BTC Sessions - $2.4M Bitcoin INCOMING! – Major Central Bank FORCED To Go ALL IN | Adam Back, James Check, Eric Yakes

Episode Date: April 25, 2025

A $2.4M Bitcoin price could be incoming as a major central bank is forced to go all in. Join Adam Back, James Check, and Eric Yakes to hear how this could trigger the biggest Bitcoin surge we’ve ever seen!FOLLOW TODAY’S PANELISTS:https://x.com/adam3ushttps://x.com/_Checkmatey_https://x.com/ericyakesFOLLOW BTC SESSIONS on X/Nostr: x.com/[e-mail] private one-on-one sessions with BITCOIN MENTOR! Learn self custody, hardware, multisig, lightning, privacy, running a node, and plenty more - all from a team of top notch educators that I've personally vetted.https://bitcoinmentor.io/—------------------------------SHOW SPONSORS:BITCOIN WELL - BUY BITCOINhttps://qrco.de/bfiDC6COINKITE/COLDCARD (5% discount):https://qrco.de/bfiDBVAQUA WALLEThttps://qrco.de/bfiD8gNUNCHUK HONEYBADGER INHERITANCEhttps://qrco.de/bfiDARHODLHODL NO KYC P2P EXCHANGEhttps://hodlhodl.com/join/BTCSESSIONDEBIFI LOANShttps://qrco.de/bfiDCp#btc #bitcoin #crypto

What if I told you one of the wealthiest and most financially conservative nations on earth is now being pushed to add Bitcoin to its central bank balance sheet? On the same day that Ark Invest just happened to increase its 2030 Bitcoin price target to an eye-watering $2.4 million per coin. And one of our guests today made a similar seven-figure Bitcoin price call last year. Switzerland, nearly $1 trillion in GDP, over $900 billion in central bank assets, is under massive pressure to make a strategic Bitcoin allocation. And this isn't just coming from internet hype and you and I spurring people on to do it. It's coming from Lucius Messer or Meisser, a respected economist and co-founder of the Bitcoin Association of Switzerland, who made a public call for the Swiss National Bank to,

embrace Bitcoin. I'm going to bring up my screen here and we're going to take a quick look at what he had say on the topic. Let's listen. In such times, society needs resilient institutions, institutions like the Swiss National Bank. And here, I want to point out the fundamental difference to other speakers. The green activists want you to support their agenda. They distract the Swiss National Bank from its mission. The Bitcoin initiative, in contrast, seeks to support the National Bank by providing it with a monetary tool for the digital age. How is that?

Bitcoin is a special asset. I have to admit it might not be worse much in scenarios that most of you consider normal. However, Bitcoin can be worse a lot in the specific. scenario of a multipolar world order with fading trust in government debt. The high price of gold and Bitcoin is the market signal to tell us that this scenario is not unlikely. In economic terms, Bitcoin resembles an arrow security named after the Nobel Prize winner Kenneth Arrow. And as anyone with a formal education in portfolio theory knows, the question is not whether to hold an arrow security It's how much should be held.

I leave it to the competent employees at the Swiss National Bank to figure out the right amount. But I'm pretty sure that it is higher than the 1000 Bitcoin you already hold indirectly through shares of companies that have Bitcoins. If you want to help, if you want our help with these considerations, we stand at your disposal. Interesting words there. Imagine, imagine the signal this week. send to the world. We're watching game theory unfold in real time at the level of nations. If Switzerland were to make a move, it wouldn't just flip the script. It could trigger a global scramble for Bitcoin unlike we've ever seen. And that, that lights the fuse on Bitcoin's

next explosive leg up. Today, I've got a stacked panel of guests to discuss this and much, much, much more. James Check bringing you the best in on-chain metrics and market analysis through check-onchain.com. Eric Yakes, managing partner at Epoch, an author of the seventh property, one of my favorite Bitcoin books. And finally, the legendary Adam Back, original cypherpunk, co-founder, and CEO of Blockstream, and I don't know, whatever, he just happened to be cited in Satoshi's Bitcoin white paper. With this epic list, you're not going to want to miss a second. I am And Ben with the BTC sessions. And this is your bullish session.

All right. So it's time to bring in our panel. I want to welcome to the stage. Eric Yakes, Adam Bax, James' check. Gentlemen, welcome. Thank you guys for being here. I want to tease up with this initial kind of topic that I was talking about here. And so I'm just going to bring up a couple quick things in regards to the whole Swiss National.

bank thing because I know there's going to be people in the chat that are saying, well, you know, they're not they're not super keen on it with the actual national bank and what they've, what they've said. So let's just kind of take a look at what they've said versus what they've done. So really quick, Swiss National Bank chief dismisses Bitcoin Reserve calls, basically saying that it's, they're dismissing the calls. They're saying that the chairman, cryptocurrency cannot currently fulfill the requirements for our currency reserves. And meanwhile, you've got people saying holding Bitcoin makes more sense as the world shifts towards multipolar order.

So there's kind of arguments on both sides. But either way, the chief of the Swiss National Bank has been very, very dismissive. However, they've been stacking the hell out of micro-strategy. So they are getting exposure to it. And it's not just, you know, they, when, when they, when they, when they. got up to, this was late last year, they've got somewhere in the realm, 466,000 shares. You get these reports quarterly. So this would have been back in September, the previous quarter. But then they've just released the latest, and they're now up to 517,000 shares of

micro-strategy. So they're making moves. To me, it seems like they want the exposure without explicitly going out and directly buying Bitcoin. In terms of the price call from ARC, I mentioned that at the beginning, they did raise that up from, I believe, a previous $1.2 million per Bitcoin up to, or sorry, where was it? I lost it here. They were in the realm of, I think, 1.5, somewhere around there, and then they moved it up to their 2.4 call. Part of that accounting for Bitcoin that are assuming. assumed to be missing. And finally, Adam, I was alluding to you last year. You said if the

strategic Bitcoin Reserve happens, you're pretty pumped about the idea of seven-figure Bitcoin. So Adam, maybe I'll toss the question to you first. You know, one, how likely do you think it is that we start to see either Switzerland or other countries begin to actually look at this as an asset on a actual central bank balance sheet. And two, do you see all of the dominoes kind of lined up to begin this kind of global Bitcoin grab on this nation state level? So I'll leave you with that. Yeah.

So my mother is from Zurich. And so I spent some time in Switzerland. I thought about getting a Swiss passport as possible. I still might try to do that. And I was talking to the guys that are doing the referendum to, because part of what's going on, what they're quoting is a fresh run at having a national referendum to require the Swiss national back to do that. Because they have a very direct democracy. If you get enough signatures, you can force a referendum to repeal the law, introduce a law, and then I don't really have any choice.

So it's about popular sport, actually. It's not, you know, so it's more like the people tell the government what to do and they have to do it. So now, the other thing, the interesting bit of context is the Swiss franc was, you know, if people remember 1970 in the US like got through Gold Standard, but the Swiss Frank got for Gold Standard in the year 2000, like shockingly recent, right? So they're familiar with hard money. They like cash. It's a very strong economy.

The Swiss economy is generally top of the world. economic efficiency ratings, low unemployment, low interest rates, etc., etc., right? And the Swiss franc is generally very strong versus anything else, all the other major currencies. So it's quite interesting, you know, of the stronger respected economies with respected banking regulators, etc., I'd say it's probably a best shot, is the Swiss government for it, right? And so really the question is how much support is there for doing it in Switzerland? And now they did have a referendum, I don't know, probably five years ago or something, to reintroduce the gold backing, but it didn't pass quite.

So now they take another run out of it, now that Bitcoin is being around for longer, and to see if they can do it with gold and Bitcoin. So the other interesting thing about Switzerland is the Swiss National Bank is very economically proficient. They're smart money managers. So basically a very high and successful hedge fund. And they own about 150 billion of US equities, which are disclosed by the SEC. So when you say in Microstrategy, I think you're looking at that report, which shows about 1% of their US stock allocations in Microstrategy. And of course, they've got other things.

I think the M2 my supply of Switzerland is about a bit over a trillion Swiss francs, which would be 10, you know, 10, 15% more in US dollars because it's overtaken to. dollar over the last few years used to be below a dollar knaps over so anyway lots of interesting things going on with there where you know even and in the process of doing the referendum they have to you know try and get signatures from a lot of people and it will be in the national news and it of course people think about it and it generates a bunch of you know positive uh media about bitcoin and of course you've got the u.s discussion of the sovereign bitcoin reserve so it's good timing because they got that to reference as well. And there are actual sovereign reserves, for example, Abu Dhabi, one of their sovereign wealth funds, what about 450 million in Bitcoin.

So there's a lot of momentum. So it would be, it'd be good for them if they did it. We'll see if they actually did it. What does that do to Bitcoin? If I, again, I know that they've got to, they've got to have a referendum that I don't know how easily they'll be able to sell Bitcoin and gold, but as time goes on, that Overton window shifts. And so when that tipping point happens and not just small countries, but countries like Switzerland start actually saying, hey, we need allocation here. What does that do to Bitcoin and how quickly?

Well, I think the Overton windows definitely shifted compared to a couple of years ago. I mean, starting with a spot ATF switch, which, You know, they were reluctantly granted, right? The grace scale, I think it was, had to take them to court to get them to do the right thing. But now it's all systems change, right? With the new US administration, they are fixing up all that stuff quickly. New SEC chair. A lot of that government is stacked with Bitcoin-friendly and enthusiastic people.

And, you know, the fact that they're talking about a sovereign reserve is it's self-moving. window and that you've got favourable regulations. So I think that actually matters to different types of institutions, the financial institutions that might adopt Bitcoin like pension funds, endowments, sovereign wealth funds, because, you know, we're into Bitcoin, we like it for the bearer currency. So the average sort of Bitcoin, it probably doesn't care too much about the establishment, but it matters to the other establishment that it's a kind of seal of legitimacy or something, like somebody important in their world saying you can trust this now.

So I think, and they also, you know, there's a clomo and they look at each other as well, right? So if one respected entity does it, the next one's more like to do it. And so you've got some good names who are pretty far into Bitcoin, like Fidelity was quite early, right? And a number of the players. So things happen. The other fun thing is the institutional adoption is a bit slow, so they'll do something. but then they've got to, you know, have some financial institution with millions of retail investors and they'll say, yeah, we're going to make it available, we're going to put it in our managed

bonds or something, but it will take them six months, do the training materials and write the policies and stuff. So you hear the news and nothing much is happening, but eventually all this stuff will land and it'll start snowball, I think. I want to jump up to Eric as well. I'd love to hear your take on the fact that this is even being discussed on a global stage, you know, would you have believed seeing stuff like this four or five years ago? No, and I think it's, it's happening in a like backwards way from how I expected things would naturally occur. And that's great. But yeah, I expected these types of events to be happening around 2030, I expected, you know, much smaller economies to be showing interest and

for the Overton window to take much longer to shift around all of this. I think that I'll come back to this, but I have a question for Adam online. Is the for, is this specifically the referendum required around allocation policy adjustments like within particular categories or do you know specifics around how that works with them? Well, I mean, they used to have a mandate where the Swiss franc was 40% backed by gold some kind of legal requirement, and that's what's got scrapped in 2000s. So they want to reintroduce it, right? And how they depend, you know, they could say they need a certain percentage or, you know,

leave it to the national election or something. Right. So it depends. Yeah. Sorry, go ahead. Yeah, go ahead. Yeah. So like that when I think about from the perspective of some of these larger scale type sovereign

institutions that are adopting it, whether it's through a central bank directly or through a sovereign wealth fund or what they're looking at, what I, you know, Bitcoin has its advantages that a lot of retail investors are looking at within it and then sovereign or institutional type investors are looking at as well. But from a sovereign standpoint, what's holding it back is. is just really characteristics that improve as it gets adopted more and more. And the depth of liquidity within the capital market itself and then the stability and volatility of the asset over time. I mean, I think Schlegel, their chairman, is pushing back on it publicly for those specific reasons.

And that's what gold has a very material advantage of any type of, you know, sovereign entity that wants to get commodity exposure to scarce assets. It's, well, what has the, you know, largest depth? If I want to go liquidate $150 billion, like in their equity exposure, we were just talking about, you know, what market can I do that in and not move it the most from a commodity standpoint? That's a huge advantage that gold has over time. But it increasingly becomes less and less of an advantage, which is why, you know, I presume that adoption would happen in a much more bottom up way, which it certainly is. I just didn't expect that some of these top-down ultimate, ultimately, like, there's just this change in the culture of institutional investors that's happening in a significant way. There's a bunch of reasons behind that, which I can get to into the bullish section. It's almost like, again, it's polar ends of kind of the, I guess, the economic spectrum, right?

The people that have the least to lose that are in the worst economic situations are using it for a variety of reasons. Some just censorship resistance or lack of access to regular banking. But then also at the far other end of the spectrum, you've got the people whose job it is to preserve purchasing power and actually build capital. And those people are cluing in too. And it's like working its way inwards almost. You can actually say this at a few levels. Like if you think about strategy, there were a business that could not get ahead, right? So that's a needs-based thing.

You can also look at it at the sovereign level. There's a period where Iran was like 3% of the hash rate because pick a country that's going to get sanctioned and closed off from the world, Iran, Venezuela, Russia. So you see it on that side of the equation. And then you're right, we're seeing it on the upper end. I forget, I think it was Wisconsin, but there was a pension fund that allocated like $100 million. And when you actually, it might be these guys, it could be someone else. But when you actually look at their balance sheet, they were one of the few pension funds, state pension funds that was like properly backed. They actually had the money that they owe people.

So you're seeing the ones that are the most fiscally prudent. And then you're seeing the nations and the companies that needed it. And you're right. It is starting to work towards the middle. It almost reminds me of the bell curve meme, right? We've got both sides of the spectrum. I think was it Jesse Myers did that piece on why the yuppie elite don't understand Bitcoin. That's the middle of the bell curve.

like you can see all these things happening. Bitcoin is, right? I'm sure many Bitcoin has recognized. You're probably on one of the two sides of the spectrum. The middle folks just never quite worked it out. I see that in my daily life with people that I know personally. Very much. The bell curve meme is the best meme that's ever been made.

It's so right. It's parallel to everything that I ever see ever. And we're going to sandwich out all the middle of the bell curves with Bitcoin. Yeah. Yeah. The only exception to it, again, is in terms of economically is, again, the crazies that just happened to be in and around this stuff early. But, you know, now that everybody's aware of it, we're really seeing that bell

curve play out. Now, gentlemen, barring any other quick topics you want to drop here, or not topics, but final comments, just in and around the Swiss thing, you're welcome to. But otherwise, I want to get into the meet in the show and I want to learn why you. guys are bullish if you guys are game to dive in. Yeah, awesome. Well, Eric, I'm going to start with you this evening. And again, anybody that's watched the show, all of these gentlemen have various reasons for being bullish. And so we're going to get to hear them tonight. And so, Eric, I'm starting you off with the same question everybody will eventually get. Why are you bullish? The most, okay, so the most bullish thing that I've seen over the past week was that Bloomberg reporter

who referred to gold as analog Bitcoin. That was probably the most bullish thing that I've seen in a long time. I absolutely love that. And I think it was kind of off the cuff too, an accidental, I think. But I, like, Tato's crashing in your frame.

Look at that guy. Yeah, we're just hanging out at the space. I go Friday in the space. There he is. I think that guy showed up super drunk to my birthday in New York recently. That adds up. That adds up. He's been doing that a lot recently.

We're going to get him out. Anyways, Eric, continue. Thanks for ruining everything. Okay. Like, let's put this in perspective, right? Just a few, over the past few years, I think that what's really changed is the burden of proof in so many ways has shifted off of Bitcoiners and on to everyone else. It's like the core thing that I see. If I walk into a room full of institutional finance professionals, the burden of proof is on them to explain why they don't understand this asset.

We're talking about an asset that's like the best performing asset in measurable history by so many different metrics on an absolute on a risk adjusted basis. Things are moving just in a historic way. and the ETF launch is the most successful in history. It's one of, you know, arguably outside of the internet itself. And, you know, maybe Adam will correct me on this, but the most distributed network that really exists. All of these different variables that are completely historic. And, you know, capital allocators are all taking a look around the world. And it's gone on for over 15 years now.

There's really no way to make an argument that this was some sort of flash in the pan. for any sort of asset. And the biggest thing that I've been talking about recently on podcasts, and we wrote an annual report through my firm kind of diving deeply into this. And we're not necessarily macro people. And I don't really follow the price that much. But the one thing that we're looking at is, when is Bitcoin going to decouple from assets? And I think that that happening is the primary catalyst towards the suddenly moment when there's really no other reason. for people to make, you know, it's a risk on asset argument against it. And that's when I think allocation decisions in many allocators' minds go from, you know, a 1%. Let's test the waters on this

risky asset type investment to, no, this is a commodity allocation and commodities will all trend towards, you know, a very high negative correlation during a market downturn. And that's when it turns into a 10 to 20% allocation type framework of thinking. And that's when things get crazy. I think that, And I've been shit posting at lunch on Twitter just saying decoupling over and over again. And of course, it's going to take, you know, we need a lot more data. But the question is really like, how much data do you need to determine it? I mean, last year there was a divergence in correlations. You want to be too.

That was getting me excited. And that's what it's the first for a lot of a year. Not out of the wood yet, but it seems like from a narrative standpoint, you know, we have media outlets that are starting to say this, that Bitcoin is reacting. different way. And I feel like there's there's a shift in the cultural sense around the asset and it's starting to become much more pervasive that this the safe haven status that we all know it's eventually going to get to is really starting to shift into a reality for people. And I think that once we have, you know, a persistent, say years worth of data like very consistent market contractions and Bitcoin behaving in an alternative way, putting liquidity in the markets aside,

That's what I'm really bullish on. And I think that we're getting very close to that inflection point right now. I think that on top of that, what we're seeing like through my firm, you know, we're dealing a lot with investors that are interested in like broader cryptocurrency and everything. And we're always talking to people trying to make the case for Bitcoin. And one thing that I think is really starting to change and we can see this appear in much of the pricing. we'll see if it's persistent. I think retail is just getting a lot smarter now.

And people are really understanding what's going on here and they're understanding where the value is. Never say never, who knows what's going to happen. But this might be the moment where we really do start to see the death of a lot of false marketing within the broader cryptocurrency ecosystem. And I think that that's one of the most interesting things because it's going to change the incentives of all of these. these people who formed a business model out of wealth,

we can not actually create something real, but we just focus on marketing, we can get a pop and we can use that in a way to finance something that we may or may not perceive to be legitimate or real for whatever reason. But the second that that stops happening, and that's really been dampened in a significant way in recent history, now the structure of incentives changes.

And you can kind of see that a bit more pervasively within the broader cryptocurrency world where like on their podcast and the things what they're saying, they're starting to say, like, well, we need to build legitimate projects that make money. And that shift in mentality, like you're hearing it very frequently, it's becoming a pervasive narrative. That shift in mentality is going to lead them to Bitcoin. And I think that that's, there's a lot of paths and roads where there's a shift in the way that people are thinking about the asset. And it's a beautiful thing. Awesome. I'm curious to get comments. Maybe I'll go to James

first here and then we'll get Adam's thoughts here but on any of like again the the shift from gold to bitcoin as a as an acceptable option there uh the quote unquote decoupling uh trademark and uh and yeah and and the the recognition of why bitcoin only and why everything else has been a little bit of smoke of mirrors yeah totally and you know michael how was on uh macro voices uh on this friday and And one of the things that he's run, he's obviously Mr. liquidity, and he's done all this analysis to look at how Bitcoin trades relative to the NASDAQ, because you often hear, oh, Bitcoin is just a leverage NASDAQ and versus gold. And what his model was basically saying is that over the long term, it actually has a more gold-like behavior. In the short term, if you get a sell-off, yes, it tends to trade a bit more like the NASDAQ. But here's the simple math.

I ran this calculator a little while back. But, you know, as we were selling off and everyone's talking about decoupling and, oh, no, Bitcoin's dying as well. and like it's all this mix. I just pulled it back and said, okay, guys, let's not compare long duration assets over a 15 minute time window, right? Bitcoin and gold are long duration assets, as is the NASDAQ. So let's just look at how the market has performed. This is at the worst point of the tariff tantrum. Let's look at price since 2024. And from that lens, the equity market was up like 3%. So that's over a 15 month period. Basically, equities gave back 100% of their gains in 2024. In that way,

one move. Bitcoin was up 80% over that period. Gold was up 40%. So you look at that and you're like, well, okay, so Bitcoin is trading somewhere in between gold, which didn't really have much of a correction and NASDAQ on the short term. So it's actually trading somewhere in between these two. And generally speaking, it has the short term burst of being Mr. Leavid NASDAQ. And then it goes, actually, wait a second, I've got way more properties that align with gold. I'm going to do what he's doing. Right. And if you look at what gold has been doing, it's just added a seven $7.4 trillion to its market cap this year. This year, it's an unbelievable number. If Bitcoin was $7.4 trillion, we're up over $250K,000. That's just Bitcoin's market cap being what gold increased.

So I think what's really important to note is that when sound money moves, it moves, right? Sound money assets tend to do nothing most of the time. Over the macro scale, Bitcoin actually trades sideways 40% of the time. Any one day, it goes less than 1% up or down, 4%. 40% of the time. But if you do that on a quarterly skew, suddenly it goes up much more often and sometimes you get 100% quarters. So it's very much one of those things with Bitcoin. You've just got to be there through all of the chop. But then when it goes, it goes. And on the decoupling side, you know, there's been a few areas where this has occurred. And you need these like the frequency of data points. You need the number of them. One that really just reminds me is back in

23, we had the SVB banking crisis. We've got banks collapsing in the US and Bitcoin goes up. That's a data point where every single Bloomberg terminal is looking at and going, oh, that's, that's interesting. And then during this tariff tantrum, we had a couple of days where like, you know, Bitcoin was flat and the equities were down 5%. And if you told me six months ago, right, then NASDAQ's going to have three, five percent down days in a row. What's Bitcoin going to be doing? I'm down 30 percent, easy. And yet we were down 10. So you just look at all these data. data points and like, yeah, it's too early to say it's a decoupling, but at a fundamental case, it's not hard to argue that we will decouple because Bitcoin has far more properties

with gold than it does with equities. It makes sense in this environment for sound money to do very well. And just all these Bloomberg terminals, the more that they keep seeing these data points, the more the more difficult it is for a numbers guy to argue against the numbers. He's getting more and more numbers coming across his desk and eventually he just has to concede and be like, I need to own some of this stuff. I think when you said it's too early to call it a decoupling, I saw Eric in the background tweeting decoupling again. All caps exclamation, right?

Yeah, exactly. Adam, I want to jump to you again, same topics if you want to throw in there. I'm also curious in, you know, the coming decade or two, how much of a piece of gold do you see Bitcoin whittling away for itself? Well, I mean, I'm supposing Bitcoin will surpass gold because it does more. But that's a kind of first target. And it's not, I mean, of course, they're both moving, right? But it's not that far away, like around it used to be 800,000, it's probably a million now because the gold's a bit higher per Bitcoin.

And, you know, we could have that in this hobby, possibly. And I think the other thing that is interesting is not very much of gold is in ETFs and assets trade at the margin, right? The prices are covered the margin. A lot of gold is probably in bolts and stuff. And so if you get, you know, if Bitcoin starts to get closer, so it's on Bloomberg and CNBC that Bitcoin's growing, it's getting compared to gold on the market cap basis. What a financial news. Then I think you might. might see people selling gold ETFs and buying Bitcoin because, you know, it's similar concepts and one one's growing, the other one's stagnant and has been for, I don't know, I used to have some gold in my portfolio when I first started trading and I thought years ago or something

and I decided it was a gold brick. It was stagnant and sold it all. I still think that, right? I mean, yes, it's a bit of a macro hedge, but so is the US dollar, right, or the Swiss prank. So I think Bitcoin has the great story and stronger scarcity and more use cases. And, you know, permissionless money is important and useful. So, yeah, I think that the gold target could be there. And the correlation, you know, there was a day, I was earlier this week that, like, the NASDA, like the NASDAQ was down or the US stock indexes was down 5% and they're losing their hair, right? Because 5% move across the board in equities. It's like, oh no, it's like Bitcoin fell 50%

or something, right? It's scary. That's a big move to what stock traders are used to. And Bitcoin went up 5%. So I'm like, okay, there's a decorrelation when it matters, right? I think the other thing that you get is that Bitcoin is, there's something structural about the Bitcoin market that you know, all the Bitcoin is inviting to buy more. So it's not a lack of interest, right? If it falls at a good, I could buy more, except they don't have any money left. So because they win. And so there's not that much money that's able to buy dips.

And, you know, even the people who get money, like Saylor, they foam over it in, right? They're more scared that it's going to go up or they want to stack it quickly to get annualized yield, like rate of increase in Bitcoin per share. So they don't wait for a drop or something. Waiting for a drop is a bad statistic, right? I figured this out like 2013 as soon as I started trading Bitcoin. I was like, well, wait a minute. This thing's got an exponential adoption curve and it's volatile.

If you just assume it's a random variable moving around an exponential curve and you think you're going to sell it and buy a back lower, the odds are clearly against you, just some basic math rate. So you, people are going to tend to buy and run out money. So anyway, the point is that because they're all in, if there's a price pullback, there's not that much liquidity to buy it. Whereas with equities, they can, you know, it's diversified. So there are portfolio managers and individual traders who would say,

well, I'll sell, you know, I'll sell some Microsoft, some Tesla, some whatever, and buy Bitcoin because Bitcoin's down. and I believe in the long-term trend, right? So the fact that you don't have that, it's going to be some, we call like, value traders doing market making who are buying Bitcoin as it falls and then taking a profit when it rises and repeating it. And you can see the pattern, like there's some APIs

on a BitFinex exchange called BitFinex Longs, and you can see, see because over the last month or so they bought uh how many thousand bitcoin i don't know like 15 000 bitcoin or something on margin and sold it probably about 10 000 so anyway it looked like they made 20 to 25 million dollars on that trade and they did more so whenever whenever bitcoin's down a bit they start buying and now the reason i say you sit sort of saying they start buying is because you can see it they're not doing it in a manual way there's a kind of T-wap right it's well not even

that it's it's just buying like 500 or a thousand bitcoins a day but every minute it's nibbling a bit in a in a straight line and so you can calculate i mean there's other traders mixed in but you can see the straight line it so you can figure out oh they turned it on and it gets if it falls further it starts buying faster so i don't know maybe there's some manual human adjustment of this trading thing. But I call that market making, right? And they make money doing it. So other people can see they're doing it and they can start doing that too.

And then maybe that would become a more exciting thing to do. And to say stocks are down, let's sell Bitcoin because it will fall faster and then, you know, they'll short it and then buy it back or something, right? So of course, when you get that day where Bitcoin jumps 5% up, that could cost them a lot of money with what they're doing, probably some hedge fund, with a lot of leverage, shorting Bitcoin on the open, buying it back half an hour later or something, right? So, yes, I think, but like overall in terms of correlation, I mean, no, like, zoom out, right? You know, Bitcoin's up, one, five and a half, six times since the bottom of the bare market.

US stock index is sure on. So I don't believe it. Stick for just to build on that one point there I actually ran an analysis you were mentioning you know trying to people selling and trying to buy back later it's a very natural thing for people to do I actually ran a study where I looked at all the different cycles 2016 sorry 2016 17 17 21 22 and all I did it's not a perfect model but I literally just removed the worst five and 10 days so meaning that you sold at the perfect time and you bought back in so you missed the five worst days, but I did it on the other side as well. You miss the five or ten best days.

So if you miss the best 10 days in each cycle, you're usually flat to down, meaning you actually don't make any money or you lose money on Bitcoin, just by missing those 10 days. And you never know when they're going to be. They're sporadic. They're random. And the other one is if you miss, if you can sell and buy back later and you miss the worst days, at best, you make 2x to 3x on your cycle return. So in many, you can sell and buy back later. So in many, you miss the worst days, you make the worst days, So in many ways, like, you know, most people are going to be pretty happy. And by the way, the meat of the move, you're still going up, as Adam said, you're up 6x, 5x. So, okay, you're up 12x or 15x.

It's obviously much better. But the risk is that you miss the best days and you actually end up flat with zero or you're down on the whole cycle. So in many ways, it just really shows that the huddle strategy for most people. And actually, rather than, you know, caring too much about big sell-offs, be that opportunistic buyer instead. generally speaking, he's going to perform way better. Absolutely. Well, gentlemen, I think it's time that we do a little rotation

here. We're going to be diving into the next reason for being bullish. So Adam, I'm going to be coming to you next, actually, and then James will be heading up with the third reason. But before we do, we're going to give a quick sponsor shout out. So we're going to be back in just a minute.

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we're just giving away some quick sats here. So you've got a lightning wallet, pull it out, scan that QR code, whoever scans it first, gets it first. Of course, this is a Bitcoin well. Great place to be stacking stats in Canada and the U.S. And as you stack sats, refer friends, all of that, you earn points, which you can use to toss coins in the well. And up to a million sats can be one each time you do. This one, rather ominous, 66s.

I don't know if you want to scan that necessarily, but if you do, you'll be rewarded. Either way, check them out. And, of course, there's links to Bitcoin well down below. We're going to do a quick little change up here, actually. James, I know that you're tight on time. So I want to make sure that we get your reason in as well. So James, I'm going to go to you, queue you up with the same question everybody gets. Why are you bullish?

Yeah, ironically enough, and this is going to sound strange when I say it, I'm actually very bullish because of the magnitude of cell side pressure. So what do I mean by that? Bitcoin has in every bull cycle, we see it all the time. It's like clockwork. Whenever the market rallies back towards the previous all-time high, there's a cohort in non-chain data that we call long-term holders. Now, these are people who have held their coins for at least five months. A lot of people will say, oh, that's not long enough. It doesn't matter

because the statistics of how UTXOs are spent is that once a coin reaches five months, it has a similar probability to a coin that's been held for 10 years of being spent on any one day. So there's a very consistent probability of spending, and it's not very much. On the flip side, short-term holder coins, coins younger than five months, they're moving all the time, right? Highly liquid, they'll trade in and out of positions, they'll move in and out of exchanges, highly liquid. So every time the market gets towards previous all-time high and then moves on the next run, and we saw this in 2024 when the ETFs went live, we got to a 73K peak. Sell side in that process was absolutely enormous. There was like 1.5 million Bitcoin that were distributed and

spent into the market. I was doing some reflection yesterday. We had Mount Gox coins come back in. the German government sold 50,000 Bitcoin at the bottom. You've just got an enormous amount of supply that was sold. And where did the market go? Down 30% for four hours when the Yen-carry trade blew up. 25% was a bad drawdown. Go and look at any previous bull market. 35, 40% is a normal day, right, being down from the peak.

So why I'm bullish is it when people talk about sales, I talk about sales so pressure all the time. And a lot of my, a lot of my subscribers, they say it's actually really refreshing because no one talks about cell side pressure. But what is cell side pressure? It's the other way around as well. It's demand because for every seller, there's a buyer. So when we're measuring cell side pressure, you're actually looking at the demand that's coming in. So we had so much demand in 2024 that the market was chopping around.

Every time it went below a trillion dollar market cap or a 1.2 trillion market cap, which is 50, 60K for round numbers, it was bid relentlessly. right and these are serious institutional sizes we're talking about tens of billions of dollars a day the market just soaked up and it just didn't go lower they could the bears could not make ground so that to me is actually really really interesting and to give you a bit of a sense of scale in 2021 we got to 60k twice and in both instances the market said nope sorry not happening you're not ready. So we got to 1.2 trillion the first in in April 2021, the market said, not back down to 29k you go, right, and just slaughtered us in a 50% sell off. Then we got out there again. It's like, all right, second attempt and then we went down to 15K.

The market said no. The market said yes at a trillion dollar market cap for eight months. That then gave us the springboard to launch up to, launch up to 100K, 110K. Now, the next amazing stat is that we can price every UTXO, every UtexO, every Ute so we can give a price stamp, what was the price when it last moved. And if you look at all of the collective value of coins that were moving and just priced the UTXOs, 52% of all the dollars that have ever come into Bitcoin had a cost basis above 90K. So that's the amount of demand that came like there's a stack of sell side pressure, a lot, about 70% of the selling that occurred up at 100K, 90K came from that 2024 chop zone,

only about 30% came from previous cycles. But we built this enormous pool of coins up there above 90K. 90 to 100 is really a hot zone. But a lot of those coins are still held today. So even though we traded lower, most of these folks just seem to not want to spend. And if we look at, there's a, you know, people have seen the hoddle waves. I like to look at the hotter waves, but on a, on that price stamping basis. Because at the end of the day, Satoshi's coins, yes, they represent 1.1 million, but they have a price of

zero. So we can actually discount them by looking at using this price naming method. At the peak of previous bulls, usually those long-term holders, they own about less than 10% of the overall network wealth. Right now, we're still at 40%. So Eric, you mentioned that people know that retail is smarter. Investors in Bitcoin are smarter these days and you can actually see this in the data, whereas they used to distribute everything and just be like, cool, I'll wait for the next cycle, see you in four years, bear marketing coming. People are like, I'll take five or 10% of my stack off. And now I'm just going to sit and wait.

And more and more people are waiting. More and more coins are getting sold at 100K. And people are coming in and buying it. The institutional scale of the capital that has to absorb that sell side is phenomenal. So I think when you hear sell side, flip it around. We're actually measuring demand. So having a really large amount of cell side pressure and the price goes sideways through it is super bullish. Yes, you can have time where you get what I call a top heavy.

market too many people buying too many coins at too high over price, right? Yes, that can precipitate a bear and eventually it will. But at this point in time, right, the way the market's performed since that point is honestly, it's quite astounding. My only takeaway is that people know what they own and why they're here. And then I reflect on myself back in 2019, the penny is finally dropped. I know what Bitcoin is. Oh, shit, I need to stack as much of this as I possibly can. And the reasons I started buying and accumulating Bitcoin in 2019, I look at the world around me and I go, this is kind of that. This is exactly what I was doing it for. Why would I sell now?

Right? This is literally why I started buying it in the first place. So, you know, sit tight. It's working. It's working. It's literally working, right? It's been theorizing this. It's wild.

James, I'm curious, like, so do you see any, like, what one of the big things that I talk about when it's like institutions are coming in is just like passive buying behavior right and like so like part of that with like you know the more long term focused toddling is there anything else within the data that you think you know broadly falls under like here's how we're looking at the representation of like passive buyers within on chain metrics yeah i mean generally speaking we're just seeing more people holding more coin for longer so a larger percentage of their holdings are sitting tight than what we previously see now let's say we keep rallying and we keep going higher.

So, you know, we talk about price models. I tend to look at, I mean, I use two personas. There's Check the Hodler, who's all of us, and then there's Check the Analyst, whose job is to just be very objective and call it how it is. If we get up to 120 to 160K, that zone, it's like what I call my topping cloud,

that is where every single metric is going to be super overheated. We're going to be too far away from the 200-day moving average. The average guy is going to be way too much profit. There's just going to be a whole lot of things that check the analyst is going to have to say, and check the,

analysts are supposed to appeal to people who are retirees or money managers, people who have to be more conservative by design, hoddlers, you could ignore him. Don't worry about him. He's just an interesting, interesting dude. So from that perspective, if we get to 160K, the average Bitcoin is going to be so up on their position that they, in every previous cycle, have sold enough to put a top in. If those models just break, and this is not like a wick to 200 or a week to 250, and then we come back down. This is like we go to 200, 250, 300, and we stay there. If that happens, that is just another data point that people are just refusing to sell. They're just not letting up. Those passive flows are going to be a real thing. I did a study on all the 13F filings,

and it was, it was, you know, it's crude numbers, but I was just looking at how big the institutions are versus how much they've allocated. And there was a couple of very clear trends, but the one that really stood out to me, there's a couple of funds that are very small, right? There's a couple of funds that are very small right there on the $100 million size or less in terms of their AUM. A lot of those guys were 5%, 10%, some of them were 100%. These are like obviously Bitcoin only hedge funds. They've got a 5% position, so and so forth. But they were all very small.

You go to the other end of the curve and you've got the behemoth, the trillion dollar, the $100 billion AUM firms. And they've got 0.01% as an average allocation. So if you do 0.01% times 100 billion or, times a trillion dollars us as individuals can't wrap our head around how big that you couldn't spend that if you try what if they go from 0.01 to 0.02 or 0.05 or 0.1 or 0.1 the numbers just you can't actually fathom how big they are and a lot of people talk about market manipulation and derivatives and all this kind of stuff i actually wrote a piece called uh called paper bitcoin which is one of my

favorite pieces that i've written so far and my case was without deep and liquid derivative markets, these institutions can't allocate. If you can't hedge a billion dollars worth of risk, you can't put a billion dollar position on. So by these derivative markets developing and getting bigger and deeper, that 0.01 can actually start to climb. The more that the derivative space gets bigger, the more money they can allocate because they can hedge the risk. So without derivatives, we actually can't go higher. Retail got us to $2 trillion. It's hard to see retail getting us to $10 trillion. But then you look at the size of this money. And you're like, okay, now I can make a case for getting up to 200, 300, 500,

million. And I did a quick calc before, Adam. You said, what happens we get to gold parity? It's 1.1 million USD at the moment at current prices. So basically, and, you know, I ran this exercise. I've got some silver coins. I've got a gold coin and I've got Bitcoin. And if you look at what five grand worth of silver coins is, it's a fistful, right?

You can bench press it. It's like it's a heavy weight of mass. If you then look at your gold coin, it's literally a single coin, right? So that the exponential decay in terms of the amount of space it has, and you think about Bitcoin, you can have a billion dollars and it would be the same size. And you can zip it in and out of a safe on the other side of the world. Suddenly you realize that, you know, the exponential change, this is why my price target for Bitcoin is 10.8 kilograms of gold, because that's parity, and that's just where it starts.

Love it. Adam, I'm curious to get your thoughts on kind of the changes. dynamic of who is buying Bitcoin, how long they're holding it, everything that James has been touching on here. Yeah, so apparently the ETF buyers have to be sticky. This is what Eric Backelner has been saying. He's an ETF analyst. And that's good. You know, that's what you want. It's considered a good investor in shares in sales. So why's the price of balls, they're going to buy more a value investor. And there's another concept we'll talk about, which is, you know, how much inflow of money

does it take to increase Bitcoin's market cap from one trillion to two trillion? And it's not a trillion dollars. Like maybe it's, you know, 100 billion or something. It's about 5x is my best estimate. When we look at how much the realized cap has to change for the market, it's roughly around 5x, 3x, 5x. Yeah, so I mean those numbers, I mean, people have like vastly different numbers. Somebody had one that was 100 in the past, but really it's sort of a market structure

question and it can change over time as a type of market participants change. So my thinking about the ETFs turning out to be good investors because, you know, a bad investor is one that buys and then the price falls 5% of the panic sell and take a loss, right? because that will, you know, undermine price growing and add volatility and stuff like that, make the market feel weak. So the fact that they seem to buy and hold an average is good. And I think that also tends to make the money multiplier a higher number. Because if all of the buyers just bore and hold, you know, that has the maximal impact on the price, as well as, of course, if there's very little to sell, like if the current holders are not selling and say,

And you get in the reality and there are people day trading, there are people selling for various reasons. So that's that topic. There's another thing that I saw in the scrollback where, so I was talking about paper Bitcoin. I don't think there is much paper Bitcoin or not in a way that matters. So the, you know, you have perpetual futures and dated futures in Bitcoin. And so you can see that there's a side contracts. So people who hold a future or perpetual future would consider they hold Bitcoin, but they don't really. And the reason I say it doesn't matter is because there's a, there's very few people that want to be long-term short Bitcoin because of what we're talking about.

You know, it's going up exponentially. It's a dangerous thing to short. And so because there's a, there has to be a buyer and a seller for any future. where do the sales come from? And the answer is they're synthetic. They're doing basis trading. And to do that, if they can collect, let's say, 15, 20% a year in a Bitcoin collateralized perpetual,

they can collect the basis trade by buying Bitcoin using it as collateral and then shorting it. So it's a dollar interest strategy. They've got to have dollars. They collect the funding rate. Yes, that enabled somebody to buy the future who didn't buy sport Bitcoin. But in order for them to buy the future, somebody had to sell the future and to sell the future and not lose their shirts, they had to buy a physical Bitcoin. So it all cancels out.

And it actually probably helps because it's a form of leverage rate. It allows somebody to buy a Bitcoin and pay later. You know, if they can, if you think the price is going up and I think they'll be able to afford, you know, another 10th of Bitcoin within three months time. They can buy it now with 50% margin on CME with a stock portfolio and then pay it off. And there's an interest rate. So they pay the interest rate. But that's sort of creating buying out pay later opportunities for Bitcoin.

So it brings forward some demand. So I don't know it's very much pick up Bitcoin. That's my solution. And, yeah, and the strategy companies, you know, they put every, every dollar they get straight into Bitcoin. I don't think you can't really, I think you can really call that paper Bitcoin either. So, you know, there is more claimant paper Bitcoin with gold ETFs because some of them are sort of synthetic. They're, you know, they don't have the gold or they lent the gold out or they're partly constructed of gold stocks. So they look, and they try to track gold, but they don't actually hold 100% gold.

So I did have gold in portfolio a long time ago. I went researched which ones actually have the gold. and don't re-hypothecate it because it was a thing people were suspicious about that right and they were different you know you could you could look at the data and uh so yeah i don't don't think of bitcoin's an issue um then then about the the buyings i was looking more at the you know so the last couple of years there are a lot of false sellers from the bankruptcies and government policy seizures and so that you know people were tracking that you know this this guy you know ftx has got to sell this many billion and

scale Genesis could sell that to clear this and you know we're losing trying to track it and see when it's done and you know then the other side of it is you know I'm I'm always a standard boy Bitcoin is under 100,000 that seems ridiculously cheap to me so I'm like who the heck is selling and if particularly getting the context of all the people that are buying so since the halving um micro strategy has bought two times the daily mind coins per day, average. And the ETFs bought another two times the mine coins. And there are other strategy companies buying, like Tether bought 8,88 in Q1 this year. And the kind of value market maker type of investor I mentioned, you know, they're buying between one times and two times

the mined coins when Bitcoin is down a bit, but, you know, slow selling when it's up. So you can see there's an awful lot of buying going on, right? And, you know, I guess that's good. I think what basically what helps, what makes Bitcoin strong is, you know, Bitcoin's transferring from weak hands to stronger hands. So people are buying it, are buying it with intent, and they're pretty desperate to buy it, and they're cold store it. that's good because that's the new holder for the long term right and the person who dipped in

i'd hesitate to call them long term investors this like six month band or something i think those are the people that were selling uh james said and i heard other people say that then you know they haven't really held very well have they you know maybe they made 20% return or something i mean it's it just seems a really strange time in the market cycle to be selling too you know if somebody was inclined to sell 10% when they thought it was getting near the top, then why now? I mean, inflation adjusted. We're barely, you know, we're not far above where we were years ago, right? And look at all of the positive economic signals, the number of public companies buying,

all the financial institutions to start off products, the overtime window shifting, the regulation is being largely fixed in the US. sovereign Bitcoin reserve discussion and they're selling below 100. I mean, come on. So if that's the way they feel, then other people are going to buy their coins. And then we can, you know, move upwards from there, I guess. So it's sort of the allocation. Absolutely.

Well, gentlemen, we're going to do a final rotation here. James, I know that you are on a timeline and I believe you have to duck out. but I wanted to say a huge thank you for joining us here before. Unfortunately, you're not going to get to hear why Adam back is bullish. And I think it's, you're going to have to come back and skin back through the tape, I think. I think so.

Yeah, just to kind of close out, Adam touched on some really important points there. One was the ETSs. He's dead right that they just have been way more robust than people expected. There was a lot of calls that the ETF investors were going to be just orange poker chip holders and they were just here for the speculative favor. You know, we really just didn't see outflows to the magnitude that people expected.

And I did run some numbers. You can overlie. I just use like a 30 day change. 30 day change in the ETFs, inflows and outflows. And compare that to the 30 day change of the CME open interest, which is where they do this basis trade. And what we saw is that we saw about there was like a period of $4 billion in outflows. And everyone's panicking and, you know, everyone's looking at the ETFs and going,

holy shit, it's all over. But what was actually going on is we had about $4 billion worth of CME open interest. decline. So we saw an uptick on the way higher to up to 100K, and most of that ETF outflow was actually technically just a basis trade unwind. Yes, we saw some outflows here and there, but the vast majority of it was technical in nature. Now, the thing with those basis trades is it's neutral for the trader, because they're long and short, but it may not be neutral for the market when they enter and exit the position. And the reason for this, futures markets are far bigger, far more liquid. So if you need to go and sell or buy back your futures position, the market can

absorb it without too much issue. The ETFs, they trade 100, sometimes 200 times less than the futures markets does. So if you're going to unwind the ETFs, you may be selling that spot ETF, which for you is neutral, but for the market, it's got to absorb $4 billion worth of sell side. So it can be on the point of entry and exit, bullish, bullish, because it's buying spot, selling spot, but over the longer term, whenever there's a premium there, someone's going to step in. And as Adam said, it's bullish on the upside and it's a little bit bearish on the downside, right? That's just how these things work. But this is a technical market structure dynamic. We're not actually seeing people who aren't toddlers. The vast majority of money in those

ETFs appears to be very, very sticky. And that's just a remarkable thing, right? It kind of goes against what a lot of tradfai analysts were saying. Amazing. Well, James, thank you so much for being here. We'll have to have you on again sometime. And everybody that's watching, of course, right now, if you've been enjoying James and Eric and Adam, make sure you drop a like down below. And James, everybody's Twitter handles are in the show notes down below.

So make sure you give a follow. On the other side of the break, we're going to find out why Adam back is so bullish, as always. So we'll be back in just a moment. And James, thanks again. Thanks, folks. Cheers. Looking for a simple and secure way to manage your Bitcoin on mobile, Aqua Wallet has you covered.

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for those just getting started or for convenience when traveling. You can head to coincite.com and use code BTC sessions for discounts or simply scan the QR code on the screen to get started right away. All right. We are back in and we're into our final reason for being bullish of the evening. And Adam, I'm going to just tee it up to you. Same question everybody gets. Why are you bullish? Well, I think Bitcoin's oversold at the moment. So the fundamentals are what matters. And you can't ignore the fundamentals into longer term. And so I, I think there's a lot of upside here.

The other thing that people have been talking about is this diminishing return theory, because the increase in Bitcoin cycle to cycle was lower between the previous two. And I argue two reasons why that should not be necessarily the case in this cycle, the next one, which is that firstly, the previous cycle was disrupting. disrupted by a lot of stuff, you know, the China mining ban, the COVID, the supply chain, the quantitative easing, the defy, kind of Ponzi contagion. And that's, so I'd say that the previous cycle was a kind of one-off event, and you shouldn't like draw too much inference from that.

And then the other thing is that technology goes through S-Cerve adoptions, like the sort of pattern, right? Where there's early adopters, it's growing slowly, and at some point you get a kind of network effect where it grows more quickly. And with Bitcoin, there are more network effects because people who are already in the network, you know, if you're on the internet, you're only on the internet once. if you have a mobile phone, you don't need more than one or two. But with Bitcoin, people get more enthusiastic because they see other people getting involved. And then they go and buy more at higher price. So you get the kind of network effect of people getting more conviction, I guess, right? And that's contagious.

And you get more kind of utility because there are more people who can transact with, more different types of financial products and institutions you can interact with. So I'm thinking we could have, it could be an interesting cycle too here coming up because we might get to see breaking the gold parity, taking some of the shine off gold and disproving the diminishing return theory to the upside. And then of course, you know, you've got the institutional adoption institutions being money managers of individuals money, right? So ultimately, it's still the individual's money. If a pension fund manager puts Bitcoin in a balance sheet, that's a long-term type of activity because it's pensions, they keep it there for 20 years.

People are going to have better pensions in the future. So that's good. I mean, there's some suspicion about, you know, institutions, suits to coming into Bitcoin, but they are just professional money managers for other people's money, right? As like pension funds, mutual funds, or just people's savings plans, most people, the average person doesn't self-manage, stock portfolio, so their savings and their pensions and life insurance is all managed by other people. So if those people clue in and buy Bitcoin, that's a form of Bitcoin adoption for the

every everyday person. So I think those things are not really here in a big way. You know, like the Abbott's every sovereign wealth fund bought 450 million, but I think it's just basis points because they've got huge funds, right? So as that does come, I know exactly. the timing because they're slow movers. That also has a network effect because they look at each other for cues. So timing is hard, but I think this could be a turning point, like tipping point for the network to start growing faster and sort of invalidate the diminishing return theory. So I think like there are a number different models.

My models don't really predict price. That's just an kind of observation right. So there's the power law, which is diminishing. So there will be some number which if Bitcoin goes above, they would admit that, okay, the power law didn't work out. And there's another number which goes above the, you know, the Stock to Flow also, which is a higher number, but it's also diminishing. So if Bitcoin goes above that, that would be an interesting indicator as well.

So I've got a few questions to queue up here. And I know I can see Eric's just burning with some topics to touch on here too. But there's a few things I wanted to ask. Okay. So you were talking about last cycle kind of being like a one-off. There's a number of things contributing to, you know, a diminishing return that time around. you mentioned the China mining ban. Of course, there was also FTX,

which was basically just taking in people's money that thought they were buying Bitcoin. That was paper Bitcoin. Yes. Yeah. And what I'm curious is, what do you think had the bigger effect that cycle, the mining ban and miners having to move all their stuff all around and all that,

or FTX just pretending to buy Bitcoin but buying Bahamas real estate? And in the absence of those things, where do you think we would have gone last cycle? Well, I thought we would have gone over $100,000 easily last cycle, if not for all that stuff. And, yeah, I'm not sure. I mean, the problem with the people got too cute in doing high-risk stuff and selling it to average people as low-risk when it wasn't. And so, and those funds were like exposed to each other. So one failed as like a real dominoes.

They all fell over right. So again, defy contagion. So I mean, some of it was CFI, you know, like Genesis had taken a user Bitcoin from Gemini Exchange and the own program. And they were using it in the GBT Arb. So the closed ended pre-ETF thing, which had a premium. You got locked up for 12 months, later six months. So there was a nice arbor you could buy or borrow Bitcoin, put it in there, and sell it at premium six months later.

And so three areas capital was borrowing Bitcoin from anybody would give it to them, under collateralized. And so when that turned around, you get bare market and the premium became a discount, all that leveraged trade got liquidated, three areas went bankrupted. And because they were under collateralized, no, you bankrupted other people who bankrupted other people who bankrupted other people because they're all borrowing from each other without enough collateral. And FTCS was in the mix too because they borrowed from people.

And yes, actually, the FTCS money should go back. Like the bankruptcies wound down. I think there's 16 billion of assets. So eventually people will get their money back. And I'm not sure like, you know, the FGX sold it all, right? So they sold the Bitcoin in a bare market for probably like $20,000, so now people will get their money back and then like, look at $100,000 Bitcoin.

So what are they going to do? It's like, you either stay out or you suck it up and you buy Bitcoin at higher. And, you know, so I think that money will find its way back into the market. One final thing before I tossed to Eric here. You just mentioned about the possibility of us breaking gold parity, potentially this cycle. So I'm going to preface this with a show and tell. I've got a very special framed tweet on my shelf here that I think you'll like. One second here.

I've had this on my shelf for five years, and it's aging like a fine wine. So I just want to recite it to you for a moment. This is a gold-framed tweet from Peter Schiff. And it reads, by the way, this was tweeted on January 6th of 2020. And it says from at Peter Schiff, those Bitcoin bugs excited about Bitcoin's 4% rally in 2020. Think about this. Hashtag gold is also up by the same percentage this year, only with significantly less downside risk. if this is the best rally hashtag Bitcoin can muster, how will it ever hit 50K, let alone

$1 million? And so we just heard from James that gold parity would have us at $1.1 million a coin. Are you telling me that there's a possibility that this framed tweet could reach its final form this cycle? And what would place the odds of that? happening well i think i think the odds are better than people think because you know it's a dynamic system so yes it's if if everything else stays like if gold is not impacted by bitcoin's growth and people's conviction in gold facing an onslaught of bloomberg and cnb discussion about oh no bitcoin is now

a third of gold and gold's fallen 20 percent did that 20 percent come from bitcoin And did that go from gold to Bitcoin? I think they could change fast, right? So to actually reach parity, you know, half or a third of that could come from gold, money leaving gold. Because, you know, Bitcoin's sharp ratio is, as was mentioned earlier, like risk-adjusted return is an outlier for like 15 years or something, right? So stubborn gold owners might eventually get on the train, right? And if they start, you get followers.

A lot of Trotify financial advisors and traders are momentum traders, saying they'll call people when something is up or down, tell them to chase it up or chase it down, right? So yes, I think it could be closer than people think. And I do think it's just it too because, you know, this third wave of money, the first waivers, they're people buying retail and then the new wave being ETFs, the second wave, and the third wave being institutions, but like the second wave money, the ETF buyers, if they're talking to their financial advisor or their broker and they want to buy Bitcoin ETF, there's not money they're wiring in.

It's like something in their portfolio. So the question's going to be, what do you want to sell? Right? Where do you want to take the money from? The obvious answer is, well, I'm buying digital gold or not a physical rate. So it's just that bias will have an effect. So and there's not that much gold, like the percentage of gold that's in ETFs is a lot smaller than Bitcoin, right? So that, if that is the market, the active market is what's at the price. So even though gold is a lot bigger, the active market in it that could move the price could be smaller.

I'm not a gold price expert, but that's just my theory about it, that if you've got a much smaller market that's actively traded, you know, the impact on gold ETFs could be much bigger than you'd expect because the market is smaller compared to the asset, because most of it's just cold parked and not used, right? Well, Eric, I want to, sorry for hog in the mic for a second, but I had a few things I had to get out there. Got, questions.

Go ahead, man. Yeah, this is this is incredibly bullish. And so I think what's interesting about the gold piece too is that from like a, you know, quantifiable market cap perspective when you look at the where gold reserves kind of exist and how they exist, you know, a pretty large proportion of that market is actually just like bullion and jewelry. And then there's central bank reserves and there's, you know, a few other categories. And then I think that's one of the most interesting things to Adams point about how the gold ETFs are such a small percentage of the total market capitalization of gold. And then a large percentage of that is actually just in like physical form jewelry.

So like based on that like if we reach based on, you know, supply of gold above ground times market price of gold if Bitcoin's market capitalization reaches that market capitalization, well there's we've already kind of surpassed. I would call gold parity reaching that probably much less than whatever that number is. Because there's a lot of people that, you know, are still going to be wearing their jewelry and things like that, etc. So from like a scarce commodity safe haven type asset that's protection against fiat currency, I think that we'll surpass that, you know, before we even start taking over the supply of gold that's like, you know, a large allocation of it that exists within the market of jewelry. I know that this show is called Why We're Bullish, and I don't want to say anything that's not bullish.

And this is bullish. But I think one of my concerns with this cycle is, to Adam's point as well, about all of this systemic collapse that we had from Paper Bitcoin or, you know, what's the de facto of the expansion of credit within the system that happened, whether that was known or not, it was fraudulent or not. This cycle that's expanding into much larger pools of credit. And we haven't, you know, right now there's this like convertible notes market and the amount of leverage that Sailor has been taking out, you know,

reasonably material percentage of that market, you know, five percentage of that type of, you know, credit structure. But markets are bigger and people are going to come up with more creative ways of doing this. And we're kind of for the first time really tapping into more of these. traditional pools and there's like a strong value proposition. We saw what happened with the launch of 21 capital publicly and people speculating, you know, from the 1.3 nav to 3x within like a day or whatever it was. That is based on the expectation that a significant amount of lending is going to be happening within this or at least a significant amount of investments going to be happening

within this from an equity standpoint, likely, you know, a strong mixture of both. That's one of the things in our annual report from my firm that we kind of flagged is we could see driving the next ultimate like overzealous credit expansion within the industry this cycle is this Bitcoin balance sheet plays. It starts to emerge all over the world. And it starts to capture value within different markets due to the friction between how markets are traded. And that's obviously a very good thing. But what I do, think we'll see is we're going to start to find a lot of like, you know, cowboy risk seeking CFOs where they're taking on a lot more risk in their capital structure than how like Sailor,

for example, has structured things given the amount of liquidity and assets that he has. Saylor is good. The scenario where, you know, micro strategy goes bankrupt is, you know, very, very remote given where the market currently sits. And but there's going to be a lot of other people that are just, you know, they want to see a stock price. Maybe they don't even have as much confidence in the long-term potential of Bitcoin, but they're looking for ultimately just like get a clip pop in their stock. And we're going to see this while it happens with some of the stronger institutions, we're going to see this

become more persistent in smaller institutions or more risk-seeking institutions. And there's probably going to be a degradation of terms that happens in that credit as well, where it gets, it's going to be more and more favorable to the lenders over time. And I think we kind of saw a little bit of that initially with how the public mining companies were issuing credit around these strategies. And they're still getting exceptional terms, but not quite the investment grade type terms that Sailor was getting. They're marginally more favorable to lenders. And I think we're going to continue to see that over time across these markets.

And so very well could be the drive of the next credit expansion. And those pools of capital are much larger. And whatever the marginal buyers and marginal sellers within the market structure come out to be from that, that's going to be highly, highly expansionary over time. And it could lead to a cyclical crash or something. But yeah, I'll let Adam jump in. Um, I'm mute. Yeah. So, um, somebody asked me recently, would, you know, they were concerned about, I mean, first, firstly, a lot of people still stratify people are skeptical about the market strategy play. And they don't get it because it, it's hard to, you know, because the, the enterprise value company, the minister, dismissed versus the Bitcoin at this stage. Um, you know, that company might be worth one or two billion. historically and it's sitting on you know 80 billion worth of well 45 50 billion worth of bitcoin and 85 90 billion market cap like a two times them now roughly and they're looking at that's a bucket of

that that's a bucket of bitcoin that company is it's not a big part of that and so they think it should trade at mnf 1 i'm like no it shouldn't because you know it's it's trading it about two times up now now but last year it achieved 73% increase in bitcoin per share and Q1 this year it did some more so it's basically in the last 15 months already recouped approximately two times right so buying it two times mnaf last January be great because like now that's paid for and you know they're going to keep doing the same thing for the next decade and presumably they can do some more right so um i mean it's just basically it's an arbitrage because you can see that bitcoin adoption is growing faster than the cost of borrowing so if you can if you can borrow money or do convertible notes or other things like

that um on a five year duration like you know anybody taking that bet thinks that bitcoin is going to be higher in five years and historically that's been a fantastic bit right and then the other thing somebody else knew was well but as more companies come into it Will is the is the effect scalable so there are some things which are not scalable like if you lend money into You know the the when when you buy Bitcoin a margin on exchange there's a lending market right and the interest rates are high You know if a big if a big bank comes in and lends You know trillion dollars of course interest rates going to drop to the prime rate because

there's not that much of shortage, right? So they're kind of saying, you know, is this, if there's too much competition in the strategy companies, does it ruin the opportunity? Like, do they arbitrage each other down to MNAV-1 and that's the end of it? And my answer is no, that's complete misunderstanding. It's fully scalable because what you're looking at

is, you know, lots of people using lots of different strategies, individuals trying to save money, like Bitcoin, etc the end of the game is to accumulate as much bitcoin as you can and within your you know your income and ability to access finance with a safe structure and stuff but the size of the market is it's it's basically the dislocation between the bitcoin future and the fear present which is a one to 200 trillion arbitrage and so the more people that are attacking the arbitrage the faster or flow and the more of a tipping effect you'll get and the more effective it will be to operate the strategy because you know if bitcoin's growing faster that strategy is more effective

so you know of course eventually when everything's when when that arbitrage is fully played out bitcoin is much bigger so that bitcoin is not growing other than you know at the rate of inflation and population growth and you know productivity improvements then then then it won't work as well. But while it's going through an adoption cycle and this arbitrage is happening, then I think it's vastly scalable. Like all of the public companies could do that and do it for years to tear that down, right? So more is better, I think, in treasury companies. Yeah. I agree. I think it's, I think it's, in theory, of course, it's very scalable. I think that And a lot of it depends on time rise.

And the complexity around it comes down to the distinction and market value to net asset value is predicated upon an expectation. And those expectations can create a convexity, not in the sense of like directly with like fixed income investments, but convexity within. There is a derivative, multiple derivative relationship to the price. based on these variables. And to your point about where you're describing, the more, the better drives demand for the asset continues to go up. I just think that the risk is that this type of a system in a vacuum makes a lot of sense.

And it will continue to make a lot of sense because Bitcoin is valuable, and Bitcoin will continue to be valuable. But the risk is that there's exogenous variables on the system that can also quickly reduce liquidity in the capital markets, which is a huge part of the expectation that, underpins that distinction in MNAV. And that can result in a similar degree of convexity to the downside. And then the question turns to, well, what is the solvency of the institutions that you're involved in? And so, I mean, maybe you're saying like it exhausts

the convertible note market, exhaust the bond market. But I mean, I've got a ways to go for that. But like you said, the convertible note market, it's, it's taken a surprising amount of it, right? But Also, you know, that convertible market will grow if there are better instruments. And micro strategy is a more attractive instrument. So people could reallocate that for income or something, which isn't doing much. Fixed income is losing much cost in inflation adjusted terms, right? But at least on the asset price inflate. Yeah, that's a good point.

That's actually, that's a great point that it, because it's aligned with what we're seeing just more broadly in credit as well. like we're talking with, you know, there's all this huge new trend of people wanting to structure products and have Bitcoin associated with them in some way, shape, or form. And some of these products, I don't care because it's good for Bitcoin, but a lot of them just like categorically don't seem to make that much sense. It's more like, well, you should just buy Bitcoin. And if you also want to own real estate, buy some real estate. And of course, there are things that make a lot of sense.

But what I think is happening is that there's classes of investors that have mandates and they're specifically designed to get exposure to particular. particular areas. So it's all of these constraints and this friction put around how investors actually work that create demand for these unique structures. Like in theory, you're like, well, why wouldn't I just buy Bitcoin? When you look at how these investors actually work, it's like, well, they're forced to kind of operate within these constraints. So if you can get Bitcoin within those constraints, then they're going to buy that. And what we're going to start to see is all these reits that have Bitcoin associated in their allocation and they're going to be in the top performers of the

reet category. And all the reed funds are going to have demand for that. and so on and so forth throughout all these other different forms of credit. So, yeah, Adam's point is huge is that fixed income has been underperforming, and you have all of these capital managers who are trying to find ways, well, this is what I've done my whole life. And I'm a fixed income investor. What else am I going to do? And they're all looking for a bit of a lifeline under the current macro environment

and associating Bitcoin into their portfolios in some way, shape, or form is probably going to expand that market of investment. for them as well. So there's a large top on it. The question is more just how much risk do the people that are taking on the leverage take on? And I think just like in any growth period of any market, there's going to be an expansion and contraction. And it could be a very, very large expansion. I want to tag onto the real estate portion of that. Again, the people just having a portion of their portfolio allocated to Bitcoin to outperform the rest. I just last week got home from a real estate conference in Toronto put on by these guys.

They've got a company called Rockstar Real Estate. And they do an event called Your Life, Your Terms. And these guys basically, they've been doing real estate for a long time, but in around 2020, they got orange-pilled. And they're like, oh, my God, the whole reason that our business exists. is because the money's broken and people are treating homes like a, you know, to store their value as opposed to, you know, primarily utility. And so they had premised their entire lives on this and build a company, a very successful company on it. They have these regular events. And

they started to realize what was going on. And they started basically forcefully orange pilling all of their clients, all of these people that have been allocating to real estate for years, they're saying, oh, my God, you guys have to learn about this. So I just got back from an event. And so I spoke there. I did a live demo. Hey, here's how to get Bitcoin, put it in a wallet, we'll delete, we'll recover it. And there was, I think, 1,100 people in the room all, you know, with having multiple properties.

And all these people are learning this. We had Francis Pooley out there from Bull Bitcoin. He was quoting and ran at the crowd. But like, it was crazy. And the booth, so I had a booth there with Bitcoin mentor, my kind of like one-on-one, you know, walk you through your Bitcoin setup company, Bull Bitcoin was there. Both booths were swamped with people. Like the appetite, the curiosity was beyond anything I've experienced in a non-Bitcoin conference ever.

And on top of that, the guys that run the thing, they now have, like the proof is in the pudding and they're showing charts of like, hey, here's how, you know, an average portfolio with multiple properties would have performed over the past X number of years. You know, here's the one year, the two year, the five year, whatever. And then they're saying, here's what it looks like if you had 5% or 10% in Bitcoin alongside your real estate investments. And it's not even close. He's showing the charts and like you just blow everyone out of the water and everybody's jaws were on the floor at how this changes the game for them, puts them a leg up. And so they're being eased into it. And everybody is just so curious and

just rabidly hungry to learn more. And it was so exciting. And I'm so, you know, to tag on with the existing conversation just in around the real estate piece, I'm so bullish on Bitcoiners entering non-Bitcoin spaces and the curiosity that we're starting to see. It's worth it for all of us to branch out and start visiting

these outside events and being the odd man out for a change because it's, it's, It's the place to be right now. The world is curious and somebody needs to be out there. So anyways, I just wanted to tag that in. I don't know if there's anything else for me to add there.

Can you guys hear anything? Sorry. People tend to get Bitcoin quite quickly. It doesn't Grant Cardone now talking about it was a big real estate guy. It's talking about Bitcoin. Of course, Trump, real estate guys, too. Yeah. They realize Bitcoin apparently because the bank accounts politically interfered

have locked out or canceled. So that's something to focus the mind about ability to access or use your own money. Yeah, absolutely. I think it resonates. But gentlemen, I'm conscious of time. I kind of looking to round this out now because I don't want to waste away your evening. But this has been a fantastic conversation. Really quick, Eric, can you?

you, any quick final thought that you might have and point people towards anything you want them to check out, anything that might pique their interest. Yeah, I have a very special shout out to if you look around this office. This office is a part of the space, Denver. We are the Bitcoin Citadel. Started from a group of guys at our bit devs. We convinced a bunch of people to just give us money until we ended up with a beautiful building a year later. And now we've got 80 members. We've had multiple Bitcoin companies emerge out of this and we're cooking. We need more members. We're expanding to people outside of the state. We're coming up with like a package for people who want to join and have membership out of that in a way to support, setting up a

nonprofit entity as well for people to donate into. Economic education, changing the dynamics of our state. That's what we want. Colorado's a beautiful place. The politics aren't what we would like them to be. One day we think we can change that. So yeah, if anybody is interested, it's Denver. Space is our website. And maybe one day we get a BTC Sessions membership. Maybe one day we get an Adam back membership. I don't know. Just done it out there. Awesome. I love to love to visit. And everybody check it out. It was it was Denver.combeys you. Denver. Dot space. Yeah. Perfect. Adam, same to you. Any final things. Any final thoughts? Anything to point people towards. Go ahead. Yeah, one one thing that seems to be a bit recurrent.

theme lately is concerns about institutional adoption. Like they're worried that there are too many fund managers, not enough Bitcoin being cold stored. And I have like Bitcoin is decentralized system. So if you want to do something about something, you have to do it yourself. There's no, you know, management to complain to, you know, politicians to complain to nobody can lobby. So my message is stack harder and cold store. Then then you're going to. helping the balance of because i because i think generally as long as enough is of bitcoin is in cold storage by people who are monitoring the network and the trends and are going to make a noise if if they see something coming off the rails that's that's enough but yeah if if people are

concerned about that you know take your coins off exchange and call store them and stack harder so that you're a bigger economic force and i think like there's one of the positive things about Bitcoin is that with the internet in its early phases there was this phrase of the eternal September which meant each September there was a fresh wave of students at university and eventually just people connecting to the internet and so for people who've been there for you know two years five years and learned some things about effective ways to conduct yourself online they would get like washed out by hordes of like 10 times more newcomers every year and with bitcoin you you know i think part of the worry is like that you know the fund manager

will listen to their corporate lawyer but it's still competitive you know so if the fund are doing it on behalf of users and ets are an access away from you it's just a way for people access bitcoin who don't want to do the uh understand or take technical risks if they if they find that scary. So, but you know, if any of those fund managers do something by policy that's against the user's interest, the users will sell those units and buy another one or not cold store, right? So I think you've got that protection. And also, you know, there's a bias that the earlier people are, on average, they have more Bitcoin. So if you see something you don't like, you can be the activist investor who, you know, sells the fork.

that you don't like and things like that, which things in Bitcoin seem to be ultimately decided by the market. So, you know, buy Bitcoin to be an activist investor and you'll keep it true. I love it. I love it. Well, gentlemen, thank you guys so much. Everybody that's been watching, if you enjoy the show, of course, drop a like. It really does help.

If you need any help in your Bitcoin journey, check out my team over at Bitcoin Mentor. where you can book more on ones to help you through everything, including the self-custody that Mr. Back has been talking about here that is oh so important. And again, to Adam Beck's point here, if you're not a fan of the suits, don't cry about it, go stack sats about it. So everybody, it's been a hell of a time. Thank you both. And also a tip of the hat to James who departed early. And we'll see you guys next time. Thanks so much. This was your day. session. See you later, guys.