01:05:57,610 --> 01:06:03,970
2017, we absorbed in one month. If you take the ETFs and strategy and put them together,

1222
01:06:04,410 --> 01:06:11,170
the market cap combined of those two is like two days before the 2017 all-time high. So literally

1223
01:06:11,170 --> 01:06:16,030
everything up to 20k is in the etfs and strategies balance sheet which really both of those have

1224
01:06:16,030 --> 01:06:21,090
grown up over the last like you know really let's say 18 months the etfs are 18 months strategy

1225
01:06:21,090 --> 01:06:27,670
bought the most um over the last like six seven months so guys like old history doesn't matter

1226
01:06:27,670 --> 01:06:32,930
anymore like all those previous cycles they're irrelevant they're like a footnote of behavior

1227
01:06:32,930 --> 01:06:39,030
they don't count we are in a new paradigm they we are in a new paradigm and what it looks like

1228
01:06:39,030 --> 01:06:40,750
is stair-stepping, right?

1229
01:06:40,850 --> 01:06:42,850
This slow, boring-ass grind.

1230
01:06:43,010 --> 01:06:44,310
I think Joe Calasari said this.

1231
01:06:44,390 --> 01:06:45,930
We're in line with a slow, boring-ass grind

1232
01:06:45,930 --> 01:06:46,810
to a million dollars

1233
01:06:46,810 --> 01:06:48,530
and we're going to be price suppressed

1234
01:06:48,530 --> 01:06:49,950
the whole way up.

1235
01:06:50,670 --> 01:06:51,870
Stop being bored, guys.

1236
01:06:52,150 --> 01:06:52,730
Be bullish.

1237
01:06:53,110 --> 01:06:54,050
It's fucking bullish.

1238
01:06:54,210 --> 01:06:54,710
Get excited.

1239
01:06:55,010 --> 01:06:56,010
You're going to be at 200K

1240
01:06:56,010 --> 01:06:56,310
and be like,

1241
01:06:56,370 --> 01:06:57,690
there's paper Bitcoin out there.

1242
01:06:57,970 --> 01:06:59,150
I know, there's so much.

1243
01:06:59,810 --> 01:07:01,070
Why aren't we at 2 million?

1244
01:07:01,130 --> 01:07:02,090
We should be at 2 million.

1245
01:07:02,170 --> 01:07:02,850
We should be higher.

1246
01:07:03,330 --> 01:07:03,550
Yeah.

1247
01:07:03,990 --> 01:07:05,770
And if the other thing

1248
01:07:05,770 --> 01:07:07,610
we can focus on what's happening

1249
01:07:07,610 --> 01:07:10,330
in terms of demand drivers internally

1250
01:07:10,330 --> 01:07:12,190
within the Bitcoin market,

1251
01:07:12,330 --> 01:07:14,390
whether it's ETFs, treasury companies,

1252
01:07:15,330 --> 01:07:17,350
structured credit products coming to market.

1253
01:07:17,910 --> 01:07:19,890
Then going back to what we were talking about earlier,

1254
01:07:20,070 --> 01:07:21,170
is there a big print?

1255
01:07:21,350 --> 01:07:23,070
And if so, how big, how fast?

1256
01:07:24,030 --> 01:07:27,930
And what does that mean for inflows in Bitcoin?

1257
01:07:28,850 --> 01:07:29,210
Exactly.

1258
01:07:29,530 --> 01:07:31,350
And sorry, just something that clicked to me before.

1259
01:07:31,770 --> 01:07:33,770
I wrote a piece that I called Paper Bitcoin

1260
01:07:33,770 --> 01:07:35,250
trying to address this topic.

1261
01:07:35,250 --> 01:07:39,430
I mentioned before that BlackRock is tearing away from the other ETFs.

1262
01:07:39,610 --> 01:07:42,250
That is real Bitcoin going into those ETFs.

1263
01:07:43,230 --> 01:07:43,990
Why are they doing it?

1264
01:07:43,990 --> 01:07:44,850
Because of the options market.

1265
01:07:45,330 --> 01:07:49,010
In order to take advantage of the derivatives, people can now allocate to the asset in the

1266
01:07:49,010 --> 01:07:49,490
first place.

1267
01:07:49,730 --> 01:07:53,810
So the growing up of derivatives allows bigger money to come in.

1268
01:07:54,190 --> 01:07:55,750
This is why BlackRock is peeling away.

1269
01:07:55,870 --> 01:08:00,610
So it's just great evidence that just because you have paper Bitcoin in the system being

1270
01:08:00,610 --> 01:08:05,230
derivatives, that actually enables a lot of these big entities to allocate when they previously

1271
01:08:05,230 --> 01:08:09,410
couldn't because i can hedge risk so i think that's just a really really important uh um uh

1272
01:08:09,410 --> 01:08:14,030
thing to pay attention to i missed your question before actually um what would you say before that

1273
01:08:14,030 --> 01:08:18,410
no i'm just saying um it wasn't even a question it was a statement i'm just how big is the big

1274
01:08:18,410 --> 01:08:23,370
print if it comes oh yeah how long does it last and what is it i mean in terms of market structure

1275
01:08:23,370 --> 01:08:28,910
changing moving forward like how much effect does that went from 36 to 37 trillion like i remember

1276
01:08:28,910 --> 01:08:33,230
people talking about 36 trillion then like next thing it's like 37 it's probably like halfway to

1277
01:08:33,230 --> 01:08:39,510
38 by this point like i mean they don't have a choice so just like grit your teeth and sit tight

1278
01:08:39,510 --> 01:08:44,530
i really don't send it on turbo as elon said before he left doge

1279
01:08:44,530 --> 01:08:50,370
that's his hands and that's that's another great example right where they go in saying they're

1280
01:08:50,370 --> 01:08:55,690
going to cut one trillion two trillion they got 150 and then he got kicked out it's like

1281
01:08:55,690 --> 01:09:01,050
the beast is too big i kicked out saying that trump's on the epstein list as he's walking out

1282
01:09:01,050 --> 01:09:08,850
the door it's chaos it's beautiful chaos though i think despite whatever happens whether it's

1283
01:09:09,630 --> 01:09:17,350
within bitcoin treasury companies going crazy etfs going crazy ria's aping in externally

1284
01:09:17,350 --> 01:09:24,350
elon saying that trump's on the f-stein list world war three fears ufo fears who knows what's

1285
01:09:24,350 --> 01:09:31,590
going to pop just blinders on stay focused keep stacking bitcoin don't get over levered don't get

1286
01:09:31,590 --> 01:09:38,370
crazy just focus stay humble stacks yes it's just not that difficult that is is that is that is the

1287
01:09:38,370 --> 01:09:43,210
best advice it has to go i mean it's it's going to compete forever with nothing stops these trainers

1288
01:09:43,210 --> 01:09:48,730
the two like quintessential bitcoin memes if you just listen to those two little phrases you're

1289
01:09:48,730 --> 01:09:52,170
gonna be just fine well it's funny it's not that hard but it's very hard for for a lot of people

1290
01:09:52,170 --> 01:09:55,210
Well, it's simple, but it's not easy.

1291
01:09:55,670 --> 01:09:57,130
I think that's a really important element.

1292
01:09:57,370 --> 01:10:00,070
And I actually wrote about this in the piece you were talking about before,

1293
01:10:00,170 --> 01:10:00,630
P. Coddle.

1294
01:10:01,210 --> 01:10:03,670
I opened by saying, like, why do I actually write any of this stuff?

1295
01:10:04,230 --> 01:10:06,750
It's to just help people not feel like a deer in the headlights

1296
01:10:06,750 --> 01:10:08,810
because hoddling is simple.

1297
01:10:08,990 --> 01:10:12,970
It is a very, very simple strategy, but it is really, really difficult

1298
01:10:12,970 --> 01:10:14,950
because the world keeps telling you that you're wrong.

1299
01:10:15,050 --> 01:10:16,510
We keep getting crazy headlines.

1300
01:10:17,170 --> 01:10:20,010
Every influence in the world wants to shill you why their thesis

1301
01:10:20,010 --> 01:10:21,670
as to why the market's up or down is better.

1302
01:10:21,670 --> 01:10:27,530
like at the end of the day you just have to stay humble stack sats and just trust the process

1303
01:10:27,530 --> 01:10:31,990
this is just trust the process yeah it's funny because you have the the trad fi

1304
01:10:31,990 --> 01:10:37,890
incumbents who hate bitcoin saying uh it's going to zero and then on the other side you have

1305
01:10:37,890 --> 01:10:44,230
those far out on the risk curve within bitcoin like aping into all these treasury companies and

1306
01:10:44,230 --> 01:10:48,230
levering up whatever it may be saying oh you're you're gonna miss out you're not you're not levered

1307
01:10:48,230 --> 01:10:52,050
up enough and then you're in the middle like wait a second it's like smash buying moving the cold

1308
01:10:52,050 --> 01:10:56,190
storage that's not good enough and because every treasury company still has to buy the bitcoin as

1309
01:10:56,190 --> 01:11:00,150
well we're all in the same trade there and uh i'm just going to like at the end of the day you're

1310
01:11:00,150 --> 01:11:04,550
selling the stock and buying the coin i'm just buying the coin i'm just going to skip the middle

1311
01:11:04,550 --> 01:11:09,410
man of buying the stock who's going to buy the coin just buy the coin just buy the coin james

1312
01:11:09,410 --> 01:11:15,170
it's always a pleasure sir thank you for doing what you do good to be back on well uh we'll have

1313
01:11:15,170 --> 01:11:19,730
to do this again uh maybe uh we'll catch like peak euphoria at the end of the summer beginning of

1314
01:11:19,730 --> 01:11:26,210
fall uh we'll be catching up then yes yes we when uh when we enter the topping cloud things start to

1315
01:11:26,210 --> 01:11:33,890
get really exciting um we can definitely do a an ad hoc episode now the uh uh i have a feeling we're

1316
01:11:33,890 --> 01:11:38,450
gonna do an episode people are gonna be like oh james is too bearish it's a super cycle and then

1317
01:11:38,450 --> 01:11:44,710
something's gonna happen either it'll be a super cycle no no i'll have a very rational sound view

1318
01:11:44,710 --> 01:11:46,670
evidence as to why it's over

1319
01:11:46,670 --> 01:11:48,150
and it's just going to keep going forever.

1320
01:11:49,650 --> 01:11:50,870
That's how this plays out.

1321
01:11:51,190 --> 01:11:52,530
That's the best way it could play out.

1322
01:11:53,130 --> 01:11:54,930
Yeah, totally. And that's the other thing,

1323
01:11:55,030 --> 01:11:56,010
right? In a way,

1324
01:11:56,770 --> 01:11:58,070
by being very rational,

1325
01:11:58,490 --> 01:12:00,150
if it keeps going, I win.

1326
01:12:00,690 --> 01:12:02,350
If it doesn't, then at least I'm

1327
01:12:02,350 --> 01:12:04,950
aware and prepared for it if it doesn't

1328
01:12:04,950 --> 01:12:06,390
go the way that the moonboys think.

1329
01:12:06,690 --> 01:12:08,590
So, you know, again,

1330
01:12:08,650 --> 01:12:10,830
it's all about managing your psychology

1331
01:12:10,830 --> 01:12:12,710
because at the end of the day, you're the

1332
01:12:12,710 --> 01:12:14,570
only one that can manage your Bitcoin and

1333
01:12:14,570 --> 01:12:16,630
or how you deal with market cycles.

1334
01:12:17,050 --> 01:12:17,990
It's actually a mental game.

1335
01:12:18,090 --> 01:12:19,250
Don't worry about it as a financial game.

1336
01:12:19,290 --> 01:12:20,050
It's a mental game.

1337
01:12:20,510 --> 01:12:23,410
And that's what getting a reasonable take on things,

1338
01:12:23,450 --> 01:12:24,070
that's what I do.

1339
01:12:24,190 --> 01:12:26,030
That's why I write and why I do the analysis.

1340
01:12:26,230 --> 01:12:27,670
It helps me stay grounded

1341
01:12:27,670 --> 01:12:29,750
so that when stuff doesn't play out

1342
01:12:29,750 --> 01:12:32,050
the way the Moonboys said or the Doomers said,

1343
01:12:32,470 --> 01:12:33,630
it kind of goes down the middle.

1344
01:12:33,750 --> 01:12:35,310
I'm like, oh yeah, makes sense actually.

1345
01:12:36,410 --> 01:12:38,110
Yeah, check the rational analysts.

1346
01:12:38,210 --> 01:12:38,910
You actually win bigger

1347
01:12:38,910 --> 01:12:40,970
because you're prepared to buy the dip

1348
01:12:40,970 --> 01:12:41,850
when it materializes.

1349
01:12:42,410 --> 01:12:43,070
You're not over-levered.

1350
01:12:43,070 --> 01:12:48,510
and and the rip you're not surprised when it happens no all right you go enjoy your tuesday

1351
01:12:48,510 --> 01:12:56,570
thank you for hopping on and uh keep keep writing the newsletter i love it um if you guys haven't

1352
01:12:56,570 --> 01:13:02,430
checked the substack.checkonchain.com yeah i just gotta check on jane.com you can't you can't miss

1353
01:13:02,430 --> 01:13:07,590
it all right it's there go check it out peace and love freaks okay freaks thank you for listening

1354
01:13:07,590 --> 01:13:12,570
to the show i hope you liked it if you did like it please make sure you subscribe rate review the

1355
01:13:12,570 --> 01:13:16,870
show it helps us out a lot and also if you like these conversations i've come to realize that

1356
01:13:16,870 --> 01:13:23,950
many people listen to the podcast they don't know we have another sort of layer of this media

1357
01:13:23,950 --> 01:13:29,590
company we have the newsletter the bitcoin brief go to tftc.io make sure you subscribe there a lot

1358
01:13:29,590 --> 01:13:34,590
of the topics that are discussed on this podcast i write about five days a week in the newsletter

1359
01:13:34,590 --> 01:13:41,850
we also have the tftc elite tier if you sign up for that become a member we have a private discord

1360
01:13:41,850 --> 01:13:49,090
server for the elite freaks out there where we're dropping ad-free versions of this show

1361
01:13:49,090 --> 01:13:55,690
and having discussions about everything we talk about a day early logan wanted me to make sure

1362
01:13:55,690 --> 01:14:01,850
if you want to get the show a day early become a tftc elite member you will get that we have our

1363
01:14:01,850 --> 01:14:09,670
discord server right now it's conversation between myself and tftc elite tier members but we're going

1364
01:14:09,670 --> 01:14:16,510
expand that we'll probably do closed q a's with people in the industry i may be doing macro mondays

1365
01:14:16,510 --> 01:14:22,510
so join us go to tftc.io subscribe find the button in the top right corner of the website

1366
01:14:22,510 --> 01:14:26,230
become a tftc elite member thank you for joining us