What do you think that these precious metals are screaming to the Bitcoin market?
Bitcoin down more than 22.
I think it's definitely screaming at the thesis is.
Saylor actually had a unique little point here when he was interviewing with Danny Knowles.
Why don't you actually put the focus upon the people that make the investment decision?
The companies don't determine the price their stock trades at.
Now, you're inside all of this.
So I'm curious, how do you view essentially the other Bitcoin treasury companies now coming in?
Just because other people have bought Bitcoin and owned,
no, if you have zero Bitcoin,
you probably need Bitcoin more than anybody else.
I think that that's going to accelerate
as we approach 2035.
I'd want to own way more Bitcoin than everyone else.
It's 10 million by Q1 of 2035, is that correct?
We'll never be able to create more than 21 million Bitcoin.
So related to the $10 million price prediction in 2035 is
bing bong i am back with another edition of the state of bitcoin podcast where i've got the man
the myth the legend recurring guest now joe burnett who is now vp of bitcoin strategy over
at strive so a lot has changed since the last time we have spoke but something very interesting
obviously developed all through last year and made waves. And it's a Bitcoin treasury strategy.
So we've seen so many different Bitcoin companies or now just regular companies go and buy Bitcoin.
And Saylor actually had a unique little point here when he was interviewing with Danny Knowles
not too long ago that Bitcoin companies shouldn't be viewed at as competing against strategy or
anything else. They should be viewed at as competing against other companies within their
niche. Now, you're inside all of this. So I'm curious, how do you view essentially the other
Bitcoin treasury companies now coming in and the development of this movement and maybe a little
bit of the rockiness that kind of came with it within this past calendar year? Yeah. Well,
Brandon, first, thanks for having me back on. Great show. Excited to be here. And starting off,
I guess, with the hot topic with Bitcoin treasury companies. Yeah. I mean, there's a
of different places to start. One I can say is like, which is kind of the point of, you know,
Sailor was making on that podcast, is are Bitcoin treasury companies competing against each other?
And like, the answer is kind of like, I would say yes and no. You know, one way that I've thought
about in the past is like, if you are, you know, just like an individual, like, we're not like,
in a way, are we competing against each other to accumulate more Bitcoin for ourselves? Like,
yes, but like, it's a positive sum game, like we can both win together and accumulate more wealth,
real wealth in terms of like, what our Bitcoin can buy, the more people that actually buy Bitcoin,
like money is a network good, which means as the network grows, everyone kind of wins.
And so in that sense, you know, it's good for other companies to buy Bitcoin. And,
And if you're, for example, Similar Scientific, initially a healthcare company, and I believe in 2021,
before Similar adopted any sort of Bitcoin strategy whatsoever, Similar was a billion dollar healthcare business.
Perfectly normal business, publicly traded, making a good bit of free cash flow, and business was great.
And, you know, it's, you know, similar is still a healthcare business and they bought Bitcoin in the balance sheet. And so, and obviously Strive then acquired similar. And so it's like any company that either has free cashflow can buy Bitcoin.
any company that is stuck or a zombie business, as Eric Simler has previously called in the past,
that may be generating a lot of free cash flow, but doesn't know what to do. They're not growing
very fast. They're not on the same growth rate as a big Mag7 company or NVIDIA. And they're
looking where to deploy capital. They could do stock buybacks. They could do dividends.
they could try to acquire another company or whatnot. If it doesn't beat the hurdle rate of
Bitcoin, then arguably you should just buy Bitcoin. And so in that sense, I think we have a lot of
capital allocators, whether that's an individual and you're like, I don't know where to invest that
will beat Bitcoin. So therefore me as an individual, I Bitcoin. Or as a company, whether you're an
existing shareholder or you're on the management team of the company, you're deciding, okay, I have
this capital on my balance sheet that I need to allocate properly. If I can't find something that
beats the hurdle rate of Bitcoin, I should just buy more Bitcoin. And so in that sense, it's like
almost every company should be buying Bitcoin, just like how every individual should probably
be buying Bitcoin. And so in that sense, I don't necessarily see them competing against each other,
but then it's also like the Bitcoin treasury companies that are like native and focused
almost entirely on accumulating Bitcoin. In a way, you could argue that they're all competing
for similar pools of capital. For example, with my capital, I can buy Strategy, I can buy Shrive,
I can buy MetaPlanet. And if I have $1, I can't have the same $1 in all three companies. I wish I
could because that would be... I mean, I have $3, but if I only have $1, I got to pick where I put
that $1. And so in that sense, you could argue it's kind of competing. But at the end of the day,
I think the market size of Bitcoin is so small relative to the entire global wealth, whether you
look at bonds, equities, money, real estate, art, whatever else. It still has such a long ways to go
that it's more so Bitcoin and Bitcoin treasury companies
are competing with inferior traditional stores of value.
And so that's kind of how I would think about it.
It's definitely an interesting topic.
But yeah, I mean, like you brought up how the last six months or so,
or I guess eight months or so,
have been like very rocky for Bitcoin treasury companies.
And that's a whole other topic that we can definitely get into.
You know, at a high level, it's interesting
because I think a lot of people, I think if you look back at 2025 and you saw arguably like the
success of strategy or 2024 and 2025, you saw the success of strategies. You saw the success of a
lot of Bitcoin treasury companies as they performed pretty well. And one way that I've
kind of thought about it is the strategy worked so well that strategy got bid to an extreme valuation.
You know, a lot of companies got bid to an extreme valuation.
It created the incentive for other people to go out and build their own Bitcoin treasury company.
And so we had this, you know, supply rush to the market because of how good of an idea amplified Bitcoin, you know, potentially is.
And so the market, you know, rushed to provide a solution for all of this demand that we saw in 2024 and 2025.
And then, you know, Bitcoin doesn't always just go straight up, unfortunately.
There it's an extremely volatile asset. And so when Bitcoin is ripping, demand for amplified Bitcoin is off the charts.
Arguably, it could be almost infinite. But when Bitcoin is not ripping and we had all this incremental supply of amplified Bitcoin come to the market, well, now no one, fewer people want to hold the amplified Bitcoin position.
And that's part of what we saw, I think, over the last six to eight months.
From my perspective, it's not so that the strategy is broken.
I mean, at the end of the day, a lot of these companies are simply doing a carry trade on Bitcoin where they have a cost of capital that's lower than their expected future compound annual growth rate of Bitcoin.
and if that's the case and it plays out over a long enough time horizon
and you can weather the volatility,
then arguably there's a reasonable case to be made
that you would outperform spot Bitcoin with extremely high volatility.
And that's what I think a lot of people are figuring out,
that Bitcoin is incredibly volatile.
Amplified Bitcoin is a whole other animal.
Yeah, 100%.
And I mean, I agree with you there.
But one thing that I will push back on you,
Maybe I'm speaking for the plebs out here, but I think the reason why maybe Danny asked that question or people in the Bitcoin space view as these treasury companies competing for each other, competing against each other, is essentially they see Bitcoin as this scarce asset, right?
That it is.
And so they think, okay, well, I want to get and accumulate as much Bitcoin as possible.
So this is why, you know, it is a competition because there's a finite amount of resources. I mean, well, we can maybe get into like the gold and silver what's going on in those markets in a bit. But, you know, I guess from that angle, you know, I mean, you were talking about maybe investor capital, you know, maybe only having like $1, which company do I invest in.
But when you look at it from like the Bitcoin lens in that angle, you know, do you see it in that sense? Or do you see it as just essentially, you know, companies are essentially saving their free cash flow in a better money. So it's, you know, there is no competition because you're just essentially saving in that better money. And so it's a better strategy just in general.
Yeah, it's a great question. I mean, I definitely would say I see it both ways. It's like, yes,
of course, I'd want to own way more Bitcoin than everyone else. And as an individual and as a
corporation, and yeah, if there's only 21 million Bitcoin, obviously, and I think the price of
Bitcoin is going to go up significantly, then I better start stacking as much Bitcoin as I possibly
can now while the price is potentially lower than it could be in the future. And I know that I have
you know, a certain share of 21 million, but also in the sense, like, like we talked about,
it's like, okay, well, as a company, we currently have our existing resources.
We just need to deploy our existing resources into maximizing the amount of Bitcoin that we can
generate. You know, there's not, obviously like we want to keep accumulating as much as we possibly
can, but you know, we, you can only do so much, you know, if we could buy all 21 million Bitcoin,
We would buy all 21 million Bitcoin, but there's just like a realistic limitations to what you can do.
But yeah, I think it's healthy competition.
It's similar also to like saying, okay, you as an individual, you haven't bought Bitcoin.
Just because other people have bought Bitcoin and own 19.8 million of the 21 million Bitcoin already,
that doesn't mean you should just give up and be like, oh, well, I can't win.
I'm never going to get any serious amount of Bitcoin.
No, if you have zero Bitcoin,
you probably need Bitcoin more than anybody else.
And so I think that's kind of the point that I would make is like,
okay, if you're a company that has zero Bitcoin,
just like if you're an individual that has zero Bitcoin,
you need some Bitcoin.
Most likely you have not been beating the hurdle rate of Bitcoin.
And if so, you're losing money if Bitcoin is money.
And so I don't want you to be losing money.
And you shouldn't want to be losing money if you own a company.
The purpose of the company should be to make money for shareholders.
And if you're not beating the hurry of Bitcoin, you should start deploying capital into Bitcoin so you stop losing money.
Yeah, I mean, that's all fair to say.
Now, I want to get into another angle of this market, you know, because obviously we had Peter Schiff got his victory lap within this last year because of gold and the silver performance.
So, you know, there has been a lot of hot topic or hot conversations around this because Bitcoiners, you know, the initial sale to Bitcoin was its digital goal, right?
But obviously, we saw Bitcoin on a down year and we saw the precious metals absolutely rip.
So, you know, what do you think of the market dynamics currently in Bitcoin and in the precious metals markets?
Yeah, the gold and silver market has been fascinating to watch.
as I'm sure a lot of people have been paying attention.
I mean, gold up, I guess, like over 100% the last 12 months,
silver up like, I don't know, maybe like 200 something percent over the last 12 months.
It's pretty incredible.
I mean, part of me is, and I think a lot of Bitcoiners are disappointed
in the sense that, you know, this is kind of the environment that people have been expecting.
Like the quote unquote debasement trade has, you know,
kind of been a popular uh phrase that people have used and it's you know it's the idea that a lot of
the typical bitcoin macro people have been talking about where uh the u.s is on kind of an unsustainable
uh physical process you know len alden says the train has no brakes uh the feds or the government's
running up you know absurd deficits it has the the entire nation is extremely over indebted
and it kind of ends one or two ways.
Either the amount of debt in the system is so large that you default
and we go into like a Great Depression
or more likely the money printer comes on to kind of ease the pain.
But inflation and commodities could run hot.
And I think that that's, you know,
the market is starting to agree with that perspective
that I think a lot of people in the Bitcoin space
have been saying for a while.
yet gold's been the one running over the last you know 14 months 13 months and bitcoin's kind of
stalled out a little bit and you know it's interesting to look at because it's like okay i
think on a five-year period bitcoin and gold are pretty neck and neck gold might be a little bit
ahead at the moment but pretty close together on a four-year period i believe bitcoin's ahead on a
three-year period, Bitcoin might be ahead. And then even like a two-year period, I think it's
possible Bitcoin might be ahead. It's just like the one year slash, you know, 15 month period,
like it's been kind of tough and gold has just absolutely crushed Bitcoin over that period.
And so like in a way, I would argue that, you know, Bitcoin's kind of just like taking a breather
from the performance that it's done over the last five, 10 years. And, you know, you also got to
look back like there were a lot of catalysts for bitcoin uh right before the the past 15 months
we had the etfs approved which arguably should have brought forth some demand and you know i did
the price went up uh we had the you know trump getting elected uh the strategic bitcoin reserve
executive order like that brought forth some demand and so like we kind of pulled forward
possibly some demand that would have may have came later naturally just as Bitcoin became more scarce and price started running and people learned about Bitcoin superior monetary properties But yeah I mean like but gold is obviously just massively outperformed over the
last 15 months. So it's hard to, you know, it's frustrating, but I think it's really probably
only a matter of time until it's Bitcoin's turn again. And I think that, you know, gold being as
high as it is, I think it's an hour around 20X larger than the total market size of Bitcoin,
which you know and we're going to keep mining more gold at around you know one to two percent per year
and bitcoin's already less than one percent per year monetary inflation obviously trending to zero
over the long run you know the it there's a lot of potential upside for bitcoin here and it makes
it a pretty compelling uh interesting opportunity yeah it is interesting because uh i think i saw
something where it's like the fed or the central banks have increased their gold purchases about
like one to two percent and then the price has increased by 40 percent so uh take for take that
for what it is even though the narrative is you know that people are buying the physical gold not
as much the etf and and watching these precious metals go out but you've had a plenty of interesting
price predictions uh over your time in bitcoin i believe um you're won by 2035 i don't want to
misquote you, but I believe it's 10 million by Q1 of 2035. Is that correct? Yeah, definitely. I
think that's possible. Okay. Well, let's dive into that. Did this actually, I guess, seeing the
precious metals affirm your prediction or has that made it change? Maybe you think it's increasing.
What do you think that the precious metals, I guess, are screaming to the Bitcoin market?
I think it's definitely screaming that the thesis is directionally correct. I think right now,
the last measure that I've seen is total global wealth may be around $1,000 or $1,000 trillion.
So $1,000 trillion. And that's allocated across bonds, equities, real estate,
number of different asset classes. And I think we're kind of at the peak of this long-term debt
cycle where there's a huge debt bubble. And so arguably, almost everything is overvalued at this
point. And people are just pouring capital into all of these different things because they know
they can't hold cash because interest rates are fairly low, or they have been in the last five
years. It really lasts 15 years, I guess. And so all this capital is kind of just pushed into
everything else at extreme valuations. And yet, like I talked about, we're at this phase where,
okay, we're either going to default or print a bunch of money. And most likely it's going to be
a volatile process kind of edging between the two, but leaning towards printing money in the long run.
And I think that's kind of what we're seeing. And so I think that in this scenario where the money
printer kind of continues to go burr, we'll see a rush towards scarce assets that are
permissionless and without counterparty risk.
And, you know, Peter Thiel had an interesting slide at a Bitcoin conference a while back
that showed in 1980, when there was high inflation and gold was doing incredibly well, and it
was the peak of the gold market, the total market capitalization of gold or total market
value of all gold match the total market capitalization of all US equities. And so if
Bitcoin could just, you know, one, reach digital gold at this point, but two, reach the parity with
gold, that puts it around, last I checked actually, around $1.8 million per Bitcoin, which is pretty
great. And then arguably, like I said, like you can make the argument that these scarce assets
that can be held without counterparty risk are arguably incredibly undervalued still,
even after the big run that gold has measured in dollar terms.
And so I think that that's one big kind of movement that's going on,
like pushing capital into Bitcoin, just the current macro conditions.
But two is the whole idea of the Jeff Booth thesis of technology deflation and AI.
I think that that is really accelerating in a big way that, you know, a lot of normal people probably aren't paying too much attention to.
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proven. I think that that's going to probably keep happening, driving the real prices of basic
goods and services lower, measured in dollars, they probably will keep going up around the Fed's
target CPI inflation rate. But in real terms, whether that's measured in S&P 500 or Bitcoin,
I think the prices could start falling pretty significantly. And especially if AI and humanoid
robots and, you know, all of these and self-driving cars and so much like really do become very
prominent and popular by 2035, then there's going to be this rush towards, you know,
actually scarce assets because we're creating abundance in almost everything, basic consumer
goods. But we can't create an abundance of Bitcoin. It's one of the, it's the only thing
that no matter how intelligent humanity becomes or how much energy gets directed into Bitcoin mining
because of the difficulty adjustment, we'll never be able to create more than 21 million Bitcoin.
And so, you know, related to the $10 million price prediction in 2035 is that Jeff Booth
technology deflation thesis, I think also applies to our traditional store of value assets
that we hold today. You know, I've been posting a chart of the annual mined production of gold
over the last 200 years, it appears to be going in a fairly exponential manner.
And arguably, gold is one of the most scarce, coveted assets that has preserved value pretty
well over the last 50 years, obviously.
And we're still figuring out via technology and more humans on the planet and so on and
so forth to mine more gold.
And so I think that technology deflation thesis is going to dilute the wealth that's stored
gold, buy money, more gold. It's going to dilute the wealth that's stored in real estate because
we're able to build more houses or build higher or even create more land. There's an island called
Palm Jomera where tens of thousands of people now have, or residents now have beachfront property
because we literally have been able to create land, which is pretty, you know, something that
you can't even fathom. But that's, you know, if you decide to store wealth in something, humanity
is going to try to figure out a way to make more of that. And I think that that's going to accelerate
as we approach 2035. And as people hold this one quadrillion dollars worth of wealth in everything
other than Bitcoin, I think a lot of that is going to be trying to, one, realizing that they're
probably getting diluted and that there might be a better store of value and that Bitcoin might be
that best store of value because no matter how smart we get or how much energy we're able to
produce, we're not going to be able to make more than 21 million Bitcoin. Yeah, it's interesting.
I want to get into the AI and kind of like Jeff Booth's thesis, because you had a great piece here
written the other day. But before we get to that, I mean, you talked a little bit about,
you know, some of the other markets and the traditional stores of value. Obviously,
we've seen Saylor come in and talk about how Bitcoin is going to take over the $300 trillion
bond market, the $145 trillion fixed income market. And now he's talking about the
$200 trillion credit market. Obviously, those aren't small numbers to say the very least.
But I'm curious because you got your foot dipped into both the TradFi world and the Bitcoin world.
How is those two worlds essentially colliding? And how is Bitcoin being looked at as taking over
some of these giant markets? Yeah, I mean, I think it's definitely happening. One of the things that
I always wanted someone to build like in the Bitcoin space.
And I still want people to build this as like a,
is what Saylor has been talking about,
like with digital money.
It's, you know, this idea of, okay, we have,
we have Bitcoin, which is arguably the super collateral,
you know, incredibly,
has all of these, the correct monetary properties.
And it's liquid 24 seven, it's portable.
it's fungible you know it's it's incredible collateral issuing and and arguably because
it's incredible collateral people should want to borrow against it and people should want to
lend dollars against it if you want if you happen to want to earn dollar yield which obviously
there's you know as a bitcoiner maybe you don't want that but as uh you know the fact that there's
300 trillion dollars worth of wealth in bonds and 100 trillion dollars worth of wealth and
money, dollars and bank accounts and savings accounts and CDs and whatnot.
There's a lot of demand in the world for dollar-based yield. And I think that that's kind
of exactly one of the main innovations of Bitcoin treasury companies, being able to
use Bitcoin as an asset on the balance sheet and then issue this idea of digital credit,
which is effectively a dollar-based yield product. And it's in high demand because
it's massively over-collateralized. You might have two, three, four, five times the amount
of Bitcoin on your balance sheet compared to the dollar-based IOUs that you've issued
via this digital credit. And it's kind of a win-win for both because it's so over-collateralized.
And if it's all issued via digital credit and there's no maturity, then arguably it's even less riskier. But obviously there's a lot of demand for this idea of digital credit. And there's also a lot of demand for this idea of digital equity, which is like just taking the other side of that trade, borrowing the dollars and buying additional Bitcoin, the amplified Bitcoin position.
So it kind of becomes like this win-win for both. And arguably this digital credit idea of people who want dollar-based yield with a higher return at lower risk, there's a pretty clear argument to be made that digital credit is providing that.
And the success of strategy, obviously, in 2025, when they just started issuing digital credit, I think it was like some of the largest IPOs of the entire year were just strategies, digital credit products.
And so I think that it's evidence that the market is really excited about this, both retail investors and both institutional investors, too.
And I think that if we're looking at the bond market and it's $300 trillion, we're not going to wake up tomorrow and trillions of dollars are going to be in digital credit, unfortunately.
But I think over time, as the strategy and other companies that issue digital credit continue to make the dividend payments, Bitcoin continues to just not die.
and Bitcoin simply just continues to not guy
and goes up slowly or goes up at rates
that Bitcoiners might expect,
then I think this concept of digital credit
will become a lot more acceptable
in the institutional world,
maybe after like two, three year track record
of being massively over collateralized
and continuing to make the dividend payments.
Then I think a lot of capital will be able to trust it.
Just like in the early days of Bitcoin, you can argue that Bitcoin wasn't a serious thing until 2020 when Saylor bought it.
I mean, 2017 bull market was pretty good and pretty exciting in 2013 as well.
But 2013, Bitcoin was still arguably just a toy.
2017 it was kind of becoming like you know niche silicon valley like uh uh like coinbase was
obviously like really exploding at that time but it was still like uh you know for the most part
there weren't very many serious people that you know were storing a lot of value in bitcoin
but then sailor when in 2020 when you had a large public corporation decide to buy hundreds of
millions of dollars of Bitcoin. That was kind of like a, I don't know, a step change in like
the way that the world seriously looked at Bitcoin. And I think that that's kind of
progressed in a positive manner probably every year since then.
Yeah. And I think, you know, the way that Saylor has kind of like, I guess,
intertwined himself with the TradFi world is really interesting. And, you know, you seemingly,
you look around with his development of meeting with all these big giant money pools of capitals
essentially in different countries. I mean, obviously he was just in Abu Dhabi. He's been
spotted in Brazil. And then coincidentally, six months later, Brazil was talking about a Bitcoin
strategic reserve. So it seems like everywhere he goes, it's essentially just making it more
bullish for Bitcoin and more people are seeing the light. On that note, how influential do you
think he's been when it's come to just the traditional financial world and I guess seeing
the light of Bitcoin? I think he's been very influential. I mean, I think he's, you know,
looking back at Bitcoin history, there's not like one person I think that, you know, other than
Satoshi, I guess, but there's not one person that, you know, was required to make Bitcoin
successful. I think it was Bitcoin was kind of this like code that was dropped into the world
and in a way it's like a digital organism.
Like you know the nodes are kind of like the cells and the humans are running the nodes and holding private keys They like you know part of the part of the organism And you know if you look back over the years like no one really knew what Bitcoin was necessarily going to become And it was going to
become probably whatever it was going to become without any single one person deciding what it
should be, because it's a it's this decentralized network. This is like the centralized organism
that exist on the internet.
And so when you're talking about Saylor,
where would Bitcoin be without him?
Or how influential is Saylor
on getting TradFi to adopt Bitcoin?
I think he's been incredibly influential.
And I think it's interesting to think of
where Bitcoin would be without him right now.
And I think it'd still be fine.
But I think he's probably been definitely
one of the most influential people in the Bitcoin space.
And I think he's done an incredible job
of convincing older pools of capital
or more institutional pools of capital
to say, hey, this digital internet money thing,
it's actually real.
And there's actually a pretty valid use case for it.
Objectively, if you look at its monetary properties,
it's a better form of money.
And if we're right about that,
then this could be worth a lot of money
and it could have an incredible future
compound annual growth rate and you should allocate capital to it. So I think that,
I think he knows that, right? Like he, I think in the early days, you know, he was going on like
every single Bitcoin podcast almost to talk about it, which was, which was pretty cool. And, you
know, he still loves making presentations and, and, and talking about Bitcoin. And so I think that,
I think he's been a, personally, I think he's been a great voice for Bitcoin, both from like
a retail perspective, but also from like an institutional perspective. Yeah. A hundred percent.
I'm trying to get the nickname going, Hard Money Mike, to get that coined on.
But I think I'm the only one really saying it.
Maybe I'll get you on it now, Joe.
But when we see the TradFi world just kind of intertwining,
and then now especially with the takeoff of the gold markets,
I think it's really interesting.
But we brought up earlier the kind of the intertwining with AI
and kind of that new thesis.
Jeff Booth's been knocking the door down with this thesis of essentially AI
and then Bitcoin essentially making everybody more efficient
and essentially being able to live our lives a little bit more free.
So you wrote just a great piece here the other day.
So why don't you dive into that thesis
and how you see AI and the Bitcoin world starting to play out.
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enough from me. Let's get back to the show. Yeah, I mean, it's anyone that's been, I think,
playing around with the AI tools, you know, kind of knows that this is kind of, this is a really big
new technology that humans have unlocked, right? And part of what inspired me to write this,
the article is you'll have people like Elon Musk, who I greatly respect, but he'll go out and say
things like, in the future, we won't necessarily need money because AI and robotics and whatnot has
unlocked a period of total abundance. And I think that it's hard to conceptualize what the future
really will look like as we go into this concept of the singularity and AI just becomes a thousand
times more intelligent than Albert Einstein. And we have billions of them working 24-7, 365 around
the clock to hopefully make the world a better place. Like it's, it's, it gets kind of reflexive
and, you know, it's hard to, it's hard to predict what exactly is going to happen, but assume that,
you know, it's, it's going to be good and we're going to be able to create an abundance of almost
everything. I still think we need to get from where we are today to here, to there, because
we're obviously not, you know, today there's, you know, people are, people are starving, you know,
A lot of people feel like they're struggling.
People in America, and I imagine all around the world, feel like they can't even really afford a house, at least my generation.
And so I think that we're very, very far, or we feel to be very, very far from this period of abundance.
and so as we merge from where we are today to this abundance phase which could be actually
pretty soon because ai is advancing so fast or we could be progressing towards it very soon we may
not ever reach this idea of total abundance but we're it's hard to argue that we're not like on
the path or trajectory toward that in a very fast manner so it relates to kind of what i was talking
about earlier where it was like, okay, this going towards this abundance, Jeff Booth has done an
incredible job of explaining technology deflation thesis of, okay, very easy to see how, you know,
your basic goods and services will be, you know, very affordable and get more affordable over time,
if not free. Like an example that I've used in the past is like when calculators first came out,
you know, however many years ago, well, modern, somewhat modern calculators, at least,
came out, you know, 50 years ago or so, like they were actually expensive and they'd, you know,
they'd sit on your desk and they'd be pretty big and it may cost, you know, a few hundred bucks to
buy one. Now it's like everyone gets a calculator on their, on their own phone and it's free. The
app to download the calculators is free and it can actually have more, more features. It can be
a scientific calculator, financial calculator or whatnot. They're all, they're all free. So it's
easy to conceptualize something like that as being deflationary in a sense, but it's hard to
conceptualize like the next phase of what I think still is happening. And it's the idea that
our assets that we hold today are also like, you know, subject to this idea of technology deflation.
A super obvious example, I think at this point is something like software as a service,
where, you know, vibe coding is now becoming like the popular thing to do on X at least or Twitter.
And arguably, if it continues, it may already be here to some extent where you can say,
hey, my business needs a website or a CRM or whatever.
And it builds it for you and it builds it to your exact everything that you want,
all of your specs that you're requesting it, it can build.
and therefore why would you go out and pay a thousand dollars a month or if you're a corporation
five hundred thousand dollars a month or millions of dollars a year for this software as a service
when you can tell you know an ai system to build it and it builds it and then you own it and you
can customize it as much as or as little as you want and so it's like in that sense if you are an
individual that's storing wealth in the nasdaq or you know big basket of technology companies
software to service companies. Well, technology deflation isn't just affecting the calculator
that's on your phone and making that free. Technology deflation is eating at the wealth
where you've stored all of your wealth, which is a little bit concerning if that's where you're
storing 100% of your wealth. And like I said earlier, it applies to gold. We're able to mine
a lot more gold. I think last year, we maybe mined 100 times more gold humanity as a whole,
mined 100 times more gold than we did in the year 1800.
And so that's a 200-year period,
but we're getting a lot more productive
at creating even the most scarce things in the world.
And I think that we have all this wealth in these,
what we think are scarce things in the world,
software service companies, gold, real estate or whatnot.
But as AI advances faster and faster
and we head towards this idea of total abundance,
which Elon Musk and others in the AI space think we're going towards,
well, everything becomes abundant except for a monetary asset like Bitcoin
because you can't make more of it.
So in a way, if you take it out to the extreme,
it's like it's almost hard to keep wealth outside of Bitcoin
as we head out to this period of total abundance
because if you keep wealth in a software as a service company
and a software as a service company is worth a billion dollars,
well, people are going to be, you know, vibe coding your software as a service company and
undercutting your margins and trying to suck that $1 billion of market cap that you have in your
software as a service company into some of their company. And they don't care if they get, you know,
a hundred million dollars, right? They just want to, you know, keep sucking wealth out of what
humanity has already stored wealth in. And so the more wealth we store in all these other assets,
the greater incentive it is for AI and robotics and other humans to dilute that wealth and to try
to take it and to build a better service or more efficient service. And so in that sense, it's like,
okay, we have all this wealth outside of Bitcoin. The wealth really needs to be in Bitcoin because
that's the one place where we can't dilute any of the wealth. Yeah. It's interesting that you said
all that be about the SaaS companies. Because I've been after ever since I discovered vibe coding,
I've been telling people that I think SaaS is just dead. Because exactly like you lined out here,
I mean, I made a dashboard to do some of like my social media analytics in an afternoon. So I mean,
like, you know, ordering something like that, or getting somebody to do that used to take like
months. And now, you know, it takes just a few hours to build things like that. And like you said,
They could be essentially customized for everything.
So I think it's a really interesting development.
But the Bitcoin and the scarce asset,
I guess let's dive into the Elon Musk thesis
because, I mean, obviously I've heard him say that,
but I'm curious kind of how you think that world looks
because I see a couple of different ways
where essentially we've seen Bitcoin,
I guess, develop a lot over time.
And part of that development has been intertwining with people, how they're saving and everything else.
But having a money where they're having a world where there's no money that just everybody says if we were on the hard money standard, we would be in this utopia and we'd have flying cars.
So how do you think that this world playing out would be with the development of AI and essentially no money?
Yeah.
Yeah, so it's like, it's such an interesting question.
I mean, like I said, I think like if you get to the point where we have trillions of Albert
Einsteins and they're all working 24-7, it's hard to predict what's going to happen.
And so I think we're heading towards that world.
And so maybe Elon, you know, you could make the argument that Elon is right in the sense
that like maybe very far into the future.
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All right, enough from me. Let's get back to the show.
Maybe like money is not a concept, but I think we are not there yet.
And I think we're pretty far away from that, unfortunately or fortunately.
I'm not really sure.
But like in the sense of like the calculator app example, it's like, well, how much money or how much Bitcoin do you need to buy a calculator app?
It's like, it's free.
I mean, you just download the app.
And so money is kind of like in certain things, money is kind of already become irrelevant because the winner was the consumer that receives something for free or Google.
Right. I mean, like as long as you have an internet, like you don't pay for Google, it's free.
You indirectly may be paid for ads through ads, but like, you know, you still a lot of people still use Google or for chat GPT and everything else.
you still use Google. But again, I think that we're heading towards this idea of abundance.
So I don't even know if we'll ever make it to where money itself is not relevant.
And I think as we go from where we are today towards that potential state, which may not ever
exist, because there might always be things that are obviously artificially scarce. Yes,
at palm jomero we created additional beachfront property but for whatever reason if you want to
live on miami beach at the house right next to michael saylor you know you you that's there's
only one of those or there's only two of those i guess because he's got two neighbors but um
like there will there will like humans will probably always create some form of artificial
scarcity and i think bitcoin is obviously like the best form of of scarcity that's digital and
and is a good form of money, which is important. But as we go towards this idea of abundance,
we'll still have some form of scarcity. I mean, right now, common scarcity is obviously
real estate for younger people. People want to be able to afford a relatively normal house.
That is still scarce And so I think Bitcoin as a tool is going to help people unlock that future scarcity that they may seem today like oh I never be able to buy this or afford this
Bitcoin is a better savings tool than everything else that exists.
And so therefore, if you say Bitcoin and AI and free markets just continue functioning, it'll create technology deflation in those things that you might want or something very close to what you might want.
And that'll like help you, you know, reach those goals. So yeah, I think like my, I don't like,
I think Elon like jumps a bunch of steps when he, when he arrives to, oh, we won't need money in a,
in a, you know, in a certain amount of time. I think, you know, I think that we got to get to
that point first. And I think Bitcoin is a very useful tool to help us get to help you as an
individual or a corporation get to that point because arguably it's the world's best savings
technology. And maybe we never reached that point because there were all, there may always be
artificial scarcity. Now you brought up real estate, obviously like your, our generation is,
is looking at it as a, as a different, as a different way, right? I mean, essentially we've
seen a trad fight come in and financialize housing, which has done a disservice to the younger
generations. And I think the average age of like a first time home buyer now is closing close,
getting closer and closer to 40. So it seems like the American dream is somewhat dead. How do you
see, or I guess the traditional American dream, as we know it, the white picket fence in the house
and all of that. How do you see real estate, I guess, playing out here with the evolution of
Bitcoin? You know, obviously there's a bunch of new products coming out that you can combine
the equity with some Bitcoin, some different tactics that way. But how do you see, I guess,
just overall the real estate market as it is right now and projecting a little bit further here?
Yeah, it's an interesting question because you make a great point of like,
okay, real estate in the US and around the world has been financialized to a large extent.
And I would argue like what that means is like, it's been monetized. Our money is broken.
Most people, whether you think about, you frame it in that way or you don't frame it that way,
it's kind of what has happened where you just,
you pour your wealth into other assets that are not dollars
because you know dollars are going to be debased over time.
And so real estate has obviously been a very popular way to store wealth.
And I think that creates, you know,
obviously a lot of negative externalities, right?
One, you're saving in wealth, you're saving in real estate,
driving up the price for people that actually like need the real estate for,
you know, for their house to live in or to start a family or whatnot. And then not only that,
I would argue that if we had a better money, because everyone has pushed up the price of
real estate so high that you're buying real estate at high valuations currently,
if we had a better money, you could probably, which is Bitcoin, I would argue you could probably
just buy Bitcoin instead of buying the house. And in that way, you have a better long-term total
return than buying real estate at a price that doesn't make any sense. And the prices of housing
should go down because less people are incentivized to buy housing if they know that there's a
superior alternative to store wealth in Bitcoin. And then housing gets more affordable. So I think
obviously that won't happen overnight. A lot of people will probably continue
holding houses for a number of different reasons. But I do think that over time,
as the AI thesis plays out and technology advances and we build more houses, we build
more apartment complexes, and Bitcoin continues functioning and simply doesn't break,
it'll become more clear over time that hoarding real estate is not you know it's not outperforming
bitcoin it's not it's not beating the hurdle rate of bitcoin and as people begin to recognize that
okay like i've been using the dollar as my unit of account for a long time i bought this house for
fifty thousand dollars decades ago now it's worth five hundred thousand dollars you know five years
maybe it's worth a million dollars like maybe like the house didn't go up 20x in decades maybe
it's like the dollar just went down and i think people are going to start to realize like maybe
there's a better form of money and then they'll realize like wait like i bought this you know i
had this house in 2026 and it was worth you know six bitcoin seven bitcoin and now it's worth one
Bitcoin. Like I lost, you know, six, five to six Bitcoin over the last five years because
the house is, you know, Bitcoin one is a better form of money. It's being, and it's actively being
adopted right now. Two, it's getting more scarce over time. And three, like, you know, the house
breaks, like you got to update things. You got to pay property taxes. You got to do maintenance.
Like it's, and, you know, and we're building more houses. Like we're diluting, you know,
your share of total wealth that's stored in real estate.
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All right, on that for me, let's get back to the show.
So I think it's going to be probably like a fairly gradual process.
And I think real estate will probably get more affordable,
certainly measured in Bitcoin, obviously, if I had to guess.
and I think that that's going to be good for the younger generation that saves in Bitcoin
or anyone that saves in Bitcoin
and I think that the people that recognize that Bitcoin is a better form of money
will perform, will have better financial returns
by not storing a bunch of wealth in houses
and saving Bitcoin instead
and like you said, you pointed out, there's products now that make it easy for
people to kind of like extract some equity that they have in their house and put it into Bitcoin,
which I think is great. But, you know, arguably if, you know, it might still be better to just
sell the house and buy Bitcoin. But again, there might not be enough people that would be willing
to do that. So it's going to be interesting. Yeah, it's definitely like one of those areas
where everybody kind of wants the security, right? Having something that they quote unquote own.
But, you know, when obviously as Bitcoiners, we know when you break it down, the property taxes, all of that, do you really own it?
But I think the one interesting part of real estate still is the amount of leverage, you know, the amount that at least in the United States, you can put just like three and a half percent down on your first time house and everything like that.
But we are seeing banks start to get into the Bitcoin space.
So I guess tell me tell me your overall view on the banking system.
like how they're starting to get into Bitcoin?
Do you think it's maybe out of necessity?
They see, you know, more people going towards Bitcoin
and getting out of banks,
or do you see it as they see it maybe as a way to make money?
Like how do you view, or how do you think that the banks
and the traditional banking system looks at Bitcoin right now?
Yeah, I mean, this is an interesting topic
with like probably a number of different avenues
because it's to talk about,
because you have banks,
one, like how,
get into Bitcoin and how so.
There's like a number of ways
that they could get into Bitcoin
or Bitcoin adjacent things.
And I think like the current market structure bill
that's, I guess, being debated
in the United States right now
is related to stable coins.
Should stable coins be able to provide yield?
Obviously, the existing banking system
is kind of advocating against that
because if stable coins provide yield
and they hold T-bills
and they pay the highest interest rate
compared to all the deposits on their bank accounts
that are currently outstanding,
and stablecoins are arguably better
from like a payments perspective,
then it makes a lot of sense to just be like,
okay, why would anyone have a bank account
if you can have stablecoin,
which is more portable,
pays a higher yield than a bank account,
probably has less counterparties involved,
honestly, as well.
So that's like one thing that's kind of interesting too,
is like, okay, are banks going to start custody in Bitcoin? I would argue that they, you know,
some, some, as far as I know, like are working on things like that. Uh, and it seems like that would
be, uh, inevitable that they're going to try to do something like that. And then the third thing
is will banks, uh, you know, so like the, the business model of a bank is you have your
liabilities, which are customer deposits. If you have $100,000 in your account, the bank owes you
$100,000. But the bank has assets to obviously backing that $100,000. And it's not usually cash.
It's normally credit. It's normally T-bills. It's normally your neighbor's mortgage. It could be
your mortgage. It could be corporate debt. It could be in the future, digital credit, which I think is
also kind of interesting. It's like, okay, well, banks buy credit and they back your deposits with
that credit. Bitcoin treasury companies are issuing digital credit and they hold a lot of Bitcoin on
their balance sheet. Arguably, digital credit, if you're still into dollar yield, which banks
obviously are very much so, banks arguably could be some of the biggest buyers of digital credit.
And I think that's why Saylor gave that presentation in Abu Dhabi, trying to encourage someone to go out there and build digital money, basically a bank that issues dollar deposits backed by digital credit rather than T-bills or mortgages or whatnot.
So I think, yeah, like this is where probably the banking system is going to be colliding with Bitcoin in a way.
And some, you know, some banks are and are probably going to be resisting it, realizing that this is a huge disruption to their business.
But I also think some are probably going to realize that the creative destruction is inevitable and they should be, you know, for thinking and they could benefit from it by attracting a lot of Bitcoin as deposits or, you know, juicing their returns by selling mortgages and buying digital credit.
So it's going to be very interesting to see how it plays out.
You know, some jurisdictions probably are going to be restrictive and worried about banks getting involved with Bitcoin.
and then other jurisdictions are going to be encouraging probably banks to get involved with
Bitcoin. And I hope the United States decides to be on the side of being more progressive towards
Bitcoin and encouraging banks to not take absurd risk, but to open their products and services and
their balance sheet to Bitcoin and Bitcoin adjacent products. Yeah. And it seems like,
I mean, there's obviously been the rumors floating around of like the coordinated attack of MSTR on JP Morgan and kind of the stablecoin issue with banks.
So I guess, do you think that, I guess, does it worry you maybe in the short term that when these banks start to come in and I guess financialize or attempt to financialize Bitcoin, that we're going to see like more volatile times?
Like, do you think that that was partially the reason why we saw maybe a negative 25 when it came to the Bitcoin price action, even though we had so much bullish news?
Like, do you think it's going to be, I guess, more of a the Wild West type of market just because like these big money players are starting to come in?
Yeah, it's a really good question.
I mean, one of the probably unpopular opinions that I have in general is that people say Bitcoin's volatility is declining, which is historically very accurate.
However, the case for future volatility to expand is there's a lot of different cases to be made for that to happen, whether that's the upside or to the downside in the short term.
And I think that, yeah, like there could be, you know, fights between the banking industry and, quote unquote, the Bitcoin industry, you know, certain parts of the banking industry.
And that could be, you know, have a negative short term impact on Bitcoin.
There's also a catalyst for that to be a very positive on Bitcoin.
It's hard to really tell.
But yeah, I definitely think that more volatility could certainly be on the table.
but it's hard to know if that's going to be the case for sure.
And I'm not one to bet on short-term price movements
because I think it's almost unpredictable
to figure out exactly how the banking system
and how specific people in the banking system
are going to react to Bitcoin.
Yeah, I mean, that's all fair to say.
It is kind of a variable, I guess.
I mean, when humans get involved,
Jamie Dimon and Larry Fink, all of these guys,
when we see them start to backpedal seemingly on Bitcoin.
It seems like they're going to start to embrace it,
but I guess time will tell and we shall see.
But Joe, you've been very generous with your time.
So why don't you tell everybody what you're working on
and where they can find out more of your great content.
Yeah.
Well, thanks, Brandon, for having me on.
This is an awesome conversation.
Always enjoy your podcast.
Yeah, I mean, obviously I work at Strive right now,
so if you want to learn more about Strive,
You can find Strive on Twitter or search us on Google.
You can find me on Twitter and YouTube as well.
Just type in Joe Burnett Bitcoin and it should pop up.
But thanks for having me on. This was fun.
Yeah, man. I'll put all that in the show notes.
Everybody go check out Joe and his great content and read his latest article as well.
It's got great insights on Bitcoin and AI.
And Joe, thanks so much.
Thanks for having me.
Thank you guys all for tuning in to another great episode of the State of Bitcoin podcast.
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