TFTC: A Bitcoin Podcast - #755: The Bottom Is In with James Check

Episode Date: June 8, 2026

Marty sits down with James Check to discuss why Strategy's 32 bitcoin sale is a de-risking "sacred cow" moment, why the current "time pain" chop marks the final chapter of the bear market, and why Bitcoin is entering deep value territory while the broader crypto ecosystem faces an extinction-level event. James on X: https://x.com/_Checkmatey_ _checkonchain: https://www.checkonchain.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/yHGkvYxdqT Opportunity Cost Extension: https://www.opportunitycost.app/ Shoutout to our sponsors: Bitkey https://bitkey.world/ Aven https://www.aven.com/bitcoin CrowdHealth https://www.joincrowdhealth.com/tftc Unchained https://unchained.com/tftc/ Salt of the Earth: https://drinksote.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 And that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. James, check. They've got our boy in the street and they're murdering him in the street.

Bitcoin is at $66,500 right now. It's over. $66,250 based on my block clock, mate. It'll be $2K by the end of this thing. No, it's been a fun ride. It was cool. We learned a lot. We made some friends.

And that's the thing. The yield is the friends you made along the way. Yeah. well the yield could also be the uh the cash you get from bitcoin sold from micro strategies balance sheet to to cover the yield that that's been promised to you be a stretch isn't it yeah yeah 32 32 bitcoin show i mean the sell side you just can't handle it who's buying this 32 bitcoin right uh it's uh we were discussing it right before we recorded but it's funny i i got three are you okay text today it's like yes i'm fine been through this before but it is weird i know

you've uh you did some um some content with michael sullivan about sentiment analysis sentiment and matt odell and i were discussing this last thursday on rabbit hole recap for me personally it hasn't been this bad since the summer of 2015 when people legitimately thought bitcoin was going to die and i mean i wasn't around 2015 but uh just based on my studies that is the bear that's like the most horrendous of all the bears anybody who thinks you've been through a hard time you haven't been through a hard time that the length of it like it was a year of down and then a year of nothing and bitcoin was dead your biggest exchanges got like just a whole different animal every bear market gets progressively less brutal there's also a side to it we were saying before

he record that like you you develop some you develop a thicker skin right you and i we've been through a couple of these drawdowns before so uh i forget where i heard this but just the the idea of resilience right mental resilience in a anything really but as an investor mental resilience is how quickly you can bounce back like you get the initial shock wave and go oh man what's this red candle but then you go okay back to clear thinking what does this actually mean does it change my thesis is it has anything actually materially changed and the answer is no nothing has materially changed at all bitcoin's the same so there's been talking about having to sell some portion of their bitcoin i wrote a piece on this yesterday just sharing my thoughts at the end of

the day what i think is like the sale of 32 bitcoin let's face it they don't need the two and a half million bucks maybe he needs more ai tokens for his slop image generation but my general view is that they don't like they don't need the money they're selling it to slay the sacred cow right they've been saying don't sell your bitcoin for years and years and years and that just is not for the business model they've built they can't do that they have to sell the bitcoin at some point in time. And more importantly, what they're really doing is saying to their creditors, whether prefs or debt holders, don't worry. There's six months of cash in the bank, but also we've got 34 years worth of Bitcoin. They're making that like, no, no, guys, we're serious,

34 years. And in my piece, I was saying like, these guys, you got to remember with strategy, they have a fiduciary duty to their stakeholders. Bonds first, prefs second, equity third. You know who's not on that cap table? Bitcoin and Bitcoiners. I'm sorry, guys. Bitcoin is not on the strategy cap table. They have no fiduciary duties to look after us. Now, of course, there's like a secondary effect where they don't want to nuke the market to zero. So my view is that what they're doing is they're slaying the sacred cow because there is going to be very serious money out there. And to be perfectly fair, rightfully so, who's been concerned saying, hey, there's this 840,000 Bitcoin hoard that this dude might have to liquidate in a distressed manner.

And the sale of 32 Bitcoin, I don't know what the 32 number is. I'm sure there's some symbolism behind it. But the sale of a very small, trivial token amount is just the firm basically saying to their creditors, don't worry, your dividends are here, we're going to pay for them. And the other one is it's kind of waylaying a lot of the fears that he's going to get himself into hot water. They may have to sell Bitcoin before they get to hot water, but they're not going to get to a point where they're just distressed and it's like, now we're in liquidation. They'll be peeling stuff off. In theory, they could sell 1.7 billion worth of Bitcoin, which is one week of ETF outflows. And most of that is basis trade anyway, all these angles we can go down. Can the Bitcoin market

handle a $2 billion sale? Yes. It's been doing that religiously for the last however many months. So can you take $2 billion off? Yeah, sure. Price takes a hit. But then it's got a year runway. So that's my big picture view. First and foremost, strategy does not have Bitcoin and Bitcoin is on the cap table, right? So that's just reality. And the other one is that at the end of the day, if they buy themselves a year runway, problem solved.

You know what I mean? So that's my view. It's a signaling mechanism to say, yes, the dividends are going to get paid. Yes, we're going to liquidate long before you, Mr. Market, take us out to the woodshed. And in my view, it's actually a de-risking event. You know, you get the short-term stuff or algorithms just pick up the headlines like oh strategy sells therefore run sell algorithm 101 but at the end of

the day when all the dust settles i do actually think there's a bit of a de-risking event because now we have clarity markets absolutely hate uncertainty and that's been like this uncertain overhang it's still going to have a degree of an overhang but certainly once if you rationally think about the problem a decent chunk of that overhang has actually been taken away in terms of the uncertainty component which you know i think overall we'll look back and say it's a good thing yeah and to the people saying that uh this is causing the the current stress in the in the of the price i find it hard to believe again 32 bitcoin uh not enough to move the market and to your point i think uh just slaying the sacred cow doesn't mean they're going to drop all 840,000

whatever bitcoin they have now tomorrow um and by the way if they are going to drop 840,000 bitcoin do it at a lower price for me if you wouldn't mind that'd be wonderful please and honestly like you know i'm in this world where i'm i have mixed feelings about the whole strategy slash digital credit thing i'm gonna hate the term digital credit i just think it's nonsense but doesn't make any sense no i'm really not a fan of it so like i would rather honestly if i could like construct the world that i would love that i can't because you have to just live in the world in front of you i'd rather this stuff wasn't there um but at the same time i also understand that you know you can't change how the market operates so staley just happened to do what he did this is

where we are this is how the market played out is he going to kill bitcoin no is he going to be part of the the story moving forward of course absolutely so you know it's one of those interesting dynamics where you just kind of have to accept the world that it is right you can't shape the world that you want um but i also don't think that i don't think they're going to get themselves in a hot water because they're really sending a signal say don't worry guys we'll be paying down stuff and clearing any you know any thorns long before we hit them yeah and it's funny because i'm looking at the show notes um and we recorded last uh in the beginning of february right after the capitulation i think it was during i think the night that we were early in yeah that

was the price pain capitulation make the make the distinction because i i suspect that this is the time pain one and all the people who have just been like oh my god i can't do this anymore i can't it's that end of 2015 type thing it's like i've been down here for six months it's it's over it's done yeah we were so we i think literally while we're recording i think we went down to like 58k and then went back up published it hit 63k here we are 66 uh headed towards 65 right now 66 393 pumping a little bit during this recording uh we've been up towards 80 since then just looking at year to date um we got up to 82 now back down to the level as we were when we recorded in early february time pain is that what you think i have a word for this chop consolidation and that

was my that was my call back when we had that time paying capitulation my view was and still is uh the downside momentum has crescendoed i think in february right now that you know right now we're having a waterfall sell-off decline right and by the way taking out the low is actually better because you generate just maximum fear right and it's funny actually because like for me as an analyst um no matter what happens there's gonna be people throwing tomatoes at me because like i've been saying and i stay and buy it for a probability standpoint 60k is like really low type stuff 55 is i'll talk about it in terms of q's quantiles like percent of all days 55k is q5 meaning five percent of all days have been further below that i use a whole mean reversion index i

got a whole bunch of different um different tools in there uh if you go back and look at all the previous bears they've all like the bottom wick was a q5 q4 q5 q6 something like that um the ones that are deeper is 2011 when bitcoin is two dollars right which let's let's face it that's not really a comparative market cap um that 32 bitcoin in valley would have bought the whole their market cap back then um so like in terms of the price paying capitulation i think that the the downside momentum crescendoed that doesn't mean you don't have more downside it just means the downside like if you think about 2022 as an example that was the only bear market where the time pain capitulation which came with ftx actually undercut and went lower than the original low

but from a technical standpoint you get a nice weekly bullish divergence on like rsi and things like that there's a bunch of you've just lost that downside momentum and that's that remains my base case i still believe that bottoming between the true market mean at 78k and the Realize price at 55. That's the zone of interest. The lower down you go, the deeper into deep value you are. I just keep it really simple. Deep value is anything below Q20, right?

Below the bottom fifth of the market cycle. If you look at any statistics and say, hey, you've got an 80% win rate, you roll that game all day, right? You don't even ask any questions. You say, yes, I'm going to dollar-cost average the whole bottom. Below 70K is Q20. So welcome back to deep value. And I'm not even going to dig it up.

i uh i do find it interesting all the folks who quote tweet themselves and be like okay look how smart i am and look how right i was at this point in time i gotta tweet somewhere someone else can go and find it because i'm not going to do it um there's a tweet where i was saying like you know if we pull back down to that level if maybe when think about what you're going to do and that's that's all that people should be doing don't worry about what some dude's predicting the price is going to do because none of us know but the right thing to do is to just find high value right look for the probabilities, put them in your favor, make the decision for what you're going to do ahead of time, and just stay humble and stack stats when the time comes. Too many people are

going to get too cute with it. And I'm actually running a study right now, which will probably publish later in the week, where I try to model out what is the perfect DCA versus lump sum strategy in a current bear market setup. If you do a lump sum and you're waiting for that Q5 event, you might get plus or minus like 5% or 10% of a better entry with all the stress it takes to like try and buy the bottom wick. But if you just start DCA-ing in the bottom fifth, you get like plus or minus 5% the exact same cost basis. It just doesn't matter.

So too many people are going to fantasize about buying the bottom wick. Just look for high probability, deep value, anything below 70K. It's just happy days. But I was told it's over. It's not happy days. It's over. ai is taking all the money quantum is going to kill us again that'll show up again too right we'll have quantum things showing up in the next uh next couple of weeks yeah it's it's uh it's

funny how this all rhymes what is the on-chain data saying i mean you mentioned the um the realized price uh the short-term realized price 55 k 55 yeah oh 54 for the realized price yep yeah how's that uh how's that evolved since we last we last basically it's basically flat yeah Yeah. So when I'm looking at those mean reversion models, there's some models that I call fast and some are slow. The realized price is like the two-in-a-week moving average, like an aircraft carrier. These things take a lot to move them, right? They're very, very stable, which means they're good anchors because they don't move over long periods of time. Over the course of several months, yes. But the realized price has more or less been 54K for a long time. Certainly since

February, it's basically gone nowhere since then. I was looking at it this morning. What I like to look at during these types of events is what are people doing? So there's two buckets of metrics that we look at in the on-chain world. There's what I call unrealized metrics, things like MVRV, show me how in-profit people are, unrealized profit or loss. That's incentives. How are people feeling? And right now, similar to Michael Sullivan's work, people feel terrible. Their cost basis is down, they're underwater, coins in loss. People feel terrible because their portfolio is red the other side of the coin is what are they doing with that information and there's signal there particularly when you break it into cohorts so what are the people who have coins under 60k

were they bought under 60k what are they doing right now absolutely nothing the amount of realized profit being locked in i looked at before 138 2 million a day which sounds like a big number that is as low as it was during the period after FTX like after FTX had happened in dollar terms mind you the price is whatever it is 15 up to 60k so we're four times higher more than and the amount of dollar profit being locked in by people who are in the money is as low as it was in the weeks after FTX so that's how much that's what the old money's doing the old money is doing absolutely nothing. So take that as one packet of information. And then the other packet of information, what about the people who aren't so young, who bought much higher? Well, they're currently

locking in the second largest loss spike that we've seen of the cycle, 750 million. So approaching a billion, three quarters of a billion. It'll be a billion by the time I run the data this afternoon. So we're now getting to half the amount of loss that are getting locked in is what we saw in February, which is about 2 billion, same in November. So the folks who bought recently and are terrified are capitulating massive losses. The people who've been in this market for a long time and are really in the money are doing absolutely nothing. That's what their spending behavior is doing. So I kind of flip that around and say, well, for me personally, where am I? I'm the guy with the coins that are in the money for the most part. What am I doing? I've been

buying like a madman the last 24 hours. My DCA has been humming since November, just chugging away daily dca um once we broke down below the true market mean um in february switch it on to double and just let the thing hum so uh yeah i think it's really interesting just watching these kind of disparities every man these dogs got a chart i've got a ton of charts no one knows what the future holds but like the sentiment picture and sullivan's done work on this too the ogs are far more optimistic and their moods are far less volatile than what he calls like the plebs or the retail the new folks who've come in and just here for like number go up so there's a divergence there between people who are a bit more seasoned and have taken a punch a few times

and folks who this may be their first rodeo uh when you compare those two you get just these these interesting divergences are just everywhere and i love when you see it across michael's work across what's going on in the on-chain world you start to see all these like packets of ah this is a consistent this is now a very consistent story across the uh the whole market and it's it's funny too like comparing where we are today again we were falling through this level in february when we last met and for some reason i don't feel like i don't nearly have that like pit in my stomach like oh man this this this one hurts like this one's like all right we're back to where we were yep three months ago yep no and that's that's part of that resilience thing right

you've seen this movie before uh in my view like i can feel it that february one felt like the shockwave um there's also part of it where like you kind of get used to the fact i've been shopping around the 60k range 60 70 whatever um now if we go down to i don't know 50 let's go down to 55 which is the bottom of where my my like range of probabilities is we're going to 55 54 you are going to have so much beer that is like if you are not looking at this as like okay it's it's i think the downside is over bull begin at that point in time you're kidding yourself because it just generates so much fear every remaining tentative white knuckling bull just goes no it's over i have to get out of this thing they capitulate and what there's a pain everyone's

been there when you've sold the bottom a bottom could be local could be global doesn't matter you sold an asset and then like you did it not forced selling sometimes it's for selling but like you did it because you were scared the next three months you can't buy you just like there's something in you that's like, no, it can't. It can't. I know it's high, but it has to come lower. And everyone's been there. You've felt it. And there's this denial phase. And what happens is the bear beats people into submission. Every rally fails. And the deeper it gets into the bear, the more confident the bears get. Michael's also done work on this where he shows how confident people are. And I loved his confidence metric because confidence is a non-directional tool.

i got a bunch of non-directional tools as well uh and i like my personal favorite metrics are non-directional tools because i then have to go okay so people are feeling really confident right now let me go and find other stuff to contextualize what they're confident about so it's like the opening question and then it gives me a whole bunch of other things to then i've got to then answer the question of what are they confident about they were confident at the bull market peak and they're confident like they were really tentative through november february but then march hits iran war oils are world's falling apart bitcoin's got to go to zero at 65k and suddenly everyone's angry and confident and the bearish sentiment starts

coming out every man and his dog's got a bear flag pointing to 45k got the same chart and you just get this like ah now they're really confident on the other side of the equation and what happens is people it's recency bias the reason people lever up at a bull market top is because they've looked at the last two and a half years of green candles and gone, mate, this thing's never going to stop. And then journalists will only ever write a bearish headline when Bitcoin's down near the bottom

because now it feels safe to jump in the pool. It doesn't feel safe to be out on a limb at 125. I think Bitcoin's a Ponzi and it's going to zero. You just look like an idiot. But you don't look like as much of an idiot when everybody else has jumped in the pool and that's why the IMF bottom ticks because they only feel safe enough to put out a paper.

they spend six years writing with all their phds they only feel safe enough to publish it when it goes down at the bottom and it feels like it's never going to come back so that's all the same sentiment confident at the exact wrong time that's funny i mentioned the texts i got today and these are from two of them are from people who should know better they've been they've been in it they know one of them was like hey you're not worried about this right like i'm pretty sure you're not i was like yeah i'm fine stacking like increasing the stack but there is um i'm sure you've noticed it but there is this narrative floating around that ai is sucking out all the sales uh from the winds of bitcoin sucking out the wind from the sales of bitcoin and uh

liquidity is just simply going towards that and it's going to be hard for for bitcoin to recover until that liquidity um sort of finds a pressure release valve via ipos for spacex anthropic open ai whatever it may be or um bitcoin finds a reason to be bullish for and i think it's important a lot of what i spent um i've recorded with chris martinson today i'm going to talk about on on air but off air he's asking me he's like are you wearing like no it's just getting back to the the basics of like all right does this peer-to-peer distributed cash system still enable peer-to-peer transactions that are censorship resistant is it backed by proof of work is there 21 million it's like yes yes yes okay we're good yep um and are they going to base

the currency when this is all said and done absolutely so you just put all these things no totally you go back to fundamentals and the system keeps humming um there's no question that the ai trade is just like a big you can feel it you can it's like a vacuum that's just sucking up absolutely everything um now there's some parts of it that have a lot of merit there's bottlenecks left right and center um you know you can argue that there may not be certain bubbles but then once you get these ipos go live i mean i've read a bunch of pieces on the spacex ipo and i mean does it the numbers are so far off making sense like and i'm no equity analyst i'm not going to pretend to be an equity analyst i couldn't tell you left from right but i like can smell test

things and i've kind of seen this stuff enough i'm like the numbers are just out of control it makes no sense so and like are they changing rules for the s&p to stuff this thing in because like they don't have the buyers for it so everything's going to get sold but let's go back to the bitcoin piece let's imagine right that we have this ipo moment um you know go back through history generally speaking there's like a hero ipo and that's like the genesis point of the the beginning of the end of the bubble because like suddenly the euphoria just goes and in this scenario where is bitcoin going to be it's going to be the most under-owned forgotten asset of all time you know like people people it's like oh but when the bubble finally cracks bitcoin's going to

get taken down to zero it's like dude no one's going to own it he's going to sell it at that point in time like that's what the time pain process does it removes anybody who's sitting there going like for me i'm not rotating my bitcoin profits into ai sure would it be a good decision yes but there's also like i don't buy bitcoin for the swing trades you know i buy it for and when i whenever i do buy it's that long-term investment right i buy for the it's my longest duration asset i've got play money that i stick in all sorts of stuff but for my long-term duration out. I don't trade my gold. I don't trade my Bitcoin. They're my long-term savings. So at some point in time, we've got a massive alligator jaws. They close. And everyone

always assumes they're going to close by Bitcoin going down and stocks going down as well. It's like, no, they're going to close because Bitcoin's forgotten. And then suddenly it's going to be the only thing in the room that's moving. And what happens to all the fast money? So the market is cyclical. We're going through this rotation. And I would actually say something I've observed and i kind of had this idea as a theme i do think this like idea of capital rotation it feels like something that i know it's always been a factor but uh even if you think about it from like the the microcosm of the bitcoin crypto world it used to be like a rising tide lifts all boats and that used to be the same for the stock market too a rising tide would lift all boats but now

we've been in this like oh this sector is getting crushed but these ones are doing well ai is doing well but this sector is getting crushed it's a lot more of like a stock pickers market and i do think that's more more or less going to stay the same but it kind of feels like how do i describe this in terms of like the energy of the market it feels like the ponsification of everything like real late stage fiat stuff where everyone has become the fast money like everyone is the fast money now the system incentivizes people to chase the hottest thing all the time and forever and that's why you're almost getting this like almost like a resonance rather than like being like stable pool of capital it's invested in everything in a ball of hot money the ball is

the majority and then there's like less and less of that fundamental capital because there's career risk oh why didn't you own all these ai names then everyone just piles in so yeah it's an interesting dynamic but i i can't imagine the bitcoin is going to be a heavily owned heavily for sale asset when it's all said and done because we're in the process of flushing them out as we speak that is what this process is time pain there's gonna be no one left who like everyone who's in the trench at the end of this process there's gonna be people like you and i and who do i want to be in the trenches with the asset of a bear market you know good stuff so freaks this work was brought to you by good friends at big key guys things happen things get lost you need

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If you want a partner that helps you secure and grow your Bitcoin without giving up control, go to unchained.com and use the code TFTC10 at checkout to get 10% off your new Bitcoin multisig vault. That's TFTC10 at unchained.com. I love being in the trenches with you, James. It's funny too, because this is the first time, again, 13 years where AI has obviously taken

in the the window of the sales from the liquidity perspective but then like from a mindshare perspective um all the capital and then all the mindshare i mean admittedly i think we talked about it in february like it is certainly taken up a good chunk of our time here at tftc over the last six months has been trying to implement it and we've had great success doing that it's been a lot of fun um but i think it's the hot chick on the block right now and i think to many extents deservedly so and i think that's going back to the sentiment analysis if you haven't been in it for a while and you came in like 2020 2021 and it was like oh yeah the debasement trades here it's on bitcoin's going up uh people are looking at the attention getting

sucked out of the room too and being like oh is this really dead and that's when you have to fall back on the fundamentals where yeah and like you know at a smaller microcosm um gold's pulling back gold's been down from its high is it over for gold too it's like precious metals out of favor it's like no markets just go through these cycles bitcoin hit a peak it's got to work off the the steam gold went through a peak it's got to work off the steam eventually all these things have to peak because nothing goes up in a straight line or a parabolic line in some cases nothing goes up in a parabolic line forever and everything comes to an end and that's why at the end of the day i think i've mentioned this on your i think it would have been last time i was on there's really

two worlds here. Bitcoin is genuinely dead, which is its own conversation at a fundamental level. If you do not believe that is true, which I don't, then at some point, the bottom gets put in. And all you're trying to do is find the most opportune period of time. And I mean, most of investing is doing nothing. Most of succeeding in these markets is just doing absolutely nothing, being patient, waiting for the right opportunity, putting the odds in your favor, and then doing absolutely nothing. And it's actually very hard to do, right? Because people want to go and chase the next thing and once they're invested somewhere else they don't want to rotate their capital and like it's a whole thing and that's why i think like for most people

having a basket of like these are assets i just accumulate at this pattern here's my simple rule set and this this is my like capital that i rotate in and out of stuff and kind of play the you know play the hot money game so um just understanding your buckets is super helpful um knowing what asset you own and why like what's the actual reason for it my gold there's a very specific purpose. It is different to the purpose of my Bitcoin, which is different to the purpose of my hot ball of money. So just having those different buckets, I think not a lot of people do it. They just think, oh, I'm 100% invested in Bitcoin because I believe in it. It's like, yes. But now you're going to feel this anxiety and pain because you have no other capital.

Just play around with this stuff. You know what I mean? And don't get, if you're 100% geared to one asset, ideologically, I get it, but it's not probably the healthiest mindset. Because in many ways, it clouds your judgment because you only look at one thing, right? You're so anchored to one thing, but having a bit more of a spread gives you a bit of a feel around what's going on. Yeah. And it's actually been refreshing, not like on the AI stocks, not that I've been covering or allocating to them, but it has been refreshing, like picking up a new hobby, if you will,

and like thinking about something different than Bitcoin 24-7, 365. And that's not to say I'm not still very focused on Bitcoin, but it's just like, you get to focus on other things. And I think the first six months of this year, too, it's been really interesting because it's using the AI tools to figure out how to increase cash flow at my business, which is like, okay, if you're going to be ideologically pure and allocate to one asset in particular,

it's like, okay, how do you de-risk or how do you sort of de-leverage your emotions to the assets? It's like, oh, you increase cash flow where you're not really worried about your savings as much. Yep. Yeah, yeah. And I'm like, I won't go into all the details, but there's a tax change policy here in Australia,

the new budget and all the rest of it. And it took me like 10 minutes to get the bones of the analysis. But the ability to just like punch in a problem and say, look, here's the setup. Here's go and find the old rules. Go and find the new rules. Build a program. I want to test the sensitivity of this scenario, this scenario,

this scenario. and its ability to just like build up the bones of the analysis um like it's amazing and you can do that for anything right there's times when i've got to reconcile two spreadsheets in my accounting i'm like hey can you go and just reconcile these to work out where the different oh here's the error there's something over here that isn't being carried forward or whatever all these things are fascinating i mean it's an amazing tool but i've certainly noticed i'm sure you've come across the same i can totally understand the logic of if you're a skilled operating whatever it is that you do it's going to be massively advantageous for you if you're

just punching in slop queries you're going to get slop out you you have to kind of know what you're doing and the the process of actually like putting the time into writing a brief making sure that the whole system understands like what exactly is it that you want to do um here's the area like you've got to be really explicit with here's where i need you to help make a decision versus here's the decision that i want you to make because if you give it a suggestion if your idea is wrong and you don't ask it to fact check it'll find a better solution for you because it can find better solutions for you but if you just say hey do this this and this and like you know use this method and blah blah blah if you use this method is incorrect it's going to build you a model that

has your slop in there so just that whole process i find fascinating um the more time you spend with if you're in like a single project you're working on the first like 10 prompts amazing stuff once you get to like the 20th prompt errors start showing up it starts like forgetting context and like things start to break down but like yeah i find it fascinating um you can see where it's going but you still have to babysit it and you still have to be a skilled operator i do worry about graduates in all fields though i think that's a real like that's a scary prospect because it kind of makes sense to hire a not gray hair but near gray hair in terms of skill hire a more senior person who can then handle you know these ai agents but if you're coming

on the tools and trying to learn the job much much harder because you don't have that skilled operator and there's also a thing i remember from my engineering days uh this concept of uh what happens if we hire a bunch of people and we train them and then they leave the company and the perfect i was a beautiful counter answer is what happens if we hire them and we don't train them and they stay but now you got to flip that around because what's going to happen is a bunch of companies who cut costs and don't hire graduates someone else will go well no we actually need to grow our workforce but people aren't that loyal so yes they may give them a good start but after five six years people get bored of any job and then they want to move so what happens is you

could actually not be the one training these people saving and making a bunch more money because you're you know using a couple of gray hairs and some ai tools and then you can go and hire the new folks who've been trained elsewhere now they'll be scarce and they'll be expensive just a simple supply and demand problem but that whole concept of like what happens if we don't train them and they stay it falls apart yeah well that i mean that and that's why it's important to not only train people but i'm not sure if you caught jack dorsey's conversation with the sequoia partners but i think i was happy to to hear his perspective on that which is like the whole concept of company is changing with ai where you have this company's basically becoming

an intelligence layer that has all the context of your business your different product lines your customers your revenue your cost all that stuff and it sits in the intelligence layer and then the job of an employee is just to work around the edges and ping that intelligence layer to basically do their job correctly and better than they would have been able to do before and what I've honed in on

is something I've been focusing on internally here at TFTC to your point about the 20th prompt being very, very shitty it's like we've been building this memory system in the back end, this persistent memory system that has the full context of our business so it has like every transcript every newsletter every ad deal blah blah blah like and it just sits in this intelligence layer that we can ping and it has all the context of the business over time and it's building that context as we add

more information to it it's the tftc.skill right that's that's the idea you're basically building like a your business bespoke skill yeah but it comes down to like there's there's knowledge graphs that you can run. So we use OpenClaw. We run a couple of knowledge graphs on the server. And these basically just track everything. There's a James check page in our knowledge graph that has every transcript of every podcast

you and I have ever recorded. I hope you don't mind, but every newsletter, what paid subscriber, I'll feed it to the LLM to help make sure that we facilitate a good conversation whenever you come on the show. It's got your newsletters throughout time and how your perspectives have changed. And it doesn't have to go search that basically from zero. Anytime I prompt it,

because it has a knowledge graph, it pings the knowledge graph first. It's amazing how you can build the, and having that context means that you do have that back history and you can, it's almost like you're building your own brain, more or less, your own AI brain that you can then ping and say, Hey, find this invoice for me, right? How do we build this client? How do we do the contract language here? No, that's awesome. makes a lot of sense yeah but the point being is like if you know how to do it it's going to be

incredibly um beneficial to your business it has been for us and and then bringing back to the broader point like it makes sense to me while why some of the attention has been focused towards ai and away from bitcoin because this stuff is is fascinating but again it goes back to i mean what you just mentioned i think people would be remiss to overlook bitcoin right now because if you look at the fundamental backdrops of the job disruption that's on the way like what's that going to do for the fiscal side of the books with with all these governments you look at what's going on in the middle east with the trader hummus like there are certainly going to be some price inflation pressures that emerge towards the back half of this year as the supply

chain disruption really begins to hit the market so that's going to be price inflationary and then And then you're going to have like the potential perfect storm of like prices rising while a lot of people are getting laid off. And what is the Fed? What is the Treasury going to do? What are central banks and other governments around the world going to do? And I think the big print, for lack of a better term. The bill comes due eventually. That's just the nature of the beast.

And all this stuff accelerates it. It accelerates the approach to it. And, you know, what is kind of interesting in the moment, I mean, you mentioned the debasement trade before. I found it kind of interesting that the I think it was JP Morgan released like the debasement trade is like a thing now you and I and gold bugs and everyone be talking about the debasement trade for years right 2019 I think things really started to accelerate in terms of that dynamic Lynn Alden's talked about this with the the repo right spike and all those things that's where it started to become evident that there were cracks right COVID then came and dropped all that stimulus in the

system kind of push things further ahead but the cracks were well and truly in the process and continue to be in the process of widening with this ai capex boom it has been a private market stimulus it's buying materials it's building things it's hiring labor building data centers buying copper like you know mines the whole lot our power generation the grid all of these services materials it's a private sector stimulus in many ways it kind of looks like growing our way out of the debt but the problem is that like all of these things have a timeline there's a timeline that this can go on for and just like the dot-com bubble they build a ton of fiber optic cable that is tremendously valuable but it took years and years and years to break even on right decades

so it's going to be something very similar like there is no world where we don't have a bubble like that's just how markets and people and capital operates so there's going to be this point in time where like we get this concentrated burst of stimulus could go for many years but it doesn't actually fix it doesn't grow out of the debt because the debt is so unbelievably large and is growing because the government's involved in all of this as well borrowing money to spend and and build stuff up it's been funny again i'll come back to the australian setup uh you know they're they're putting through all these budget changes and there's this very sad state of affairs video of our finance minister um and you know the the guy's griller and saying

so you saved 150 billion you said you saved 150 billion in the in the budget is that net or gross i don't i don't have that number so i give it if you saved you say to the public you saved 150 billion most people in the public would say okay you've got an extra 150 billion but it looks to me like you've spent it back into the budget like there's it's been spent and more elsewhere so do you have spare money at the end of this budget or do you have more oh yeah we saved 150 billion no you're not answering the damn question like and this is the thing they've already gone and spent 250 billion they saved 150 but they've gone and spent 250 billion somewhere else so none of that is fixed by any of this and there's another layer to this whole thing which

nick barder and i have been talking about the the impacts of both ai the shortages you mentioned earlier from the straight all of these things are not going to ripple through economies equally uh if you're in a developed nation like the u.s china even i would argue australia probably gonna be fine because we can just outbid other countries uh a lot of this stuff is going to impact poorer countries right the global south it's going to impact them considerably more so a lot of the like the the k-shaped global economy is probably going to widen as well um which is a it's a sad state of affairs but that's it's very much in this regime of like global power competitions and man i mean we are living through genuine genuine history and uh

trying to handicap all this stuff and predict how it plays out is impossible but you know that it's changing and you know that within that change the one thing that isn't changing is the governments are no they're just they're no more fiscally responsible than they've ever been many ways they're worse because they're spending wartime budgets in a time when i mean sorry you can argue it's kind of wartime it's a cold war type thing uh but you know that that that problem doesn't get fixed so uh is there gonna be more fear at the end of the day absolutely so freaks this rip is brought to you by good friends at crowd health i've been a happy crowd health member for almost five years now my wife and i have had two children while we've been on crowd health and i actually

just got the last bill for our third child funded uh it was six thousand one hundred fifty seven dollars crowd health negotiated down to two thousand three hundred nine dollars and we only paid $500. The rest was crowdfunded by the CrowdHealth network. If you're sick of health insurance premiums and having to pay deductibles and getting ripped off at the hospital, join CrowdHealth. It's an alternative way to pay for your healthcare. It's not health insurance. It's crowdfunded healthcare. As you can tell, they negotiate prices for you. You pay in cash. It's much cheaper. Overall, we're much happier. They have incredible perks. Go to joincrowdhealth.com slash TFTC to sign up. Five years on CrowdHealth, not looking back. Joincrowdhealth.com slash TFTC

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you've got the interest expense on the debts about to surpass social security um payments and you're gonna have to roll over a ton of debt you're going to go into more debt looks like 70s era echo inflation maybe on the table and yeah it's not looking great and to your point about the emerging economies i actually had a conversation with somebody last friday um off record over lunch and he made a really astute observation with ai specifically like all the ai infrastructure is being built either in the states or to some extent in china and obviously u.s equities markets are way more open than china and so what you're seeing is like a capital flow from europe emerging economies into the u.s equities markets so it's like we're

sucking capital not only away from Bitcoin in other assets, but literally from other countries. And then to your point, their opportunity cost of using that capital to invest in their local economies versus US equities markets is real and will manifest in potentially a negative way and exacerbate that global K-shape that you just described. MARK BLYTH Yeah, it's very interesting because it would have been April last year, April 2025, I did a big report right around the tariff Tariff Tantrum, where I was trying to help my clients understand what my general view was in terms of how the rest of the world perceives the US actions with all the tariffs. And my read at the time, and I still think it remains valid, my read at the time was we're probably actually

going to see a net outflow from the US. And we did. Over the course of 2035, most other stock markets outperformed the US market. But then as we came into late 2025, the AI trade just suddenly it was humming and starting to grow, but it just exploded. And then you started to see like South Korea. I mean, the Korean stock market's gone ballistic, Japanese, all these companies that are involved from a memory or whatever it is, all these bottlenecks that are occurring, they started to explode. You started to see copper prices, right? Miners start performing very well as well. So you start to see this dispersion as the trade really heats up in the back half of 2025. And now the US is sucking that money back in. So you kind of get to this

interesting position where back in 2025, my view was you're probably going to see over the course of the next couple of decades, you're going to see like the Europeans and the Japanese say, actually, you missed a Japanese pension fund or you missed a European pension fund. You've actually got to invest your money here. It's almost like soft capital controls where they increase the regulation on the amount of local government debt that certain entities have to hold. So that I think is likely to continue because it's trying to fight this free market force of the market putting money in the u.s right which is very much in um brent johnson's view of this dollar milkshake the u.s is the market where these things happen and it just

sucks all the juice out of other countries and they've got to fight often by regulation to keep that capital so yeah fascinating stuff man we're really watching it is sovereign games of it's game of risk right sovereign game of risk yeah and then like if we do build all the data center infrastructure here or a dominant or a dominant percentage of the overwhelming or the overall data set infrastructure that exists globally like then like we're selling that we're exporting that compute to it's like a new commodity that you're exporting absolutely people don't own it in other countries it's crazy again and you can turn off the inverted commas intelligence of other people which is why it's an actually and this is the thing it's an existential

national security grade thing and that's why it's going to suck in so much capital why it is because like there's no this doesn't happen it it's going to happen right now it's going to get overbuilt there's no question about that is going to have a bubble um you know these ipos just history would say is probably the beginning of the end of that process can get pretty lunatic by the end of it but it is most likely uh that the governments are going to back this the chinese can't not be competitive in this field the americans can't not be competitive and then at a company level google has to invest because they have to be competitive with you know all the other businesses that are trying to build this stuff so all the individual players also have to be

dominant because once you lose your dominance it's it's game over so it's this game where they just they must it's a must uh type event rather than a want yeah it was zuckerberg said it last last year it's like i don't care if we spend a trillion dollars like we can we blow up like the the opportunity cost of not trying is too high crazy right yeah it's uh fascinating times but switching gears back towards our little cottage industry here in the world of bitcoin and broader crypto there has been interesting the dislocation of a broader crypto from not only bitcoin but i think you mentioned earlier there's gonna be pockets of things e-cash had like a little moment there with all the shills came out it seems like hyperliquid is having a moment itself it's sort

of dislocated from bitcoin and broader crypto and then you have capitulation um in eth world with like the bankless guys dumping all their eath and uh finally coming around to john pfeffer's view that he wrote in 2017 it's gas and gas is not very valuable yeah brutal it is a brutal thing but I appreciated David's, he wrote that piece on Twitter. That's crazy. There's a bunch of Bitcoiners who are like, oh, man, I can't believe you're an ETH shill. It's like, no, dude, I'm looking at a guy who had his whole,

it turns out the Bitcoin thesis was wrong. It takes a lot of balls and a lot of compute power to come to the realization to say, oh, the ETH is money thesis did play out and it was really lackluster. yeah it's a he did a very self-reflective i finally recognized the problem that takes balls man like that's that's you may not agree with everything he says i don't agree with everything he says but at the thrust of it he has come around to the john pfeffer view which is a gas is gas and gas is not very valuable and you had your time in the sun and you priced in all the future growth

and then it's kind of this that when you're pricing all the future growth there's no future growth so you know you kind of run out of steam so you know credit to him for for writing that piece because it would have been hard right selling it all would have been quite difficult agree agree it's just it is i think uh i engaged in a little bit of shouting for it and shame on me for doing it but it is funny like we've been screaming for like a decade like hey this is the ultimate outcome it is a big uh big boy thing to to come out and say hey acknowledge i was wrong um changing my mind and gonna publicly do that uh but i think is to the point uh brought that up because like what do you think happens with broader crypto moving forward do you think

i think it's in a world of trouble i think it's a real world of trouble like we're talking about stock pickers market i think that is on steroids i just think it's an extinction i i think we finally got to the crypto extinction level event where the garbage just gets culled and eventually there's There's just no bias for any of it. Now, I'm sure we can probably trace this thing back. And like, if you go back to the 10th of October, 25, right? There was that deleveraging event, which kind of kicked everything off. There's bodies there that we probably, I don't think we've really found out what happened

properly in terms of who got wiped out, but market makers and all the rest of it. But some of these tokens quite like quite literally went to zero on that day. The price went to zero. And that's because there were no natural bidders. And that's the thing. Bitcoin doesn't go to zero because it has natural bidders, right? We can see it all the time. We can see it in terms of the amount of sell side that gets absorbed,

the amount of buy side that comes in. So, you know, Bitcoin has a natural buyer of real people, real entities, real companies who actually want to own it. On the flip side, that is just not true for the crypto world by and large. So really, like, it's a painful recognition that the thing you built is perpetual swaps and stable coins. that's the product market fit been developed right that that is ultimately the product market fit that's a very narrow band it's really not like for the hundreds of billions of dollars of vc

and all the speculation everything else you made dollars digital and you built a casino it's just a really painful recognition and like there's a point where the market just goes it's just not coming back and i think i do think we've hit that extinction level event so i think it'll very interesting um i think there'll be a lot of people i mean at the end of the day i would say that it's overall uh it's a net negative in terms of it's like ftx there are people who got burned by ftx who will simply never buy this asset class ever again and i think people who've been in crypto for five six seven years and have gone through the process that you and i have gone through with bitcoin like my conviction of bitcoin doesn't change um it's you know i learn more and i

understand it more and i analyze it more but like my core view that bitcoin is going to be a very important part of the future of the monetary system is unchanged but imagine if you lost that imagine if like it was just really really apparent really clear as day that it was just never coming back there's a lot of people who are going through that right now and i just don't think they are ever going to own this stuff ever again i think they just drop off the map they might as david did buy some bitcoin because like i get it like i still get the premise but to just like pull out of the entire other x million tokens to be like it's just over i mean that's it's just going to be a true extinction level event um there's still folks who think there's gonna be like revenue but

like i i look at the whole defi world and like i can see a world where defi was a cool idea like i can construct a world where that would have been quite interesting the problem is it relied on shit coins and speculation so that's a part of it but like you can imagine let's just for example just imagine the bitcoin happened there was some breakthrough we were able to do a lot of this stuff maybe bitcoin is using it all the time the problem is the attack surface and if you think we were talking about ai before if you think about how much attack surface there is as the ai models get better and spot loopholes that no human would have ever thought about I just think the risk for the whole crypto world, any DeFi system, has moved from return

on capital to return of capital. Case in point, something called KelpDAO got hacked by the North Koreans, and it basically created so much bad debt in Aave, which is the biggest lending protocol, blue chip, so to speak. And suddenly, they drained half the treasury of every founder and d5 project that all came it was all very wholesome rainbows and unicorns come together we're going to patch it over don't worry you'll be made whole the north koreans are going to do it again and they're going to have pack something else called like bread dowel or something and it's just going to be like eventually you just can't have your money in it and i think that any serious capital is looking at that and i certainly told my clients to look just be if you have d5 positions if people

do just go through the process of thinking about your exit you know like i'll leave it to you what you want to do but like understanding that the the risk is now a zero not a two three four percent yield it's like you might get just a haircut straight off the bat and i just think that the bear case for the whole ecosystem it's always been there but now it's like front and center really really hard to argue in the affirmative it's a really really bad state of affairs yeah yeah it's not looking great because the kelp dowel wasn't the only wasn't there like two or three that that got drained uh it was oh you know there's i mean arboretum or what happened to arboretum uh there's no there's there's all these weird wacky names there's

all this stuff getting like i saw a chart basically saying that like we're currently at an all-time high of like monthly hacks and i do find it quite interesting because like it's just a touch on the quantum thing not to disparage the quantum thing i still i'm you've got said my view i still believe we should be developing the solution because the risk is existential even if the probability and the fugazi and stuff is all i think still real however think about all the hundreds of billions of dollars that have gone into the whole crypto well that's like a big treasure chest that could be nicked and then like there's these these folks building these weird and wacky quantum machines that may or may not work spending tens of billions of

for an uncertain outcome and like a lot of them pitching now that stealing satoshi's coins will be their like that's their revenue maximizer they're by the way telling bitcoiners that this is our revenue pool to which like just imagine a world whilst i don't support freezing the coins just imagine that tomorrow we all go oh yeah we'll freeze them why didn't they just do what the north koreans didn't use ai and just hack someone because like if the business case for quantum is theft and crime just do crime just use ai and just steal shit from the defi ecosystem what are you doing building these complex machines i don't know i find that like parallel humorous at a minimum right it doesn't i don't want to disparage i think quantum we should still

take seriously but i do find it kind of funny that like bro just go and hack any go and hack kelp down you'll make a ton more money and it will cost you 50 bucks in tokens what are you spending 10 billion dollars on a bridge and all these pipes and you know weird quantum particles and shit like it doesn't make any sense yeah it is it is comical and it like and again it highlights the design principles that the bitcoin project has taken over the years was like hey let's keep the attack surface as small as possible let's make sure this is relatively simple dumb and straightforward of a protocol uh so that people understand how it works and if bugs arise how to fix them pretty trivially and i think it's to your point being validated in real time that

this design approach to uh distributed uh monetary network is is very wise on on satoshi's behalf and those who have picked up the uh the mantle of of keeping the protocol going um since he left and it is i do feel a bit for the crypto people or it's like there's a lot of people rah put in more than a decade of work prime years um and i mean a long arc of history will be recognized like even the bad ideas are necessary to to to try in a free market that's actually functional um and i i mean i don't want to come off like a prick here but i think to your point it's becoming clear that um these are not going to work out in the long term and it will be interesting to see the sentiment backlash that bitcoin gets um in terms of like a scorned ex-girlfriend just saying

i i can't i can't david obviously recognize like hey there's something with bitcoin here i'm going to acknowledge that but how many others are going to say no it's all fake uh if my thing was fake bitcoin is too yeah and you know it's it's it's tricky because ethereum's got this whole roadmap to to quantum proof the protocol it's like yeah but ecdsa is just like hard-coded throughout all of your smart contracts like the user experience of saying hey guys how do you email them can't tell them like hey guys can you move out of like the v5 protocol move into the v6 and then liquidity pools are going to shift around and you just think about all the places that and then all you need is one of them and let's face it the whole my my core view for the quantum debate is this is gonna be

really hard and really risky really really risky stuff new crypto cryptography is not you don't take that lightly that's that's there is a bigger risk in my opinion of us rushing it and putting the wrong system in place than a quantum computer showing up tomorrow considerably more risk in that angle it's hard there's a small pool of people in the world who can do it right we're talking about you know very very small um collective of people who actually have the cryptography the quantum skill are able to sense check this stuff understand the existing system know how swapping this out like that's not small small potatoes and you think about all these little protocols that have zero chance of finding one of those people and then trying to fit in with everything it's just

like the downstream effects if quantum is real it's just game over for that whole system you may fix the protocol but you that like the base chain but you're not going to fix all the smart contracts the users are going to get wiped then you've got the north koreans who are also stealing stuff you got ai hackers crime crime crime crime crime like it's just it's it's really big attack surface and yeah i mean look you know bitcoin's not strictly out of the woods i still think it's gonna be very interesting i mean i i do believe that it has been so heavily reviewed and scrutinized by some of the i mean literally every hacker on the planet has been looking at the bitcoin code and saying how do i get into this thing right it's been happening forever so it has to be the one of

the most reviewed pieces of software in the world so it'd be amazing if ai finds holes may slop and pretend it finds holes we'll see but i think that the attack service on bitcoin is considerably smaller um and certainly i mean that's that's it's just the only place in this world it's the only place i can feel safe with um so yeah it's however one more thing i want to float uh i had an idea the other day uh gold bugs love to point at quantum as like bitcoin's existential zero zero day risk if spacex is successful in any way shape or form or any space company is successful or if ufos are a real thing right we're going through this whole disclosure i have no edge in understanding the disclosures and aliens but i just thought this

was an interesting thought experiment uh if it turns out that aliens are real or we start space faring gold's a zero because there's a whole universe of gold out there that eventually comes comes to earth so it's kind of the same argument just flipped around but like in theory we can actually solve the quantum thing once you're up in space you can't solve the gold supply problem that's an infinite problem yeah and i think uh i mean we don't even need to go to space i think uh grubles was highlighting this like yeah i think in april this year just a reminder that there's more progress creating gold out of thin air than there is for quantum computers factoring past the number 15 like they're literally solving some alchemy problems in china i believe where they

can turn some some raw materials into into gold using some sort of system so it's like you don't need to get it sounds like the same remember that um uh it was like a superconductor at some point where they a room temperature superconductor in the whole world was lit on fire and then it's like oh no it turns out it was bullshit it sounds like one of those yeah it is uh it is fascinating you mentioned stable coins earlier maybe we're gonna end on that what is your thesis there are they susceptible to the potential um security risks that exist on these competing protocols that a lot of the stable coins that's an interesting one well they're they're a target because they're money right there are money of of forms and lots of people use them uh the issue with them is they

can be frozen now they can't necessarily be frozen straight away and you know if you've if you've got a bunch of tether there's a possibility of and we saw this with from memory i'm fairly sure some of these kelp down hackers swapped it into eth which to be very fair can't be stolen and frozen um so they kind of understood but they also had a bunch of their tether stolen they had a bunch of it on an l2 which got frozen so like there's gates all over the place you can't exactly deposit it to binance and get away with it coinbase they're probably going to block you so um i think stable coins are it's interesting because i wouldn't want to be i mean sorry i shouldn't say that because uh being tether is a crazy crazy lucrative business but the amount of like having to surveil

that's just going to get out of control right the amount they're going to have to surveil stuff and freeze things and request from governments and all that kind of thing that's going to be a whole a whole headache but i do think that the stable coin thesis uh and that's why in my post when i was replying with uh with david from bankless my post is basically saying ethereum the blockchain is very successful and i actually just don't understand how anyone can argue otherwise uh i could say the same for tron i could say the same for solana why because they have literally dollarized parts of the world venezuela um you know there's parts all over the world that predominantly use tether as their money right you go to turkey you can easily spend tether

So it's one of those things where it has dollarized parts of the world, which quite frankly has been like a desire for the Bitcoin idea for a long time, to provide a money. Stablecoins have done that. So undeniably, those rails have been successful. There's no value capture potential for the underlying asset, for the ETH and the SOL. There's no value capture for the token,

but the rails have quite literally dollarized, and it doesn't matter what rails it's on. So I also think that just Genius, Clarity Act, both of those are a very clear signal that the US sees this is actually good for dollar hegemony. So going back to that national security idea of AI, I think that stablecoins proliferating is hugely beneficial to the US and they're going to push for it.

I think they're going to support it as far as they can because it makes all the sense in the world. And what I think is so interesting about the stablecoin story, it was chosen by the free market. People chose Tether, right, in these countries. In fact, their government would rather they didn't have it. They chose it because it was better than their local savings. And truly, that's part of my thesis for Bitcoin as well,

because we're fortunate, you and I, to live in Western nations, the US and Australia. Our currency isn't great, but it's also not terrible. It's not the lira. It's not the bolibar. So the quantum leap, to use a pun, the quantum leap from the lira to, or the bolivar to the dollar, US dollar, it's about the same magnitude as us going from the Aussie dollar to Bitcoin or to gold, right? You're going up into a sounder money, right?

Sound soundness is a scale in many ways. Now there's obviously a large portion of currency that is unsound from a absolute value, but there are far more unsound monies. And this what the Ethereum folks never understood with their ultrasound money theme. The rate of issuance isn't the problem. The number, the absolute value of the issuance is not the factor. It's the ability for some dude to turn up overnight and say, your dollars are worth half as much. They're worth twice as much. I want more. You get less. It's the change. It's the human governance layer that makes it unsound. And if you think about any of these currencies that get devalued overnight, it. In fact, I use this analogy. Again, it's different, but it's close enough. The Australian

government, I won't bore people with the details, but with their budget, they effectively changed from a 50% capital gains discount after one year to being it's now indexed. So if you think about that, indexation of CPI is like 3%. So now your long-term capital gains discount goes from 50% to three percent right per year they've effectively devalued our savings right they've made it just they came out with a budget that kind of came out of nowhere and suddenly if you're an australian your savings after 2027 are going to be taxed at practically double the double the rate uh they've devalued your savings and that was a human governance decision same when they devalue the the egyptian pound or they devalue the turkish lira the human governance angle is the problem

and over time the u.s dollar is just going to absorb and consume all of these smaller currencies the u.s dollar is going to that's why i'm very much on board with brent johnson's dollar milkshake theory i think the dollar just absorbs all these smaller currencies uh the people of that nation choose it their government hates it and that's why their weaker fiat currencies will collapse into the dollar, the dollar dollarizes more and more places. But ultimately, does that change the soundness of the US dollar? No. So the more people that move on to the US dollar, the more people eventually realize that, hey, you know what? Yes, it's stronger than what I had, but now this is my baseline. Hey, it turns out this is also shit. What do I do now? I've got to

keep going up and up the stack. So there's just this perpetual flow of people moving up towards, I actually need a sounder savings asset. So yeah, I mean, this is the kind of the long-term view that i see but i don't think the dollar is going anywhere uh i think it's going to eat all the other fiat currencies first and i do think stable coins are a big part of that yeah as parker lewis said and gradually then suddenly it's the credibility of your monetary policy which is what you're together like yes you can have ultrasound money but it's actually ultimately not ultrasound because you've changed it four or five times along the way and settled on this for memetic purposes and no number of bat and speaker emojis is going to change that yeah no it was a

it was a it was a good college try though it was good effort uh and and it's funny too as we call it yeah the uh i i completely agree i think that everything's going to fail into the dollar and then ultimately like what is the credibility of the dollar's monetary policy not very good for reasons discussed earlier and many bitcoiners will get frustrated and say like oh we shouldn't be pumping stable coins and i think want to be clear i don't think you or i are saying like go use stable coins tomorrow particularly i mean we're fortunate i think individuals in our shoes and our economies we don't have to and uh you would be um just very stupid not to recognize that there is demand for these things i mean that's objective as you undeniable yep already

pointed out and i think you should also be objective about the state of bitcoin as a fully mature monetary system that covers savings and payments and the payment side while it's made massive strides in the last decade it's still probably not where it needs to be for mass adoption and that's one thing that's incredibly encouraging to me or has been at least for the Last year, first six months of this year, particularly with the onset of these AI tools, while the attention has been drawn into other markets and other parts of the economy, the second layers that are being built on Bitcoin are getting more mature at a faster pace. that infrastructure that will be necessary to enable that that jump from stable coins to to bitcoin is is getting to a point where you can actually facilitate that not not tomorrow but

it's working towards that that sort of ultimate state where it can do that yeah and i think it's also important for people to recognize uh we've been in a bear market for six seven months right six seven months right uh you know if even if you're a four-year cycle theory dude um or last it you know it's 12 months is the typical bear market duration so guys we're in the last chapter of it so there's a lot of folks who are looking at this equation and being like this bear market feels like it's never going to end bitcoin is just dead it's over it's been just started it's There's quite literally no data point in Bitcoin history that suggests that this doesn't resolve violently to the upside.

What's going to happen is a lot of people are going to miss it because they're going to get too cute. They're going to try and be too cute, time the absolute bottom, and like, again, run the studies. To my best estimate, just dollar cost averaging through the bottom 20% of the cycle, anything below $70K gives you a better entry price, or as good an entry price as trying to lump some the bottom tick stop like don't lose hair gray grow gray hair over it and by the way i've said this before the feeling that you have right now

watching ai moon and the feeling you had back in january watching silver moon and choose whatever it is that has been peter schiff's life for 17 years it's why he is the way he is right it's six months seven months gonna be all right bitcoin's gonna bottom you just got to be there for it you know what i mean like don't get too cute with it don't try and time the bottom um i spent uh going back to michael sullivan's work i spent a bit of time a couple of weeks back where i liked a couple of bullish posts and the algorithm on twitter immediately showed me the most moon boy ridiculous nonsense and the most doomerish and like some dudes predicting 6k charts with like a legitimate arrow on their price chart being like this is like my ta and i was like

oh my god so then i did the other thing the next day and the reason i cottoned on to this is i mentioned the australian tax thing i mentioned i put a bunch of posts out my feed just immediately changed entirely i stopped seeing anybody who wasn't australian like it was so instantaneous it's like how sensitive are these algorithms so then i started liking some bearish posts and next thing you know i've got again the most ridiculous moon math because they're the ones i'm going to engage with like you're an idiot you're so wrong um and then just like chart after chart after chart of the same bear flag with the same arrow all pointing to 45k again might happen not my base case in fact very far from my base case but like be very very careful with how

sensitive these algorithms are like on x particularly and to be fair that's the only social media platform i use aside from substack it is so sensitive that the world you are seeing is absolutely crafted by your mood and your mood crafts that scene which then crafts the scene for your mood this is what michael is doing he's analyzing how people get pulled into these ditches, right, of just utter doom. And people who've been around for a while, you develop that resilience. You'd be a bit more optimistic because I know how this resolves. I've seen this movie so many times. It looks the same. The patterns are the same, right? All these dynamics are very familiar. It doesn't feel like February, right? February felt like a true fear capitulation

moment. This is apathy. This is apathetic. No one cares. So all these fears about, oh, the stock market's going to blow up and then it's going to take bitcoin down it's like dude there's gonna be no one who owns it when that happens there's no sellers like there's almost no sellers now like once we get to that point in time like it's just so yeah i think folks don't get too cute just honestly my advice for this cycle is just buy the bottom fifth the bottom fifth of the cycle my like just round numbers the bottom fifth is below 70k uh below 60k is the bottom 10th so you're talking about a 90 chance of it being like in the money uh and down at 55 54k that's the bottom fifth five percent the lower you go the better it is don't ever think it just

just stay humble stack sats get through the other side it's gonna be fine i could sign that message we did it out earlier today this is the summer stack tune out the noise hone your craft and just stay humble and stack sats just remember how it felt at 80k when you're like damn i wish i bought more in the 60s 66 650 right now what are you doing yeah yeah it may run away from you between now and when this is actually posted next monday but we shall see james it's always a pleasure stick around uh stick around after we record i want to show you something because uh i think uh i think you'll you'll get a kick out of this good i know thanks mate good to be here all right peace love freaks thank you for listening to this episode of tftc if you've made it this far i

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