1 00:00:00,000 --> 00:00:10,480 One of the things I'm really excited for is to see some of these things play out where supply shock combined with some of the emerging derivatives in Bitcoin, the buying pressure is pretty. 2 00:00:11,380 --> 00:00:18,220 What I think young people have found really worthwhile is that Bitcoin is the thing that is going to store value better than real estate. 3 00:00:19,080 --> 00:00:27,260 But imagine if the supply shock that you mentioned is the lead up to Bitcoin's price action for which now the short is getting squeezed. 4 00:00:27,260 --> 00:00:31,780 you actually have to cover it. And when that happens, I think that's actually the biggest 5 00:00:31,780 --> 00:00:37,260 fireworks for a Bitcoin price action. And once that Rubycon is crossed... 6 00:00:38,340 --> 00:00:42,680 What's up, guys? Before we get started, I've realized that over 50,000 of you guys keep 7 00:00:42,680 --> 00:00:47,520 coming back for every single episode. And while I'm eternally grateful for you guys to keep coming 8 00:00:47,520 --> 00:00:54,560 back, I've realized that 79% of you guys are not subscribed. So I have one small ask before we get 9 00:00:54,560 --> 00:00:59,160 started. If you guys could hit that subscribe button and hit that like button to help send 10 00:00:59,160 --> 00:01:05,180 this interview and many more to the stratosphere, it would be greatly appreciated. All right, 11 00:01:05,240 --> 00:01:11,160 enough from me. Let's get into the show. Bing bong. I am back with another edition of the 12 00:01:11,160 --> 00:01:17,200 State of Bitcoin podcast where I've got the man, the myth, the legend, Jeff Park of Bitwise in the 13 00:01:17,200 --> 00:01:24,500 house. But Jeff, we've had some recent positive price action here and it seems like everybody is 14 00:01:24,500 --> 00:01:30,180 now starting to wake up to the fact about Bitcoin. But you work at Bitwise and you guys have one of 15 00:01:30,180 --> 00:01:36,160 the larger ETFs in the game. And there's always the narrative that retail isn't really here yet 16 00:01:36,160 --> 00:01:43,080 and that people are still buying the ETFs and that's traditional financial people, right? The 17 00:01:43,080 --> 00:01:48,340 financial advisors now that they have these ETF products. I'm curious, one, where do you think 18 00:01:48,340 --> 00:01:53,180 we're going in this cycle? Do you think we've just even scratched the surface? And two, do you think 19 00:01:53,180 --> 00:02:00,400 traditional finance has even gotten into the game just yet? Man, I think we're still early and we 20 00:02:00,400 --> 00:02:04,640 still talk to a variety of RIAs and financial advisors who are still trying to understand and 21 00:02:04,640 --> 00:02:09,160 wrap their head around Bitcoin. And I think one thing that's been really helpful is that this 22 00:02:09,160 --> 00:02:14,120 year, despite the incredible price action with the stock market and select companies in the tech 23 00:02:14,120 --> 00:02:18,960 sector in particular, the actual kind of outperformer that caught a lot of traditional 24 00:02:18,960 --> 00:02:24,240 investors off guard is gold. Gold is actually leading the way. And I think that opens the 25 00:02:24,240 --> 00:02:30,540 purview to then have conversations about global macro. And there's a wedge in which Bitcoin can 26 00:02:30,540 --> 00:02:35,040 enter the conversation in a thoughtful way, piggybacking off of gold's phenomenal success 27 00:02:35,040 --> 00:02:40,740 this year. So I think that's been pretty additive. And then secondly, everything that has been 28 00:02:40,740 --> 00:02:45,780 unfolding with a lot of chaos and volatility, including the trade war and the tariffs imposed 29 00:02:45,780 --> 00:02:48,480 is coming to a point where I think it's been digested 30 00:02:48,480 --> 00:02:51,600 and people are able to see the impact it's had on inflation. 31 00:02:52,140 --> 00:02:56,120 And all of the measures today, as we've seen it so far, 32 00:02:56,200 --> 00:03:00,900 would intimate that we are going to continue to have a pretty smooth landing. 33 00:03:01,300 --> 00:03:04,460 And we are, in fact, going to get rate cuts later this year. 34 00:03:04,460 --> 00:03:09,360 And I think all of that affirmation is bringing a lot of risk on sentiment 35 00:03:09,360 --> 00:03:13,060 back to the market as well, which is, of course, always additive to Bitcoin. 36 00:03:13,060 --> 00:03:21,760 Then, of course, you had on the back where we've had one of the largest fiscal stimuluses, again, in the backdrop of government spending and the tax cut bill. 37 00:03:22,380 --> 00:03:29,320 And all of these things continue to pound the table as to the importance of having a diversified exposure into something like Bitcoin. 38 00:03:30,060 --> 00:03:38,300 So I think 2025 is really the year that institutional investors have woken up to the reality that fiscal dominance is real. 39 00:03:38,820 --> 00:03:39,720 That's why gold is up. 40 00:03:39,920 --> 00:03:46,700 And now they're considering, hey, can Bitcoin also be a correlated asset in that theme, but uncorrelated in its price action? 41 00:03:48,040 --> 00:03:48,760 Yeah, that's interesting. 42 00:03:48,920 --> 00:03:50,300 You touched on a lot there. 43 00:03:50,300 --> 00:03:57,380 And I kind of want to dive into the more of the macro situation because, you know, you brought up potential rate cuts, right? 44 00:03:57,500 --> 00:04:02,580 So Powell, you know, there's been rumors circulating he's going to step down and all of these things. 45 00:04:02,680 --> 00:04:06,180 Trump is calling for a 300 basis point cut. 46 00:04:06,180 --> 00:04:09,560 and there's a lot of, you know, chatter around that. 47 00:04:09,600 --> 00:04:11,880 And everybody thinks that, hey, once rate cuts happen, 48 00:04:12,240 --> 00:04:14,040 Bitcoin's going to absolutely explode. 49 00:04:14,040 --> 00:04:17,100 And then on top of it, we've got the big, beautiful bill 50 00:04:17,100 --> 00:04:20,320 where they're going to, you know, increase a lot of spending here. 51 00:04:20,860 --> 00:04:23,840 So I feel even without rate cuts that, you know, 52 00:04:23,880 --> 00:04:25,420 once government spending increases, 53 00:04:25,760 --> 00:04:28,380 that Bitcoin's price is going to increase as well 54 00:04:28,380 --> 00:04:31,200 because the way that traditional finance is looking at it 55 00:04:31,200 --> 00:04:34,080 is still kind of almost as an inflation hedge. 56 00:04:34,080 --> 00:04:37,740 Now, I'm curious kind of your thoughts on both of those aspects. 57 00:04:37,960 --> 00:04:42,420 With or without rate cuts, how do you think Bitcoin is going to potentially react here? 58 00:04:43,220 --> 00:04:44,460 Yeah, great question. 59 00:04:44,920 --> 00:04:56,020 I think the biggest driver is really tangential to the liquidity injection that is possible within fiscal stimulus, which is really the question. 60 00:04:56,220 --> 00:04:57,680 Number one is the Fed's balance sheet. 61 00:04:57,940 --> 00:05:01,280 What is the Fed's balance sheet going to be doing for the remainder of the year? 62 00:05:01,280 --> 00:05:07,200 And the second question is, what's dollar strength and where is that trajectory looking like? 63 00:05:07,280 --> 00:05:10,480 And those two things have touch points to what you just mentioned on fiscal stimulus. 64 00:05:10,780 --> 00:05:14,080 But I think those are the key focus points for most investors. 65 00:05:14,940 --> 00:05:29,400 You know, a remarkable stat I'll share with you is that the Fed's balance sheet as a percentage of GDP back in, let's say, 2007 before the financial crisis was something like 5% to 6% of GDP. 66 00:05:31,280 --> 00:05:35,120 And I think it was maybe like 800 billion or something like that. 67 00:05:35,580 --> 00:05:42,780 Fast forward today in 2025, the Fed balance sheet as a percentage of GDP is north of 20%. 68 00:05:42,780 --> 00:05:44,960 It's something closer to 25%. 69 00:05:44,960 --> 00:05:47,120 And it's in the trillions, right? 70 00:05:47,160 --> 00:05:53,220 Now we're talking it's in the $6 to $7 trillion of balance sheet acquisition growth. 71 00:05:54,000 --> 00:06:10,240 So that, I think, is actually a pretty domineering theme as to how people are trying to understand where is the direction of the market in terms of what is the Fed's balance sheet going to look like next year in the way that they're trying to find ways to dispose some of the assets and its liabilities. 72 00:06:11,160 --> 00:06:22,880 So that's the open question. And that has a lot of impact to market liquidity, global liquidity, dollar source and funding, and all the things that really come to intersection for Bitcoin investors. 73 00:06:23,220 --> 00:06:49,260 But here, I think the general good news is that the Fed's been generally pretty accommodative, I think, to understanding that trajectory in a pretty thoughtful way, which is, I think the biggest pushback that you hear often about the rate cut delay versus Trump wanting it urgently is rooted on this notion that the tariff price escalation is really like a one-time endeavor. 74 00:06:49,260 --> 00:06:55,240 Right. Like if tariffs happen and it raises consumer price, let's say it raises it by 10 percent. 75 00:06:55,400 --> 00:07:01,200 That's a one time event. It doesn't have 10 percent increasing every year thereafter. 76 00:07:01,400 --> 00:07:11,360 Right. Tariffs is a one time hit. And actually, the Fed generally should be guiding policies towards the rate of change and not solving for one time hits. 77 00:07:11,360 --> 00:07:18,820 So I think the sympathetic side of why people would say the Fed needs to start cutting rates is to be accommodative of the fact that inflation has come in. 78 00:07:18,820 --> 00:07:23,980 And if it actually goes up one time, it doesn't mean the rate of inflation itself is changing. 79 00:07:24,120 --> 00:07:25,320 It's just a one-time hit. 80 00:07:25,780 --> 00:07:29,160 And I think people are coming around to that because people are seeing that inflation is 81 00:07:29,160 --> 00:07:32,360 slowing post the hits that have occurred. 82 00:07:32,900 --> 00:07:35,760 And it's not going to be a thing we live with, right? 83 00:07:35,840 --> 00:07:37,120 It's just a one-time adjustment. 84 00:07:38,660 --> 00:07:44,700 So it is important, I think, at some level that we do get some accommodation on that front. 85 00:07:44,780 --> 00:07:47,240 But really, the most important thing is the long-term rate. 86 00:07:47,240 --> 00:07:58,500 And people will be focused on the long end of the curve, which is actually where most of the business financing opportunities and economic growth is happening. 87 00:07:58,960 --> 00:08:01,660 To that point, this goes back to the Fed balance sheet. 88 00:08:02,060 --> 00:08:05,040 There is an asset liability mismatch right now on the Fed's balance sheet, right? 89 00:08:05,080 --> 00:08:09,720 The Fed is literally losing money every year because the assets they've purchased are at a loss. 90 00:08:09,720 --> 00:08:17,140 They're underwater because they engaged in a kind of maturity transformation where they're long, a variety of long duration assets. 91 00:08:17,240 --> 00:08:46,680 And of course, most of the liabilities they have are short term in nature, right? It's currencies outstanding. It's the Treasury General account, and it's the bank reserves. And those are all generally short term liabilities. So that's the open question. You know, how is the Fed going to affect the disposition of its assets in a way that promotes the chance for long end of the tail of the yield curve to come in? And when that happens, I think that's actually the biggest fireworks for Bitcoin price action. 92 00:08:47,240 --> 00:09:06,040 So then what do you think the fireworks of the Bitcoin prize action entails? Is it starting to get these corporations FOMO into it? Is it a multitude of factors? Where do you think the fireworks are going to, I guess, kind of come from, I guess, the big bag holders, so to speak? 93 00:09:06,040 --> 00:09:13,760 I think that eventually it'll be normalized for every institutional investor to own Bitcoin. 94 00:09:14,120 --> 00:09:16,080 And that means we'll have incrementally new buyers. 95 00:09:16,200 --> 00:09:20,760 Bitcoin, like a commodity, always moves based on marginal supply and marginal demand. 96 00:09:20,900 --> 00:09:21,720 It's really that simple. 97 00:09:21,900 --> 00:09:23,640 And I know you know it, Brandon, because you followed it. 98 00:09:23,720 --> 00:09:27,960 And that's why we see these asymptotic cliffs to the ups and to the downs. 99 00:09:27,960 --> 00:09:31,980 And because there's no relief pressure otherwise than the fact that there's buyers and sellers. 100 00:09:31,980 --> 00:09:36,780 And there's no manipulation of that quantity nor price in which you can smooth it. 101 00:09:37,920 --> 00:09:39,780 So that's the most important thing. 102 00:09:40,320 --> 00:09:42,220 Are there rails for institutional adoption? 103 00:09:42,420 --> 00:09:46,400 And I think the two big story here is one, stablecoin adoption is happening. 104 00:09:46,700 --> 00:09:58,160 And stablecoins, I think, is mostly used today to participate in the crypto economy for where Bitcoin is the pristine collateral for there to be additional leverage that can be built in the system. 105 00:09:58,160 --> 00:10:08,700 And then two, you may have seen the Federal Reserve actually just put out a note where they are allowing banks to custody digital assets and crypto assets. 106 00:10:09,080 --> 00:10:15,980 And they've sketched out kind of the safekeeping rules to which they would want this to be permissible. 107 00:10:16,180 --> 00:10:19,100 But the punchline here is the banks are coming. 108 00:10:19,640 --> 00:10:21,700 The banks are going to offer crypto custody services. 109 00:10:21,700 --> 00:10:32,880 And once that Rubicon is crossed, you no longer have to deal with the notion of your investors asking whether crypto is like a safe thing to hold or not. 110 00:10:33,000 --> 00:10:39,800 And once you know, like the names you're trusted and involved with are in the space, that's a huge, huge boon. 111 00:10:40,400 --> 00:10:44,000 So that will just promote more investors to come in. 112 00:10:44,100 --> 00:10:50,020 It'll allow brokerages to actually permit more freely spot Bitcoin trading and all those things. 113 00:10:50,680 --> 00:10:56,180 So yeah, now I think it's just a little bit of like the final last mile of getting broad-based 114 00:10:56,180 --> 00:11:01,480 infrastructure buy-in for not you and me who have already been in the space, but for those who've 115 00:11:01,480 --> 00:11:05,500 been looking with a lot of curiosity, a lot of interest, but maybe with still a tinge of that, 116 00:11:05,500 --> 00:11:10,680 is this still sketchy? 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It's kind of on that back and forth with Amazon, 133 00:12:52,227 --> 00:12:56,727 but that the volatility is going to go down. And that's actually going to be a benefit for 134 00:12:56,727 --> 00:13:02,787 the traditional institutional investors. Now, what you're kind of lining out here seems like 135 00:13:02,787 --> 00:13:06,327 there's going to be more money that's coming in, right? It's going to be bringing in more investors. 136 00:13:06,327 --> 00:13:13,287 So more money to me would mean that even though it's a higher market cap, we would still have a lot of that volatility. 137 00:13:14,007 --> 00:13:17,327 Now, are you kind of on the same wavelength there? 138 00:13:17,407 --> 00:13:24,707 Or do you think more along the lines of the traditional financial, I guess, viewpoint here where the volatility is going to go down over the years? 139 00:13:26,207 --> 00:13:30,767 Yeah, I think there's many ways to quantify volatility. 140 00:13:30,767 --> 00:13:38,927 volatility can mean something as simple as standard deviation close to close daily observations over 141 00:13:38,927 --> 00:13:45,047 rolling window of 30 days 60 days 90s it could also mean however the distribution of fat tail 142 00:13:45,047 --> 00:13:52,267 events that can happen more or less than normal which is a vol of vol construct so what i'm trying 143 00:13:52,267 --> 00:13:57,027 to intimate here is do you consider an asset that's not moving very much day by day but then 144 00:13:57,027 --> 00:14:00,247 moves 30% one day to be volatile or not volatile, right? 145 00:14:00,987 --> 00:14:01,307 Yeah. 146 00:14:01,387 --> 00:14:05,267 The intuition here is that volatility matters for the moment in which it happens. 147 00:14:05,267 --> 00:14:10,387 And the distribution of those events are equally important as the severity of those events. 148 00:14:11,007 --> 00:14:18,667 And my guess and belief is Bitcoin in general will continue to have fat tail events. 149 00:14:18,947 --> 00:14:23,907 It will continue to have high vol events where one day it could go up a lot and one day it 150 00:14:23,907 --> 00:14:29,427 go down a lot simply because, like I've said before, Bitcoin's price is set by the marginal 151 00:14:29,427 --> 00:14:36,287 buyers and sellers. And it's actually not that important what the total market cap of the actual 152 00:14:36,287 --> 00:14:42,387 asset is. It's not dissimilar from how oil, for example, remains volatile, right? Like oil could 153 00:14:42,387 --> 00:14:47,327 be the biggest commodities market on earth where there's an incredible buyer base and seller base 154 00:14:47,327 --> 00:14:50,287 on the product of use case of the global economy. 155 00:14:50,287 --> 00:14:54,787 And yet oil is very volatile in moments of distress 156 00:14:54,787 --> 00:15:01,907 or news events where people have been unexpectedly 157 00:15:01,907 --> 00:15:05,267 or unhedged towards these outcomes to geopolitical affairs. 158 00:15:05,987 --> 00:15:10,327 So my instinct is Bitcoin will look more like oil 159 00:15:10,327 --> 00:15:11,467 in the way that it trades, 160 00:15:11,567 --> 00:15:12,967 where there will be high vol events. 161 00:15:13,467 --> 00:15:15,047 And because of that, I think the volatility, 162 00:15:15,247 --> 00:15:16,987 it could look muted day to day, 163 00:15:16,987 --> 00:15:30,107 But it doesn't mean that it's actually like a fixed income asset. If anything, it will still, I think, have lots of peaks to troughs in the ways to give investors a great room of outperformance and underperformance based on active management. 164 00:15:30,107 --> 00:15:52,847 Yeah, that's very interesting. And I really like the way you put that about still having those highly volatile events. But it's been kind of interesting in this cycle where I think we're getting the volatile events based more on Bitcoin related news opposed to maybe geopolitical or macro type of factors. 165 00:15:52,847 --> 00:16:09,027 Now, to me, that almost feels like it's going to be kind of short-lived where now soon everybody's going to have this massive wave of adoption where, you know, this company's buying Bitcoin, this company's buying Bitcoin, these new ETFs, this government's buying Bitcoin, what have you. 166 00:16:09,027 --> 00:16:12,047 But soon I feel like it's going to be normal place. 167 00:16:12,047 --> 00:16:17,507 And then, you know, it's going to be more kind of ingrained into just the overall macro landscape. 168 00:16:18,147 --> 00:16:28,227 Do you kind of see that development here right now where it's, you know, hey, maybe Bitwise or, you know, BlackRock or somebody's announcing something and that sees the giant wave up. 169 00:16:28,347 --> 00:16:36,427 But then on the flip side of things, like eventually everybody's going to own Bitcoin and it's just going to be more ingrained in just everyday business and life. 170 00:16:36,427 --> 00:16:42,107 i think it's a good question i i think um 171 00:16:42,107 --> 00:16:51,347 you know we we who live in crypto every day can also develop a sense of myopic perspectives 172 00:16:51,347 --> 00:16:55,127 towards what bitcoin represents to us but the reality is like when we step out of this bubble 173 00:16:55,127 --> 00:17:00,067 like there are still a lot of people who don't understand bitcoin who really who really don't um 174 00:17:00,067 --> 00:17:06,387 i was just having a conversation with one of my college friends uh really you know bright person 175 00:17:06,387 --> 00:17:20,927 And, you know, even today, I would say she's fairly dismissive about Bitcoin because there are like fundamental gaps in understanding of what the social benefits of Bitcoin is. 176 00:17:20,927 --> 00:17:44,927 There are still a world of people out there who consider Bitcoin to be unproductive, wasteful, and actually a wealth creation scheme that has no value proposition to a productivity creation scheme or a value creation scheme, which you and I would fight back and say, actually, the most valuable thing is having the ability to store your wealth in a way that is censorship resistant. 177 00:17:44,927 --> 00:17:53,447 But that in itself can sometimes still fall pretty flat on people who want to unlock real productivity gains. 178 00:17:54,066 --> 00:17:58,306 So I think we're still early in that journey, especially on the institutional front. 179 00:18:00,047 --> 00:18:06,707 We're still working at Bitwise to get our ETF approved across a variety of different wire houses and the bank platforms. 180 00:18:06,707 --> 00:18:15,687 And we still have these conversations around this, that very basic fundamental principles and tenets about Bitcoin and the security risks that can exist in the space. 181 00:18:15,927 --> 00:18:19,907 Because people are still not used to the idea of things you can't hold, right? 182 00:18:19,947 --> 00:18:22,847 Like, what do I own this thing that I cannot touch? 183 00:18:23,147 --> 00:18:26,107 You know, it's still a conversation we have. 184 00:18:27,167 --> 00:18:33,767 And so you have to assume like there's still a world of investors out there who still haven't wrapped their head around it that want exposure. 185 00:18:33,767 --> 00:18:47,427 And actually, that's why I think these Bitcoin treasury companies at some level are another version of like creating inflows like ETFs, because people actually just know wrappers they like and know and they're comfortable with it. 186 00:18:47,687 --> 00:18:56,167 So people like ETFs because it shows up in their brokerage statement and it says, hey, you own these assets worth this amount and here's a tax cost basis. 187 00:18:56,167 --> 00:18:58,586 And they know that because they've seen it before. 188 00:18:58,687 --> 00:19:01,047 And it's right next to Facebook stock and Amazon stock. 189 00:19:01,826 --> 00:19:03,647 It's still a line of code. 190 00:19:03,767 --> 00:19:05,806 Like Bitcoin, it didn't change. 191 00:19:05,887 --> 00:19:07,586 It's still this amorphous thing. 192 00:19:07,767 --> 00:19:09,267 It just lives now in your brokerage. 193 00:19:09,306 --> 00:19:11,267 And that's enough to get like people over the hurdle 194 00:19:11,267 --> 00:19:13,287 because like, oh yeah, I trust the ETF format. 195 00:19:13,607 --> 00:19:15,207 I know what a 40 act fund is 196 00:19:15,207 --> 00:19:16,847 and I know what grantor trusts are. 197 00:19:16,927 --> 00:19:18,107 And these things give me comfort. 198 00:19:19,647 --> 00:19:20,947 Operating companies are similar. 199 00:19:21,287 --> 00:19:23,407 There are people who understand securities. 200 00:19:24,267 --> 00:19:27,707 They understand that like value creation 201 00:19:27,707 --> 00:19:30,066 can happen through an executive team 202 00:19:30,066 --> 00:19:35,207 with operational excellence and financialization of its capital structure, 203 00:19:35,387 --> 00:19:37,707 where the job of a CEO is capital allocation. 204 00:19:37,707 --> 00:19:41,566 And they understand this approach to investing. 205 00:19:42,306 --> 00:19:46,627 So it also then opens up to investors who can buy something like MicroStrategy 206 00:19:46,627 --> 00:19:49,907 and get exposure, which is why, I don't know if you've seen lately, 207 00:19:50,086 --> 00:19:55,207 but now Vanguard is the largest MicroStrategy shareholder. 208 00:19:55,847 --> 00:19:56,967 Vanguard, who hates Bitcoin. 209 00:19:56,967 --> 00:20:03,586 right so like these these wrappers are actually quite important and the thing that we're really 210 00:20:03,586 --> 00:20:08,047 excited about for the second half of this year is there's a wall of money coming from these treasury 211 00:20:08,047 --> 00:20:13,826 companies that are going to be price inelastic indiscriminate buyers of bitcoin and as we've 212 00:20:13,826 --> 00:20:20,027 touched upon again before bitcoin will move based on that marginal demand and price pressure so and 213 00:20:20,027 --> 00:20:25,667 when it does it has the chance to move very violently to the up and i think people have forgotten 214 00:20:25,667 --> 00:20:33,326 that it could happen because we haven't seen it in some time, but it can. And the implied 215 00:20:33,326 --> 00:20:38,167 volatility market, I think as of last week, finally started to adjust for that. This whole 216 00:20:38,167 --> 00:20:45,267 year implied volatility has been going down lower and lower and lower from 60 to 50 to 40 to even 217 00:20:45,267 --> 00:20:50,347 below 40. There were times in gold's volatility was higher than Bitcoin's, believe it or not. 218 00:20:50,347 --> 00:20:54,367 and then hit its real kind of peak low. 219 00:20:54,687 --> 00:20:57,127 And then now we're on the up and up 220 00:20:57,127 --> 00:20:58,947 where implied vol is actually, you know, 221 00:20:59,187 --> 00:21:00,907 pricing in the possibility for more movement, 222 00:21:00,967 --> 00:21:01,607 which is very exciting 223 00:21:01,607 --> 00:21:04,667 because I think that's how Bitcoin is going to win. 224 00:21:05,247 --> 00:21:07,007 One worry that I've always had about Bitcoin 225 00:21:07,007 --> 00:21:09,227 is it has to be more volatile than gold 226 00:21:09,227 --> 00:21:11,267 because that's actually what young people want. 227 00:21:11,326 --> 00:21:12,127 They want volatility. 228 00:21:12,547 --> 00:21:15,387 And it's not just the price appreciation they care for. 229 00:21:15,467 --> 00:21:18,107 They actually like volatility, leverage, 230 00:21:18,107 --> 00:21:20,347 ways to make money very quickly. 231 00:21:21,586 --> 00:21:26,807 This bull run, I'm looking for ways to stack Bitcoin in my sleep and mining has always caught 232 00:21:26,807 --> 00:21:32,647 my eye. 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And they've even opened the facility up so anyone can go and visit. 235 00:21:43,447 --> 00:21:49,907 They manage over 15,000 machines for 500 clients handling all of the maintenance and repairs 236 00:21:49,907 --> 00:21:51,547 so you don't have to. 237 00:21:51,987 --> 00:21:55,067 And for the Green Candle listeners, they're giving an exclusive offer. 238 00:21:55,467 --> 00:21:58,127 All the repairs for the first year for free. 239 00:21:58,387 --> 00:22:02,767 So if you've been thinking about mining, head on over to simplemining.io 240 00:22:02,767 --> 00:22:08,727 slash greencandle to get this exclusive offer and learn about the potential tax benefits 241 00:22:08,727 --> 00:22:11,667 that you can get from mining with Simple Mining. 242 00:22:11,667 --> 00:22:13,207 All right, enough from me. 243 00:22:13,447 --> 00:22:14,487 Let's get back to the show. 244 00:22:15,107 --> 00:22:15,807 Yeah, 100%. 245 00:22:15,807 --> 00:22:20,787 And I think that's probably part of the reason why we've seen such a big gambling uptick as well, 246 00:22:20,887 --> 00:22:25,867 is just the young people really want to get those boom and busts and that volatility. 247 00:22:26,067 --> 00:22:31,387 But you mentioned Vanguard buying MSTR, being the largest shareholder. 248 00:22:31,627 --> 00:22:36,487 JP Morgan, Jamie Dimon is a huge anti-Bitcoin. 249 00:22:37,007 --> 00:22:41,767 Every week, it seems like he's saying something new about how Bitcoin's terrible. 250 00:22:41,767 --> 00:22:46,927 and JP Morgan just rapidly increased their shares of MSTR in Q1. 251 00:22:47,667 --> 00:22:50,307 And for those of you guys who come to the show a lot, 252 00:22:50,307 --> 00:22:55,787 I love to show that chart of just how big that exponential growth 253 00:22:55,787 --> 00:22:57,887 of JP Morgan's holdings of MSTR is. 254 00:22:57,967 --> 00:23:01,347 But you said something big about that the violence swings up. 255 00:23:01,507 --> 00:23:05,887 The narrative right now is there's a lot of Bitcoin getting taken off exchanges. 256 00:23:06,086 --> 00:23:09,107 There's about a little over 2 million Bitcoin left on exchanges. 257 00:23:09,487 --> 00:23:11,467 The OTC desks are running out. 258 00:23:11,767 --> 00:23:17,347 Do you think that there's, you know, that that potential of like a supply shock that we have here? 259 00:23:17,447 --> 00:23:25,987 Because, you know, I think that the biggest selling point for me, at least initially with Bitcoin was the digital scarcity aspect. 260 00:23:25,987 --> 00:23:28,947 And I think that that's still a big gap for a lot of people. 261 00:23:28,947 --> 00:23:36,247 You know, even though they see that ticker on the screen that they could buy, you know, right next to their Apple stock or whatnot. 262 00:23:36,247 --> 00:23:46,447 I think the underlying asset is something that's so unique that people are just going to try to keep buying those ETFs or buying these holding companies. 263 00:23:46,967 --> 00:23:49,507 And they're going to realize very quickly, like, hey, you know what? 264 00:23:49,627 --> 00:23:53,527 This is the first time I wasn't able to buy more of an ETF. 265 00:23:54,147 --> 00:23:57,467 Or there's that potential of that supply shock. 266 00:23:57,547 --> 00:24:02,507 Do you see that potentially happening this cycle with the amount of buying pressure that's going on? 267 00:24:03,287 --> 00:24:04,687 I do. I do. 268 00:24:04,687 --> 00:24:14,086 And there's one fundamental misconception, I think, in the Bitcoin community about what these financialized Bitcoin exposure means. 269 00:24:14,247 --> 00:24:20,647 These synthetic paper, as people call it, to be diluting Bitcoin kind of price action or ownership. 270 00:24:21,507 --> 00:24:46,373 And most of the violent upswings actually happen because there a liquidity gap in which there are folks who are short and they need to cover And from that perspective even though these short exposure types of things can feel like it paper money it is one of the contributing factors 271 00:24:46,373 --> 00:24:52,213 to price movement in a way where price and elastic buying and selling behaviors are introduced. 272 00:24:52,213 --> 00:25:08,033 So, you know, I think it's ultimately a positive thing that we get a diverse market for Bitcoin's price action where you get the chance to have both buyers and short sellers in the mix, because ultimately those are volatility fueling agents. 273 00:25:08,033 --> 00:25:16,593 it's also why micro strategy has had a lot of volatility beyond the fact that it is of course 274 00:25:16,593 --> 00:25:21,813 buying bitcoin on its balance sheet there are financial arbitrageurs who are out there and 275 00:25:21,813 --> 00:25:28,673 they play different games of shorting trading gamma against it these options can also create 276 00:25:28,673 --> 00:25:33,353 different kinds of pin risks and all this financialization like adds some path dependency 277 00:25:33,353 --> 00:25:40,273 to the price action in a way that if it's concerted in the right fashion are really, 278 00:25:40,413 --> 00:25:46,273 really good for Bitcoin. So I think one of the things I'm really excited for is to see some of 279 00:25:46,273 --> 00:25:51,093 these things play out where the supply squeeze, as you've mentioned, the supply shock combined 280 00:25:51,093 --> 00:25:57,993 with some of the offsite positioning that could exist within the financial community, 281 00:25:57,993 --> 00:26:04,453 leveraging derivatives in Bitcoin can all come to a point where the buying pressure is pretty 282 00:26:04,453 --> 00:26:08,873 immense. So for example, these Bitcoin treasury companies that are coming online right now, 283 00:26:09,613 --> 00:26:14,893 a lot of these are through pipes that have not been registered yet, which means you actually 284 00:26:14,893 --> 00:26:20,873 can't actively trade those. But if you thought you wanted to hedge some of those risks right now in 285 00:26:20,873 --> 00:26:24,693 the way that you're long these instruments, you might go out there and you might short Bitcoin 286 00:26:24,693 --> 00:26:27,113 or you might short micro strategy, right? 287 00:26:27,133 --> 00:26:28,373 Because you're doing a pair trade. 288 00:26:28,673 --> 00:26:31,893 But imagine if the supply stock that you mentioned 289 00:26:31,893 --> 00:26:34,253 is the lead up to Bitcoin's price action 290 00:26:34,253 --> 00:26:36,753 for which now the short is getting squeezed 291 00:26:36,753 --> 00:26:38,453 and you actually have to cover it. 292 00:26:38,533 --> 00:26:41,253 That has this double kind of amplifying effect 293 00:26:41,253 --> 00:26:45,153 on these violent upswings that can be ultimately 294 00:26:45,153 --> 00:26:46,773 what sets the price higher. 295 00:26:47,413 --> 00:26:49,173 And this is the most important thing, Brandon. 296 00:26:49,413 --> 00:26:53,353 I've always described Bitcoin as a flow asset 297 00:26:53,353 --> 00:26:54,413 and not a state asset. 298 00:26:54,693 --> 00:27:12,433 And what I mean by that is the market cap of Bitcoin is actually irrelevant because it's not like a stock where like a market cap is justified on its operating cash flow and a multiple of that as a valuation metric to justify whether the present value of that is worth or not worth paying for that today. 299 00:27:14,893 --> 00:27:16,793 Bitcoin's not anything like that. 300 00:27:16,873 --> 00:27:20,873 Actually, Bitcoin is just a thing that people buy and sell at some price. 301 00:27:21,193 --> 00:27:23,453 And the only thing that matters to people are their cost basis. 302 00:27:23,453 --> 00:27:25,973 So if they're really in the money, they made money. 303 00:27:26,093 --> 00:27:27,613 If they didn't, they didn't. 304 00:27:27,973 --> 00:27:32,193 So if Bitcoin goes from 100K to 500K, right? 305 00:27:32,473 --> 00:27:34,693 Let's say there's gaps to 500K. 306 00:27:35,473 --> 00:27:38,113 And like, there's a bunch of people that lost money. 307 00:27:38,153 --> 00:27:39,513 And there's a bunch of people that made money. 308 00:27:39,513 --> 00:27:40,893 And eventually they all netted out. 309 00:27:41,293 --> 00:27:42,773 The price is just there. 310 00:27:42,833 --> 00:27:43,733 It's 500K. 311 00:27:44,253 --> 00:27:47,153 Like, it actually doesn't need to come back down. 312 00:27:47,253 --> 00:27:52,333 That is the new price in which people are transacting and people are coming in and coming out. 313 00:27:52,333 --> 00:27:54,413 And that's what I mean by when I say it's a flow asset. 314 00:27:54,633 --> 00:27:59,133 It's just a medium of exchange for a time in which people come in and come out. 315 00:27:59,413 --> 00:28:02,553 They might buy Bitcoin to store value and they might sell it one day to get dollars back. 316 00:28:02,853 --> 00:28:06,973 But that thing is reflective of value at a certain time. 317 00:28:07,093 --> 00:28:14,473 And it doesn't mean that there's any sense of that market cap in itself being an anchor to like what the spot asset should be worth today. 318 00:28:14,573 --> 00:28:17,393 Because it's not really like a state asset. 319 00:28:17,393 --> 00:28:23,933 yeah and that's very really interesting that you think that yeah i mean the shorts i mean it makes 320 00:28:23,933 --> 00:28:29,933 all the sense right because i mean yesterday we are maybe two days ago now we had like 1.3 billion 321 00:28:29,933 --> 00:28:36,153 in shorts liquidated in 60 seconds and instead of bitcoin just going from you know 119 to 120 it 322 00:28:36,153 --> 00:28:40,713 shot past another you know a couple percentage points because of that and obviously the more 323 00:28:40,713 --> 00:28:45,353 money that comes in the more shorts are going to potentially be and then that just you know is going 324 00:28:45,353 --> 00:28:51,133 to be amplifying every single day. And then, you know, the more violent swings, it seems like it's 325 00:28:51,133 --> 00:28:58,013 all for the extremely bullish news here going forward and the bullish price action. But, you 326 00:28:58,013 --> 00:29:03,373 know, I've seen a recent interview with you that you talked about getting to one Bitcoin as the new 327 00:29:03,373 --> 00:29:09,033 American dream. You know, the narrative right now is that retail still hasn't shown up yet. 328 00:29:09,393 --> 00:29:14,333 I want you to dive into a little bit of that mindset, too, that you kind of see shifting here, 329 00:29:14,333 --> 00:29:16,673 because outside of the price action, 330 00:29:16,753 --> 00:29:19,313 like if we have this giant swing up, 331 00:29:19,353 --> 00:29:20,793 it almost seems like getting to one Bitcoin 332 00:29:20,793 --> 00:29:22,973 would almost be unattainable. 333 00:29:23,713 --> 00:29:26,093 But do you think that that is one, 334 00:29:26,153 --> 00:29:27,133 the new American dream 335 00:29:27,133 --> 00:29:28,953 and that people are still going to be, 336 00:29:28,953 --> 00:29:31,573 I guess, kind of shooting for that here going forward? 337 00:29:32,473 --> 00:29:34,613 Yeah, yeah, I absolutely do. 338 00:29:34,713 --> 00:29:38,153 I do because the reason people value homeownership 339 00:29:38,153 --> 00:29:41,353 in this country in the model of capitalism we have today 340 00:29:41,353 --> 00:29:42,813 is because real estate happens to be 341 00:29:42,813 --> 00:29:46,993 one of the most protected asset class in this country. If you're a real estate investor, 342 00:29:47,173 --> 00:29:53,333 there are tons of strategic structuring tax advantages to which the asset class is 100% 343 00:29:53,333 --> 00:30:01,933 supported by the fabric of America's economic engine. So the store value that homes represent 344 00:30:01,933 --> 00:30:07,113 as a result is very much like a generational mindset. And I think what young people are 345 00:30:07,113 --> 00:30:14,033 realizing today is that these home values are actually not that reflective of anything that 346 00:30:14,033 --> 00:30:20,453 the home is actually worth. It's probably worth a lot of other things as to, you know, just living 347 00:30:20,453 --> 00:30:25,453 a life that you want to live, whether you might have kids you want to send schools to, and these 348 00:30:25,453 --> 00:30:30,573 like social things matter. But at the end of the day, that doesn't have to come by ownership, right? 349 00:30:30,573 --> 00:30:36,233 That can be a rental model. And actually, if you leave the US, like if you go to Europe, for example, 350 00:30:36,233 --> 00:30:43,073 there's a whole norm out there where renting is the thing you just rent and live uh and actually 351 00:30:43,073 --> 00:30:47,793 i didn't i didn't even know this until very recently apparently in the in the london real 352 00:30:47,793 --> 00:30:55,353 estate market none of the homes you actually own are even um real deeds like all of the land for 353 00:30:55,353 --> 00:31:00,433 the most part is generally owned elsewhere with like a hundred year 500 year lease type 354 00:31:00,433 --> 00:31:04,753 um things that ultimately go back to the crown so like you actually don't even own 355 00:31:04,753 --> 00:31:11,573 the land for most of the condos and like homes you'd buy in London, which is crazy because like 356 00:31:11,573 --> 00:31:16,293 you actually don't even think about that here in the US. But all to say, like what I think young 357 00:31:16,293 --> 00:31:22,093 people have found really worthwhile is that Bitcoin is the thing that is going to store value better 358 00:31:22,093 --> 00:31:29,753 than real estate. Sorry to cut you off. But basically, I was going to say, so then everything 359 00:31:29,753 --> 00:31:34,613 seems to be shifting from that $300 trillion real estate market towards Bitcoin. Is that what you 360 00:31:34,613 --> 00:31:41,493 see coming? I think it's entirely possible that we'll see some of that depression come to real 361 00:31:41,493 --> 00:31:49,053 estate as a result. Look, real estate is not free in the sense that it's not just buying the home. 362 00:31:49,253 --> 00:31:53,433 There's a lot of servicing costs that gets associated with it on a maintenance basis, 363 00:31:53,553 --> 00:31:57,333 right? So first of all, let's take the mortgage out of the question for a second, which is 364 00:31:57,333 --> 00:32:05,213 obviously a servicing cost. There's usually like, of course, there's the property tax, right? And 365 00:32:05,213 --> 00:32:09,413 that property tax is anchored to the home value to which the inflation of the home value inflates 366 00:32:09,413 --> 00:32:15,753 the tax, which inflates the state's tax on you. And so the whole like race to the bottom of these 367 00:32:15,753 --> 00:32:22,553 fiscal and state deficits is reflected in real estate too. And then you of course have like 368 00:32:22,553 --> 00:32:29,293 common charges or like whatever community charges you might have in your home ownership. 369 00:32:29,293 --> 00:32:34,133 And those things are also administrative and they do go up with inflation. So all of these things, 370 00:32:34,473 --> 00:32:40,413 you're locked in where the cost of carry is actually indexed to inflation and usually more. 371 00:32:41,353 --> 00:32:47,513 Bitcoin doesn't have that. I think this is a profound thing. Like Bitcoin, actually, 372 00:32:47,593 --> 00:32:51,253 if you just have it, you don't actually have to keep paying more money to just keep the same 373 00:32:51,253 --> 00:32:55,933 amount of Bitcoin. It's the other way around. People come in and help you realize the value 374 00:32:55,933 --> 00:33:01,453 proposition of Bitcoin's growth in the network. Real estate really is the opposite where you just 375 00:33:01,453 --> 00:33:06,833 have to keep spending money to own it. And you have actually no way to control any of those 376 00:33:06,833 --> 00:33:11,353 exogenous variables. If the state says they're going to raise property tax, or if Trump comes 377 00:33:11,353 --> 00:33:16,073 out and says the tax deduction is changing, all of those things are out of your control. 378 00:33:16,273 --> 00:33:20,913 And you're at the whims of ultimately what the federal government wants to exert on its tax 379 00:33:20,913 --> 00:33:27,673 basis. So I think this is a broader movement where young people are fed up and they don't want to let 380 00:33:27,673 --> 00:33:32,013 others control their destiny in ways where they feel like they're constantly getting shafted by 381 00:33:32,013 --> 00:33:38,813 things they cannot control and decide. Bitcoin just gives you such incredible freedom and ownership 382 00:33:38,813 --> 00:33:45,673 and peace of mind that you own what you own. It cannot be inflated away. They can't put a tax on 383 00:33:45,673 --> 00:33:53,173 it they're not gonna you know like have it in a situation where like you have to liquidate it 384 00:33:53,173 --> 00:33:58,373 against your own will like it is safely with you i think there's something really peaceful and 385 00:33:58,373 --> 00:34:02,493 beautiful about that that young people have embraced as comforting uh and i don't blame them 386 00:34:02,493 --> 00:34:08,013 and i and i think that's also why bitcoin is always going to win uh where where the general 387 00:34:08,013 --> 00:34:14,373 trend of society is this disillusionment with governments and centralized intermediaries that 388 00:34:14,373 --> 00:34:16,053 don't seem to have their interests at heart. 389 00:34:17,133 --> 00:34:22,333 Okay, so you've discovered Bitcoin and are on the path to financial self-sovereignty. 390 00:34:22,553 --> 00:34:25,233 But simply holding Bitcoin is not enough. 391 00:34:25,273 --> 00:34:30,933 You need to make sure that it's scored properly and you are in 100% control over all your assets. 392 00:34:31,113 --> 00:34:36,373 So sharing your keys with third parties and taking on that counterparty risk is not the answer. 393 00:34:36,573 --> 00:34:38,373 The answer is pure and simple. 394 00:34:38,493 --> 00:34:40,773 It's uncompromising self-custody. 395 00:34:40,913 --> 00:34:43,833 And there's no better way to do it than the Bitcoin way. 396 00:34:43,833 --> 00:35:00,853 They've got over 25 years of cybersecurity experience and their team of experts can help you properly self custody your Bitcoin, secure your digital life, configure your privacy phones and even establish a plan B residency if you're looking to do so. 397 00:35:00,853 --> 00:35:04,873 So I'm going to help you guys out here and give you a free consultation. 398 00:35:05,413 --> 00:35:10,733 If you take the first step and visit thebitcoinway.com backslash green candle, 399 00:35:11,033 --> 00:35:17,373 and you can check out the boys at the Bitcoin Way and see how they can help you become self-sovereign. 400 00:35:17,813 --> 00:35:21,073 Yeah, and I think that that's kind of the shift that we're seeing, right? 401 00:35:21,133 --> 00:35:28,793 I mean, you know, I think River put out a study here recently that detailed that more Americans own Bitcoin than own gold. 402 00:35:28,793 --> 00:35:32,733 And that includes the ETFs and all those different aspects there. 403 00:35:32,793 --> 00:35:47,733 And I think we're starting to see that flock over towards Bitcoin as more of that safe haven asset for a multitude of reasons, not only just because of the real estate stuff that you're lining out to, but more as the inflationary hedges as well. 404 00:35:47,733 --> 00:35:53,253 So do you see that shift as well that people, maybe the gold bugs are starting to get over? 405 00:35:53,773 --> 00:36:02,233 Or is that just a narrative that us Bitcoiners like to tell each other that, you know, the gold bugs are finally starting to see the light of Bitcoin? 406 00:36:04,433 --> 00:36:11,973 I think we have some clients at Bitwise who are big investors of both now more than before. 407 00:36:11,973 --> 00:36:18,333 So I think there is an awakening of that trend, though I will also say it's pretty bifurcated. 408 00:36:18,933 --> 00:36:23,633 There are, yeah, I almost don't see any people mid-curving gold and Bitcoin. 409 00:36:23,813 --> 00:36:29,813 Like basically, they're very passionate about either embracing it or antagonizing it as a gold investor. 410 00:36:30,673 --> 00:36:39,713 There's no one that's like a gold investor that has like no opinion on Bitcoin, which I think is kind of telling, which ultimately means they understand it's either a competition or a substitution. 411 00:36:39,713 --> 00:36:42,133 and both of them, you're either supportive 412 00:36:42,133 --> 00:36:43,593 or you're going to be against it. 413 00:36:44,693 --> 00:37:00,580 And that reflective of truly what Bitcoin is It can be a substitute but it could also be a compliment And in my case I love gold just as much as I love Bitcoin too They both valuable to me And at the same time 414 00:37:00,780 --> 00:37:07,260 you know, you might feel like they're actually more differentiated where you couldn't have that 415 00:37:07,260 --> 00:37:14,760 view. Ultimately, I think what it comes down to is the price action. If you think that there's 416 00:37:14,760 --> 00:37:20,480 benefit in portfolio diversification where the correlation between gold and bitcoin is 417 00:37:20,480 --> 00:37:27,260 small enough to warrant the ability to push out the efficient frontier of your modern portfolio 418 00:37:27,260 --> 00:37:34,200 by owning both then that's easy to explain right that's just mad and and i think that will get a 419 00:37:34,200 --> 00:37:38,800 lot of people over the hump and so far i think people have shown that actually having both gold 420 00:37:38,800 --> 00:37:44,380 and bitcoin is additive and we actually launched a product in europe where we actually have a 421 00:37:44,380 --> 00:37:51,660 Bitcoin and gold as a mixed index basket strategy because it's done well together than actually 422 00:37:51,660 --> 00:37:57,220 independently of each other from a risk-adjusted return, from the ability to earn return on a vol 423 00:37:57,220 --> 00:38:04,280 unit basis. So I'm a proponent for most people to consider owning both and that we shouldn't 424 00:38:04,280 --> 00:38:08,880 necessarily antagonize each other's interests because I think long-term we're actually all 425 00:38:08,880 --> 00:38:14,340 pretty much aligned. Gold bugs and Bitcoin investors have so much more in common philosophically 426 00:38:14,340 --> 00:38:15,400 than they might even know. 427 00:38:16,240 --> 00:38:17,499 I mean, I agree. 428 00:38:17,860 --> 00:38:20,519 Like, I mean, Peter Schiff to me is like a perfect example. 429 00:38:20,519 --> 00:38:24,420 Like I agree with like 99% of the things that he's saying 430 00:38:24,420 --> 00:38:27,380 with the overall macro economy. 431 00:38:27,540 --> 00:38:28,740 It's just his view on Bitcoin. 432 00:38:28,960 --> 00:38:31,820 He just, for some reason, just won't agree 433 00:38:31,820 --> 00:38:33,060 and won't come over, 434 00:38:33,140 --> 00:38:34,999 even though he was at the Bitcoin conference 435 00:38:34,999 --> 00:38:36,740 and spoke there this year, 436 00:38:36,800 --> 00:38:38,519 which I thought was crazy. 437 00:38:38,680 --> 00:38:40,340 But I think it's just a sign of the times 438 00:38:40,340 --> 00:38:42,700 that eventually they'll all bend the knee 439 00:38:42,700 --> 00:38:47,360 and maybe he just realizes at this point it's his brand to be against Bitcoin, but who knows. 440 00:38:47,880 --> 00:38:51,420 But I definitely think that that's going to be a growing trend. 441 00:38:51,780 --> 00:38:54,600 But we've talked about the ETFs a little bit. 442 00:38:54,660 --> 00:38:59,280 You guys just made a big announcement here recently about your ETF product, 443 00:38:59,440 --> 00:39:01,660 actually this morning as we're recording it. 444 00:39:02,080 --> 00:39:05,420 So why don't you detail a little bit about that announcement 445 00:39:05,420 --> 00:39:09,940 and we can discuss a little further about what the implications are, you think? 446 00:39:11,120 --> 00:39:12,120 Yeah, absolutely. 447 00:39:12,120 --> 00:39:36,360 So when we launched the Bitcoin ETF, one of the things that we were really proud of was we launched it in the ways that crypto investors would find alignment for all the virtues of the blockchain technologies for which Bitcoin can empower transparency and DYOR and all the proof of asset stations to the ways in which people really want this idea of trust, but also verify. 448 00:39:37,220 --> 00:39:42,340 So we had our custodial wallet addresses that were shared. 449 00:39:42,499 --> 00:39:48,200 So any of us can click and go on Block Explorer and check that we actually do own the Bitcoin that we said we do in the Bitcoin ETF. 450 00:39:49,200 --> 00:39:52,760 And I think this was really popular and well received by the community. 451 00:39:53,960 --> 00:39:57,019 Today, we made the announcement that we're going to actually do something a little bit different, 452 00:39:57,019 --> 00:40:03,120 which is we are partnering with a firm called The Network Firm, and they're actually a CPA accounting firm. 453 00:40:03,120 --> 00:40:11,700 and they are bringing to us what is really a proof of reserves report that brings several 454 00:40:11,700 --> 00:40:16,960 benefits. One is we now have the ability to verify both sides of the ledger, not just the assets, 455 00:40:17,140 --> 00:40:20,519 but also the liabilities from the ability that they can navigate as an accountant. 456 00:40:21,320 --> 00:40:26,280 And then they also therefore give us an independent examination as verified by such a third party 457 00:40:26,280 --> 00:40:31,060 while still leveraging all the public keys that we have historically shared in the past. 458 00:40:31,060 --> 00:40:44,360 So I think in a way, this is like one step up to how people have attacked the proof of reserve construct by sharing that it's not enough if you don't have the liabilities also existing side by side to see the net effect. 459 00:40:44,360 --> 00:41:03,479 So this is one dimension of going forward on that. But the other part is really that we were having a lot of conversations with institutional firms who still had some worries about these public key addresses posing different kinds of risks in the future that might be unanticipatable. 460 00:41:03,479 --> 00:41:09,700 and this was a way to show, well, we can address all of these things together at once 461 00:41:09,700 --> 00:41:12,260 and the benefit that everybody can feel better off. 462 00:41:13,499 --> 00:41:19,460 You know, the reality is my view and broadly, I think most crypto investors view would say that 463 00:41:19,460 --> 00:41:26,300 sharing your public keys actually doesn't introduce like an actual technical risk from a security perspective, 464 00:41:26,300 --> 00:41:30,920 but maybe it does introduce some kind of diminution of your privacy, for example. 465 00:41:30,920 --> 00:41:43,320 And maybe there's something to be said about privacy that institution investors have a different standard for and actually would find that to create different kinds of OPSEC risks that they think is still unwarranted. 466 00:41:43,780 --> 00:41:51,560 We think that the ETF is actually one of the most transparent, predictable, and automated things that could never exist. 467 00:41:51,840 --> 00:41:54,680 Literally, we just buy Bitcoin based on client demand. 468 00:41:54,860 --> 00:41:55,320 And that's it. 469 00:41:55,360 --> 00:41:56,240 It's a passive vehicle. 470 00:41:56,519 --> 00:41:59,680 So there is no real OPSEC risks that could arise out of it. 471 00:41:59,680 --> 00:42:09,340 But at the same time, it's important that we try to be institutional in the ways that can bridge the gap between crypto and the mainstream investors. 472 00:42:09,720 --> 00:42:19,220 And I think this is one step ahead in that direction where everyone's going to be able to win off of now having some additional proof of reserve constructs with its liabilities. 473 00:42:19,840 --> 00:42:25,380 The best place to buy Bitcoin in the United States and Canada is the Bitcoin Well. 474 00:42:25,380 --> 00:42:31,740 You can go to the bitcoinwell.com backslash green candle and sign up today and they will 475 00:42:31,740 --> 00:42:33,580 give you wishing well tokens. 476 00:42:33,960 --> 00:42:39,620 They are one of the only exchanges in the United States that will give you free sats 477 00:42:39,620 --> 00:42:41,440 every time you buy Bitcoin. 478 00:42:41,900 --> 00:42:45,620 You have a chance to win 1 million sats every time you buy. 479 00:42:45,880 --> 00:42:47,720 You get wishing well tokens. 480 00:42:47,920 --> 00:42:54,060 You flip the coin down the wishing well and you have the chance to win 1 million sats. 481 00:42:54,060 --> 00:42:55,580 You heard me here, folks. 482 00:42:55,820 --> 00:42:56,820 One million stats. 483 00:42:57,260 --> 00:43:05,979 And on top of that, they have the absolute best over-the-counter service where you can make purchases over $50,000. 484 00:43:06,720 --> 00:43:08,560 And they will walk you through the whole thing. 485 00:43:08,640 --> 00:43:11,560 They have the best rates in the United States and in Canada. 486 00:43:12,160 --> 00:43:20,440 And on top of that, they have the best white glove service where they will take you through those giant purchases just so you feel comfortable. 487 00:43:20,440 --> 00:43:24,640 You'll get it in cold storage, and it's strictly non-custodial. 488 00:43:24,860 --> 00:43:28,860 They are saying, we want you to experience the true power of Bitcoin, and that's self-custody. 489 00:43:29,220 --> 00:43:33,900 So go to the well, sign up, bitcoinwell.com backslash green candle today. 490 00:43:34,300 --> 00:43:34,820 Enough from me. 491 00:43:34,940 --> 00:43:35,580 Back to the show. 492 00:43:36,140 --> 00:43:44,019 Yeah, so I mean, I do agree that it is really unique that everybody in the Bitcoin space is very much about privacy. 493 00:43:44,440 --> 00:43:47,640 But then they want the ETFs to show these proof of reserves. 494 00:43:47,640 --> 00:43:51,740 So, and it seems like it's been kind of like a hot button topic, right? 495 00:43:51,760 --> 00:43:54,800 Like some companies have now published it. 496 00:43:54,960 --> 00:43:58,560 Some ETFs have published, you know, their wallets. 497 00:43:58,640 --> 00:44:02,280 You guys obviously were a leader and a forefront at that at the beginning. 498 00:44:02,940 --> 00:44:17,280 But, you know, from your perspective, do you think that it's going to be more of a, I guess, a norm to potentially, I guess, go towards, like, are you guys viewing this as somewhat of setting the standard? 499 00:44:17,280 --> 00:44:23,760 where it is kind of like an institutional worry for you to publish your Bitcoin addresses 500 00:44:23,760 --> 00:44:28,260 just because of the way that traditional finance has gone about it. 501 00:44:28,820 --> 00:44:32,100 And this can kind of help weather some of those worries, at least initially, 502 00:44:32,600 --> 00:44:37,080 and that we'll get to a point where maybe everybody's publishing their addresses down the line. 503 00:44:37,220 --> 00:44:43,880 Or do you see it kind of, I guess, staying in the realm of traditional finance here for some time? 504 00:44:45,019 --> 00:44:46,180 Yeah, it's a really great question. 505 00:44:46,180 --> 00:44:56,660 I think the journey to crypto is never always foreseeable in the community's reactions and involvement to what they want to strongly hold to their belief system. 506 00:44:58,380 --> 00:45:03,540 At the core, there is a fundamental tension between crypto and institutional investors, right? 507 00:45:05,220 --> 00:45:13,680 The fundamental tension is that crypto really believes in provenance for which that they are the non-custodial owners. 508 00:45:13,680 --> 00:45:36,660 And institutions are built off of a totally different structural mechanism, which is you actually have third-party experts that are able to do the hard work to ensure compliance of the assets and its functions and its strategies that relies upon that expert servicing. 509 00:45:37,459 --> 00:45:41,420 And so at times it is a fundamental chasm, 510 00:45:41,720 --> 00:45:46,640 but I think this is a really neat way for us to bridge it because we're still 511 00:45:46,640 --> 00:45:50,660 leveraging what is really powerful within what is possible within proof of 512 00:45:50,660 --> 00:45:55,580 reserve with also a company that is able to be both a CPA and also a crypto 513 00:45:55,580 --> 00:46:00,100 native to bring this accounting package in an authentic way to institutional 514 00:46:00,100 --> 00:46:03,100 investors. And I think that's kind of the unlock here. 515 00:46:03,100 --> 00:46:10,800 at the end of the day what the other thing that i don't ever dismiss is that most humans are 516 00:46:10,800 --> 00:46:18,820 actually really really bad at having no insurance and having uh every responsibility fall on you 517 00:46:18,820 --> 00:46:22,940 right that's why you still hear about people who lose their coins and whatever and they can't get 518 00:46:22,940 --> 00:46:27,740 it back and and they wish they had someone else they could rely on who could help them recover 519 00:46:27,740 --> 00:46:34,780 their keys or unwind a transaction or all that stuff. And the reality is the whole ethos of 520 00:46:34,780 --> 00:46:39,940 crypto is it's immutable and irreversible. But that's a very scary, scary thing for most humans. 521 00:46:40,300 --> 00:46:45,740 Most humans do not want that level of responsibility at all. It's why people choose 522 00:46:45,740 --> 00:46:50,280 credit cards as a way to spend their money than debit cards, because they like having the idea 523 00:46:50,280 --> 00:46:52,180 that they can appeal and repeal. 524 00:46:53,240 --> 00:46:55,420 So just recognizing that is important. 525 00:46:56,040 --> 00:46:59,580 And I believe that truly most Bitcoin investors 526 00:46:59,580 --> 00:47:01,999 who love Bitcoin are already going to own it 527 00:47:01,999 --> 00:47:03,780 pretty much in the way they want. 528 00:47:04,280 --> 00:47:05,999 And we're trying to just broaden access. 529 00:47:06,300 --> 00:47:07,900 Our number one goal here truly is, 530 00:47:08,240 --> 00:47:10,519 can we find more ways to broaden access points 531 00:47:10,519 --> 00:47:12,400 for more investors to discover Bitcoin? 532 00:47:13,120 --> 00:47:15,160 And hopefully that just leads them down the journey 533 00:47:15,160 --> 00:47:18,720 further and further to this self-individualized 534 00:47:18,720 --> 00:47:25,360 sovereign model that i think ultimately crypto supports but is is um is still one that institutions 535 00:47:25,360 --> 00:47:31,120 will abide by in the format they know and trust yeah i definitely definitely agree right i mean i 536 00:47:31,120 --> 00:47:36,160 think that the people that are you know utilizing these etf products that's what they're comfortable 537 00:47:36,160 --> 00:47:42,320 with right so um you know i think that there's there's a way and broadening it for and allowing 538 00:47:42,320 --> 00:47:49,760 access to, you know, thousands, millions of people to, you know, to get more access to Bitcoin is 539 00:47:49,760 --> 00:47:55,060 definitely the way. And eventually everybody will kind of find out what's the best way for them to 540 00:47:55,060 --> 00:47:59,740 hold Bitcoin, whether it's, you know, self custody, which obviously, you know, huge proponent of here. 541 00:47:59,940 --> 00:48:05,340 But, you know, I think that this initial exposure and whether it's through, you know, a brokerage 542 00:48:05,340 --> 00:48:09,459 account or something else is definitely the way to go. But Jeff, you've been very generous with 543 00:48:09,459 --> 00:48:13,740 your time. So thank you so much for coming on the show. Why don't you tell people more where they 544 00:48:13,740 --> 00:48:18,580 can find out about you and find out about Bitwise and all the stuff that you guys have going on? 545 00:48:19,240 --> 00:48:25,920 Yeah, absolutely. Thanks for having me again, Brandon. I'm generally on X. My handle is dgt10011. 546 00:48:26,540 --> 00:48:30,820 I also have a sub stack that's viewable on my profile link. Otherwise, you can find me with 547 00:48:30,820 --> 00:48:35,260 a Bitwise crew. We're generally around the country, different conferences, different points. I'm here 548 00:48:35,260 --> 00:48:40,999 in New York, feel free to say hi if you're in town. And otherwise, we'll all see each other 549 00:48:40,999 --> 00:48:45,760 online. Amen to that. Jeff, thanks so much for everything you do. And I'll put all that in the 550 00:48:45,760 --> 00:48:52,540 show notes. So thank you guys for tuning in. Thank you guys all for tuning in to another great 551 00:48:52,540 --> 00:48:57,340 episode of the State of Bitcoin podcast. If you found some value in this one, please hit that 552 00:48:57,340 --> 00:49:01,680 subscribe button and that like button to help send this one to the masses. And I've got a surprise 553 00:49:01,680 --> 00:49:06,040 for you guys. I've got two more episodes that you have the chance to watch here. So go ahead 554 00:49:06,040 --> 00:49:08,580 and click one of them and I'll see you guys all at the next one.