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I was on the floor trading in 0809, and I can tell you the fright of the market participants was over the top.

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So Bitcoin that lives on an exchange today might not be there tomorrow.

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If you have any type of financial crisis, 0809 type scenario where people begin to question the viability of their money in the bank, what are they going to do?

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They're going to pull their Bitcoin out of the exchange and they're just going to hold it on their Trezor until everything calms down.

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Well, everything I know about derivatives tells me that this ends in a mother of all

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short sequences, right? The only solution to the problem will be, I mean, substantially higher

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prices. Had Bitcoin existed in 08, 09, you will have a supply stock the likes of which

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Wall Street's never seen. What's up, guys? Before we get started,

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I've realized that over 50,000 of you guys keep coming back for every single episode.

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And while I'm eternally grateful for you guys to keep coming back, I've realized that 79% of you guys are not subscribed.

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So I have one small ask before we get started.

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If you guys could hit that subscribe button and hit that like button to help send this interview and many more to the stratosphere, it would be greatly appreciated.

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All right, enough from me. Let's get into the show.

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Bing bong! I am back with another edition of the State of Bitcoin podcast where I've got the man, the myth, the legend,

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Darkside 2030, excuse me, in the house.

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But Darkside, I heard a recent interview with you

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where you were talking about the potential of this Bitcoin supply shock.

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We just had MSTR having the most insane earnings potentially of all time today.

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So I want to hear your thoughts about all of these Bitcoin treasury companies coming on

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and the potential of this coveted supply shock that we are seeing.

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Yeah, absolutely.

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Thanks for having me, Brandon.

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I look forward to the discussion.

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Let's dig right in.

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Yeah, so tell me, what do you think of all this?

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Do you think that there is the potential of a supply shock with what we are seeing here

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with all of these Bitcoin treasury companies now coming online and, you know,

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really just buying up days, weeks, months worth of supply in one big swoop?

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Yeah, it certainly feels like we have the immovable object meeting the immeasurable force,

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We have a massive amount of buying coming from treasury companies, from institutions, from people playing the fiat Bitcoin arbitrage game.

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At the same time, we have an ever-growing and ever-expanding derivatives market creating synthetic Bitcoin, paper Bitcoin.

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Just in the last two weeks, we've seen 12 million shares of Ibit sold short.

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The amount of COMEX cash settled futures outstanding is about 121,000 Bitcoin.

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So then we get into the perp markets, excuse me, the perpetual future markets globally, probably about another 40, 50 billion dollars worth of Bitcoin there.

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So we have, at the same time we have this insatiable desire to buy Bitcoin, we have Wall Street creating synthetic paper Bitcoin almost seemingly to meet the demand.

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Now, these two systems are antithetical to each other.

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Wall Street is used to large derivatives markets.

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Now, the issue with Bitcoin is that, A, there's only $21 billion.

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It's an infinitely scarce asset.

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And at the same time, we have in Bitcoin, you have a market that cannot essentially fix itself.

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Right. Meaning that if you look at traditional trad fi markets, they're always able to adapt to their derivatives complex.

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They're able to grow through the creation of more of an asset because the assets are almost entirely inflationary.

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Additionally, they're able to create a playing field by which hedging and the need for economic

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shorts is made available to the market.

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Bitcoin was never designed to have a derivatives complex.

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Satoshi didn't envision paper Bitcoin, synthetic Bitcoin, tremendous hedging of Bitcoin positions.

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It was created as a peer-to-peer money to live outside of the existing banking complex.

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So you can see where this is almost headed, right?

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At some point, and this is my thesis of the big long takeoff on Michael Berry's big short,

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is that at some point there won't be enough Bitcoin available to loan.

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And sitting underneath this entire thesis is a blockchain that's auditable and verifiable

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on average every 10 minutes.

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So what happens when we get to the point that Bitcoin treasury companies own 21.5 million Bitcoin?

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Well, it's checkmate.

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And arguably that checkmate will come a lot earlier in the equation.

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But for now, it's sort of like the golden age of Wall Street.

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They are just printing Bitcoin to meet the insatiable demand.

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But at some point they will lose their ability to print.

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And I also would speculate that in the next financial crisis, and make no mistake, we will have a next financial crisis, but in that next financial crisis, we'll find ourselves in a position where institutions and even individuals fearful of a banking system that's in potential freefall will pull their Bitcoin off of exchanges and into self-custom.

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right so bitcoin has a couple characteristics that wall street's really never seen before

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one it's infinitely scarce and second probably even just as important is that it's a bearer asset

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that you can take delivery of it off of the financial rails so how do you build an effective

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derivatives complex around an asset like this well the answer is you don't right in the end

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it's built to fail.

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And unfortunately, I would suggest to you

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that the compensation structures of Wall Street employees

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hasn't changed in decades.

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They didn't learn anything from 08, 09, right?

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And the way Wall Street is constructed,

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the players are out to make money today.

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They don't look at the risk that they're taking

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years down the line, right? If they did, they wouldn't be borrowing and creating synthetic

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Bitcoin because in the end, there's not going to be enough Bitcoin to meet the demand. The underlying

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foundation of any derivatives market is that underlying asset, in this case, Bitcoin,

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is freely available to be borrowed and loaned. And when that tightens up, as we saw with GameStop,

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as we saw with Porsche and Volkswagen, as we saw with Nickel, right? In all of these cases,

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when the underlying asset becomes tight and you can't borrow it and you can't lend it,

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the derivatives markets freeze up, right? And then because Bitcoin is a bearer asset

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and you can just yank it out and put it in self-custody, you can see where this entire

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problem can become exponentially worse, literally overnight. And I think we're headed in that

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direction brandon yeah so let's dive into that a little bit more so do you think this is essentially

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going to be the the mother of all short squeezes because we'll see you know the the true scarcity

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of bitcoin just really play through with all of this or do you think that they're going to try to

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muster up some solution quote unquote where they're issuing that that more than that fixed supply of

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21 million. Well, you can't issue more than the 21 million, right? You can issue some,

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you can get to a number, but at some point, the amount of Bitcoin that's actually out there

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available for institutions to borrow and to loan will freeze up. Like the creation of IBIT,

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the creation of ETFs wasn't a mistake. It was intentional, right? The creation of cash settled

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futures on the COMEX. Wasn't a mistake. That's intentional. These are tools used by Wall Street

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to create instruments to easily short Bitcoin, to create derivatives complexes, to manage risk,

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to hedge volatility. All of the natural economic forces of Wall Street is that if institutions are

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going to get into a product, they want to manage the risk. They don't want high volatility products,

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They want low volatility products, and they use derivatives to accomplish these means.

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But in the end, it's not going to work this time.

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Bitcoin's different than any asset Wall Street's ever seen before, and its design, its very design, will be the undoing of the derivatives complex.

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Yeah, so that is really interesting that you think that the design will be kind of the undoing of this entire financialized system.

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But in the interim, what needs to happen in order for us to get there?

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Is there going to be some sort of just major colossal crash where everybody's going to not, I guess, a bank run, but almost flood all their capital into Bitcoin and then take it off exchanges, which would cause this giant tsunami up?

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Or, you know, how do you see this playing out?

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Is it obviously, you know, you mentioned the derivatives market and how Bitcoin isn't really meant for all of this.

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But how do you see, you know, this this kind of, I guess, you know, we're starting to see some cracks underneath the surface.

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How is it going to develop, you think, further?

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Yeah, I think that the catalyst for the mother of all short squeezes, as I like to call it, will be a financial crisis.

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But it may come out of Japan.

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It may come out of Europe.

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Right.

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It remember our financial system is so intertwined and institutions have so much counterparty exposure to each other.

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that it doesn't need to be an American problem, right?

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It can easily be a global problem that spreads to America.

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But I can tell you this, that had Bitcoin existed in 08, 09,

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that crisis would have looked a lot different, right?

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I mean, it's funny because so many of the participants

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in the market today were not participants back,

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you know, it's coming on almost 20 years now, right?

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I was on the floor trading in 08, 09,

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And I can tell you the fear, I'll actually use the word fright, the fright of the market participants was over the top.

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I knew traders that were going to the bank and pulling out every single dollar they had in cash, putting it in their mother's freezer.

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It was that scary because we didn't know when Lehman failed.

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I think that was September 16th.

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Then September 17th, Congress declines the request for the TARP bailout funds, the $800 billion. Then the market crash has a virtual crash, I think on the 19th. In that time period, had Bitcoin existed, almost every institutional player would have bought Bitcoin and held it in self-custom.

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they would have gotten out of the banking system every last dollar they possibly could.

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Right. And that's the part that people don't understand, is that everything's fine until it's not fine.

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Our system is fragile. I've seen the fragility. I've been doing this for quite some time.

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You know, I started on the options floor in 1989. I've been through long term capital management, Russian default, Internet bubble, GFC.

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like just go one after the next, after the next.

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And we've gotten to a point now

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where everybody knows the numbers are too big.

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If you ask any market participant with a straight face,

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you know, what does 37, 38 trillion dollars look like?

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They just look at you with a blank stare, right?

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The whole thing's almost ludicrous at some point.

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But here we are, and the system's kind of cranking along,

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but at the same time, we see the cracks.

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We see the cracks in Japan.

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We see our long-term interest rates going up when the Fed cuts the short-term rate.

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These are all signs of trouble.

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The dollar has declined, what, 10% in the last six months.

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I mean, these are all signs that the system is not healthy underneath the coverage.

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Yeah, the dollar actually had, I think, the worst start that it's ever seen in the year

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for the first, like, 30 years.

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or the worst six months start to the year,

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it's been the worst in 30 years.

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So, I mean, I think that this is, you know,

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kind of lining out for the potential of just, you know,

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a big giant either recession or depression.

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But it seems like the only way out is to print.

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That's what everybody's talking about.

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Larry Lippard's got the big print.

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Lynn Alden says nothing stops this train.

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It seems like everybody in the Bitcoin space thinks that it's inevitable.

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Do you see it the same way?

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because I mean, we do have some kind of interesting,

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I guess we'll call it political theater going on

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with Trump essentially trying to strong arm Powell

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into cutting rates.

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proven. I know that's a form of QE, but do you see that there's going to have to be some sort of,

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I guess, like mega print that's similar to what we saw in 2020 and 2008?

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I do. Remember, there's two ways to get to a depression. One is through a deflationary

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spiral, a la 1929. The other is through a crack up boom. That's Mises theory,

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the Austrian economist where you essentially go into hyperinflation They both end up in the in the exact same spot which is an utter and complete depression So I in the camp that we see a crack up boom I think prices just continue to go higher The money printer will go into full burr when

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Powell's replaced at some point. And yeah, I just think we'll lose control of the dollar to

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printing not to a deflationary spiral now do you think that that that would lead to essentially

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just like an economic crash and burn globally and uh you know i guess it'll be a slow rebuild back

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on onto a potential bitcoin standard or do you think that you know we're still going to have some

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i i guess almost delusion in the market where you know we're seeing some hyper inflationary signs

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uh but uh you know people won't lose faith in the dollar as quickly as maybe the bitcoiners think

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Well, it's a good question.

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I like to say the dollar is the world's tallest midget, right?

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So we're gonna lose every other currency in the world before we lose the dollar.

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Now, to that point though, if the dollar does begin to hyperinflate,

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yeah, it will crash the global economy.

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But I would say this, that out of the ashes of that crash,

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will be born a much better system.

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The system we have today is functionally, it functionally does not serve society, right?

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We have a system that's created a complete K-shaped economy with the top 10, 15% of the

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country killing it and the bottom 85% really getting smoked, right?

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It's only the people that own assets that are doing well.

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So we're seeing right now signs of trouble, right?

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I point to the housing market because there's so much leverage built into real estate.

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So between commercial real estate and housing, we've seen, you know, obviously the commercial real estate story is well known.

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The housing market is starting to see inventories build past 2019 levels.

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We all know what COVID did. That was crazy.

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But as these inventory levels build, you end up in a real problem.

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So either they solve the problem with substantially lower rates and how you get to those lower rates is not just a function of the Fed.

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Trump can yell at Powell all he wants about the front end of the curve, but that doesn't do anything for the back end of the curve.

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Right. So you could lower you could cut the front end of the curve down to one percent tomorrow.

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I think the long end would go higher. Right.

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And that would force the Fed and the Treasury into some form of operation twist, betterly known as yield curve control, where they're forced to buy down the long end of the curve.

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That's a massive QE printing exercise.

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That's sort of the last straw.

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It basically gets you to one of the last tools in the tool shed.

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And how long they can maintain that, I don't know, probably a couple of years before the whole thing blew up.

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But that's certainly seems where we're headed, Brandon.

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Yeah, and it's interesting that you're, you know, kind of describing the real estate market as well, because, I mean, we've just had this recent law that was passed by Bill Plute, where you can use Bitcoin as collateral for Frannie Mae, Freddie Mac, for some of these, you know, housing markets.

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Obviously, Bitcoin has been, you know, the move for Bitcoin as a collateral has really taken off in the past, you know, six months.

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So how do you see that as playing a role?

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I know you kind of talked about the potential of these companies, I guess, using the traditional system to buy more Bitcoin.

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But what about Bitcoin as collateral?

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Well, Bitcoin, to me, is the most pristine collateral in the world.

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But let's look at what's happening with MicroStrategy, since you mentioned it earlier.

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their creation of these perpetual preferreds, particularly STRF and now stretch STRC,

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where they're creating a fiat yield curve on Bitcoin. So what does the market see as the

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appropriate rate for Bitcoin as collateral in the current system? And this is a monumental

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see change in the way the financial markets, Bitcoin will view Bitcoin the way the government's

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going to view Bitcoin. Essentially, Saylor is making an end run around the rating agencies

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and telling the market, you go ahead and rate my debt. You go ahead and rate the Bitcoin that I hold

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as pristine collateral. So I personally believe these products are going to explode.

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I think you're going to see demand off. I mean, like he said yesterday in his earnings call, he mentioned that, well, to him, this STRC was their, I think he called it their AirPod moment or their iPhone moment, something like that.

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But he really now understands that the $6 trillion sitting in money markets earning 4% could easily migrate over to a Bitcoin-backed debt instrument yielding 8%, 9%, 10%.

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That's just where we're headed.

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It's just getting started.

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We're in pitchers and catchers, to use a baseball analogy.

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We haven't even gotten to spring training yet.

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So we're just getting started, but the world's going to change drastically over the next few years.

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Now, the question, Brandon, that we all need to ask ourselves is if they want to save the dollar, if they want to save the system as it's constructing, they need to start intertwining hard money, Bitcoin into the system.

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Right. And, you know, easier said than done.

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And the objection, you know, it sounds good at first thought, right?

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Well, let's just create bid bonds that'll work, that'll yield 9% and that will solve some of the social security problems of Medicare, Medicaid, underfunded liability problems as yields would rise.

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But what would that do to housing?

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What would that do to car loans?

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What would that do to credit cards?

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Right.

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So there's knock on effects.

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We've gotten so far down this hole, right, that any attempt to fix the problem comes with second order effects.

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So look, I hope that they make, I hope they take their medicine and do the right thing.

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But my confidence in government is extremely low.

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So I will generally assume that the government will go down the worst possible road and get the worst possible result.

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Yeah, and it seems like, you know, that's kind of a similar thought to majority of Bitcoiners and myself as well.

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And it's interesting.

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How big of a role do you think MSTR is going to play in all this?

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Because I think one of the more interesting, you know, graphics that I saw was one Preston tweeted out this morning about our last night, actually benchmarking the strategy, benchmarking strategy versus the S&P 500 companies.

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And one of those unique things was if you look at the PE multiple of strategy, it's at 4.7.

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Of course, that's with massive amounts of earnings from their unrealized gains in Bitcoin.

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But with that, it seems like it's getting back to a little bit more of the quote-unquote value investing principles where it seems like we've kind of gotten away from that.

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And it seems like the market has just been kind of almost built on a house of cards where everything is all just very forward-looking.

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The tech companies rising up to billion-dollar valuations, then crashing, and then going bankrupt.

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I mean, it seems like it would almost help the financialization of the markets to move towards a Bitcoin standard.

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But there is a lot of resistance, it seems, at least initially from companies to get Bitcoin on their treasury.

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Now, with this massive earnings call that, you know, strategy just had, do you see this as like an overarching shift where, you know, eventually every single company in the S&P 500 is going to have some sort of Bitcoin play?

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Not yet.

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So let's kind of break this down a little bit.

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strategy is a balance sheet based company, right?

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Their earnings are coming from their balance sheet, as you just stated.

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The entire concept of the Bitcoin treasury is a balance sheet play.

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Wall Street has spent the last five, six decades rewarding the income statement,

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right?

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And they use the balance sheet as a way of hiding problems.

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So you'll very often see a company report record earnings

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and then some type of one-time charge

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where they write off some bad investment

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and they just throw that on the balance sheet

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and analysts ignore it because it's a one-time charge.

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That's a trick, it's sleight of hand,

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but it goes to show how Wall Street has so degraded

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the value of the balance sheet

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and so inflated the value of the income statement.

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Now, what's Saylor's bringing to the table?

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This bull run, I think everybody should focus on getting their Bitcoin in self-custody and off exchanges.

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We all saw what happened last time with the huge blow-offs.

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We had Celsius, FTX, all of the big dogs blowing up.

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Well, this time, everybody's being smart and holding their Bitcoin in self-custody.

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00:25:03,120 --> 00:25:06,820
This is why I'm going with the number one hardware wallet in the game.

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That's Trezor.

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Enough from me. Let's get back to the show.

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Not just seller, but all of the treasury companies are going to bring a balance sheet

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based company to Wall Street. They don't like balance sheet based companies. Matter of fact,

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they never want you to look at the balance sheet because the balance sheet will show you any of

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the defects in the company, whereas the income statement and the earnings per share and all of

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the different metrics that they pull out of the income statement, that's how they sell their product.

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So it's really an interesting dichotomy to look at a balance sheet based company like

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strategy versus an income statement company like everything else and understand that real

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value is created in the balance sheet, right?

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If you're making all this money, the balance sheet should be improved.

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But when you see companies where they making a ton of money, but the balance sheet is deteriorating,

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well, that should be a warning sign.

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Saylor's gone about it the exact opposite way.

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building unique products, but the real flow of value comes into the balance sheet. And as the

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balance sheet grows, it's going to change at some point, not immediately, not next year,

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but at some point, some Wall Street analysts are going to get together and say, hey,

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we got to spend more time focusing on balance sheets. And that will be when the sea change occurs.

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Now, he did say something interesting in that earnings call as well, where he was kind of

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describing the balance sheet, you know, the amount of like cash or Bitcoin equivalents on the balance

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sheet, where, you know, I think it was the speaker after Saylor, I can't remember his name, I'm

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blanking, but he essentially said that it wouldn't surprise him to see strategy move to the second

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largest balance sheet, you know, behind Berkshire Hathaway by the end of this year, or in the next

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two to three years, and then in the next three to five years, passing Berkshire Hathaway and being

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having the largest balance sheet of any corporation.

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Now, those are some bold claims, obviously, to come in hot like that.

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But analysts are now starting to look at Bitcoin because they're having to look at MSTR.

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And for better or for worse, they're projecting Bitcoin's price.

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They said a modest $165,000, I believe, by the end of this year.

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So with all of this attention now around the Bitcoin space, it seems like everything is just going to accelerate now.

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But there seems to be there's got to be some risk around that.

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Right. So is there any risks to these Wall Street companies and Wall Street and coming into Bitcoin at this point?

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You know, where maybe they just are, you know, it's a little bit nuanced and they don't understand the true scarcity as we were kind of lining out earlier,

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that there could be some potential downfalls coming with Wall Street coming in?

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Yeah, I think it's fair to say that leverage in the system becomes a risk.

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At this time, I think the total leverage of all of the existing treasury companies,

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obviously strategy being so far and away the biggest, is about 16%. It's very low.

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If you get on Bitcoin Twitter, you would think we're in the greatest bubble since 1929.

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But the reality is we're nowhere close.

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I saw one stat that said back in 1929, the average leverage in the companies was somewhere around, you know, a thousand percent.

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And we're at 16.

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But look, there's a narrative being spun now, right, by Wall Street.

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They're threatened by Bitcoin.

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Don't kid yourself.

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Right.

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Bitcoin threatens the existing system, unlike any invention in my lifetime.

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Right.

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There's nothing even been close.

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Bitcoin is a deflationary system sitting alongside an inflationary system.

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These two systems cannot peacefully coexist, right?

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A deflationary system will eat an inflationary system 100% of the time.

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So is there risk?

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There's always risk, right?

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But over the long term, I feel pretty confident in telling you that Bitcoin will eat fiat.

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And that's what we're seeing, right?

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When you see STRC, when you see MicroStrategy, 21 Capital, the rest of them all coming out and buying Bitcoin, realize that that's capital leaving fiat and wanting to get into Bitcoin.

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And we're still in the very low numbers.

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We have $2 trillion of cash out there, cash equivalents.

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And we're talking about sub $1 trillion in Bitcoin-related companies.

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So the door is wide open for fiat to find its way into Bitcoin.

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And ultimately, I think it will.

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Yeah, and we talked a little bit and touched on it briefly of the big long, your theory for this, kind of the anti big short, so to speak.

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So I'd love to hear you dive into that theory and the timing of it.

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How quickly do you think that this thing is going to take off?

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That's above my pay rate on timing, but my thesis is well grounded.

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as a guy who traded on the options floors

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for 20 25 years I understand options markets I understand derivatives markets And the underlying core necessity of any well derivatives market is that the underlying security has to be freely available to be borrowed loaned and shorted

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Right?

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That's just a fact.

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You cannot have a functioning options market, a functioning derivatives complex, unless you can borrow, loan, and short the underlying asset.

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Okay, that's why, just for the audience's information, the reason Saylor hit the ATM so hard last year was not just to acquire Bitcoin through that methodology.

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The real reason he hit the ATM so hard was he needed to create the shares, the float,

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to have a dynamically functioning, well-oiled derivatives complex around microstrategy.

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You wouldn't be able to have products like MSTY or STRC or STRK or convertible notes

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if you couldn't borrow and short his stock.

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And he understands this.

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That was the reason that he pounded the ATM so hard. There is now plenty of stock available. It's easy to borrow. It's freely available to loan. You can short MSTR and get full rebate. That's not an issue. And that's through hitting the ATM.

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Now, unlike MicroStrategy, Bitcoin is infinitely scarce. There's not enough Bitcoin to support a gigantic derivatives complex. Yet what do we see being built every day around Bitcoin is a truly gigantic derivatives complex.

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It's growing with leaps and bounds. And this is a natural function of institutions coming into the game and wanting to minimize their exposure. They want to hedge volatility risk. They want to hedge downside risk. You have long-term holders that have figured out, well, I'm better off hedging my risk to the downside now that I can, rather than selling and incurring a huge tax consequence.

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So, you know, it's important for the audience to understand that a huge amount of the shorting that takes place in Bitcoin is not people betting that Bitcoin is going to go lower.

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Right. It's economic hedging. If I own a thousand Bitcoin, OK, let's say I own it at a thousand dollars and I want to go out and say, look, Bitcoin's trading 115,000.

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I want to stop out myself at $100,000. And I go to Goldman Sachs and I say, look, I'd like to buy

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Bitcoin insurance at $100,000. I own this $1,000 Bitcoin. I want to make sure that if it crashes,

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it goes to zero, at least I get my $100,000. They're going to sell you an over-the-counter

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put product, essentially. They've now sold you that put. You want Bitcoin to go higher. You still

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own $1,000 Bitcoin. Yes, you bought insurance, but by buying insurance, you don't want the product

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to go down, you want it to go higher, right? Goldman Sachs doesn't want Bitcoin to go down,

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then they have to honor their put contract. But they do need to short Bitcoin in order to hedge

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their downside exposure, right? So you have two parties to a transaction that are creating a need

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to borrow Bitcoin and short it, but neither party wants to see Bitcoin go lower. They both want to

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it go higher. While plenty of people need Bitcoin to short to hedge exposure, that doesn't mean

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they're betting on the price to go low. And that's the problem in its derivatives complex. It's not

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designed for an asset like Bitcoin. It's designed for an asset that you can freely borrow and loan

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and short. And that's not what you have in Bitcoin. Yeah. So when we have that and you have this

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non derivative uh you know the the infinitely or not infinitely scarce product like all of this

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and the derivatives market that is essentially built essentially needing that is there ever

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going to be a future where there's never going to be like the derivatives market just kind of like

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00:35:03,180 --> 00:35:09,660
runs out like how does this future hold is it just going to end in some sort of just giant short

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00:35:09,660 --> 00:35:15,660
squeeze like this or is there um you know going to be some sort of i guess like end to this market

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because there is just such fixed supply with all of this?

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00:35:20,160 --> 00:35:23,360
Well, everything I know about derivatives tells me

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that this ends in a mother of all sorts of reasons, right?

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For a couple of reasons.

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And I touched on this earlier.

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Probably the most important characteristic of Bitcoin

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beyond the fact that it's completely scarce

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is that you can take delivery, right?

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So Bitcoin that lives on an exchange today

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might not be there tomorrow.

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00:35:41,460 --> 00:35:45,140
Why would you ever hold generational wealth on a piece of paper?

395
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It doesn't make sense. You need a foolproof solution and I've got it for you. You could get

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399
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C phrase. I don't know about you guys, but I don't have too many things where I think one ton

400
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is going to fall on this, but it could survive all of that and more. So go to CryptoSteel.com.

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So go ahead and protect your generational wealth and do it with CryptoSteel. All right,

403
00:36:34,860 --> 00:36:41,280
Enough from me. Back to the show. Bitcoin that's available to short today might not be there

404
00:36:41,280 --> 00:36:47,140
tomorrow. So if you have any type of financial crisis, as I mentioned earlier, right, 08, 09

405
00:36:47,140 --> 00:36:52,540
type scenario where people begin to question the viability of their money in the bank,

406
00:36:53,220 --> 00:36:57,660
right, what are they going to do? They're going to pull their Bitcoin out of the exchange.

407
00:36:57,880 --> 00:37:01,340
They're going to pull their Bitcoin out of custodial services, and they're just going to

408
00:37:01,340 --> 00:37:05,900
hold it on their Trezor until everything calms down, until they have a resolution.

409
00:37:06,540 --> 00:37:11,760
But in doing so, they're going to create the fuel to throw on the short squeeze fire.

410
00:37:12,540 --> 00:37:18,540
And unlike GameStop or Volkswagen Porsche, there's no CEO to tap on the shoulder and say,

411
00:37:18,620 --> 00:37:24,960
hey, look, we need you to sell more Bitcoin, right? Like that doesn't exist, right? So where

412
00:37:24,960 --> 00:37:30,760
do you end up? You end up in a short squeeze that can't be stopped. There is no easy mechanism

413
00:37:30,760 --> 00:37:32,800
to put an end to the squeeze.

414
00:37:33,340 --> 00:37:35,060
Now, once the squeeze starts, of course,

415
00:37:35,120 --> 00:37:36,880
every hedge fund in the world is going to come in

416
00:37:36,880 --> 00:37:38,240
and start buying call options,

417
00:37:38,820 --> 00:37:41,460
just making the entire situation 10 times worse

418
00:37:41,460 --> 00:37:44,400
or exponentially worse, and off you go.

419
00:37:44,900 --> 00:37:47,500
The only solution to the problem will be,

420
00:37:47,500 --> 00:37:49,920
I mean, substantially higher prices.

421
00:37:50,420 --> 00:37:52,560
You will have a supply stock

422
00:37:52,560 --> 00:37:55,100
the likes of which Wall Street's never seen before.

423
00:37:56,420 --> 00:37:57,380
My God.

424
00:37:57,620 --> 00:38:00,640
Well, then I guess we need to all buckle up at this point

425
00:38:00,640 --> 00:38:04,840
So does that mean that this is the end of the four-year cycle with this?

426
00:38:04,920 --> 00:38:08,560
And then it's going, as Michael Saylor says, up forever, Laura?

427
00:38:09,540 --> 00:38:11,780
Yeah, the four-year cycle is dead.

428
00:38:12,940 --> 00:38:21,460
The four-year cycle was born out of a miner boom-bust cycle with supply cuts and miners going bust.

429
00:38:21,960 --> 00:38:27,400
Today, I just don't see that being a major effect on Bitcoin price.

430
00:38:27,400 --> 00:38:33,840
The amount of Bitcoin being acquired just by IBIT, add strategy in there.

431
00:38:33,960 --> 00:38:41,700
Those two entities are acquiring so much Bitcoin on average that they just dwarf anything that the miners can produce.

432
00:38:42,320 --> 00:38:49,240
Well, I'll play devil's advocate with you here because this is one question that I'm kind of wobbling with.

433
00:38:49,240 --> 00:38:57,640
Because yes, I agree, there's only less than 7%, 6% left of all coins to be mined.

434
00:38:58,140 --> 00:39:02,100
So I think that that amount is not going to really hold weight.

435
00:39:02,200 --> 00:39:08,440
But I think there's still two factors here that might play a little bit role into the cycles.

436
00:39:09,000 --> 00:39:15,900
One, I think that if you take a step back and look outside of the Bitcoin mining having cycles,

437
00:39:15,900 --> 00:39:20,120
You also got the business cycle, which seems to run every four years as well.

438
00:39:20,120 --> 00:39:23,620
And then, of course, like the presidential cycle here in the US.

439
00:39:23,940 --> 00:39:29,100
So those kind of two factors almost seem to help with the boom and bust and maybe have

440
00:39:29,100 --> 00:39:33,000
elevated the effects of the halving in a sense.

441
00:39:33,540 --> 00:39:39,580
But I'm curious if you think that that point is, I guess, worth the argument or if you

442
00:39:39,580 --> 00:39:44,860
just think it's more about this, just the simple supply and demand and I'm overcomplicating

443
00:39:44,860 --> 00:39:45,080
it.

444
00:39:45,900 --> 00:39:51,400
Well, I think the biggest argument you could make is the political cycle, right, the presidential cycle.

445
00:39:51,760 --> 00:40:03,820
But I would argue back, well, now that BlackRock is in the game and, you know, we can argue about whether what they control, but I'm kind of in the thesis that they sit on top of all politics.

446
00:40:05,160 --> 00:40:09,260
I just don't see the political cycle being the major driver.

447
00:40:09,260 --> 00:40:19,980
This doesn't mean we won't have bull markets and bear markets, but I think it's going to be like a traditional asset, a lot more like traditional asset than what Bitcoin has been in the past.

448
00:40:20,120 --> 00:40:23,140
So I'm not a believer we're going to see 80% drawdowns.

449
00:40:23,300 --> 00:40:30,460
And I would also suggest to you that the last drawdown, the last cycle was more driven by choke point 2.0.

450
00:40:31,280 --> 00:40:35,020
FTX, I believe, was a government operation of sorts.

451
00:40:35,520 --> 00:40:37,900
We know how much money was funneled back into politics.

452
00:40:38,460 --> 00:40:40,160
Celsius was involved with governments.

453
00:40:41,060 --> 00:40:46,260
It's just hard to believe that with the modern framework we have,

454
00:40:46,280 --> 00:40:49,500
the political framework, yeah, I just don't see it.

455
00:40:49,780 --> 00:40:51,220
I mean, it's possible, but I don't see it.

456
00:40:51,880 --> 00:40:53,120
No, that's all a fair point.

457
00:40:53,180 --> 00:40:56,840
I had to play a little devil's advocate with you for all of that.

458
00:40:56,920 --> 00:40:58,720
But I mean, we've gone this entire time

459
00:40:58,720 --> 00:41:01,980
and we haven't really even talked about the main macro economy

460
00:41:01,980 --> 00:41:04,740
and kind of where you think that that is.

461
00:41:05,040 --> 00:41:07,800
Because I mean, if you look on Bitcoin Twitter,

462
00:41:07,800 --> 00:41:11,300
Like you said, it seems like we're in a giant asset bubble.

463
00:41:12,140 --> 00:41:16,800
If you listen to DJT these days, inflation's dead.

464
00:41:17,140 --> 00:41:20,080
If you listen to Powell, inflation's still running rampant.

465
00:41:20,400 --> 00:41:24,000
So I'm curious, with your experience, where you think we are,

466
00:41:24,220 --> 00:41:27,720
and are you seeing any similarities to any of the times past?

467
00:41:28,900 --> 00:41:32,100
Well, today we got the jobs numbers.

468
00:41:32,220 --> 00:41:32,780
They were awful.

469
00:41:33,140 --> 00:41:37,580
True inflation came in at 1.6%, well under the 2% target.

470
00:41:37,800 --> 00:41:42,800
Look, I think we're headed straight into a crack up boom.

471
00:41:42,800 --> 00:41:43,800
That's what I think.

472
00:41:43,800 --> 00:41:45,800
I think prices are just gonna go higher.

473
00:41:45,800 --> 00:41:48,800
It's gonna catch everybody by surprise.

474
00:41:48,800 --> 00:41:52,800
Inflation will at some point, you know, pick back up again.

475
00:41:52,800 --> 00:41:55,800
Credit creation is the problem.

476
00:41:55,800 --> 00:41:59,800
I mean, we just have too much credit creation and the wrong type of credit creation.

477
00:41:59,800 --> 00:42:04,800
I don't know if you saw a Richard Verner's piece on Tucker.

478
00:42:04,800 --> 00:42:08,200
It was absolutely a dynamic, unbelievable three hours.

479
00:42:08,560 --> 00:42:10,220
Encourage the audience to go watch that.

480
00:42:11,260 --> 00:42:18,960
He did an incredible job of summarizing for me everything I've known is wrong with the banking system, but wasn't able to put into words.

481
00:42:19,820 --> 00:42:26,640
Werner is an incredible economist who rightfully predicted the Japanese debacle.

482
00:42:28,260 --> 00:42:31,960
Yeah, he kind of lays out there's three types of credit creation.

483
00:42:32,420 --> 00:42:34,140
There's credit creation to buy assets.

484
00:42:34,140 --> 00:42:38,660
There's credit creation for the consumer, consumer credit.

485
00:42:39,220 --> 00:42:45,920
And then there's credit creation that's actually productive that goes into businesses, goes into hiring and creates productivity.

486
00:42:46,440 --> 00:42:52,860
I think he said the numbers today are 85 percent of all credit is created for asset inflation and consumer inflation.

487
00:42:53,520 --> 00:42:59,020
And we know that, right? Banks want to loan on things that have collateral that are collateralized.

488
00:42:59,020 --> 00:43:04,020
They don't want a loan if you go to try to start a business and get a loan.

489
00:43:04,020 --> 00:43:09,020
Even if the business you have is cash flow positive, they don't want to make a loan.

490
00:43:09,020 --> 00:43:11,020
They want no part of it.

491
00:43:11,020 --> 00:43:19,020
And that's part of the problem is that when you create credit and that credit's used to buy an asset, that doesn't help GDP at all.

492
00:43:19,020 --> 00:43:20,020
It just raises prices.

493
00:43:20,020 --> 00:43:23,020
And those prices then get filtered back.

494
00:43:23,020 --> 00:43:29,020
Asset inflation certainly leads to consumer inflation, but also credit cards lead to consumer inflation.

495
00:43:29,020 --> 00:43:31,040
Money printing leads to consumer inflation.

496
00:43:31,580 --> 00:43:38,760
So yeah, given the system we have today with credit creation out of control, I think we

497
00:43:38,760 --> 00:43:40,180
go straight into a crack up boom.

498
00:43:41,420 --> 00:43:46,760
Then does this mean that all assets are going to essentially rise up to including S&P 500

499
00:43:46,760 --> 00:43:47,920
and gold as well?

500
00:43:48,740 --> 00:43:49,220
Absolutely.

501
00:43:49,680 --> 00:43:54,340
Gold seems to be wanting to do the best, better than the S&P.

502
00:43:54,960 --> 00:43:58,460
Look, the S&P, it's a cap weighted index, right?

503
00:43:58,460 --> 00:44:03,360
So what we're really talking about is the top, the MAG 7, maybe the top 15 stocks.

504
00:44:03,860 --> 00:44:08,740
The other 485 are sort of a drag on the index, if you look at it.

505
00:44:09,000 --> 00:44:11,080
And that just speaks to the health of the economy.

506
00:44:11,600 --> 00:44:17,180
The S&P 500 has become, in its own way, a measure of monopolies, right?

507
00:44:17,380 --> 00:44:23,100
The bigger the monopoly gets, the more powerful and the more representation it gets in the S&P 500.

508
00:44:23,660 --> 00:44:27,280
But I think we all know that that's not really good for the economy.

509
00:44:27,280 --> 00:44:34,600
it's good for the monopolies yeah now let's get into the monopolies do you think that there is

510
00:44:34,600 --> 00:44:39,820
I mean I know strategy isn't necessarily a monopoly at this point but you know they're so

511
00:44:39,820 --> 00:44:46,820
far ahead of every other company is there a risk where uh you know strategy becomes essentially too

512
00:44:46,820 --> 00:44:52,820
big with all of this because what they have over 600,000 bitcoin right now and the next closest

513
00:44:52,820 --> 00:44:55,940
is a marathon with like 50K.

514
00:44:56,200 --> 00:45:00,540
So the gap between one and two is drastic,

515
00:45:00,740 --> 00:45:04,720
whereas the gap between two and three and so on isn't too much.

516
00:45:07,200 --> 00:45:08,420
No, I don't think so.

517
00:45:08,540 --> 00:45:12,300
I mean, in the end, strategy owns what, 3% of the Bitcoin out there.

518
00:45:13,340 --> 00:45:17,040
We know the central banks hold about 65% of the gold that's out there.

519
00:45:17,600 --> 00:45:19,220
So just compare the two assets.

520
00:45:19,700 --> 00:45:21,080
One is truly decentralized.

521
00:45:21,080 --> 00:45:23,840
even the largest player has gotten to 3%.

522
00:45:23,840 --> 00:45:26,660
They're going to struggle to get to 5% or 7%.

523
00:45:26,660 --> 00:45:30,280
It'll be really, really hard for them as the price goes up.

524
00:45:31,080 --> 00:45:33,460
So no, I don't see it as a gigantic problem.

525
00:45:33,580 --> 00:45:34,880
I think they're going to use that Bitcoin

526
00:45:34,880 --> 00:45:38,520
to offer fiat collateralized products like STRC

527
00:45:38,520 --> 00:45:41,900
and that just serves to drain capital

528
00:45:41,900 --> 00:45:46,500
out of the financial system and into Bitcoin related products.

529
00:45:47,240 --> 00:45:49,860
All that being said, look, I love strategy.

530
00:45:50,020 --> 00:45:50,660
I love sailor.

531
00:45:51,080 --> 00:45:54,920
but Bitcoin in self-custody is the exit ramp, right?

532
00:45:54,960 --> 00:45:57,460
If you own Bitcoin, you're able to self-custody it.

533
00:45:57,500 --> 00:45:58,340
You put in the work.

534
00:45:58,680 --> 00:45:59,820
It's not hard nowadays.

535
00:46:00,500 --> 00:46:03,440
When I got involved in 2013, it was scary.

536
00:46:03,920 --> 00:46:06,320
Passwords, no seed phrases, right?

537
00:46:06,400 --> 00:46:07,960
Like a wallet.dat file.

538
00:46:08,300 --> 00:46:09,360
We've come a long way.

539
00:46:09,880 --> 00:46:11,760
Organizations like Unchained, Casa,

540
00:46:12,360 --> 00:46:14,900
make it really easy to set up multi-sigs.

541
00:46:15,560 --> 00:46:18,700
The ability to custody your own Bitcoin's gotten so easy

542
00:46:18,700 --> 00:46:31,280
that people just need to put in the work get their money out of the financial system and be secure I sleep really well at night with Bitcoin in self Yeah I mean as you should

543
00:46:31,420 --> 00:46:34,060
I mean, I think that's the true power of Bitcoin

544
00:46:34,060 --> 00:46:37,900
is being able to hold it with yourself like that.

545
00:46:38,040 --> 00:46:42,440
But it's interesting kind of the way that you've gotten to all of this

546
00:46:42,440 --> 00:46:46,120
with your background and the way that we're seeing

547
00:46:46,120 --> 00:46:48,500
the financialization of Bitcoin,

548
00:46:48,500 --> 00:46:53,120
or I guess maybe it's the Bitcoinization of finance here.

549
00:46:54,060 --> 00:46:57,900
How do you see this developing when it comes to corporations

550
00:46:57,900 --> 00:47:02,220
with Bitcoin on the balance sheet and just for people in general?

551
00:47:02,220 --> 00:47:06,080
Because it seems like now we've got banks starting to come in

552
00:47:06,080 --> 00:47:09,500
and allowing banks to custody and all these different ways.

553
00:47:09,600 --> 00:47:12,260
Do you think that we're going to get to this future

554
00:47:12,260 --> 00:47:15,780
where people and businesses and everything under the sun

555
00:47:15,780 --> 00:47:21,220
is just able to, I guess, get confident enough to custody their own Bitcoin?

556
00:47:21,720 --> 00:47:27,000
Or do you think that there's, I guess, there's no way out for the businesses?

557
00:47:27,220 --> 00:47:31,320
They're going to always need to have some sort of custodial solution.

558
00:47:32,100 --> 00:47:35,180
And a lot of people in general just feel more comfortable

559
00:47:35,180 --> 00:47:38,160
having the banking system and whatever hold their Bitcoin.

560
00:47:38,440 --> 00:47:40,580
So self-custody is still a long ways away.

561
00:47:40,580 --> 00:47:49,160
well you know i hate to say it but i'm kind of in the camp that the next financial crisis might

562
00:47:49,160 --> 00:47:56,560
be the last one um yeah i'm fearful when i see that banks want a custody and there's all these

563
00:47:56,560 --> 00:48:02,420
different institutions that want to custody your bitcoin um not your keys not your coins

564
00:48:02,420 --> 00:48:08,940
and and don't kid yourself in some kind of massive financial crisis the bitcoin that's in the

565
00:48:08,940 --> 00:48:13,880
corporate system will become the government's Bitcoin and you'll get back the fiat when you

566
00:48:13,880 --> 00:48:21,520
least want it right so yeah for my two cents get get out of the system get your Bitcoin in self

567
00:48:21,520 --> 00:48:28,680
custody there's no reason to expose yourself to risk when you don't have to yeah and I agree with

568
00:48:28,680 --> 00:48:34,360
you with there and and do you see this with any sort of you know scaling risk or anything like

569
00:48:34,360 --> 00:48:40,820
that as we're starting to see Bitcoin develop? I mean, of course, you know, the fixed scarce

570
00:48:40,820 --> 00:48:47,100
supply of Bitcoin is the true superpower. And I think that's, you know, kind of what you see as

571
00:48:47,100 --> 00:48:53,660
well. But, you know, traditionally, it always seems like there's that, you know, the Wall

572
00:48:53,660 --> 00:48:58,140
Street guys, they always say, hey, you know, the Keynesian economics sort of thing, like you need

573
00:48:58,140 --> 00:49:04,940
some sort of inflation to have the economy grow. Do you see it as that way? Are you, I guess,

574
00:49:05,180 --> 00:49:10,120
seeing Wall Street, I guess, open their eyes a little bit more towards the Austrian economics

575
00:49:10,120 --> 00:49:22,260
type of thesis? These are really good questions, Brandon. Look, I see a world that's similar to

576
00:49:22,260 --> 00:49:25,940
the dark ages going into the Renaissance.

577
00:49:25,940 --> 00:49:29,020
Just to kind of paint the historical picture here,

578
00:49:29,020 --> 00:49:31,440
Europe was in the dark ages.

579
00:49:31,440 --> 00:49:35,900
The Medici family created the Florin, a gold coin.

580
00:49:35,900 --> 00:49:38,820
That gold coin became the standard unit,

581
00:49:38,820 --> 00:49:41,900
unit and weight and measure of a gold coin throughout Europe.

582
00:49:41,900 --> 00:49:44,240
And society flourished.

583
00:49:44,240 --> 00:49:47,080
There was abundance with hard money.

584
00:49:47,080 --> 00:49:50,000
The arts flourished, music flourished.

585
00:49:50,000 --> 00:49:54,480
I think the same thing is going to happen here. Do we need inflation? Absolutely not.

586
00:49:54,960 --> 00:50:01,200
But what does a world look like on a Bitcoin standard? There won't be interest rates. There

587
00:50:01,200 --> 00:50:08,140
won't be yield on Bitcoin. Bitcoin will be loaned from a grandfather to a grandson to start a

588
00:50:08,140 --> 00:50:15,100
business. Bitcoin will be loaned inside of a community because abundance creates the willingness

589
00:50:15,100 --> 00:50:24,680
to loan Bitcoin. You're not going to do it out of a desire for more Bitcoin back. The entire concept

590
00:50:24,680 --> 00:50:31,200
of interest rates and yield comes out of an inflationary system. In a deflationary system,

591
00:50:31,640 --> 00:50:36,460
I might loan you Bitcoin and take some equity in the business you're starting,

592
00:50:36,860 --> 00:50:42,140
but I'm not going to loan you 10 Bitcoin and expect to get 11 back. That's not a thing.

593
00:50:42,140 --> 00:50:45,740
There's not enough Bitcoin to support that model.

594
00:50:46,220 --> 00:50:47,640
That model may work today.

595
00:50:47,740 --> 00:50:51,860
Today you can borrow Bitcoin, but in the future, you're not going to be able to borrow Bitcoin

596
00:50:51,860 --> 00:50:57,620
or charge interest on Bitcoin because there's not enough Bitcoin available to pay back the interest.

597
00:50:57,980 --> 00:51:03,660
This bull run, I'm looking for ways to stack Bitcoin in my sleep, and mining has always caught my eye.

598
00:51:03,960 --> 00:51:09,000
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599
00:51:09,000 --> 00:51:11,760
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600
00:51:12,200 --> 00:51:15,480
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601
00:51:15,800 --> 00:51:19,800
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602
00:51:20,500 --> 00:51:26,260
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603
00:51:26,260 --> 00:51:27,900
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604
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605
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606
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607
00:51:48,300 --> 00:51:50,840
All right. Enough from me. Let's get back to the show.

608
00:51:51,580 --> 00:51:56,460
Right. That's just common sense. The math, that's mathematically solid, right?

609
00:51:56,460 --> 00:52:02,980
You can't create more Bitcoin. So, yeah, it's just a different world, right?

610
00:52:02,980 --> 00:52:04,480
It's a world of abundance.

611
00:52:04,480 --> 00:52:08,560
It's a world of deflation where things get cheaper.

612
00:52:08,560 --> 00:52:10,920
Nobody can come up with a good excuse

613
00:52:10,920 --> 00:52:14,440
why the price of a car goes up every year.

614
00:52:14,440 --> 00:52:16,400
The price of the car should go down

615
00:52:16,400 --> 00:52:19,840
because the technology involved makes it so much cheaper

616
00:52:19,840 --> 00:52:20,740
to manufacture.

617
00:52:20,740 --> 00:52:21,700
We now have robots.

618
00:52:21,700 --> 00:52:24,640
We now have all of this amazing technology.

619
00:52:24,640 --> 00:52:28,300
Prices of cars should go down every single year.

620
00:52:28,300 --> 00:52:32,220
That's the entire concept of an economy,

621
00:52:32,220 --> 00:52:36,840
is that as you invest in a better way of doing things, the price goes down.

622
00:52:37,240 --> 00:52:42,240
But we live in this crazy inflationary world where the price goes up,

623
00:52:42,240 --> 00:52:44,160
even though the technology gets better,

624
00:52:44,720 --> 00:52:49,320
even though people create innovations that should make things cheaper,

625
00:52:49,680 --> 00:52:51,580
the price still goes up because of inflation.

626
00:52:52,120 --> 00:52:57,420
So it's very hard to wrap your fiat brain around what a Bitcoin world looks like,

627
00:52:57,500 --> 00:53:00,820
what a deflationary world looks like when you're in an inflationary environment.

628
00:53:00,960 --> 00:53:01,760
And that's all we know.

629
00:53:02,220 --> 00:53:10,400
But if you really sit down and think about it deeply, you'd realize that society would be just so much of a better place.

630
00:53:10,740 --> 00:53:12,900
We would be a world of tremendous abundance.

631
00:53:13,700 --> 00:53:16,180
There would be so much of everything that you need.

632
00:53:16,720 --> 00:53:20,860
Right. And you wouldn't be buying junk because your money is going up in value.

633
00:53:21,280 --> 00:53:26,920
Right. One of the things about inflation is it forces you to spend your money on cheap crap that you don't need.

634
00:53:27,260 --> 00:53:31,660
Right. When you're in a deflationary environment, you're thinking with a Bitcoin mindset.

635
00:53:31,660 --> 00:53:37,960
Well, if I don't buy this, my Bitcoin will go up in value and I'll be able to buy more tomorrow.

636
00:53:39,360 --> 00:53:41,620
So it's just a very different way of thinking.

637
00:53:41,800 --> 00:53:46,540
You really need to adopt a totally different mindset and then think in that mindset.

638
00:53:47,180 --> 00:53:50,720
And I think you get to the fact that we'll be in a much better world.

639
00:53:52,240 --> 00:53:53,400
Yeah, and I agree with you.

640
00:53:53,460 --> 00:53:57,280
I think it just aligns incentives more with people.

641
00:53:57,280 --> 00:54:09,040
And, you know, it's interesting because of the way that, you know, we've been taught with everything, you know, really on the Keynesian economics sort of standard and everything along those lines.

642
00:54:09,340 --> 00:54:20,540
And, you know, with this, I guess, Bitcoinization of finance that we are seeing, like MSTR, all of the different, I guess, you know, corporations now putting Bitcoin on the balance sheet.

643
00:54:20,960 --> 00:54:24,400
It seems like Wall Street still isn't really, really here too much.

644
00:54:24,400 --> 00:54:33,840
I mean, of course, we've got BlackRock and we've got those ETFs, but the narrative around the ETFs is that it's mostly retail buying and it's not a lot of the institutional investors.

645
00:54:34,880 --> 00:54:42,820
Is that the way you see it as well or am I missing the institutional kind of investors starting to come in?

646
00:54:43,660 --> 00:54:44,520
Yeah, they're coming in.

647
00:54:44,840 --> 00:54:46,240
You better believe they're coming in.

648
00:54:46,720 --> 00:54:52,620
I think right now, I mean, we don't know the exact numbers, but I guess I'd say 25% of IBED is institutionally held.

649
00:54:52,620 --> 00:54:57,520
And remember, these derivatives complexes, that's institutional.

650
00:54:58,320 --> 00:55:01,840
So there's a lot of institutional money coming in.

651
00:55:02,360 --> 00:55:04,020
Like, I'll give you a perfect example.

652
00:55:04,480 --> 00:55:05,760
FDRC, right?

653
00:55:05,840 --> 00:55:07,880
So we know that's a 9% instrument.

654
00:55:08,900 --> 00:55:11,740
It's set up to attack the money market business.

655
00:55:11,840 --> 00:55:12,940
It pays a monthly yield.

656
00:55:13,660 --> 00:55:17,160
It also happens to pay a dividend instead of interest.

657
00:55:17,160 --> 00:55:21,280
Dividend tax rates are extremely beneficial, right?

658
00:55:21,280 --> 00:55:29,920
So qualified dividends, obviously much better, much more tax efficient than your standard interest income.

659
00:55:31,600 --> 00:55:40,800
Institutions are going to quickly figure out that they can buy STRC and they can hedge the downside in Bitcoin by buying way out of the money puts.

660
00:55:41,360 --> 00:55:44,520
And they can lever that product 10x, right?

661
00:55:44,540 --> 00:55:46,780
And they can make 50, 60% returns.

662
00:55:47,060 --> 00:55:49,800
That's the trade that I see institutions wanting to do.

663
00:55:49,800 --> 00:55:56,640
I think Sailor just stepped on an absolute, like he said, I created that this was our iPhone moment.

664
00:55:57,220 --> 00:56:03,040
That's why, is that they're going to quickly figure out how to take these products and create

665
00:56:03,040 --> 00:56:09,200
huge yields by levering them up. They're very low risk. Then by hedging the downside exposure

666
00:56:09,200 --> 00:56:14,740
using the derivatives market. Again, not designed to support this, but that's what's going to happen.

667
00:56:14,740 --> 00:56:20,220
yeah i definitely hear you now i want to have a little little fun with you here dark side

668
00:56:20,220 --> 00:56:25,980
so with your experience and being in bitcoin for so long i'm sure you've tried to orange

669
00:56:25,980 --> 00:56:31,380
pill some people for some very smart people in the financial space what has been the craziest

670
00:56:31,380 --> 00:56:37,180
excuse or reasoning why uh somebody has told you that bitcoin is not going to work or it's going

671
00:56:37,180 --> 00:56:41,600
to fail or something along those lines maybe a little bit different than the traditional fud that

672
00:56:41,600 --> 00:56:47,360
we hear, it seems like every single cycle. Well, it's funny because Wall Street really

673
00:56:47,360 --> 00:56:53,180
comes back at you with the same narrative. Look, these narratives, the Ponzi scheme narrative

674
00:56:53,180 --> 00:57:02,180
has been sown over years. This is not by mistake. These narratives are born out of very sophisticated

675
00:57:02,180 --> 00:57:08,460
people thinking very hard on how to protect their monopolies. So yeah, I wish I could come up with

676
00:57:08,460 --> 00:57:14,440
crazy stories and tell you some funny stuff. But generally speaking, it really always goes back to

677
00:57:14,440 --> 00:57:19,400
it's a Ponzi scheme. But then I have to ask them, well, what is money? What is the dollar?

678
00:57:19,960 --> 00:57:27,760
The dollar is really a Fiat Ponzi scheme. And built into the dollar is all of the characteristics

679
00:57:27,760 --> 00:57:33,160
of a Ponzi. You have to have deceit. Well, we have something called the debt ceiling.

680
00:57:33,160 --> 00:57:39,720
right? The debt ceiling is pure deceit. Anybody who understands how debt works knows you cannot

681
00:57:39,720 --> 00:57:44,400
pay down the debt. If you pay down the debt, you cause a deflationary spiral. There won't be enough

682
00:57:44,400 --> 00:57:50,320
money to pay the interest on the existing debts. So the debt has to go up. But yet they come up

683
00:57:50,320 --> 00:57:56,420
with this crazy debt ceiling thing that Congress has to raise every couple of years because that's

684
00:57:56,420 --> 00:57:58,840
It's a measure of deceit, right?

685
00:57:58,860 --> 00:58:02,600
The entire fiat debt-based Ponzi scheme is exactly that.

686
00:58:03,180 --> 00:58:05,400
Now, Bitcoin is proof of work, right?

687
00:58:05,420 --> 00:58:06,840
It's actually stored energy.

688
00:58:07,540 --> 00:58:10,460
It takes tremendous energy to create Bitcoin through mining.

689
00:58:10,860 --> 00:58:13,420
So look, you cannot compare these two systems.

690
00:58:13,940 --> 00:58:14,660
And you know what?

691
00:58:14,660 --> 00:58:19,440
I don't waste my time on the Wall Street guys because screw them, right?

692
00:58:19,580 --> 00:58:21,420
Like they're getting theirs now.

693
00:58:21,420 --> 00:58:30,720
I spend my time mostly with, you know, Bitcoin, Twitter, trying to preach the message of Bitcoin in self-custody and answering the questions.

694
00:58:31,000 --> 00:58:35,000
Right. That's what really excites me. Trying to get the Wall Street guys on board.

695
00:58:35,380 --> 00:58:38,360
And by the way, if you do get them on board, you know what their answer is?

696
00:58:39,080 --> 00:58:48,600
Well, well, that will kill the system. But once they figure it out, they come back at you with, well, wait a minute, that'll blow up the entire system we have.

697
00:58:48,600 --> 00:58:50,560
Well, no kidding, right?

698
00:58:50,640 --> 00:58:52,020
The two systems are antithetical.

699
00:58:52,400 --> 00:58:54,780
They can't peacefully coexist, right?

700
00:58:54,860 --> 00:58:57,800
And that's where the whole thing kind of lends itself, right?

701
00:58:58,900 --> 00:59:05,760
There's just, look, people that are killing it today on assets and Wall Street, trading,

702
00:59:06,060 --> 00:59:07,900
high frequency trading, right?

703
00:59:08,160 --> 00:59:09,720
They don't want to hear about Bitcoin.

704
00:59:10,280 --> 00:59:11,260
And I understand it.

705
00:59:11,320 --> 00:59:12,900
I understand why, right?

706
00:59:13,000 --> 00:59:15,620
Like it threatens their way of life.

707
00:59:15,620 --> 00:59:26,000
But for the bottom 85% of the world, certainly of America, you know, Bitcoin, you know, offers a chance to opt out and to say no more.

708
00:59:26,340 --> 00:59:30,460
And I think that's who we should be targeting our message to, right?

709
00:59:30,500 --> 00:59:32,780
The top 15%, let them be the last in.

710
00:59:33,440 --> 00:59:42,560
But right now we want to get, you know, every American on board, especially, you know, those that are struggling, even with $50 a month, whatever it is, right?

711
00:59:42,560 --> 00:59:47,660
In the end, you're not going to need much to be a very wealthy individual.

712
00:59:48,820 --> 00:59:49,620
Yeah, exactly.

713
00:59:49,880 --> 00:59:56,620
And I mean, I think just doing that DCA over four years really drastically can change your life.

714
00:59:56,720 --> 00:59:58,620
I mean, it changed mine 100%.

715
00:59:58,620 --> 01:00:03,120
So, I mean, without Bitcoin, I'd be in a completely different place.

716
01:00:03,180 --> 01:00:03,460
Who knows?

717
01:00:03,520 --> 01:00:07,440
I'd maybe even be in a cubicle at this point in time.

718
01:00:07,440 --> 01:00:10,920
So, it's definitely been a life changer for me.

719
01:00:10,920 --> 01:00:18,620
And that's why I get so passionate about preaching it to everybody just because of how many more doors it can open and really unlock.

720
01:00:18,800 --> 01:00:22,840
And like you said, I think, you know, everybody gets Bitcoin at the price that they deserve.

721
01:00:23,180 --> 01:00:28,880
And, you know, I think the Wall Street guys, maybe it's a little bit better that they're coming a little bit later.

722
01:00:29,360 --> 01:00:31,820
But DarkSide, you've been very generous with your time.

723
01:00:31,900 --> 01:00:33,780
So I really appreciate you coming on the show.

724
01:00:33,780 --> 01:00:42,160
Why don't you tell people where they can find out more about you or, you know, maybe follow along and hear some of the great things that you preach?

725
01:00:42,160 --> 01:01:04,520
Yeah, so come follow me on Twitter at darkside2030 underscore. I do a show on spaces every Monday through Friday, 830 a.m. Pacific, 1130 Eastern. I also host a bunch of my own spaces, usually really pertinent subjects related to what's going on today.

726
01:01:04,520 --> 01:01:07,180
yeah I'm pretty much there full time

727
01:01:07,180 --> 01:01:09,260
you know I'm retired so

728
01:01:09,260 --> 01:01:10,620
this is my work

729
01:01:10,620 --> 01:01:12,520
is giving back to the community

730
01:01:12,520 --> 01:01:15,320
I've been so blessed to be in the position I'm in

731
01:01:15,320 --> 01:01:17,500
so yeah what an honor

732
01:01:17,500 --> 01:01:19,080
it is to be able to come out and

733
01:01:19,080 --> 01:01:21,280
just share the message and try

734
01:01:21,280 --> 01:01:22,980
to get to as many people as possible

735
01:01:22,980 --> 01:01:25,320
yeah and you're a legend for that

736
01:01:25,320 --> 01:01:27,080
and I definitely recommend those spaces

737
01:01:27,080 --> 01:01:29,000
for anybody that hasn't tuned in

738
01:01:29,000 --> 01:01:30,560
and I'll put all that in the show notes

739
01:01:30,560 --> 01:01:32,080
Darkside thanks so much

740
01:01:32,080 --> 01:01:35,640
Thank you, Brandon. What an amazing time. I really appreciate you.