TFTC: A Bitcoin Podcast - Tales from the Crypt #105: Travis Kling

Episode Date: October 4, 2019

Join Marty as he sits down with Travis Kling, CIO of Ikigai Asset Management, to discuss: - Travis' journey to bitcoin - Failed narratives/frameworks of years past - How the current system is gamed - Timing - Much more Follow Travis on Twitter: https://twitter.com/Travis_Kling Check out Ikigai: https://www.ikigai.fund Shoutout to this week's sponsor, Cash App. Cash App. Head over to the App Store or Google Play Store, download cash.app and start #stackingsats today. Use the promo code: "stackingsats" to receive $5 and contribute $5 to OWLS Lacrosse you download the app. Casa. Use promo code “TFTC” to get up to $250 off your Casa membership … or hit their team up [e-mail] for a free demo, or to put them to the test with your hardest OpSec questions! Subscribe to our YouTube channel: https://www.youtube.com/channel/UCtdbWsnfA08KhSUO4amVLaQ?view_as=subscriber Contribute to the show: https://tftc.io/contribute/

Well, hey there, freaks. It's your boy Marty here to introduce this week's episode with Travis Kling from Ikigai Capital Management. I sat down with Travis last Friday, about a week ago, over some Oberon wheat ales. We talked about his journey to Bitcoin, how he thinks we should be pitching Bitcoin to the masses, and a bunch of other stuff. This episode of Tales from the Crypt is brought to you by the Cash App. You freaks already know all about them use the code stacking sats if you have not downloaded the cash app yet download it then use the code stacking sats s-t-a-c-k-i-n-g-s-a-t-s you're going to get five dollars and five dollars going to go to alves lacrosse a charity very near and dear to our heart and then you're going to be

able to buy bitcoin sell bitcoin send bitcoin uh off the app send bitcoin to the app if you want to and then on top of that they have their boost program uh you get teamed up with merchants I actually noticed last week a new merchant that they have is the MTA. If you're in New York City and you want to get a dollar off the MTA, that boost is floating around right now. But you need your boost card to do that, so make sure you sign up for your boost card. Once you have the Cash App downloaded, you're going to be able to customize that. You're going to be able to use that wherever Visa is accepted, and you're going to get the boost program on top of that. So you're going to be able to save on your MTA pass when you're getting coffee, Whole Foods.

They're adding new boosts all the time. So go to your local app store, download the cash app again, code stacking sats, get that $5, get $5 to charity. This episode's also brought to us by Kasa. Freaks, how confident are you in your key security? Have you gotten set up with multi-sig yet? Does your key setup have a single point of failure? Our friends at Kasa have drummed up one of the smartest and most secure ways to hodl

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doing really cool things really stellar team over there so again check out casa um use the code tftc to get up to 250 off and if you want to email them membership at team.casa all right i hope you freaks enjoy this episode uh don't get triggered by the amount of times that travis says distribute ledger technology i know uh some of you will get triggered but just hey take it with a grain of salt okay What is up, freaks? Welcome back to Tales from the Crypt. It's your boy, Marty Bent, here.

Recording three today, Travis. Bingo, bingo. Sitting down with Travis Kling from a key guy. Asset management. Asset management? Asset management. Yes. That's it.

CIO had an incredible spot on CNN last week. We haven't even talked about this yet. We've been we've been spitballing about your past and stuff like that. But we did not mention CNN. Got to give a shout out to you. Incredible appearance on CNN. Yeah. It's as somebody who's like been in Bitcoin forever.

That's what you look. That's what you look for is people giving good pitches on the mainstream media. And I think I think you did a good job on CNN, dude. No, I appreciate it. That one got a ton of traction. And I think part of it was just having a clear, concise message and not going too hardcore, too far down into the tech or like just explaining why Bitcoin is important using or from the perspective of like somebody more from a traditional finance background. and like some of these things the way that people talk about bitcoin it's not that any of it is untrue like is bitcoin a truth machine like yeah it's a truth machine is that helpful to an

institutional investor like not that helpful right and that's why whenever i get a chance i just say bitcoin is a non-sovereign hard cap supply global immutable decentralized digital store of value it's an insurance policy against monetary and fiscal policy irresponsibility from central banks governments globally it seems like that would be easier to memorize than like the um what is it when you put your hand in your what was that pledge of allegiance yeah this is the bitcoiners pledge of allegiance this is what i believe bitcoin is yeah no i agree and that's what we're talking about like i wasn't trying to figure out how this uh this line of questioning we'll dive into your story later but you are very passionate about sharpening the pitch um of bitcoin like

That's why I wanted to sneak attack you with the CNN line there because I think that is an incredible pitch. It's very concise and sort of gets it all in one fell swoop. That's what we were talking about before we hit record is the first 10 years, the pitch probably has not been as good for institutional investors. So that's your background is working in the institutional investment world and the people that potentially could invest in Bitcoin in the future.

Or what do you think Bitcoiners are doing wrong right now that we can improve narrative wise or pitch wise? Well, it's Bitcoin. Part of it, I think, is is Bitcoin's gone through a bunch of phases. And, you know, I jumped in all this in the summer of 17, so I didn't see a lot of them. But it started off as an absolute science experiment that maybe a couple hundred people knew about. and then it got its first big use case right buy drugs on the internet works really well for that and that proved it kind of pulled it out of of science experiment phase and into actual utility phase and then as as time went on there was the whole you know blockchain not bitcoin thing where

it was like oh no it's actually about this underlying technology which you know and and you know wall street tried to co-op that for a while and in that was the kind of 13 14 time frame i think that wall street was trying to co-op that yeah that's when you had your consortiums your yeah digital assets what was blithemasters had her um that's right set holdings or something like that and i and i tell people because a lot of pre-coiners um very good we're we were debating the uh not even debating we're we have to correct ourselves when we say no corners i'm gonna stop saying no corners i'm gonna use pre-corners it's too derogatory pre-corners pre-corners i like we love our pre-corners and i think a lot of a lot of pre-corners um are there's less people that

are latching on to this blockchain not bitcoin meme these days you still definitely find them still find plenty of people that say the technology is very exciting and what i remind people that like in a private permission setting distribute ledger technology is a google sheet it's a google sheet you share it with other people if i make a change you see the change immediately right as opposed to like if i have a microsoft excel file and i email it to you and then you make a change and then i fire up my version of it i don't see your change like it's a that's what a private permission ledger is and there are some some uses in that context that are going to evolutionize wall street's back office which is just so unbelievably less interesting than an entirely

new form of money or distributed compute or a lot of other things and but but but what you need is the the game theory and the mechanism design and the incentive structure of having this public crypto asset that's associated with the network that allows for all of this to run in a trustless decentralized or trust minimized manner and you know if you if you're just using it in this private permission you know setting then you know you're going to save you know credit swiss 50 bips on their sgna line like over the next couple years and it's like okay that's great but like that's not even a good pitch to buy credit swiss stock like that you know it's like it's just an evol a slow evolution of a boring part of finance yeah it's wholly uninteresting

right yeah and that's um for a hundred episode we have arbed out from twitter on that's i think what a lot of people's aha moments is is it's it's the it's not payments it's money right it's not the moving of money it is creating an actual good that is money and it's hard for people like to come to the realization that this is what this is all about yeah some people like that run some of the biggest companies in the space i would argue don't even understand what this is all about they completely agree with that and there's a bunch of different use cases for distributed ledger technology which i feel like is a four-letter word for like a lot of bitcoiners and a lot of like crypto people in general i i just use it um as a catch-all for that includes

private permission ledgers which we just established are pretty boring and includes like dags right and like dags seem kind of interesting and there's some people that are trying to do some things on dags and then blockchain is like sort of far and away far and away the leader in terms of the the the most usage from from a distributed ledger technology perspective but if you if you are looking at these different use cases for DLT we and I talk about this pretty often you ask yourself four questions how ready is the tech for the world how ready is the world for the tech what do you need decentralization for and how to centralize is a centralized enough so it's apparent to me that money and specifically store of value is the killer app for DLT right now

and Bitcoin is just so drastically far and away the leader in that and in the context of what's going on with monetary policy and fiscal policy with central banks and governments globally it is apparent to me that the world is ready for the tech and if you need that money to be approaching sovereign grade censorship resistance then you need 10 000 computers all over the world keeping track of this blockchain and then i look at the i compare that to a lot of the other use cases for dlt at the moment and i think smart contract platforms are super interesting um you know unclear whether or not they're all going to end up being tied back to having Bitcoin as the kind of economic unit of value through interoperability

and things like that. But like when I close my eyes and think about the world 10 years from now, 20 years from now, it seems like smart contracts are going to be everywhere. But there's a spectrum of decentralization in terms of smart contract platforms. I think you have ethereum on the furthest end of of of of that spectrum and you can run an assassination market on auger right and you know i guess if if the government really wanted to go knock on joe lubin's door in brooklyn because there's an assassination market on auger then like i guess maybe you could do that um you could even go after joey krug yeah yeah whatever right but you get my point it's very decentralized and then you know you keep moving across that spectrum and you've

got all these other smart contract platforms you got eos with these 21 block producers that are having their problems with collusion you've got this hash graph with this like federation of corporations i would throw libra in there as well too and then all the way to the other end of the spectrum you have aws and aws and it works amazing and it is so cheap we use it for a bunch of stuff like for ikigai and it's like what exactly do you need decentralization for and in a lot of these use cases it's just because decentralization is always going to be harder than the centralized solution and so you need to have a good answer for what do we need decentralization for and for a non-sovereign hard cap supply global immutable decentralized digital store of value

you need a lot of decentralization for that so bitcoin is just able to more fully answer those four questions how how long do you did it take you to come to this this real or this line of thinking like you said you got into it like the summer of 2017 in earnest but it wasn't the first time you heard about bitcoin right you peaked in before like what did you get caught up in excuse me the allure of the token economy the ico boom at any point like was what was your path to understanding yeah um Um, so bought my first Bitcoin, maybe like August of 17, 2000 bucks, something like that. Um, I'm a really cautious guy. I'm cautious as a person and cautious as an investor as like,

I think people think of hedge funds as being like hedge fund investors as being like very, like highly risky, like in the context of like people that are hedge fund investors, i'm definitely more on the risk averse side of things and personally like uh i would never go skydiving or bungee jumping or anything crazy like that i don't even like gambling i don't even like like i've never really been like a big gambler um i'm not a big gambler either but i think i would go skydiving gambling just doesn't i worked at barstool sports like that that office is filled with degenerate gamblers i would uh i would like turn my head like i sometimes look around like he's just burning money like to me present bitcoin uh i know at some point he did i don't

know right now i don't know whether he sold it or not potentially to uh pay off some of the gambling debts who knows i did go i did go parasailing in brazil where you got the big kite on your back and you're like tandem with somebody and we literally ran off a cliff like ran off of a cliff with a with like a kite on our back and sail around the bottom and i i was so freaked out going into it it was one of these things where the juice like wasn't worth the squeeze like i would not do it again like ghost white yeah just like not having a good time going into it at all that wasn't fun um but so yeah so jumped into it was looking at all these different use cases nobody knew how to think about value accrual in the summer of 17 if you think back

about what that looked like i don't know how staunchly bitcoin you were at the time were you like 100 bitcoin summer 17 uh by that point yes i'd come around to i got burnt in 2013 2014 and that uh altcoin cycle and then 20 by 27 master coin um i don't even know i don't know if i ever touched master i remember master coin i don't know if i ever touched it but believe it i mean all the way like i remember pure coin when doge was blowing up like all that all that shit um this 2017 my time like summer 2017 came around i was pretty uh in my opinion like all right i got the the lay of the land the landscape and pretty much like all right bitcoin actually probably because what do you need decentralization for right and it's like probably don't need it for

all these other things that at the end of the day may depend on oracles too and then uh the governance structures that were being thrown on like the dow like uh in the whole uh what was it mv equals pq that was summer 17 that was late 17 yeah that i got real hooked into that yeah like when mv equals pq came out started quite like how do you like and then you just started extrapolating into the future if that was reality you end up on a basically token economy of barter which nobody wants from a user experience perspective and i call i mean i wrote about it like that's when the bent started too i was calling bullshit on that stuff then but um it was like the same pitch in a different package that i'd gotten on like multi-algo uh pow coins with

no pre-mines like in 2013 yeah i was like but people are learning and things are i mean you can't it's the nature of the shit right it's gone people are going to experiment with it and try to do what they want to do with it and yeah um but a lot of lessons are learned the the value accrual propositions when i jumped into it were not that well understood and very early on when i was jumping into it i was looking for how to value this stuff because my whole career like starting when i was 19 years old when i took my first upper level finance class basically valuing shit was the only thing i ever did with my career did it in a bunch of different asset classes did it up and down the capital structure, did it in super liquid investments, did it in completely illiquid

investments. And so I started looking at like, how do you value any of this stuff? And there wasn't, there wasn't a lot out there at the time. And it seemed like the, the idea of smart contracts made my knee jerk reaction was that that made a lot of sense to me. And then Ethereum didn't scale back then that was two years ago ethereum didn't scale and you had a dozen eth killers quote unquote they were coming to eat eth's lunch because it didn't scale and so it seemed like a good idea that i should be like sprinkling some bets around these like quote unquote eth killers didn't have a good understanding of the technology at all um and then you know memetic investing was massive then right memetic investing yeah and so it's like so it's like

supply chain logistics right i'll give me some v chain i got to get some v chain in there and um and then xrp uh which i personally hit an 11 bagger on from early november to early december of 2017 um i think i bought five thousand dollars worth of xrp and turned it into fifty five thousand dollars in like a month yeah and um and that made sense to me because i was like oh bitcoins not banks aren't going to use bitcoin and this i felt like xrp was like the hedge against traditional finance not accepting you know and using bitcoin and things like that and xrp was like the meme for that right kind of and then chris bernitzky wrote put out crypto assets and mv equals pq was in there and the space got super fired up about mv equals pq

and um pretty soon there and vehicles yeah i know and like pretty soon thereafter people like if you go back and look at it and we on our we have this content depot called kana and katana where we did this we have a uh it's a valuation depot where we did like a greatest hits of like the most important kind of valuation blog some of them are quantitative some are more qualitative bunch of like pfeffers papers on there and we have a bunch of the velocity problem blog posts on there and if you go back and look at the the dates it was like bernitzky put out crypto assets in like august of 17 and then like three months later these blog posts started coming in that were like mv equals pq doesn't really work but velocity is a problem right and pfeffer dropped

his paper right and um shout out to john pfeffer huge shout out to john pfeffer yeah um and for the For those of you who know the paper, Travis is referring to, John wrote that paper. It was an investor letter he sent out in December of 2017, and then he made it public on Medium, and he basically called it, like, none of these tokens are going to accrue value. Put the top in on the alt market, full stop. Yeah. Put the top in. I've had the pleasure of getting breakfast with John a couple times.

This is an incredible dude, incredible thinker, great investor, too. Yeah. Yeah. Great investor. Really good guy. Put him up there with the most legendary investors I've ever met. John, if you're listening, I have a great bottle of Bordeaux waiting for you if you ever want to come on. I know what you like. It's waiting. Yeah. And so it's like the market's collective framework in terms of how to think about value accrual changed right around that time. And people started talking about the velocity problem, aka he just describes as the working capital problem i like to also call it the chucky cheese

problem and why the chucky cheese problem because you you go into chucky cheese and you can't put quarters into the video game you got to take your five dollar bill put in the machine gives you chucky cheese tokens you play the video game when you walk out of the arcade you don't want chucky cheese tokens you want your dollar back so you can actually go buy something with it and that's the whole that's kind of the whole velocity issue there's not what's the compelling reason to hold the token exactly um and here we are two years later and the token structure situation outside of bitcoin which has earned a monetary premium which solves your velocity problem that's an important note has still not been figured out by the alt universe there are and we talk about this

a lot at ikigai we look for what we call equity like features um where you have aspects that aspects that can at least in theory um you can make a case will lead to value accrual and so we consider the top 150 cryptos by market cap is our investable universe we did full qualitative reviews on that we've got it broken up into sectors and subtext sectors that look like the S&P 500. It's in this big spreadsheet. There's four columns in the spreadsheet that are, there's a bunch of columns, but four of the most important ones are signs of life, tech viability, asset viability, and pumpamentals. And specifically on the asset viability, that is, does the token accrue value? Is there a compelling value accrual mechanism in

And we were lenient enough to give all proof-of-stake tokens a yes. It's either a yes or no. We gave them a yes. Because in theory, the concept of a yield, if you like the underlying thing anyways and you get some yield off of it, then in theory, you can make a case for an accruing value. That's being generous. Because you also need the underlying network that the crypto asset is associated with. to actually do something that the real world gives a shit about.

That, and then on top of that, Matt and Del and I actually just talked about it on our Rabbit Hole Recap, because Binance just announced staking services for their customers. Like, to me, proof of stake is just going to, and that's the, there's many Achilles heels in proof of stake systems, but one of the biggest is that you're just going to incentivize exchange hoarding, and exchanges are going to run these systems because it's going to be easier to stake on Binance than it is to set up your own wallet and stake yourself. And you're going to get better payouts, more frequent payouts on exchange. And that's just going to centralize supply.

Yeah. And you're going to have an oligarchy of exchanges running these POS systems. And look at EOS's 21 block producer situation. Yeah, they already have like, isn't Brock Pierce calling it like screaming collusion of the Chinese? It's already, it's basically already happened, right? Um, you know, so, so the, you got to figure out if you, if you're not going to earn a monetary premium, then you got to figure out your value accrual mechanism. And there's been, um, it's been disappointing how little of that has been put forth over the last couple of years. And I say this every time I get a chance,

hoping that more people hear it if you're like a phd in mechanism design or whatever and you're not in this space like i don't know what you're doing right and i just like if any those type of people are out there and you're not working on a crypto asset like you need to come to this space because if you figure if you figure that out if you figure out the game theory to it um you know not only do have a chance to change the world, but you're going to get unbelievably financially rewarded for that. And the space hasn't figured it out yet. It was a problem two years ago and it's a problem today. And on one hand, it's nice that Bitcoin's up, I think like 140% year to date and the alt universe is up like 15% year to date. And that price discrepancy, performance discrepancy

is uh refreshing to me because it reflects fundamentals um but on the other hand two years ago when I was jumping into all this ETH didn't scale there was a dozen ETH killers coming to eat ETH's lunch uh and then here we are two years later ETH still doesn't scale it's it the ETH 2.0 roadmap is tremendously difficult to pull off if they do pull if they do pull it off it's like three years at the fastest and then these quote-unquote eth killers like a couple of them look like they exit scammed a couple more still haven't launched a project uh a platform and the only thing like you know worse off than like eth network usage statistics which like outside of of erc20 tether is like you know quite bad are the network usage statistics of every other quote

unquote eth killer which are like essentially abysmal and you've had hundreds of millions of dollars poured into these and tens of thousands of developer man hours billions at the peak yeah at some point yeah and and like and and we're still here and i don't come from a tech investing background and so i i'm not sure what the appropriate level of expectation is for the pace of development i don't know if i'm being too like hard on it well i don't think you're being too hard i think just people are just coming to the realization that the these it isn't the way to build these products you don't need a blockchain for all these products that we're talking about like what needs to be decentralized like me personally i mean i've been saying this

for a couple years now on this podcast like i just think everything that people's envisioning or like defy and all that stuff it will come to bitcoin eventually it'll be built on top of it it's just you the the course of action for all the stuff to come to be is taking course like you cannot build yes we have all these ideas for these uh exotic products enabled by decentralized networks decentralized monetary networks but we're still building out like the infrastructure and the the for bitcoin in particular like building out the base of the protocol from which we'll be able to build on top of it and so that's what i think things like lightning and um other side chain and type actions and protocol developments or excuse me developments at the protocol level

will enable everything we want it's just like so from like a tech development perspective i think people are trying to blockchain the world when that's not the solution it's like hey let's work on the most uh important blockchain that affords us the most assurances and then we'll be able to do all that unique cool shit uh we just got to build out the base right so so how do you feel about smart contracts as a use case for distributed ledger technology and like where is that gonna go i think it's great i mean bitcoin bitcoin is the first implementation of smart contracts that's what a multi-sig address is smart contract and bitcoin is getting close to uh if we get schnorcing nurses and get taproot you'll be able to do some really cool smart

contract you'll be able to leverage uh bitcoin scripting language in a way that is more descriptive than it is right now and is more flexible than it is now and then on top of that like what is a smart contract that is so basically an if and function between two parties that hopefully cannot be uh controlled by any third party i think you can build that shit with lightning like on top of bitcoin so again from a non-tech guy perspective and a guy that's never written a line of code in his life the you know vitalik's original sort of plan for needing touring complete environment touring complete was a red herring it was a red herring no that's the thing like that's That's like the biggest marketing scheme by altcoins, right?

They take a perceived inefficiency of Bitcoin, in Ethereum's case, scripting language, scriptability. Vitalik wouldn't use all the op returns that Satoshi took out of the protocol, and Satoshi took them out of the protocol because he realized they would bloat the chain and they want to be viable to run a full node and i doubt vitalik didn't like that so he went and created ethereum and again so like from first principles standpoint like he wanted to do he

wanted to build the world on top like smart contracts it's very cool but i'm like and again so my investment thesis is do it right or don't do it at all especially in this space with decentralized money you got to do it right and i do think bitcoiners are one shot right now or don't do it at all i'm like so like trying to value ethereum and their development mindset from a tech perspective it's like all right from first principles you're going and building your system based out of something that the early adopters of bitcoin said this would bloat ours so and that's what you're seeing now with ethereum like you're saying ethereum doesn't scale like they just raised the fucking gas limit this week you know what like let miners like hey we're just

going to raise the gas limit so they just made it harder for everyone who wants to download a full node uh to download a full node and that is what needs to be possible if these systems are to be viable longer is for anybody to download software and get their hardware running with the stuff right what do you need decentralization for and how to centralize is decentralized enough you need to centralize what do you need decentralization for to ensure uh for bitcoin to ensure censorship resistance right that's that's it like as long as you have enough nodes that allow anybody to transact um or send messages on the network transact where you're just really sending messages um how much is enough i don't know you don't really find

out until you're attacked right yeah and that's like so that's the next phase like that's what we were talking about earlier too like i'm interested to see if uh madora like bloomberg president yes i am adoro may be hoarding bitcoin on venezuela's balance sheet and even going as far as to use it to send to russia so that they'll send supplies so skirting sanctions and so like we could see like u.s and the u.n countries be like yo does anybody come out with an estimate of how much bitcoin they think venezuela has i think they had i don't know like how much is on the balance sheet like i mean obviously they're pretty poor with managing money So I wouldn't be surprised if I got caught up in some shit coin schemes.

But, I mean, that's what, like, I sat down with the guys from Ledin.io in Toronto. But there's a bunch of Venezuelan. One of their co-founders, Mauricio, is Venezuelan as well. And we, I'm just realizing now, we posted a rabbit hole recap. I butchered Mauricio's name and I redid it thinking I was going to go edit it. And I never edited it and posted it. so this is me realizing that live on air and the freaks are probably tweeting about them though but um but he said like that's the thing it's like that not how much yeah is the question how

much does the venezuelan government have because venezuelans are using bitcoin down there not as we would like to think they're not holding bitcoin they're exchanging it for stablecoin die being one of them they chose die as their go-to stablecoin um and so venezuelans when stability in like u.s dollar like assets and then the government did go on a campaign to basically confiscate bitcoin miners mine themselves and and mauricio described a scheme in which the government could easily print boulevards and send blackmailed people to local bitcoins to buy and send to a maduro address which a lot of people think is happening so yeah it's crazy nation states are in the bitcoin game yeah but it's not just you know it's not just

venezuela because you can swing all the way back to you know the most well-developed um sophisticated countries in the world and look at what's going on with their monetary and fiscal policies and um banking the unbanked and helping out people that are in places that have to deal with you know inflation uh like they have in venezuela is is definitely a a really noble thing for uh the crypto ecosystem to go solve um but on the flip side the the the leading economies and countries of the world um are you know 10 plus years now into the largest monetary experiment in human history which is quantitative easing while simultaneously running increasingly larger deficits on top of increasingly untenable debt levels

and you are you're starting to see um and it's apparent that they have no plan to end that Not only do they have no plan now, they know they have no plan to have people like Mark Carney coming out and be like, hey, maybe the U.S. dollar is not going to be around forever. Yeah. And other such instances like the fact that Trump is on Twitter yelling at Powell is insane. Yeah. And the another thing that I saw that I don't know if this caught your attention or not. Did you see the FOMC president, not Powell, but a member of the FOMC committee? It's a Fed. I can't remember which one it was that wrote the Bloomberg opinion article. It was basically like we should consider basically not easing because if we ease, then it's going to give Trump what he wants and basically get him into his second term. So they're politicizing the Fed now in Bloomberg.

But like the guy wrote an opinion article basically saying like we should consider not not cutting because it might keep Trump out of his second term, which is just like if you take a step back, like that's the world that we're living in right now. That's it. And you're seeing you're seeing little things like that. Right. You're seeing, you know, the whole world's growth is slowing down simultaneously. So instead of some parts of the world, their economy is going strong, some parts, you know, not so strong. Everything is either going or not going because everything is now tied to central bank actions. So it's all slowing down at the same time. So all central banks are now cutting rates and juicing QE and increasingly more exotic forms of QE. Because, you know, the first time you do heroin, you can do a little bit of heroin and you get super high.

but if you've been doing heroin for 10 years you need a real big shot of heroin to kind of kind of get a little bit of a buzz going and that's where we're at with with with monetary policy and they realize that it's not working and you're starting to see these little cracks and they're starting an easing cycle again but you're starting it from uh a way weirder place way weirder place the the ecb boj uh fed those three balance sheets were like two trillion dollars two and a half trillion dollars at the beginning of the financial crisis and now collectively they're like 15 trillion dollars yeah the u.s from the fed's inception from 1913 to 2008 it's 95 years went from monetary base in the u.s went from zero to 800 billion

and then from 08 to 14 it went from 800 billion like 4.3 trillion it's crazy right and and we're sitting at 15 trillion of negative yielding sovereign debt and we're only four years into a tightening cycle four and a half years and they have to qe again like well yeah i mean you i mean you're not even four and a half years right i mean it's like the the fed started in like the back part of 17 and um in terms of like rolling off the balance sheet yeah and uh in 2018 every risk asset on the planet started rolling over and that was punctuated by this dumpster fire for risk assets globally in q418 and uh jpal in the middle of december used this autopilot term about what they were going to do with the balance sheet. And the market really

didn't like that. And you know who else didn't like it? Trump didn't like it, right? So then Trump starts chastising the Fed on Twitter to be increasingly more irresponsible with an already irresponsible monetary policy. And it worked. And the Fed did their double capitulation at the end of January. And every other central bank on the planet followed suit. Yeah, they were supposed to hike what, like two or three times this year? Yeah. Yeah. Instead, you cut twice. And now the market is implying a cut at every meeting over the next year there's people thinking they were gonna cut 50 bips that they had to do the emergency repos last week yeah it's uh and the repos are still going on right uh they still are yep the the last two were undersubscribed after after

last week's where they were oversubscribed so it's it's um you know we can get into this for a couple minutes too just because i think it's it's topical at the moment um this dollar shortage situation which we don't have to dive into depth here i i tell everybody go listen to macro voices the macro voices podcast eric townsend's a boss yeah come on the pot eric i've emailed you you're listening i know you're listening and um uh he's had a bunch of guests on that lay it out super well and it it looks like there's some smart folks that say that this is transitory and there's some smart folks that say it's not transitory um and and you know the this this whole dollar shortage situation um is is rearing its head in some weird places and and

the the repo rate blowing out is just a symptom of this larger dollar shortage situation and um Um, I think that the crash that we've had this week in Bitcoin price, it started, look, it started, the, the market's been acting weird for two months. You know, we put in the top June 26th, we got there way faster than we should have in the first place, right? Um, the acceleration off the bottom in mid December was of, of historic velocity in terms of looking at any other kind of bottoming period for, for Bitcoin's previous cycles. and Q2 19 was the fifth best quarter for price performance in bitcoins history

or since 2012 and second quarter this year what's that second quarter this year was yes and and then you kind of made these series of lower lows and we started seeing you know we've built a good amount of quantitative tools to help kind of understand what this markets doing and the market started acting weird in the back part of july and what do you mean by acting weird just liquidity drying up or liquidity drying up um specifically the the relationship between volume and order book size where um especially in august order books started getting bigger while volume was decreasing so lots of makers very few takers people looking at setting low bids or it's it it's uh

it's like if you have a room full of people trading bitcoin what percentage of the room is algo market makers and what percentage of the room are people that actually have a view on bitcoin that got super lopsided so you think algos got turned on or they've been on okay they've been on but it's just like you had less directional buying interest starting in in kind of the back part of July that that was exacerbated in August. I write this monthly update letter. It goes out the first of every month. The August 1st letter, we basically talked about how we're seeing this beginning of a shift in market structure. And we said it was for three reasons. One, the Bloomberg article about the CFTC investigation on BitMEX. And that was scaring people. And you were seeing

uh the the supply of bitcoin fleeing bitmex which we track you can track whale traders and you yeah and you were seeing um shout outs coin metrics um that's the underlying for that data and um and then you also had uh alameda research number one liquidity provider in the space they had just launched their ftt token which was associated with their their exchange ftx and And so basically the number one liquidity provider in the space was doing much less or nothing on BitMEX anymore because they'd started their own exchange. So that was messing with liquidity. And also it was summertime and people made a lot of money and there's probably a lot

of people drunk in Mykonos, right? And like, that's totally fine. And so we were like, okay, these three things we think are going on that are kind of messing with this market structure. And then our September 1st letter over the month of August, we said, okay, this market structure has been exacerbated. It's worse now than it was a month ago. And now we're thinking either one of two things is going to happen. Either it was just summertime and everybody's going to get back from Mykonos after Labor Day and we got back coming and gold's ripping and

the renminbi's ripping and Bitcoin's going to have an up 30% month in September and we're back to business. We're going to make a run at all time high this year at this thing. Or the weirdness that we're seeing right now is actually a canary in the coal mine for traditional asset classes which has been a view that we've had um for a while it's a view shared by jeff gunlock who's one of my all-time favorite investors he had a video that he that he put out at the end of december of 18 big bond guy right yeah they call him the bond king he runs double line 140 billion aum yeah and uh and just i think one of the smartest guys doing it and uh he he said that he thought crypto was a canary in the coal mine for risk assets, where you had all risk ripping

in 17. You know, crypto broadly was the poster child of that. Crypto peaked first, late 17, early 18, started declining. Over the course of 18, every risk asset on the planet started rolling over. Dumpster fire Q4 18, crypto bottom December 15th. Steve Mnuchin calls a plumb protection team december 24th from from cabo market rips higher on that uh uh j pal does they do their double capitulation at the end of january all risk rips crypto rips and then and then you kind of start getting this weirdness and you can look at the s&p 500 right now and for the ta guys that sure does look like a double top in the s&p 500 and gold's at a six and a half year high right and uh the remember you just ripped past seven right and so there's all these kind of weird things

going on traditional asset classes and so so we kind of laid that out september 1st in our monthly update letter that like like there's kind of two things going on and we got back and we were kind of you know a week or so into september and we kissed 10-7 rejected it hard we're in this big descending triangle that everybody and their mother's looking at right and uh you know and It wasn't looking like we were having any kind of pickup in volume activity, still acting weird. And then sure enough, you get this quant quake, this Momo unwind in traditional asset classes, real big deal, torched a bunch of quant hedge funds in traditional asset classes. And then you get this repo situation. And then, you know, we're going into backed and, you know, crypto is constantly buy the rumor, sell the news.

So you should see some action going into that. You're seeing sort of no excitement going into that. The whales try and orchestrate this extremely half-assed mini alt season. There's, you know, embarrassing, right? And then, sure enough, here comes last Sunday night. Here comes back. They rip a 71 BTC first day volume. Insane volume.

Huge success. Great success. And that opens up the door, right? And then, you know, here we are $2,000 later. um i didn't think we were getting we were well positioned for it to be honest with you as a fund i did not think we were getting gonna gonna get another hack at bitcoin this low i really i really didn't i'm uh i'm counting my blessings from satoshi right now i kind of feel the same way well i think that's a big question everybody's mind right now uh is how does bitcoin react in

a true risk off scenario like where markets are crashing if we do rip into another global crisis here is bitcoin ready for the mainstream as a safe haven uh and even if it's not just a safe haven is it sort of uh unrelated to the uh the traditional financial world uh and returns in that that world yeah it's um i like to say bitcoin is a risk asset but it's a risk asset with a specific set of investment characteristics that become increasingly more attractive the more irresponsible monetary and fiscal policy becomes um there's probably gonna be some bitcoiners that aren't gonna love me for this but um if it wasn't for quantitative easing bitcoin would still be a science experiment and then in the closet of a bunch of computer science nerds what do you mean

by that um if central banks and governments were more responsible with their monetary and fiscal policies the need for a non-sovereign form of money would be diminished yeah if we are still on the gold standard like i don't know if we'd need this thing oh exactly i think a bunch of bitcoiners will be pumped we were back on the gold standard yeah they feel that like bitcoin is needed to get off and and just a gentle reminder we got off that thing in in 1971 and uh you know we've had you know call it 5 000 years of monetary history um give or take and i would argue and with a little bit of hindsight i think it's going to be apparent that it took us 46 years to fuck up the dollar after we got off the gold standard and in the

context of like 5 000 years of monetary history that's like a long weekend yeah like a hundred years from now when they write the books they're going to say in 1971 the united states got off the gold standard 46 years later they broke the u.s dollar it's gonna be like that part of ancient rome where you only talk about like one one of the emperors for like a 50-year period yeah and the day and that's another good point because like the day that that that rome fell or like when when you go back and people talk about like when when the roman civilization fell like the day it happened back then people weren't like in rome like oh shit it just fell no it was only with decades or hundreds only look back in retrospect that's it right that's it and

i think we're totally at this point right now where you're watching this sort of like unraveling occur and it feels like it's happening slowly but all this stuff it's like ernest hemingway talks about going broke slowly and then all at once which is exactly how i think that this this situation is going to play out and um with just a little bit of hindsight you know i think in the same way that we thought it was a great idea to separate church and state the beginning of of this nation's history it's going to be a no-brainer that like oh we we should have separated money state it's not even gonna like in retrospect it's not gonna be a no-brainer we've been warned like the founding fathers some of them at least alexander and was alexander hamilton a founding

father yeah he was yeah um he warned about the banks he shut down the second bank of the united states like you go you go back to aristotle aristotle warned about money like don't don't let money get corrupted like and you go back to sumerian times they have the the basically financial plans of how to build uh wealth via hard assets via livestock like money is something and this is i'm very glad you brought up this line of thinking this is something i like to echo on this podcast a lot like they people have told us throughout history don't fuck up the money like you said last 46 years we have 48 years we fucked up the money pretty pretty bad and and so like going back to like all this fed talk and like how the system actually works it's like

is it confusing for a reason like people don't even understand like the federal reserve is supposed to be an apolitical private institution separate from the government and the fact that like they're supposed to understand that the fact that trump is tweeting at pal is a very very bad sign because they are not supposed to be interacting at all but people don't even understand that they don't even understand that part of their money functions that way it's like how do we wake people up that's we're getting drunk here too episode is brought to you by oberon cheers um so so how bitcoin acts in a in a recession i think depends on uh the type of recession um what skeletons fall out of the closet as the recession

happens or as uh buffett our pre-coiner would like to tell us um you when the tide goes out you know you know where where are people not wearing their swim trunks and then it'll depend on the aggressiveness of uh central banks and governments in response to that and so the the wet dream for most bitcoiners is an inflationary recession which i think is not on the table let's speculative attack this bitch let's go i think it's i think it's probably i I think it's probably not on the table, at least not this immediate go around. And it also looks like to me that,

because I think it was like in 2014, we kind of, we didn't go into a recession, I think we kind of like just touched kind of zero growth and kept going. And it looks like that's probably what's gonna happen again, because the central bankers are so quick on the trigger right now to keep this thing

from really coming unraveled. And the reason they're so quick on the trigger is because they know how fragile this whole thing is. It's become so fragile. And quantitative easing is so deeply distorted asset price discovery in the context of public markets and the way that capital is supposed to be allocated and time preference.

And, you know, when the German 10-year is negative 60 bips. That's fucking ridiculous. Right? Strongest economy in Europe. Yeah. Then there's such a distortion. And you see it everywhere. You see signs of it everywhere.

One of the places that I like to talk about it a lot is venture capital. U.S. venture capital. Dude, I saw a CB Insights chart of the billion-dollar unicorns, unicorns that had the amount of billion dollar unicorns that have proliferated since like 2004 it's great like it's like in 2004 it's like one you know like 2008 it's like maybe three and like today it's just like you can't even read the chart yeah because and and and it has also shifted and this is definitely relevant for for for crypto it shifted uh the concept of value is subjective and um for a long time we valued equity based on the dividends that it paid and you do a dividend

discount model and you would uh come up with what the cost of money was and you would discount the future dividends back to present value using your discount rate and that was the price of your stock and then we decided that you don't actually have to pay all of it out in the form of a dividend earnings is actually enough so now here comes the pe ratio right and we've been using that for i don't know, 80 years or something like that. And then we moved to like EV to EBITDA, right? So we actually just EBITDA is okay because like the stuff below the line, taxes and interest is actually more of a function of like what your corporate structure is and what your capital structure is. And so like, that's okay. And then in the 80s, it was actually like, you actually

don't need that many, you don't need that much earnings. You can actually, if you have tons of revenue then we'll give you a big value on that and and i think the amazon is the poster child of that have you ever seen the the chart of it's uh it's the bar chart of amazon's quarterly revenue and quarterly earnings they've never made money and they just they until they got aws which a lot of aws is their money maker that is the cash cow they had this tremendous revenue growth with like you know close to flat earnings but it grew to be a multi-hundred billion dollar valuation because people like they've got all this earnings growth and then and then it was like oh we actually don't even need revenue if you got users and this is the state of silicon valley right now if you

just have some users it doesn't matter how much revenue you have uh because we'll figure out how to monetize them at some point later down the road right and so so there's been this this shift of value and it that you could call it a shift you could also currently i think call it a distortion And the distortion has really been a function of quantitative easing as it has forced people out on the risk spectrum. And all of these things, like so many things in life, politics, sociology, like, you know, professional sports dynasties, everything in life moves in pendulum swings. and pendulums have a tendency to get too far out in one direction and then the world and its beauty it's it's beautiful how this works the pendulum just has a tendency to swing back in the other way and it certainly does feel like the pendulum is pretty far out there in terms of what's going

on with financial markets and monetary and fiscal policy yeah and it's like you like you were alluded to like the goalposts have just been moved so many times it's like all right you know like i was explaining earlier like i worked at a valuations firm and uh like that was my job was like it's like the ebita and the cash flows and figure out how to value this in the unique ways in which people they don't even worry about producing a very good business where they're creating a very good end product to worry about how they're gonna manipulate their balance sheet to get that eps that they want right and it's uh it's uh again yeah it's like it's fucked up incentives and that's again like bitcoin's incentives are very straightforward that's

what draws me to it and others i would imagine i don't speak for anybody else but it is uh and again like going back to do people realize this do they understand that they should realize this that's my worry like so my biggest worry for bitcoin is apathy like people just don't even realize that they need to care about it i'd be way more worried about the apathy aspect of it if uh if central bank and government actions weren't so egregious so egregiously bullish for bitcoin right and and again you know to the pendulum analogy how far how far out is the pendulum swung and is it about to start coming back the other direction because i run a fund and manage people's and institutions' money for a living

and I need to put up returns, right? So if I'm too early to this thing and I lose a bunch of money, then like my investors are gonna take their money away from me. So like, you know, it's like I have a job to do. So I have to think about the timing of some of this stuff. And it goes back to your original question about, you know, what's gonna happen in a recession?

Like, how is all of this gonna go down? Which is like kind of the 10 billion or $10 trillion question as it relates to Bitcoin, what's the timing and how is all this going to go down? And it seems like, and it's really hard to say, it's like, it's really hard to say, but it seems like central banks are going to do everything that they can this time around.

And by this time around, I mean like right now in 2020 to keep a recession from happening or certainly a deep one. And and they're going to be able to kind of kick the can. But and then and then and then it will probably go on for another couple of years. But balance sheets are going to get a lot bigger. Right. So we're going to go from that 15 trillion dollar number to a 20 trillion dollar number, a 25 trillion dollar number. And negative aggregate sovereign debt is going to go from, you know, 17 trillion to 25 trillion or whatever the number is. And, you know, you look at the U.S. 10-year right now, and it's at $1.50. And, like, nobody's asking whether or not this is the bottom. People are asking, is the U.S. 10-year going to go negative, right?

So it's almost like a foregone conclusion that we're going to lop at least 100 bips off of the U.S. 10-year. Well, that's, like, the big question that's on everybody's mind is when does the last snowflake fall on this avalanche? So when is a complete lack of confidence like arrive in this whole system? So I think you ask yourself, where does it emanate from? Where in the global economy, global markets, where does it emanate from? And so then you ask yourself, who is the most fucked right now? Is it Deutsche Bank? And you line up the different – and so the interesting thing about this

and maybe the somewhat refreshing thing about being an American, sitting in america you know earning in dollars and i think all this is going to be strong dollar i think and um because i like to say the the fed's monetary policy is the best monetary policy house on a really crappy monetary policy block because the boj is in a way worse shape than we are boj has been doing this for two decades yeah the ecb is in a way worse shape than we are and a good a perfect symptom of that is like the state of the european banking system right and um i'm of the opinion that the the euro is a currency is going to collapse in the next 10 years and that may sound like super wacko and like off the reservation or whatever but like i don't think

you're telling me that we're like we're getting to the end of the 2020s and the euro is like still still hanging around huh like that just i don't think that's gonna happen dude michael lewis's boomerang great book like reading that's his most underrated book in my opinion i was actually i recommended to somebody and i looked it up on amazon only has four stars but if you want to get like a good look and actually what happened in 08 and many different countries at the same time like the chapters on greece and italy in particular and how the imf and goldman sachs helped them cook the books to get into the euro like that was my moment when i read those chapters i was like this doesn't make any fucking sense yeah like how could this why would germany put

up with it number one yeah the strong economy in the north basically subsidizing this other it is worth mentioning that germany's economy has been so strong because they hitched their cart to the chinese horse and so much of their economic strength has been a function of exporting their skills and really products and services to feeding chinese growth yeah and i can show you some some interesting charts that i get super apparent in terms of like the lag between like like uh the chinese pmi and their services pmi lagged against like the german uh pmi like it's like they they have done that and that's what has allowed them to um they're also the the least lazy europeans on the planet and uh in all of europe and uh and so it's allowed them to put the entire

european union on their on their back but the it's just you look at the the uncompetitiveness of different parts of of the eu and it's just it's not tenable and uh the reason that they've got christine lagarde in there running the ecb right now she's not a monetary person she's a fiscal person so they got to figure out they got to get somebody in there that's going to figure out how to spend all of the dollars that they're printing and you're all and you're starting that from such a wacky place right that like are they going to kick it are they going to kick the can and 20 yeah probably 21 i don't know probably 22 i don't know probably but you start getting into the middle part of the 2020s and i i just think you kind of run out of you know heroin to shoot

so to speak well so i agree but i think this is becoming the consensus and like so if that becomes like we're talking about like pricing and halvings and stuff like that if that becomes the consensus if that is the death knell of this central banking this hegemonic central banking dovish policy like that people are like all right we've got five years is their point at which like it happens faster than we expect right yeah i i i'm a little drunk it's hard it's it's it's it's hard to say um in terms of the timing um this stuff always takes longer than you think it's going to um but it's apparent that in between now and whenever it really they really can't kick the can anymore they're gonna do everything that they can to kick the can and they're all

racing to devalue their currency faster than the rest of the central banks and if everybody in the world is racing to devalue their currency the fastest what are they devaluing against they're devaluing against things that have provable scarcity gold has provable scarcity bitcoin has more provable scarcity than gold in austrian economics terms gold is the hardest money in human history and so all of the way that this is going to play out i think is going to be deeply bullish for a non-sovereign hard cap supply global immutable decentralized digital store of value and um at some point when the euro really looks like it's starting to come unraveled um at some time at some point in the next 10 years when it actually happens if bitcoin's price went down 50

percent like like the euro is really collapsing bitcoin's price goes down 50 wouldn't be surprised but then i wouldn't be surprised at all that you start hearing whispers or seeing things in terms of europeans trying to get out of euro-based assets and holding their wealth in your you know either euros or euro-based assets and they start fleeing to bitcoin and the velocity like it only that only has to happen just a little bit until that's my base case for the most likely hyper Bitcoinization situation. And let's say it happens in 2025. What's the price of 2025 going to be? We just, that we would have just knocked out the next halving. So now we're at 3.125 Bitcoin produced every 10 minutes. I mean, I would guess that the price of Bitcoin is going to be over

a hundred thousand at that point, but you could get into a situation where, you know, Bitcoin goes from 100 000 to a couple hundred thousand like like real quickly yeah no i think if the next rip if there is another bull run that happens i think we rip if we get past 100 000 i think people will be very surprised at how how fast we get to 200 000 after that yeah um but are we crazy like is it is it too good to be true like this opportunity is that uh and that's like the question am i like is it too good to be true like what who who am i i'm a little asshole here in brooklyn who am i to notice this this is this potential uh life-changing wealth transfer before anybody else right i i think you have to keep in mind generational shifts as well too and that's

that's a big part of it and uh getting boomers retired and not running the world anymore and moving, you know, Gen X and then millennials into the position of trigger pullers in terms of making the decisions that run the world. And the younger you are, the more sense you think Bitcoin makes and the less sense you think gold makes. And the concept of putting trust in open source software makes way more sense to younger people than it does to older people. And the other thing that i think about a lot in terms of because a lot of this is you you have to keep in mind uh human nature i think when trying to assess whether or not this massive shift in the way the world is going to work is going to happen over the next 10 20 plus years 30 years whatever um and for

as long as human history you know civilization has existed you've had one generation to the next generation and power struggles as you go from generation to generation and the next generation isn't any nicer than the last generation they fight over power just like everybody else and they hoard all of it and and uh they try and you know make as much money for themselves as they can and um uh you know that's that's just in human nature it's darwinian the way that we're supposed to be like that right and uh so i think you would be foolish to ignore human nature like that but we're at a really interesting time in technological development right now and if you look at the the if you've seen like the global it's like the the global index for

like happiness or like uh uh quality of life i've seen the global fear index but global happiness Yeah, it's like it's like I think it's a global quality of life index or something like that. And they they they put it they they have it tracking all the way back to like the 1400s. And I think it takes like life expectancy and birth rate and death rate. And you can kind of back into kind of some GDP per capita stuff even a long, long time ago and things like that. And if you look at it, the slope of the line was super flat for hundreds and hundreds of years, which makes sense. because like the difference between your quality of when you're if you're living the 1400s like there's no expectation that your life is going to be that much better than your parents or your

grandparents it's all kind of the same right and the the slope of the line shifted when we made the steam engine because then it's not manpower that's pushing uh uh uh human progress forward then we get something better than that right and then when we figure out electricity then it kind of takes a tilt up like that but then when we move to uh uh digital innovation and the microprocessor then you get this real big shift because now you're not moving linearly because you're not focused on it's not mechanical innovation now we're talking about technological innovation that's based approximately on moore's law right and that's not a linear that's not a linear phenomenon that's a super linear phenomenon and so now we're at this crazy part where where

you've inflected in that uh how how much better is the world getting and i and and for us that i'm 34 years old so for us it may feel like the world's crazy and super shitty right now but objectively this is the best time in human civilization to live it's safer we're killing each other less we're dying from diseases less we're living longer the quality of life is better it's like we have to deal with problems like depression from social from social media right like those are the problems that we're dealing with right now and so because of where we are at this inflection point there's a chance and it's technology that's bringing it bring it to us right uh there's less people in the world that are hungry today than there ever have been that's

going to continue you fast forward a couple decades from now when we get fake meat right and now we're and now and now we don't have to we don't have to use all of our agriculture to grow beef but we can actually use it to feed the world so we're probably going to solve hunger in the next it's already solved do you want do you want fake meat though no but other people eat it but i don't know maybe they get it good enough i mean i'm not trying i'm not trying it right now but but but my point being is is that where we are because of technology that is now making the world better at a super linear pace there's a chance the analogy that i use is there's a bread basket sitting right here on the table and you and i are sitting across from here and

there's one piece of bread in here. Well, the way that humans act is if it comes down to it, I will kill you for that piece of bread in the bread basket. But because of technological innovation, there is a legitimate chance that where we are in civilization right now, that there is quickly becoming enough bread in the bread basket to go around for everybody. And is there a chance that that can change the way that humans interact when we're sitting in front of this bread basket and that would be my optimistic hope that there would be a willingness for a millennial generation or maybe it's the generation after us or maybe it's even the generation after that to say you know actually we are going to democratize the way that the the the hoarding

of power that's gone on right now that is the the problems that we have right now in our political system in the united states which is the most broken it's been since the civil war wall street is rigged big tech companies take your data and they do shitty stuff with it or they don't keep it safe or they take the value that's created from it and the owners of the companies become the richest people in the world but they didn't return that value to users is there a chance that we're going to be willing to because that's what distributed ledger technology does is it democratizes all of that back out to people and um and and instead of siloing power and hoarding power and this is a broad statement um it it democratizes that back out and my knee

jerk reaction is that humans don't act like that so i shouldn't expect humans to act like that unless we happen to be at this point where technology is making the world a better place where you can actually say okay we'll do that because i don't have to worry about whether or not there's enough bread in the bread basket yeah it's by the way the bread is yours i'm on a no carb diet no but it no it is so that's like you're you're sending me we're about to get cosmic here you're sending me down like a heady path like so i'm a big fascinated by history and particularly like ancient ancient history like where there are civilizations like i'm like to think about atlantis and the way atlantis is spoken about is like some weird paradise where

humans figured it out and we're able to coordinate and cooperate in a very peaceful way and we now live in a time where that is obviously not happening we have wars they're going on but i do like you said like i do think and another theme of this podcast is like the big problem in our world is like people are swinging at branches when they're not getting to the root of the problem the root of the problem is money so i think we do solve the root of this problem like the cooperation that you're describing is possible and it's and again like echoing what i was saying earlier like do people care enough do they know that they need to care enough to get the money right so that we can cooperate and nobody has to worry about the

bread basket right like because i do think that is the main driving factor making the bread in the bread basket and less and less is is the core of the problem is the money it's it's why we name the firm ikigai ikigai ancient japanese concept means reason for being the combination of what you're good at what you like to do what the world needs and what you deserve to be paid for and they say if you get all four of those things then you find your ikigai they say one of the reasons that people in japanese culture live so long is because they have this this concept of ikigai to go to go kind of search after strive for yeah to strive for this kind of thing to get you out of bed in the morning and the world doesn't need another hedge fund manager

there's there's a lot plenty of hedge fund managers in the world but the world does need this technology and it has the potential to make the world a much better place and quickly like in one generation right in in one two generations we can make the world a better place meaningfully for hundreds of millions billions of people and uh but the playbook isn't written yet and that's the important part and that's you know it's like i had no like public presence before i got into crypto but it's like why i like when i had the opportunity to go like stand on a soapbox and wave my hands like it's it's why i want to do that stuff because if you can get enough people moving in the right direction and realizing the potential to make the world a better place

then uh that is just strikes me as the kind of thing to spend the rest of my career or life working on it's gonna sound cheesy i don't know why but for some reason that last line like trying to get the momentum of the world working in this direction made me think of finding nemo like when the end scene when they just need to get the fish to swim down uh that's what like we as a humanity like to fix this problem we just need to swim down by bitcoin that's swimming down you can solve this problem at its core but it is there's something like socially like we are monkeys or animals like for some reason it's like everybody's so like oh no this is the way things are this way they have to be they're telling me this on tv this is this is the way the world is

yeah yeah i'm gonna shake them and i'm not i'm not an optimist like i'm not like a blinding optimist by nature i would say i'm much more of a realist where you just look at what's in front of you and um uh you know call it like it is and and i try and do that in all parts of my life just call a spade a spade in this particular part i mean i am i am really hopeful because it does it's like i said it's not written in stone yet we could fast forward 10 years 20 years from now 30 years from now and if if this goes not the way that we want it to distribute ledger technology bitcoin um all the different use cases for this stuff we could we we could end up just delivering on a fraction of what it could have been and so it it feels like an obligation and an honor

um to try and do whatever i can to to to get things uh to deliver on the maximum amount of potential to make the world a better place that we can that's a cool thing to work on right and thank you for working on it i mean and i think that's something as we're talking about generations here like i do think like that we were talking about like how i worked uh in finance in chicago but like i wasn't i loved the people i worked with i loved learning i learned so much but like i just felt like there was something like i need to go do something better and i think that's something a lot of people are missing is that drive to and the feeling of participating in a common mission and uh feel like they're actually contributing to something that's actually useful

not going to a nine to five under fluorescent lights and uh crunching excel sheets for things that'll be forgotten in oblivion within five to 10 years, right? And it's like, yeah, but I mean, the world's not going to run without a bunch of people crunching spreadsheets under fluorescent lights. That's true. It's not, that's, the world just doesn't work if everybody kind of does that.

And different people have different skill sets. Different people have different interests. Different people have different risk tolerances, career risk tolerance, right? Well, as long as they're fine with sitting on their fluorescent lights and they like V lookups, it's fine. shout outs be lookups that was a good one yeah i think those were nice um it's been incredible man thank you for coming by dude really enjoyed it um is there any parting notes you want to leave

for the freaks like uh it's uh been a pleasure as like a just a hedge fund bro um to be able to jump into this ecosystem and um uh i feel like i've i've i've been opened with i've been received with more or less open arms and um uh a little less tribalism uh i think would would go a long way um a little more just constructive conversation about some of this stuff uh would go a long way and um there's a lot of potential out there like what we were just saying there's a lot of potential and um it's up to us the people listening to this podcast the people in this ecosystem um to do the best that each of us can do on an individual basis whatever it is that we can contribute and if if if you don't have necessarily a skill set you can contribute

you can contribute an attitude and uh and being on the right side of that like um uh that's the kind of thing that when you look back at the end of your life like it's like that's a good thing to hang your hat on so that's what i'm working on and and um uh it's gonna be a wild ride man it is really gonna be a wild ride it's gonna be many years all right it's just gonna be it's gonna be exciting and uh and uh you know it's just an honor to be a part of it so Well, let's enjoy it. Well, it's an honor to be on this joy ride with you. For sure.

I think trying to change the world is an admirable endeavor. Shout out to what you guys are doing at Ikigai. The Ikigai mentality is something to strive for, too. That's all we got this week, Freese. Long day of recording. Happy to end it with you, Travis. We're done. Peace and love.

Okay.