TFTC: A Bitcoin Podcast - #641: Why Bitcoin Collateral Beats Private Credit Markets with Phil Lojacono

Episode Date: July 19, 2025

Marty sits down with Phil from Berglinde to discuss Bitcoin-backed lending markets, the challenges of bringing institutional capital into the Bitcoin economy, European regulatory landscapes, and how Bitcoin could serve as a catalyst for political and economic sovereignty. Phil Lojacono on Twitter: https://x.com/PhilLojacono Berglinde: https://www.berglinde.com/ STACK SATS hat: https://tftcmerch.io/ Our newsletter: https://www.tftc.io/bitcoin-brief/ TFTC Elite (Ad-free & Discord): https://www.tftc.io/#/portal/signup/ Discord: https://discord.gg/VJ2dABShBz Opportunity Cost Extension: https://www.opportunitycost.app/ Shoutout to our sponsors: Coinkite https://coinkite.com Unchained https://unchained.com/tftc/ Join the TFTC Movement: Main YT Channel https://www.youtube.com/c/TFTC21/videos Clips YT Channel https://www.youtube.com/channel/UCUQcW3jxfQfEUS8kqR5pJtQ Website https://tftc.io/ Newsletter tftc.io/bitcoin-brief/ Twitter https://twitter.com/tftc21 Instagram https://www.instagram.com/tftc.io/ Nostr https://primal.net/tftc Follow Marty Bent: Twitter https://twitter.com/martybent Nostr https://primal.net/martybent Newsletter https://tftc.io/martys-bent/ Podcast https://www.tftc.io/tag/podcasts/

you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Bill, it's all over. The price of Bitcoin has crashed to $117,943. Yeah, amazing, right? Again, it's all over. I literally just read a tweet from like a ThreatFi guy who actually came up with that because Bitcoin crashed by another four or whatever percent. And he claimed

that bitcoin still doesn't keep his promises or yeah it's ridiculous but okay guys down from uh the high price of 123 000 but uh it's been a week it's been a fun week and i think the timing of this interview is very timely number one it's it's swiss week here on tftc unintentionally we we recorded with pascal wagley yesterday we've got you on today and uh we're gonna get the the Swiss perspective on Bitcoin, but your personal perspective, I think, considering what's going on with the price action today is particularly pertinent because of the big themes that have been talked about in Bitcoin this year, which is institutional adoption, and more importantly, traditional finance really beginning to give Bitcoin a light mark of approval. And you sit

at the intersection of Bitcoin and the traditional financial sector over in Europe. And we were talking about it before we hit record, but really interested to get the inside scoop on how these traditional banks and financial institutions react when the price of Bitcoin runs up like it did this week. Yeah, I mean, it was quite interesting already last year. I mean, when you had a lot of critiques in 2022 or even earlier, where they said, well, there's no substance, no nothing. But then all of a sudden, the biggest asset managers of this world came up with ETFs and everything was approved by the most powerful economy in the world. So obviously, that changed quite a bit already last year.

I mean, it was very difficult for somebody to claim that Bitcoin is a Ponzi scheme and there's nothing behind and all these claims when the most powerful entities in the world are actively supporting it. Right. So so so I think that the story changed already last year. Also, the price developed nicely last year. I mean, fair enough. But then you clearly saw the success of all the ETFs and then you saw the success of MicroStrategy and now in the more recent weeks, all these Bitcoin treasury companies. So, I mean, the critiques, they are a bit in shambles, let's put it that way. It's very hard to say something fundamentally wrong, which was the case before all the ETFs launched. And now, obviously, if the price rips, that's the same probably in every industry.

That's not Bitcoin specific. Everybody suddenly it's in the media again. And then people say, I mean, now we also had the latest point, which was brought up quite a bit, was that, OK, Bitcoin price only develops nicely in a low interest rate environment. Now that's clearly also wrong. So, I mean, we suddenly pushed through all the points that were wrongfully brought up. And what you can see in the ThreatFi world is basically a bit of both. You have, in the meanwhile, you have quite a few who are interested and are actually invested as well. But then you still have this very strong Bitcoin derangement syndrome.

So you can, as I mentioned just before, I mean, now the price went up in USD terms. to $122K, and then it dropped slightly. And then you see these people coming out of the woods again, claiming that it doesn't work, which is obviously stupid. But yeah, I mean, there's a very good dynamic in the market. There's a lot of interest from banks, from asset managers, wealth managers. I would also expect that a lot of the wealth managers, especially, they have to answer quite some difficult questions by their um by their clients because i mean i i had just in

two three years ago i had so many conversations about that and then and then they claimed well it kind of still not proven it doesn't work blah blah blah and now it's again the best performing asset by far so obviously as a as as a client you start to ask questions and now these these questions are asked within the industry which is great so there's a good dynamic and i'm looking forward to what comes next yeah i guess it probably makes sense to take a step back and to educate the audience about what you're doing at bergland and how you came to start this i was actually listening to uh a podcast i don't know if it was uh in german uh or swiss versus i was translating it but you were you were talking about um how you decide to start this company

how you view sort of becoming a founder and it's not really going to market with an idea it's really understanding your customer base and then building the solution that they're looking for which is what you're doing right now yes absolutely well maybe i can give you a quick quick background so i found i found my first company about 12 years ago and was a peer-to-peer lending platform in a traditional lending so working capital lending for smes i led that company for six years and we were active in switzerland and in germany um and we basically well we did a bunch of the mistakes that that a lot of startups do um so we invested too much we had two high costs on the on uh on a two well a very limited base let's put it that way um we

We didn't really hit product market fit before we scaled the cost, which was a mistake. And then I saw a lot of the financing issues, like the lending issues in the traditional world. Nevertheless, I led the company for six years. We sold it in 2020, shortly before the COVID lockdowns. Then I became CEO of another of a joint venture between a large bank and an insurance. and but always want to go back into entrepreneurship first of all but then also focus on bitcoin full-time i mean the bitcoin space or interested in it since since about 10 years i would say and basically wrote the whole the whole ico wave with a bunch of stupid crypto

decisions and then and then really started to dig into it from 2018 onwards and therefore it was very clear to me that i want to focus full-time on bitcoin and then i thought okay so i'm involved in one or two or three other startups and i see the same mistake everywhere like the same mistake i did as well uh that we that we got we got too much money too early on we invested it in the wrong things we we built a product that turned out that the product that the market doesn't really need and doesn't want it as much as we believe they want it. And so I thought, OK, let's do that differently this time. I just start by myself.

I will finance it myself. No, no external capital. And I will try to really find a way on what the market really needs. So that's why I decided in the beginning of last year, I will just start with education and consulting. And the other thing that was clear to me was that I want to build a B2B business. But that was just a personal choice because I feel like I'm better in long-term relationship building rather than large-scale growth strategies. So that was basically very simple how I started and then said, okay, I'm reaching out to my network within European banks and asset managers and financial institutions.

And it helped definitely that I had a network from my previous startup, but I also wrote a Bitcoin newsletter since five years and therefore had a bit of a reach within the German-speaking Europe. And that clearly helped me to get into a few banks and pension funds, etc. And then it ranged from simple workshops about what is Bitcoin, how does it work, what self-custody, da, da, da, all these things, very basic, but then also to some strategic projects. Especially one was with the bank, where I said, well, look, there is clearly a big need within the Bitcoin industry, which is that Bitcoiners do not want to sell, but they need liquidity in one way or the other. So clearly there is demand for that. And you guys at the bank, you have access to the cheapest capital. So fiat capital, that is. So and then therefore, they should go into Bitcoin backed lending.

And they say, well, I understand that or they understand it. That makes a lot of sense. But it takes a while until we get there. Takes like two to three years until we can actually push it through all our compliance and risk departments. and in parallel i had a workshop with a pension fund and there we really had to start on around zero basically because they were they are still nowhere pension funds are in my opinion still way way behind and um and there there was a lot of skepticism a lot of questions still and

then i at one point i said okay let's let's do it differently let's leave the term bitcoin aside I'll tell you, I'll give you the opportunity to invest in Swiss franc, euro, USD. You get Swiss franc, euro, USD back. It's credit. You earn about 6% to 8% on the Swiss franc, about 8% to 10% on the euro, about 10% to 14%, even on the USD. The collateral is always available 24-7, tradable. It's highly liquid. And the credits are always over-collateralized.

So how does that sound? And then they were like, oh, that sounds more interesting. That's more our home turf. So that was then basically those two situations led to the fact that I said, okay, so then let's build that ourselves. That was then when I found the co-founder. So we are now two, still relatively small, but decided to focus on that as a management solutions with the overall goal to basically fuel the Bitcoin economy. And the first product is just Bitcoin-backed lending, where we want to allow institutional and qualified investors to invest through the different platforms like DebiFi, like Firefish, but also through regulated custodians like BitGo, Signum, and all the banks that we have, because they have another challenge with capital requirements. So we want to build that solution to allow institutional investors to invest in these products.

that's what we do yeah and i think there's many sort of points to touch on there i mean the first of which jumps out to me is somebody who's been following the space leveraging these products pun intended uh investing in companies offering bitcoin collateralized lending solutions is that it seems like the most mispriced credit instrument in the world in the sense that you described the The collateral sits in a wallet if the custody arrangement is done the right way. It's not rehypothecated. It's extremely liquid. And the risk of a liquidity provider losing their principles is extremely low when you consider those factors.

And you mentioned the interest rates that exist are, at least here in the United States, way higher than traditional sort of lending products, even though I would consider the risk to be significantly lower. And then on top of that, you have this sort of environment over the last, let's call it five to 10 years, where the rush to private credit in search for yield has been a big trend, particularly here in the United States, and I imagine globally. And I think these Bitcoin collateralized lending solutions provide an incredible risk adjusted profile for investors looking to get exposure to credit markets, private credit markets specifically? It's I mean, I couldn't agree more. It's insane, to be honest. I still can't get my head around

the actual costs. But the thing is, the market dynamics are right now they are as such that there's not enough fiat capital so that's what defines the rates at the moment there's still not enough not enough interest and that's also why we why we exist because we want to change that it's a lot of work but i mean i fully agree on just a risk reward perspective i i i couldn't find anything that comes even close it's uh it's it's really remarkable and especially if you look into the area that you just mentioned with all the private debt funds and alternative credit funds i mean there is so much money laying around there and they are chasing returns of let's say 10 percent something on the usd but i mean they they take considerable risk there like and growth

growth growth companies pre-ipo companies or or whatever but there's there's a lot of risk in there While with Bitcoin-backed lending, I mean, you have a collateral, highly liquid, tradable 24-7. All the loans are over-collateralized. They are not re-hypothecated. It's really quite something. But I mean, on the positive side, especially speaking as a Bitcoiner now, I mean, I personally think the product that we are focusing right now has an end date. I mean, there is, especially now also in Switzerland, I mean, our leading interest rate is 0% right now from our national bank. So the banks are looking into ways on how they can lend money.

And we are working with banks, also with one that I hopefully can announce pretty soon, which will provide liquidity for Bitcoin backed lending. And then we are talking about way lower rates. Like then we are talking about three to three and a half percent on the Swiss franc. And that's going to happen. So it just takes time. It's unfortunately not as fast. And then, yeah, speaking as a Bitcoiner, I would love it to be faster and to be more efficient so that the whole economy can grow faster. I mean, there's a lot of value for a product like that.

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to recalibrate your life and begin thinking in sats go check it out at opportunitycost.app that's opportunitycost.app yeah and based off our last conversation from last month you made me aware of something that i was completely unaware of which was the the relationship that swiss regulators have with interest rates and how high they're willing to go yeah yeah it's quite uh it's it's quite interesting at the moment especially i mean when when you look at it right the the national bank decreased the the interest rates to zero percent as i mentioned and so so for banks now they have they have an issue because their main business is um is uh how do you say that it's like interest rates differences yeah um so they

need to find ways to allocate the capital and um and so that that will have a very positive effect but then um i don't know if that's also what you what you were talking about our regulator if or limits the banks on bitcoin backed lending and and crypto lending if you want to say so um with regards to that they still consider it as on um uncollateralized lending and so that comes with very strict capital requirements so that means that the bank especially let's say younger banks with more like a crypto bitcoin focus they have a problem because their balance sheet is not as strong and so because they would need to underlie all these loans with tier one capital tier one capital is essentially in in simpler terms it's just equity capital it's

the most expensive capital for a bank and so that that means they are quite limited still but it does like the the margins that they that they can generate right now especially are still attractive for that so so and i think those are those are two important factors we have the regulation which will change and then we have the interest rate pressure which is already there so you have banks that are looking into and say okay so we do have a couple of hundred millions that we can allocate to that to bitcoin back lending and then we would need to find a solution that is outside of our balance sheet and that's where we still come in and then at one point the regulation will also change i'm 100 sure about that um and and then it's basically the well the banking model

the traditional banks who provide capital for for bitcoin backlining which is which is okay and isn't there an upper limit to the interest rate banks in charge as well oh it depends so in switzerland it's like to private individuals there are like consumer credit limits that's at 9.9 percent so they are not allowed to go higher but for smes and companies that that limit is not uh is not in place yeah i'm just trying to get a well-rounded um perspective on just the path to lowering the cost of capital for these these bitcoin back lending products i think you said it perfectly which is it's just the lack of liquidity that exists for these products specifically right now that there's relatively little euros, francs, dollars

competing for these loans. They're able to charge a higher rate. And bringing this back to the juxtaposition of Bitcoin collateralized lending versus the private debt markets that have exploded in recent years are taking what I would deem to be an insane risk. When is that tipping point of banks and credit funds recognizing the relatively low risk provided by these collateralized Bitcoin products that floods the capital into the space? I mean, there are very likely there are multiple pieces of puzzle that fall into place, I would say, at the very moment. I mean, you see the Bitcoin treasury companies outperforming pretty much every other stock. And obviously, private debt funds are also looking at the

the stock markets um so so and then they see well there is clearly value in that in in that weird coin so and so then they will realize okay so there there is something that is way more transparent that is that's the same price all over the world and this is highly liquid so that makes a lot of sense and at the moment and i would give it like 12 months maybe max they can still generate excessive returns, I would say, as compared to anything else that they would invest. At $122,000 Bitcoin, the boom is still just beginning. Are you positioned for the decade long rush? On July 22nd, Tur Demeester joins Unchained for a live session. The boom is just beginning. You'll get a full macro briefing and a brief intro to how to properly secure your

Bitcoin for the long haul. Register now at unchained.com slash TFTC. That's unchained.com slash tftc don't sit on this freaks take advantage of this alpha how do you see the evolution of bitcoin collateralized lending you know because obviously to date it's been pretty vanilla you put bitcoin up in a wallet typically over collateralized ltv is around 50 depending on the individual um lender that you're you're interacting with and you get cash back but There's been the emergence of, as you mentioned, microstrategy like convertible bonds. There are different type of Bitcoin collateralized debt instrument to an extent. We've seen over here in the United States, the emergence of companies like Battery Finance.

They're doing dual collateralized sort of grade A credit in commercial real estate. Do you think Bitcoin, the meme of Bitcoin is super collateral sort of getting injected into every nook and cranny of debt markets has has legs this is something that i've been talking about on this show for probably the better part of a year and a half now is i think this is the cycle of bitcoin is super collateral really shining and beginning to expand beyond the vanilla put up bitcoin as collateral get dollars back and and get more i don't want to say exotic but get into more uh more complex structure credit products yeah 100 i mean that's that's that's clearly happening and as usual the u.s is probably about two three years ahead of uh of europe um so

but i mean that that's basically the reason why we then said okay we start with just plain vanilla bitcoin backed lending because it's the easiest to explain and how we believe we can crack the not of getting fiat capital into the Bitcoin economy in the easiest way. But that's just the first step. I mean, then clearly, I mean, injecting it into real estate like Battery does is great. I mean, that has a lot of potential. We talked to a few real estate developers over here as well. And I mean, they are struggling with that as well.

I mean, on mortgages, the rates that you pay for debt, et cetera, are phenomenal. But the bigger problem is for commercial real estate or bigger real estate projects when they have to calculate over the next 20, 30, 40 years. And then it's more on the CapEx side of things when suddenly all renovations cost 20, 30, 40 percent more because fiat just devalues all the time. And that's very hard to calculate in advance. So what they say is that, okay, so let's run the amortization part. We put a bit in Bitcoin and we basically benefit from the acceleration of the price. And hence, we can make sure that our properties, they keep the value over time. And so that's also an easy to understand product.

But then also, I would say, especially here in Switzerland, we have this, I don't know if it's a speciality, but it's quite interesting. So if you buy an apartment in a bigger building, then you own, it's called Stockwerk Eigentum, you basically own part of a floor, right? You own the apartment. But what you do is you pay in constantly every year, you pay in a so-called amortization fund. And what you can see there, which is also in the ThreatFi world, quite spectacular, I must say, it just lies around. It's just on an account. It doesn't work. And so suddenly you have, in the meanwhile, we have multiple hundred billions of dollars sitting in these funds because, and they do nothing.

They don't work. And it's so easy to actually get them to plan. For instance, I talked to a couple of friends of mine recently, and they bought a vacation home up in the mountains, and that is in one of these buildings. And then there were just about 250,000 Swiss francs lying around. And they already know that in 2030, there will be a bigger renovation project. And it will cost roughly, at current prices, about 400,000. realistically it will be 450 or something and they just calculate it as such that they just need to save until there and so bitcoin would be the ideal uh the ideal asset to save that part

that that capital um to actually get this renovation done um and so so i fully agree with you i mean this is just one example that's where bitcoin will come into place and and make sure that we can actually revolutionize the financial financial industry the traditional financial industry well on that note it's a perfect toss-up to what i wanted to talk about next is i mean you're partnered with debify firefish bitco all three of which correct me if i'm wrong do leverage some sort of multi-sig escrow for um for the bitcoin when it's used as collateral. And so I think that's been a big topic of discussion here in the United States is the centralization of custodian risk with a lot of the ETFs flooding their Bitcoin to Coinbase.

And I've long been an advocate of if the banking system and traditional finance is going to step into Bitcoin in earnest, that we really need to take a step back and think about the optimal sort of custody and how to custody the collateral when it's being used in the system and i think multi-institution multi-sig makes the sense makes the most sense to me because you really um create an incentive structure that that really disincentivizes against rehypothecation and concentrated third-party risk yeah definitely definitely i mean i i started with berglinda to And basically had this, the ideologue Bitcoin image in mind and thought, OK, so it's going to be multi-sig above all. And this is where we focus on.

And we still do. I think it is a good way, but it also comes with limitations. And so and now looking at the exact processes of all the platform, I mean, it is sometimes it's hard to argue why regulated custodian isn't safer, so to say, because then you have I mean, when you look at at processes of regulated banks, we have two in Switzerland who are fully focused on Bitcoin or unfortunately crypto as a whole. And I mean, when you look at their risk policies, at their risk processes, then sometimes it's hard to argue why this should be less secure than the multi-sig setups of some startups, so to say. And so there is still a way to go, I would say. And then I also think the right way to tackle it is multi-institution, but professional institutions, not some random one single or one key holder or so somewhere. But yes, I mean, this is also going to be built up, I would say. And I don't know how it is in the US.

I mean, you clearly have a few players who are already working on that. i think in europe this is something that we have to tackle over the next uh the next two years yeah i think the dream scenario here in the united states is fidelity who's been in bitcoin for over a decade now at this point in a century old institution here in the united states really stepping out on the ledge and i think an entity like fidelity needs to be the one to push multi institution, multisig, to get that seal of approval from not only regulators, but traditional financial players who really respect the prestige and the century-long track record of Fidelity. I think somebody like them stepping out and saying, all right, we're going to be a key agent

in a quorum of a multi-institution, multisig, would be a massive step forward. Yeah, that would be amazing. I mean, something like that would really change the way people look at at custody is also on the institutional level because i mean so far when we talk to to more institutional type of clients i mean either either corporate corporations who are looking for a for a loan then the multi-sig setup doesn't work it's always it's always a regulated custodian and and if so if a player like fidelity or i mean the equivalent in europe it doesn't really matter um could come up with something i mean even even better would be some sort of like the global uh global consortium of uh multiple institutions that would be great um because then

then we can really scale it to the to the institutional level as well yeah so shifting gears towards uh europe's specific perspective on bitcoin i mean you've mentioned it a couple of times seems like european regulators are two to three years behind what's happening here in the united states uh obviously you have the micro regulations that have gone live this year in europe and there are many people that are worried about the state of the broader eurozone economy what are what are your thoughts about europe as it pertains to bitcoin regulation and can the success of bitcoin be a catalyst to force more free market operations within within europe yeah i mean europe as a whole is a difficult topic at the moment i would say not only not

only financial regular uh regulation wise but also general macroeconomic wise it's quite it's quite challenging i mean europe is but the european union is their primary strength is uh regulation which is uh which is a bad thing in the first place i mean luckily i'm based in switzerland so we are not in the european union and it's also one of the main reasons why um why we're we are doing much better than every every country surrounding us um so this is also my personal primary motive these days like i i just try to do everything i can to so that we We are not getting too close to this regulatory monster that that surrounds us right now. It is. I mean, but also in Switzerland, I mean, you've seen an interesting development.

We we pushed forward quite, quite good in 2017, 2018 under a different different financial minister. um and but then kind of slept in so to say and then a lot of a lot of countries uh bypassed us and hopefully we can change that again i mean now our our regulator is is a bit scared given the the downfall of credit swiss uh two years ago so they they really try to avoid any risk but this will hopefully change i mean we're pushing on all fronts that uh that they are a bit less risk averse especially on on the bitcoin scene there's clearly a lot of interest right now from the industry so i'm positive that we can that that we can change at least the swiss regulator regulators perspective over the next uh few months um on europe as a whole i mean it's so

It's really difficult for me to understand how these processes work. I mean, it's heavily centralized. Europe gets more and more centralized. And the problems that they are dealing with these days are much broader than just financial problems, right? Especially energy is a big issue in Europe. I mean, the whole industry or Germany, one of the powerhouses of Europe in the past is just strangled by insane energy prices and ludicrous policies around that. So, I mean, this is, in my opinion, probably even more important than the regulation around Bitcoin for them. And I really hope they can change the direction there.

um other other than that i mean can bitcoin be a catalyst for for for sovereignty for sure will it be a catalyst for growing economy i hope so but i mean you cannot get like institutions or corporations if they are not allowed to do that you won't get them to do that right it's different on the individual level but for for corporates it's tricky so so but um so far Unfortunately, it still looks like in Europe the pain is not big enough so that the politicians really change. So we will see, I hope. But I'm quite skeptical on the European Union and the way they handle pretty much everything. What is going to be the catalyst?

So do you imagine it like Bitcoin has another very successful cycle throughout the rest of this year, potentially into next year? And you see a lot of the activity happening here in the United States, Southeast Asia, other parts of the world where people are really embracing it and leveraging the sort of monetization and adoption of Bitcoin to their benefit. And sort of people sitting in corporations in Europe looking out at the world, basically embracing this technology and succeeding massively because of that and pushing back against the regulator saying, look, what's happening around us, we're completely missing out on this. Is that what it's going to take? Yeah, most probably. But usually, I mean, usually it has to start with quite a bit policy change. And then the politicians will force the regulator to act. And I mean, there we can see some effects.

So one example is in Norway, they started with an insane wealth tax, just another socialist experiment that failed massively. So they installed this wealth tax. And as a result, a lot of the Norwegian billionaires, they moved to Switzerland, which is great for us when it's terrible for the country. And also, obviously, the net result is that is that they lost tax revenues and at the significant scale. And you see that in many different places now as well. And in Germany, they also tried to increase taxes again or increase debt, which will cause inflation, which that they already saw. I mean, the euro had so heavy inflation over the last few years already. So and I think there needs to be like people see start to realize that more and more.

They realize, hey, we are like we're being cheated on here. So that doesn't work. Like suddenly, suddenly we have 10 percent and higher inflation and things are not getting any better while our country has record tax revenues. But the infrastructure is bad. So a lot of these things come together. And then they see in parallel, Bitcoin appreciates a lot. And then you see the Arab countries and a lot of Asian countries and the U.S., especially under the new administration, really pushes forward on the Bitcoin side. And clearly they see these successful examples. And I think this will help. And then hopefully that's going to be the catalyst.

In the end, I personally believe it's always going to be price action in one way or the other, right? It's just... I need to spice your conversation. So do you think discussions about whether or not the European Union, the economic agreement between some European states is a failure after 30 years? I think the European Union is a massive failure. It's on pretty much all fronts.

i mean uh it's it's a centralizing experiment and it just doesn't work it's uh i mean it it consolidates power on unelected bureaucrats which is pretty much the worst thing you can do nevertheless they still tried so and and it clearly doesn't work clearly i mean the like all all the all the countries are struggling economically it doesn't like the all the policies around around immigration don't work they do not collaborate properly so yeah i think it's a matter of time either and that's going to be the big discussion or or the big surprise unfortunately it's either going to be that they will clearly push for like a united states of europe um which could be an outcome because there especially in the southern part of of uh

of europe there are still a lot of countries who are somewhat benefiting from it at least on the outside they don't really but they feel like they benefit from it um or the european union will fall apart it's either or in the next uh in the next three years three to five years i would say because that's it's crazy i'm having uh flashbacks to reading boomerang by michael lewis where he sort of describes that dynamic between northern europe and southern europe where uh yeah like greece and italy essentially being completely subsidized by the german economy in the early 2010s yeah but yeah absolutely and now but now you can see it in a in a in a different way almost i I mean, Italy now, okay, it's not perfect, but it's one of the more stable countries.

And also economically, they're not doing that bad. I mean, now suddenly, and that's always what happens in these centralized structures. It's like there is an orientation downwards. So Germany will go lower instead of everybody else goes up. That's just how it is. That's why socialism never works, right? and um and it's just because of the distance from the government structure to the actual people is too big it's uh it doesn't make any sense and there's a lot of corruption in this whole process

and yeah so we will see but uh it's it's it's going to be interesting but i mean people realize it more and more and you see it in elections all over the place there's still some some forces trying to push against it but i don't think it's it will be successful yeah the um the information i i say this a lot in the context of how politics here in the united states particularly in dc at the federal government level is completely disconnected and it's basically what you describe from an information system perspective they're so far away from the raw input data it's like impossible for them to make rational decisions on behalf of thousands of miles away absolutely absolutely they don't feel it and it's not it's always

sometimes when i when i talk about these topics it's it's like you you you start claiming like yet though they cannot do it but it's human it's human nature i mean this is just how it is if it's not your money then you spend it differently if you don't feel the consequences of your actions then you act if that's that's that's how it is that's natural that's by the way one of the key advantages of our political system in switzerland or how i look at it at least yeah because we have this direct democracy and it's very it's very fragmented just very small country but fragmented in 26 cantons and everybody has a vote and can vote against against pretty much every decision anybody takes so that's correct me if i'm wrong they compete on sort of tax preference too right

trying to yes well tax preferences education i mean the the overall system is quite similar to the to the u.s system it's a republic in the end um but we changed our um our constitution in 1848 based on the american constitution one thing that we that that we added is that it's not like Our constitution is not like such a sacred document. It's quite dynamic, actually. So everybody can pretty much change it. So you just need, compared to our size, obviously, that's like when you need 100,000 signatures and then it comes to a public vote.

So we can have referendums against pretty much every decision any politician takes. And that's on the federal level, on the cantonal, which is your state level and on the municipality level as well. And so that's why we have like 300 referendums every year, but it keeps politicians in check. And also, given the tax competition that we have, you can you can see the impact much, much faster, much closer. and if you had a magic wand to fix the european union problems i know you're separated in in switzerland but what would you do where what would how what is the optimal path to uh untangling the centralized control that the european union has over member states break it down to a free trade agreement and then split it apart like just just say okay so you do

there's going to be free trade so economical freedom so to say uh which is good i mean people trade that's good and that helps but then but then pretty much uh pretty much get rid of the european union and build a europe of a thousand liechtenstein so a thousand switzerland so just just go back to country level yeah and compete i mean that's that's the thing right that's that's like it's this it's this weird image that some politicians have is that it's better when you centralize and everything bigger is better that's not true it's just way better if we can if we build on a smaller scale and we compete against each other we compete with ideas with with structures with governance uh and and that really helps and i mean you can see it it's it's

just for me then that's also sometimes quite frustrating i mean we our relationship to the european union comes back every five years pretty much and some sort of an election and we will have a very important election soon which basically because some people want to be much closer to the european union and basically automatically take over regulation from from from europe just to get access to the european market which we already have by the way but apparently that should be easier and now a lot of people are are fighting against it but and to me this is just i can't get my head around how people can just look at the at the simple facts like on every economical kpi we're doing better than the european union and you can clearly see it i mean

20 years ago the european union had the same gdp per capita as uh as the u.s now the u.s is what 40 percent higher or something and so on every kpi it failed nevertheless there are still people who think it's a good idea to do to to go for it yeah it's it's mind-boggling to me watching from afar particularly the energy like how germany completely just shot itself in the foot over the last 20 years with this energy policy and that's unbelievable it's really unbelievable and i mean you it's now they are they're being de-industrialized in real time and um and they had a super strong economy right super strong industry um and and now all the companies are struggling and obviously that trickles down if if volkswagen struggles then

thousands of smaller companies struggle as well uh and and yeah it's just the primary reason is is energy prices and there seemed to be some sort of reluctance on the political elite so to say to change to change their mind because it was clearly a mistake and it was such a big mistake i mean you you can now i mean they they got rid of their nuclear reactors right or they stopped it because of uh because of fukushima in japan and now even japan started started building new nuclear reactors again and germany germany doesn't but yeah yeah it's a nightmare yeah the instance in i forget if it was 2022 or 2023 when after they decommissioned a couple of their nuclear power plants they were forced to ship coal up the rhine and then the rhine ran dry and they couldn't get

the coal to the power facilities so they had like power outages and no it's it's really it's the stupidity of it all is is mind-boggling yeah i mean with that i think transitioning this back to bitcoin i think you gave a keynote presentation in prague last month it was titled bitcoin a political force reshaping global governance and i am a strong believer that bitcoin can be a vehicle a mechanism a rallying cry that people rally around and basically leverage to effectuate the political change they want to see in the world and so i think you believe this too based off your keynote and i think just diving into some of the topics you covered there be great yeah i mean yeah definitely i see it in uh it's multi multi-dimensional i mean the first

the first part is clearly the the buying power and the the monetary like the monetary things Obviously, that will have an effect on politics in one way or the other. Pretty soon, you saw it already in the US, clearly, the last election was also influenced by probably pretty strong donations coming from people who made good money with Bitcoin, I would say. And clearly, that has some sort of an impact, probably. But then it goes much further, right? I mean, this is where I hope that with education, we can also do our part. I mean, the effects on weak currencies are just so bad. And everybody in Bitcoin knows it.

A lot of people are not in Bitcoin, unfortunately, so they don't know it. And I hope, and I was also part of my keynote, I mean, Switzerland was the last country who got rid of the gold standard. It was only by the end of the 90s, so it was relatively recently. And for some weird reason, I mean, it's not the gold standard fixed in a way that every Swiss franc was backed by gold. That wasn't the case. But the National Bank was required to have a certain percentage in gold when they printed money. So that hindered them as well.

It was also diluted over 70 years, but not as bad. And so that was the primary reason why the Swiss franc remains so strong. And for some reason, people or international investors still believe that because every time when the dollar drops, the Swiss franc goes up. And I really hope that given everything we see and given the success of Bitcoin, we can educate people as well that sound money makes a lot of sense for society and that people see that there is a reason why we have in Switzerland, we have a much more dynamic industry as compared to every other country surrounding us. And that's the primary reason was that these companies, they had to remain dynamic, innovative, lean. They had to push things forward while in the country surrounding us, they had access to very cheap capital and they got lazy and therefore things didn't work. And that's just one effect of weak currency. So I hope that with the success of Bitcoin, we can educate society as a whole more about like the hard money in general.

But then that's also what I realized is that because I, about five years ago, I wrote a blog about what Bitcoin and Switzerland has in common. And it's essentially what I just tried to try to explain before. Switzerland is very, very decentralized. It's the people are on top and politicians are servants to the people. And that works like that, that there's no there's nobody who can decide about pretty much anything. It's always the people who decide in one way or the other. And that's quite comparable to the Bitcoin system. That's basically the notes or notes or the masters. Right. So obviously, we have the miners are very important, but in the end, they're servants.

And also, there's not some superpower who can just decide and change monetary monetary policy, which is great. So there are a lot of common factors. And I also believe that's the reason, because we have direct democracy here. So we can vote. Every single individual has a vote about pretty much everything. And that helps. It pushes, like it makes us slow, but it makes us very stable. And that rings a bell when you look at how Bitcoin works.

so slower is better than faster politicians with less power is better than more power and um yeah and sometimes doing less is more and that's that's also how i look at the edit from uh in the in in the bitcoin world yeah yeah and um something i don't think is talked about enough like honing on switzerland too i'm sure you see me typing back here just doing some quick research in chat gpt but the swiss national swiss national bank has a considerable position in micro strategy which is a signal to me that they sort of know what they're doing to a certain extent that they're trying to get proxy exposure to this rapidly appreciating asset yeah this is an interesting debate. I mean, we have two or three people who go to the General Assembly of the

National Bank every year and then basically have a short speech and they calculate how much money the Swiss National Bank lost because they didn't invest in Bitcoin since a while. And it's constantly the same thing. And then I think their claim was a couple of years ago was that instead of buying all these worthless uh government bonds from countries surrounding us you should buy like five percent in bitcoin and then they go back every year and calculate and explain to them how much money they lost so far so there is there is a bit of pressure around that that uh that they should focus on it more so far the national bank always said well they feel like It's not big enough yet, but they are monitoring it.

When it comes to micro strategy, I mean, this is also an interesting debate because I also thought so in the beginning. And then I saw an interesting presentation by one of the I think it was even the president of the National Bank. And they said, well, just in general, they just need to push down the Swiss franc. Otherwise, it appreciates too much against all other fiat currencies. And therefore, they print Swiss franc and then they buy all sorts of assets in different other currencies. And so speaking about micro strategy, they say they basically just buy whatever USD denominated asset they can get their hands on. And it's less about the actual asset. It's just that they want USD exposure.

um so i was quite quite happy when i saw that the first time and then i was a bit like man okay not as exciting as i thought it is i thought the swiss national bank was speculative attacking itself probably i mean they but i mean they the good thing there are two two points to that right it's like the balance sheet of the swiss national bank is massive they printed a lot of swiss francs recently over the last five years as well the good thing about Switzerland is it doesn't finance the state it just suddenly became basically a massive hedge fund and it's then almost some sort of a sovereign wealth fund just sitting with the national bank so it doesn't the money doesn't trickle down in the economy and dilutes everything and creates all sorts of wrong incentives

but it's also it's generally wrong that we that that the national bank has a big balance sheet in the first place so yeah that'll be i've had discussions about this um with a couple of friends in the past the fact that they own micro strategy and based off of our discussion over the last hour like there's a lot of talk here in the united states of um putting bitcoin in the treasury you know i think we're pretty at least as a matter of administration is ardent about we don't want it to sit at the fed we'd rather sit at the treasury but um if you think about sort of this idea of free banking and a lot of the ideas in the bitcoin standard particularly towards the end where safes like bitcoin's greatest success would be forcing central

banks to have um sort of better monetary policy uh or stricter monetary policy to remove the opportunity cost and the misallocation of capital and i don't know the answer to this if i go back and forth like is it worthwhile or should we be pushing it's probably the better framing central banks to hold bitcoin as an asset on their balance sheet and if so who's going to move first and based off of this conversation i think switzerland has proven to be sort of forward thinking when it comes to bitcoin even though it's had some some lulls uh since 2017 but could you see the swiss national bank if these if this contingency of bitcoiners going year in and year out and highlighting the losses uh for not allocating bitcoin actually making the decision to get some

Bitcoin? Yeah, I could see. I hope so, to be honest. I mean, this is another interesting topic because there's currently an initiative ongoing on people who want to force the National Bank to put Bitcoin on the balance sheet. They have another year to collect these 100,000 signatures, and then it's going to be a vote in three to four years from now. So it's a longer project um and especially within the the local bitcoin community that is heavily debated because there is a lot there are a lot of people who say well people cannot be or bitcoin cannot be enforced on anyone or any institution and they don't want the national bank to uh to hold bitcoin i see a lot like i see that argument um in my opinion in the end it's it's it's also a bit of

geopolitical competition right so do i do i generally want to see the national banks to own bitcoin i think there's no way around it so at one point this will happen and then i would much rather see us uh gaining that that buying power that economical power um over the next few years other than any other country in general or obviously there are more friendly countries than than others but i think there's no way around it so i do think over the next give it four years there's a good chance that uh that at least a small portion will be allocated in in bitcoin do you think we're reaching a critical tipping point in terms of adoption in Event Horizon, if you will, about Bitcoin?

Yeah. Yeah, for sure. I mean, now you can clearly see it with all these treasury companies coming out of the woods. I mean, obviously that's kind of, the adoption curve comes from cypherpunks, software developers, and then individuals in general, and then it goes up the curve And then it goes to more, to companies, to institutions. And then at one point, it will be countries.

And right now, we can clearly see the critical point in the private markets or with companies. And there are so many companies now putting Bitcoin on their own treasury. There are now a lot of strategies to accumulate as many Bitcoin as somewhat possible. and uh clearly that's a that's a path towards uh towards more countries and um let's see who's first from from the actual like let's say g20 or something countries but yeah definitely that's i'm i would bet a lot of money that that's going to happen over the next two years and um let's see it's a brave new world and uh i appreciate you taking some time hopefully this is the first of many conversations because i think your perspective is incredibly valuable um from switzerland as you

can tell in the background my father-in-law has decided to start mowing the lawn so you may uh well that's important as well we may uh may have to wrap up here but where can anybody who's interested about what you're doing at uh berglinda like uh contact you and helping your efforts to get better bitcoin collateralized products to market yeah you find me on x and on nostre um always always open for interesting conversations always you you also find my email address online so feel free to reach out and uh let's discuss on what we can build together for the bitcoin economy very much looking forward to it all right we'll link to all that in the show notes phil sorry for the noise here at the end but we'll uh we'll do this another time peace and love freaks

thank you very much bye-bye freaks thank you for listening to the show i hope you liked it if you did like it please make sure you subscribe rate review the show it helps us out a lot and also if you like these conversations i've come to realize that many people listen to the podcast they don't know we have another sort of layer of this media company we have the newsletter the bitcoin brief go to tftc.io make sure you subscribe there a lot of the topics that are discussed on this podcast i write about five days a week in the newsletter we also have the tftc elite tier if you sign up for that become a member we have a private discord server for the elite freaks out there where we're dropping ad-free versions of this show and having discussions

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