TFTC: A Bitcoin Podcast - Tales from the Crypt #91: Tuur Demeester

Episode Date: August 17, 2019

Join Marty as he sits down with Tuur Demeester, Founder of Adamant Capital, to discuss Tuur's journey to Bitcoin, the founding of Adamant Research then Adamant Capital, how to leverage Bitcoin to short USD, Bitcoin's parallels with The Reformation. Follow Tuur on Twitter: https://twitter.com/TuurDemeester Follow Marty on Twitter: https://twitter.com/MartyBent Shoutout to our sponsor: 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.

Well, hey there, freaks. It's your boy, Marty Bent, a little hungover, a little ragged in Dallas, recording this pre-roll ad for the Cash App. Hey, if you haven't downloaded the Cash App yet, what the hell are you thinking? Go to the App Store, whether it's the Google or the Apple App Store, download the Cash App, use the code STACKINGSATS, one word, S-T-A-C-I-N-G-S-A-T-S. you'll get five dollars and then five dollars is going to go over a very good friend al's lacrosse in chicago uh and then after you get that five dollars you're gonna be able to use the cash app for the boost program uh you're gonna be able to buy bitcoin you're gonna be able to send bitcoin you're gonna be able to receive bitcoin uh and you're gonna be able to do a bunch of shit you're gonna be able to uh customize your own card you'll be able to spend money places

you'll be able to send bitcoin to the app convert it to us dollars if you're in a pinch i don't i don't advise that but hey sometimes people get into trouble you need to do some stuff the cash app is there for you must say the coffee boost is not what it used to be you have to go to the coffee shop five times before you get the dollar off but do not fret there are other merchants and other savings they can do via the boost program so go download the cash app today at your local app store use the code stacking sats get that five dollars and start saving money and start sacking sats thinking about your future i think you guys are going to like this episode with tour demister we threw this together haphazardly not haphazardly but uh last minute tour tapped me

on the back and said hey i have an hour before i head back to austin do you want to chat and i said a fucking course i want to chat to her so here's our conversation enjoy what is up freaks welcome back to tales from the crypt it's your boy marty bent here at a foreign studio in a hotel lobby in a double tree lobby in dallas texas uh sitting down with somebody i've been waiting to sit down with for years now this podcast has been out uh this interview came together last minute so i'm very excited that it did come together so we've got 45 minutes before our boy tur de meester has to catch a bus back to austin tour welcome to the podcast hey marty good to be here thanks for coming on man thanks thanks for

having me thanks for uh nudging my arm and saying hey i have an hour i think last time we tried to get together it was like new york and it was just one borough too far i think to make it work yeah consensus week during during that week in particular it's never never easy to coordinate schedules there's too much stuff going on um but again yeah we only have 45 minutes here let's jump right into it uh we did a little pre-interview prep uh let's get through the basic questions you have been somebody who i've been reading uh for years now to learn more about bitcoin and i would like to know what drew you to bitcoin in particular how'd you find it and what drove you to start adamant capital yeah so what drove me to bitcoin it was i guess i want to

say fear i was scared of this um just learning about the history of money and banking i was like man how is this long-term sustainable like living at the heart of europe and seeing how um how little capital these banks had and then also seeing the the banking crisis happen and belgium had it one of the worst like we had like five big banks that were teetering and needed to be restructured and bailed out and to this day they're still super like zombie banks basically yeah and so i was like man like this is like you know an economic nuclear winter that could potentially happen especially if the euro starts breaking down or these these government bonds start really because it is the the debt in europe is just you cannot pay it back it's just a matter of when it's going

to be unwound and and and be defaulted upon so i was really like kind of freaked out like how do i you know i'm here in my mid-20s like how do i make sure that i i'm not trapped and stuck here what were you doing at this point um i was working on like uh um i could some academic papers i was translating books um i was all kinds of things i sold shoes like i really just whatever to pay the bills uh i built some websites um because i had dropped out of university and but i was still kind of i wanted this intellectual career i just didn't know how to make it happen outside of the university um and then uh yeah it just kind of accumulated into writing about current affairs economics really trying to for myself just trying to understand what's going on what should i do

and then that turned into a newsletter and with the newsletter i was looking to find things out of the box like i felt like disenfranchised and not really i didn't really believe in the robustness of the european economy almost at large so i just had a really hard time buying blue chip stocks and or recommending them for my newsletter so i felt like i had to find something else and then you know it doesn't take long to run into goals and be like oh yeah that that makes sense if there's like a reckoning and an inflationary crisis then with gold at least you maintain your purchasing power and you can buy things on the cheap that's that's kind of the general strategy if you have a very liquid asset in a period of deep crisis then you are

in the best position to then invest at the bottom when nobody else can buy because their money is stuck in the bank or they just need cash um but yeah i mean gold alone was just a bit it just felt a bit too easy and too simple so i just kept looking for things and uh for for a little while i was like investigating this cold fusion scam that initially i i thought was maybe real like this italian scientist and you know and and eventually it just they just they were they were a scam and luckily i identified it before i recommended anyone to invest but so that was kind of the angle was like what is out there that nobody's looking at because all the newsletters i was looking at were like stock picking newsletters so i felt like there has to be more um yeah and

then uh once i found it i wasn't sold immediately i was mostly worried about how can you not just make more of it like that was so as soon as i really started grasping the actual scarcity aspects that's when i started getting excited and so when did you uh sort of gather the confidence to go from adamant research to to bringing in people's money and pitching bitcoin to oh to big yeah that's much later like so like the newsletter i did in 2011 and then you know i went full-time into bitcoin from 2013 as an independent investor and then i wrote my first adamant research reports around 2015 and i felt like i just had a lot to prove in terms of you know winning people's confidence and showing that i'm like long-term committed and then also just to kind of still

help myself understand the market better and and and kind of get to a place where i feel like i have something to offer that that is maybe uh just really worthwhile and then the yeah the fund really came out of the just wanting to do something that's an extension of what i'm already doing so i mean the basic concept of a hedge fund is like i think managing money for friends like that's kind of where it came from um and that's why hedge funds are kind of you know more private and and and not so it's not a public offering right you don't promote it um and so like even in this podcast like i'm i'm not going to say much more about it than that that it's just like an extension of what i was already doing and um and um and that feels very natural yeah no and i mean it seems

like a very natural course of direction for you because again thank you for all the content you put out over the years thank you for getting on real vision early oh yeah pitching the message there yeah that's been a fun ride yeah uh by the way i don't know if your listeners know but real vision is like a it's like a netflix for investors like you pay once a year and then you get to listen to all these investors that's the funniest thing about uh your interviews on real if you go back and search turd to me sir it looks like you've been through a war since the first interview to now bitcoin has aged you i think we were joking oh yeah yeah yeah it looked like a very young harry potter and now i'm like the weathered beaten down uh yeah fire resistant

bitcoiner so switching uh gears a little bit here how'd you end up in texas like how some somebody from europe end up in austin texas running yeah running a bitcoin hedge fund well i mean i think it's to some extent it's it's a new frontier and i like to be where i think things are happening and i i really have a a strong urge to get away from places that i feel like are are more um kind of sleepy or paralyzed or or just just like that i just like the dynamism um so yeah i mean the the initial arrival in the u.s was more kind of vacationy but then we were more serious about it and we started thinking about where do we want to set up base like what is going to be base camp for us me and my wife um and really kind of did a pretty systematic overview like kind of

uh systematic analysis of like all right well what are there are criteria and then it was like you know i i want a place where there's uh financial dealings happening financial center business center i want technology i want um a good airport and then eventually it was also like huh well what about a mild winter like that sounds nice and and then it's also like you know you want reasonable taxes and you want friendly people and so yeah we we tried a few places we were traveling around but then eventually just um i i think texas is even though it's booming i think it's still undervalued and it has a lot more to come and that's exciting yeah and i love that it's in between both coasts so you can just fly up and down very easily whereas like if you're

in one of the corners then you know going to the other corner is a lot further away yeah no it's not fun going to la from from new york or sf from new york it's a hell of a plane ride no they're in this texas only my second time in texas and it's crazy the the vibe here and just the the aurora of freedom that that reigns free here it's great yeah and there's a lot of history that that kind of fits with that i mean it's the the end of the appalachian trails so these like early i'm actually not the earliest settlers because they just kind of created new england but then the ones that came a bit later they were like not very welcome and so they were just kind of pushed away and and every time they felt bugged by them you know the guys that were

setting up plantations in the south or by like the more religious people that were north of them they just kept going and so eventually they ended up on the texas plains which was just very rough to cross because there was hardly any any rain anymore and the comanche were there and it was kind of so that that that line between um you know going down from from dallas that line is like and and some places are called forts like fort worth and other places was kind of the the ultimate frontier is like you almost couldn't go any further without killing yourself um but yeah and and it was like people with big dreams came here like even before they knew about oil it was still the idea that if you go further you know you can claim a bit of a bigger stake and really make a

life for yourself even though you know technically you're very poor but at least and it's also like you know they were traveling with their cattle and they had their whiskey like that was their portable wealth um which i think is just yeah fascinating yeah no it's um that was actually fascinating today to tour and i were just at event co-hosted by adamant and unshamed capital and gideon who's speaking about mining it just didn't come into my consciousness until he said this like 99.9 of the world's energy is run by monopolies either controlled by the state or other types of entities and texas has just a few pure unregulated grid which is is crazy to think that they can just have anybody own land if they find energy it's theirs and they can do whatever

they want with it yeah it's it's quite incredible and obviously it adds to the pleasure of living here is that energy prices are low because of all the competition and there's just really an abundance of it um very yeah interesting stuff and yeah i mean there may be a future for mining here yeah i think there definitely is but one thing while i have here what i want to talk about is again your presentation uh at this little get together symposium if you will that we just came from and i really like the the parallels that you uh have found between the reformation and bitcoin in particular and um if you could sort of expound about upon what you were saying earlier today yeah a little bit it'll be like a sneak peek because i i am going to be working on

a report about it because i think it's you know the thing with these historical analogies is that it's it's never perfect and there's never going to be a repeat of history but i do think that by by studying history you can kind of make connections that you otherwise would not you can kind of connect things that are seemingly unrelated and also you can sometimes just scratch away possibly you can just have a better idea of the probability of certain trends playing out and and how one thing could be a catalyst for something else uh so i guess to me studying history is like a way to discipline myself on like um just not to not to get too crazy with extrapolation because that can get you nowhere i think so so uh and i've made analogies in the

past with like the petroleum discovery of petroleum versus the whale oil which was a big industry at the time how that was disrupted and and with the dot-com the dot-com boom versus the the the crypto craze of 2017 and and some other things but this one i find really super fascinating because the the reformation was this incredible like just sweeping shift like a shift of wealth a shift of power uh like the power balance was massively shifted uh also an enormous explosion of um immigration like people were not only fleeing countries but even like you know uh going to different continents for the first time ever in in large amounts and large you know large droves um and and i i've always tried to find things that would help me understand bitcoin in the bigger

picture and so i feel like this is really something fascinating because there are some preconditions that are similar uh so in the the reformation basically was it refers to um the desire of um the merchant class who was emerging back then uh and other people to basically uh challenge the monopoly of the catholic church because they they had a monopoly on giving you the keys to heaven like you know if you want to go to heaven you need some kind of priest to tell you like it's fine you're good you have my blessing and uh and over time that monopoly was you could say abused they were basically charging more and more money to get into heaven they would sell these indulgences which then the church used to pay for very large projects like saint peter's

cathedral and other things and so people got like fed up with that so that was the reformation in the 16th century and if you look at the preconditions at least my interpretation of that i see three like one is there were some really uh incredibly impactful technological innovations at the time there was the you know the um invention of book printing uh which i mean obviously all these things the actual invention you could argue happened earlier but really when it when it broke through and really kind of started becoming performant was the 15th century sorry 16th so book printing and it you know the gutenberg printing press lowered the price of books uh from an a year's wage to the price of a chicken like it was incredible how crazy yeah

i mean over a hundred years wage so so yeah yeah i mean you have to think like it was a manuscript it was like meticulously hand copied by a monk like that was what was available and then it was on animal hide and i mean yeah so very expensive um so all of a sudden that happened so information all of a sudden was able to spread so quickly and people were able to pseudonymously write pamphlets and stuff like that so ideas were all of a sudden spreading a lot more quickly so so that's the first phase and i think arguably now we're seeing something similar where there's some really powerful technologies that are shifting things like i mean um um encryption social media email telecommunications um um even um open source the open source movement uh the commoditization of

computing power and computer storage, like information storage. All those things combined make it so much easier for individuals to work remotely, to set up startups, to basically disrupt the existing equilibrium. So that's the first. And then the second, I think, precondition is that you have wealth that's generated by these innovations

and that wealth is starting to get concentrated among a certain part of the population. So 16th century is the merchant class, which for the first time, they had more and more means. And I think having financial means also means that you have an escape hatch, so you're more likely to speak up and protest because, like Balaji has said in his presentation a few years ago, you can either voice, which is to speak or to protest, or you can exit.

So if you have some money, then you actually even have the option to just move out if it gets difficult. so so that is and then today of course i think the emerging new money is really the technology investors like it's the dot-com billionaires it's the the cryptocurrency investors like all those kind of people i think are are really a new generation not only like is the money passed on to them from older generation but they've actually created and invested in new wealth and then the last part i think that you need to have this you know basically ingredients for this explosive cocktail is um is for a rent-seeking monopoly right so you need a big monopolic

service provider who is increasingly um you could say exploiting the customers and in the 16th century it was like yeah you get your way into heaven you always need to go through a priest or a church and that's very expensive to get things done and today I mean I would argue it's the the fiat banking system right which is and the rent seeking is what Michael Goldstein was talking about earlier today is the the the money printing right you just print money and then even if you yourself didn't print the money but you're the first to receive it you can spend it at a higher purchasing power than the people who are going to receive the money later so it's a taxation of the population so it's rent seeking and so i think that those three combined

um are really and by the way the last innovation i forgot to mention today is bitcoin obviously right peer-to-peer technology encryption bitcoin but so i think all those three factors combined you could argue that that bitcoin is really the catalyst for uh potentially a massive shift in the power balance of the world of um it could it could bring about immigration flows it could um um really make big changes happen uh because similar to how the water was a moat like in the 16th century you could you could hide behind a big river and it was harder for armies to cross it or you could cross an ocean and then set up shop there stake your claim in the new world i think similarly today we have encryption and so and then pseudonymity and those kind of

things so you can kind of instill that moat not necessarily to do something evil but just to say i don't agree with the status quo i want to bypass this monopoly service provider i just want to do it my way please don't bother me so that's kind of a defensive technology that i think is is being used so yeah those are some of the thoughts that i shared today yeah no it's uh very prescient right it is uh it being involved in bitcoin for as long as i have it seems like common sense here but like for most of the world like pre-corners if you will they uh it's hard to get them to wake up and realize that they they were born in a similar situation that the people living in the 16th century were in and that's sort of this is

just a random tangent i'm going on here and that's sort of what i try to do with the newsletter in this podcast is is find little bits of information that can sort of open people's minds i guess for you when you're pitching bitcoin individuals and friends what what do you sort of focus on uh first or or what properties of bitcoin yeah or or sort of the highest hit rate of people having an aha right well um i would say i first try to figure out what people need and what they're looking for because i think bitcoin has a lot to offer and so yeah it really depends on where people are coming from like maybe they have family who lives abroad and then you know the ability to send money without an intermediary is really powerful or they have lived in a country with high inflation

before and so they're they are always looking for a store of value or um you know they're an investor and they want to invest in what's new and they want to know what millennials are going to be driving because by 2029 no i think it's i might be wrong i think it's 2029 already millennials will be the highest earning generation of our time like they will uh in the aggregate make the most money so investors want to know like what are millennials going to buy so so i would argue that you know they're going to be a big driver of bitcoin adoption uh as their earning power increases because a lot of these people have never owned even blue chip stocks like this they they were just college age when the the markets crashed and then kind of lost faith in

a lot of things and so they're a lot more open to non-traditional investing and they don't trust banks compared to older generations so yeah it really depends uh depends where people coming from yeah no i agree um i was just curious to hear what you're seeing out in the field but let's go back to the conversation at the conference today and actually uh we're talking about your investment strategy which is basically use bitcoin to lever up uh to short the dollar basically so can you jump into the sort of mental framework behind uh the mindset of shorting the dollar with Bitcoin? Yeah, I can't talk specifics about our strategy, but in general, if you have an asset that is liquid and that you believe has value for the long term, then it is very tempting to

use it as a collateral to then do all kinds of activities with. People even do it with non-liquid assets they use they do it with real estate they do it all kinds of things and the nice thing about using bitcoin as collateral is that the counterparty can basically engage in getting a secured loan from you because the bitcoin can actually be moved and then they actually can see that the moment the value of the bitcoin goes low enough it will be liquidated and they will be compensated so their risk is is very low because it's such a liquid asset and so i think over time that will cause the interest rates that you can um get for lending out your bitcoin to some extent or giving it up in collateral is going to be sharper than for some of these illiquid

assets like real estate um of course there's a big regulatory moat in favor of using real estate as collateral you know so that's going to have to be resolved over time but but in principle i think it's very interesting and then yeah once you borrow against that then you can decide like uh can i find something that will give me a higher yield than the interest that i pay on the dollars and of course it helps if those dollars slowly decrease in value and and the assets that you're invested in your collateral and your investments both increase in value um so yeah that's kind of the that's kind of the idea behind such a strategy um and there's you know there's a bunch of other bitcoin alpha strategies out there that i think are are interesting looking at um and it kind of

depends on you know your maybe your fiscal situation your where you live uh your appetite for risk um and then also your assessment about where we are in the market in the in terms of the phases of the markets i think all those play into um what strategy to choose like bitcoin denominated loans or or um being active in the in the options market you can also kind of have superior returns over bitcoin or obviously trading altcoins i mean a lot of people have done better than bitcoin in 2016-17 after that it's been a lot harder to outperform bitcoin but it's you know it's it's a strategy yeah no i think one gentleman in the crowd just naturally uh recommended a speculative attack instead of levering up bitcoin and dollars using dollars you use like a weaker

currency um to buy up bitcoin and then lever up with bitcoin and short that currency it's not not anything i would recommend people go run out and do well i mean george so it's a page out of a page out of george source's book right yeah we're um we're basically i think the idea is that if you go short that currency say that it's like the whatever the suriname i don't know what currency they have there but imagine that currency uh so you borrow a huge amount of it and then you sell it and then you obviously have a debt denominated in that currency but after selling you go to a stronger currency and the idea is that you basically it's already a weak market but your massive intervention breaks the camel's back and that's the deluge

that's the start of the breakdown which is that's what george sores nailed with the british pound when he did that it's not that you know he alone caused it to break it's that it was already weak and he kind of gave it a little kick. A snowflake on the average, if you will. But I mean, this is part of why the IMF was brought into life. It's to help countries protect themselves against potential speculative attacks like that. So that's why the IMF has a pool of currencies

that can be used to shore up a small currency against an attack like that. But it all... So, sorry, but to follow that logic, and so you could make an argument that maybe the imf needs to buy bitcoin so that they can defend against a bitcoin fueled speculative attack on another currency that is a tidbit i did not think of that's been around since 2013 i think somebody wrote a paper about pierre pierre pierre wrote that i thought it i didn't know the imf was involved with this but it does sort of beg the

question like if they're a speculative does attack does happen you become to a bitcoin standard it really highlights the the harsh reality that we're living in a currency system based on barter right so you're bartering between currencies really when you're doing international trade and stuff like that at the end of the day would you agree with that semantically i don't know i mean i guess i i'm not really up to date on the the definition of barter strictly speaking i think it means like you you trade with non-fungible goods but i do think that most maybe you're right maybe smaller currencies are actually not that fungible at all especially if you're talking about large amounts of money yeah no no just trying to itch at the point that like

it would be great to have sort of like a metric system of value and money and wouldn't it be oh like that that is very primitive that we have all these like hundreds of currencies and like it's it's pretty much a nightmare for everyone traveling or but it's basically these like mini taxation systems right they're all tax farms like they're all like you know if you print the local currency then it's like what argentina is doing like why is argentina in this crazy inflationary environment is because the government has been printing money right they've been trying to pay their bills and they've been probably having some socialist expansionary policies and then they tax their people that way so it's you know it's not really a system that's designed for the

common good it's it's designed for the good of the government that's running the scheme yeah no i mean argentina what they issued 100 year bonds two years ago maybe yeah and everybody thought like oh they're wall street guys in charge now they'll do a good job and people are buying it and um i guess the the bet is not paying off no and you have like i was telling parker this earlier i was working out yesterday i don't watch cnbc that that often but i just had it on in the gym because the market's been volatile this week and there was two or three instances where two people seriously suggested that the u.s issue 50 and 100 year bonds and to me 1500 no 50 and 100 oh but even so yeah wow so to me that signals sort of desperation is do you

think i'm correct in assuming that i mean it's a dead-end street it's absolutely a dead-end street i mean what are you gonna i mean like in in the in the middle ages and later what you had was basically perpetual bonds so you would not even bonds really because it was there was some religious reasons why a bond was considered to be not kosher and not like i think it had to do with the idea that charging charging interest on money that was like usury you shouldn't do that um but so um governments would issue annuities so you would give them money now and they would like just pay you interest on a phantom loan so you would never get the principal back but in perpetuity they would pay you back interest which is kind of like a you know a hundred year bond or

something it's almost like forever uh but of course if you if you take on enough of that debt eventually you just default and that's what's going to happen around the world as well unless of course you manage to debase your own currency enough so then you're you know it's it's it becomes super easy to pay off your debt with worthless currency and i think that's the defaults we're gonna go to like we're not gonna see genuine defaults we're gonna see default by proxy which means you know just very high inflation devaluation you're gonna devalue the debt away yeah um so staying in this vein i guess like how do you see this playing out do you see um currency by currency falling or do you see sort of like a global uh crisis where where a lot of markets fall at once

is this going to be slow and somewhat less painful transition or do you think the the state of the current financial system around the world is such that it needs an abrupt sort of punch in the arm there's this quote by an economist called i think he's called rudiger dornbusch and he was in i believe he was in mexico at the time of their the peso crisis before that he was there and then during it and he it was something like he said that it happened it was just so so slowly it was so slowly and then it happened all at once like it just it's very sudden um and it kind of has to do with the panic that comes with you know all of a sudden the masses are like panicking and people want to exit and then by definition

you all get stuck at the exit and you can't your money gets stuck in the bank and the people the banks are closed down and uh all of a sudden international investors are dumping the currency but to me it's hard to see it all collapse at the same time i do i think the dollar has this exorbitant privilege of being you know the currency of the world and so i think that um it's going to be used and seen as a safe haven for quite a while uh so in a way like sitting in a dollar-based economy i think we'll get to witness the collapse of several currencies before maybe uh the dollar will devalue as well yeah no i think i i agree with that notion i mean we're seeing right now like argentine peso collapsed by 25 earlier this week looks like the hong kong dollar is losing

its peg to the wonder what that's gonna yeah i wonder what's gonna happen there because like it looks like yeah it looks like uh there's just i don't know how many tanks were standing ready to roll in it could be that it'll be like a crimea situation where they just annex it or something on the car ride over here there was video of the tanks moving into hong kong not on the border anymore um so yeah that's that's a crazy situation and like to think and it happened so fast i mean it was only like two years ago that like hong kong was just the ultimate place to be and the real estate is booming and wow the last three months in particular just complete deterioration Yeah. And in some way you could argue, like, you know, going back to the Reformation is that it's like these are these are political powers who are very attached to their monopolistic privileges of, you know, money printing and economic stimulus and kind of manipulation.

And then seeing that Hong Kong is used as a platform for capital flight, they really don't like that. you know they they can't and so they're trying to damn off like to kind of prevent the prevent the dam from breaking well that's the interesting part of this particular situation because it's 2019 you have the ability to watch these protests in real time via periscope and live streams and you have basically the world watching this little island south of china uh and if i'm the chinese government you know that every eye is on you like how do you even act in this situation yeah you're damned if you do and you're damned if you don't right i think they're kind of really in a very i mean from their point of view in a very unenviable position because if they don't act

then the capital flight is probably just gonna you know it's gonna accelerate but if they do act they uh they kind of chase the money out of hong kong anyway so it's kind of like is it gonna be Maybe if they kind of do rush in and it's like a Crimea thing, maybe they can slow down the capital flight. And which is, from a political point of view, maybe what you want to do. Because most politicians don't think in the very long term. They're more like, can I save my skin for the next five years? So maybe that's what's happening. Yeah.

It'll be interesting to see what plays out there and how people react. Because we were talking about this at the symposium earlier today. That's, are people in these countries with capital flight buying Bitcoin? Do you think there is any flows from these capital centers into Bitcoin? And I brought up the fact that a couple people point out the exchanges in China and say that they're trading at a discount. But then you brought up a good point about Tether and the addiction to Tether in Asia in particular. and that that that may sort of hide uh actual or excuse me it may sort of underscore the excuse me the exchange discounts may sort of underscore the underlying demand that's there yeah the idea

is that maybe they're paying a premium to buy the tether and then with the tether there's just kind of the peer of everybody else because everybody's using tether to buy stuff on binance etc uh probably also uh bitfinex but i mean even so we're still not at like tsunami levels of capital flights right otherwise bitcoin would be at a hundred thousand or higher like it's still probably mostly fleeing the dollar and using the traditional traditional means to um protect themselves yeah or you know foreign assets you know foreign real estate or something like that well that's that was the most interesting part of hong kong because it's like it's one of the the highest and real estate markets in the world and you have china coming down there where does

all that capital go like you're actually seeing like cities like new york vancouver san francisco sort of constrict regulations there after years and years of capital flight into their real estate markets and people are finally starting to wake up and be like hey like where does that hong kong money go and then also if you have a currency crisis in asia then that could mean that all of a sudden all these investors and family offices are short of cash and then they need to start liquidating their foreign real estate to just you know make keep the lights on um so you could see a ripple effect in western markets too i think yeah um we live in very interesting times we have 10 minutes left here before you have to leave for this beautiful bus service that

you keep uh keep shilling to me apparently i have to move down to texas for the buses it's all about barbecue amazing weather except for two months um pretty i think one thing is also that i think it's there's there's a nice humidity whereas like you only appreciate it once you go to very dry areas and you're kind of like coughing at night and your your eyes are all sandy it's something really nice about having like a warm humid evening things like that yeah Now, I'm a big fan of watching a thunderstorm on a porch or something on a given night. Before we let you go, what are your current thoughts on the current state of the Bitcoin protocol from like a technical perspective? It's terrible.

It's teething. Just, you know, it's about to break. Give it another few months. I'm kidding. But do finish your question. I was going to say, is there anything you're looking out for in particular, anything you're excited for in particular? somebody else to custody bitcoin if somebody has to yeah yeah so things that excite me in the bitcoin space like i mean uh it's actually really nice that a lot of the noise has like died down

and and there's a renewed genuine focus on bitcoin from investors like i feel like i have a lot less explaining and defending to do when it comes to bitcoin with dominance at 70 i mean it kind of speaks for itself um so that's nice i think that institutions are wanting to are getting in and wanting to get better insurance legal custody solutions and so i think that there's really interesting stuff happening in derivatives markets which you know there's you know you can get exposure to bitcoin by proxy which is i think totally fine as long as it's a transparent contract but also more sophisticated setups for custody with not only multi-sig but only adding also adding the time element where um you have these really interesting ways to as a as a as an

owner of the coin to still retain ultimate control even though you defer uh responsibility and signing power to some other parties i think that's going to be super powerful i think um asset issuance in bitcoin i think it's still underestimated like people people think like oh ethereum has they have their whole ico thing going and tokens that that's their spiel like i think you haven't seen anything yet i think we're gonna see pretty amazing um token issuance happen not that i'm a super fan of it like i think a lot of it is going to be garbage but i do like the idea of having a market that is based in bitcoin technology and that's probably also going to be traded in bitcoin like bitcoin denominated settlement well i don't know if you've been paying attention to this in

particularly liquid but liquid tether some people are saying that liquid tether may have just made like the the first like large dark pool in crypto trading history because that's like the one bad thing about trading between exchanges right now is that you can get like whale calls on twitter just like showing that you're moving your bitcoin to a new wallet and like as an as a trader like what the fuck like everybody can see that i'm trading right now and yeah people can front run you and all that and so like now with tether on liquid combined with confidential transactions you can just see how much money is being moved you can't see from where and to where you just know that that a lot has been yeah and block stream doesn't look so stupid now anymore right

people are often being like oh like very critical and like oh why do you want to do all that confidentiality and it's like well there's perfectly economic investment related reasons to want to do that it's not because they're crazy libertarians it's just the way markets want to operate yeah you want to be able to move money between exchanges pretty quickly to trade and to trade with a certain amount of privacy yeah exactly um last question before we go out here what do you think the next cycle like we just had icos like 2017 we've had before that you had like fair pow launch coins and then like first generation pos coins quote unquote like i am under the belief that you're not going to see like a huge ico rally like we did in 2017 again

like i think the market has wised up a bit and yeah a lot of people are saying like ios maybe the next iteration of like the dumb money and the pumpable stuff like i don't think we're gonna have as severe pumps in alternative markets as we have in the past do you agree with that i agree and i think it's time for a comeback of the national coins spain coin dutch coin the dutch gilder pboc bring it on they're making one right china coin no i'm kidding of course no i'm kidding although actually i do think that uh i've said this before that we there's gonna you know we're moving into the hold my beer phase for uh large banks large corporations nation states to launch their own currencies and i think there'll be bad investments but i do think

they're really going to try to do that um to kind of kind of compete with bitcoin or try to challenge it which you know going to our reformation um analogy is like the counter reformation it's like the answer of the church to to all this stuff um but um yeah i mean i think i'm super bullish on the bitcoin lending market super bullish on the bitcoin derivatives market like really this is the bottom layer of this gigantic stack and it's just so underestimated how how much can be built on top of bitcoin because that's the thing if you have a solid basis you can build really really high and people have been underestimating the value of this an ossified protocol at the bottom of something that you know as a as a foundational layer people

have kind of seen bitcoin as slow and boring and well that's exactly what it needs to be to be the foundation for a lot more yeah i think that's a perfect place to end it you have a bus to catch thank you for tapping me on the shoulder thanks marty it was fun yeah this is always fun um hopefully i see you soon i don't know what your travel plans are but i'm sure we'll run into each other at some point we will peace and love freaks