TFTC: A Bitcoin Podcast - Ten31 Timestamp: Ad Astra Per Nasdaq

Starting point is 00:00:00 The 250 year anniversary of this country, the celebration is well underway and vibes are high. Vibes are high. John was just going on a rant. We're eight minutes past our set time to hit record and he was just ranting about the great men of history and where we may find ourselves and something we may have to come to grips with is that history is written by a few great men each generation. Look, it's a poetic timing coming up on the 250th for the, everyone can probably guess our opening topic here, the SpaceX IPO. To be very clear with everything we talk about, none of this is investment advice or an endorsement to go around and buy the stock. I have no opinion on, or no educated opinion on the valuation. Finger in the air, maybe seems a

Starting point is 00:00:46 little high, but certainly I think we're going to make the argument that SpaceX is a very meaningful company for the U.S., so don't interpret this as investment advice one way or the other. But yeah, everyone's eyes last week were on the IPO that the market has been waiting for for years of Elon's company, SpaceX. And the big headline that was blared across all the chyrons and the various news channels was Elon Musk is now the first paper trillionaire, at least based on where SpaceX priced and closed on Friday. and that's uh there's a lot that i think we could say we're not going to say here about

Starting point is 00:01:24 you know the what does being a trillionaire mean in in 2026 you know relative to 100 years ago 200 years ago the cantillion effect which every bitcoin podcast in the world has talked about the you know the debasing value of fiat currency and how that leads to these larger and larger numbers we'll probably have a quadrillionaire in you know 20 years that's all relevant not really gonna talk about that uh and yeah but i think like the the two big pieces to pull out of this are actually before we get into that i i included this picture here because i just feel like this is this is elon famously looking at the wreckage of falcon one but if you go back and look at just like the the story of where how they got to where they are today you know it's it's a it's

Starting point is 00:02:07 a classic like eating glass and getting you know kicked in kicked in the groin over and over again dozens of times and just getting back up again and going and i think anyone who looks at this combination of headlines the trillionaire thing and the history of spacex and still comes away thinking you know that that is unearned wealth or unjustifiable wealth is you know really just exercising loser mentality like we can you know you can debate all day like what elon does with his wealth is he does he use it in a good way like fine but i think i'll just say like definitively on this show like that is very much not our view but i think that yes here you go this is this is a tweet i marty's saying it uh succinctly better better than i can and the robert sterling tweet

Starting point is 00:02:48 is one for uh for the books for people to go read but to marty's point on like great men of history like i think it's hard to argue that elon is is not one of those at this point uh at least as it relates to advancing industry and advancing like human capability um to say nothing of his personal life to say nothing of a lot of his viewpoints certainly we've had our disagreements with his view on bitcoin's energy use and proof of work and i think he's misguided on a lot of that stuff but as we i think this is a relevant milestone for and is emblematic of like what we're dealing with right now that we've been talking about for the last year on the show because number one it It shows you the value of having like an Elon on your side and an Elon in your country.

Starting point is 00:03:31 There are, you know, 20 Elons, 20 Rockefellers, whatever, are worth, you know, 20 million podcasters, right? There's very disproportionate value that can be generated by certain people in history. And for anyone who looks at the current, the U.S.'s current kind of manufacturing backdrop and says, you know, we're so far behind. We've lost these decades to China and others. And, you know, there's just no way to catch up. I've said this before on the show, but I really, really recommend everyone go read the book Freedom's Forge about U.S. industrial mobilization heading into World War Two. It's a common, I think, misconception that the U.S. was already like this industrial powerhouse going into that. It could not be less true. We were extremely unprepared as late as like 1940.

Starting point is 00:04:12 And you had a couple of guys, Bill Knutson being one of them, Henry Kaiser being the other, that really just decided that we were going to mobilize in an insane way that no one had ever thought would be possible. right? They were throwing out, you know, Elon level projections to the government or in some cases being asked to hit those projections. And, you know, they came through, they made it happen. And that was on a basis of like industrial unpreparedness and massive labor strife that we can't even like imagine today. So all this is just to say, like, you look at, you look at having some Elons in the country, you look at the history of how analogs like this have played out in the recent past, you know, recent enough for your grandparents to remember. You look at the depth of American capital markets that enabled SpaceX to 15 years, you know, burn a lot of

Starting point is 00:04:55 capital, raise huge dollars and finally get to a point where they are today, where it increasingly looks like they've achieved legitimate escape velocity and really remade a category. You look at all that and you say, well, I don't know that I want to short that. Right. This isn't even just rah-rah America stuff. Right. This is I don't really know that I feel comfortable declaring that, you know, it's a foregone conclusion that America is dead. We lost the manufacturing race and you know the world is china's now so i'll pause there but i thought it was a really emblematic event for like every single thing that we've talking about that we've been talking about the last year just kind of boiled down into one single kind of you know headline yeah i think what you're

Starting point is 00:05:31 doing is it's just recognizing objective reality you can try to talk yourself out of this being reality but there's there's nothing you can point and it's there like it's happening we have starlink we have satellites in space i mean colossus one i was at a lunch two weeks ago and we talked about colossus one nobody thought he could spin up that much generation behind the meter and get a cluster running in a year let alone 100 days or whatever it took them i think it is inarguably incredibly impressive and objectively it's objective reality like he's doing it and i think there's there's some some of the universe we're both catholics we believe god i believe in divine intervention and maybe there is a bit of divine intervention in uh

Starting point is 00:06:19 the united states in this particular month in the lead up to 250 i don't know the energy is just rising we had the world cup here i'm sure everybody's seen it but seeing everybody from around the world come to the united states and travel around and get a firsthand perspective on what the country is actually like, particularly outside of the coastal large metropolises that many people just assume is what all of America is like. Your New York City's, your L.A.'s, your San Francisco's and people traveling around the southeast, the southwest and really immersing themselves in American culture. And I think really something I believe and I've been tweeting this out consistently for years now is we're going to win. And when I say that,

Starting point is 00:06:59 think it's in the context of bitcoin and what we're doing on the freedom tech side but i think it's seeped in in sort of just american values that that we've been born with which is like yeah you can get you can get stuff done i think as it pertains to the commentary that i've been watching particularly europeans coming to the united states and one of the one of the sort of side comments they make is like there's the positive like the positive mentality that exists here is unlike anything they see in europe it's like yeah you can just go do things uh and i think to your point it's a fool's errand to short that and we're talking about the great men of history and i think you briefly mentioned jack ma but i think we do have to recognize that despite the many flaws

Starting point is 00:07:44 that exist in the united states and there are many but uh everybody's a sinner nations uh make mistakes as well the ability to do this in the united states is unique like we were talking about jack ma like jack ma arguably given the ability to to run unabated in china probably would have done things similar to elon but unfortunately for the political and environment in in china he was basically disappeared for a few years for for attaining too much success and And Elon, I think, is a great counterexample to that. He got all this stuff done, took SpaceX private, or excuse me, public, and now is a trillionaire. And obviously we have many of the leftist politicians saying that this is unfair, there's

Starting point is 00:08:35 people hungry, and we have a trillionaire running around, we need to take 5% of his wealth so that we can pay for all the schools and all the healthcare. And I think we know that that is not the right way to go about things. And I actually think reading the tea leaves of the commentary around the Democratic Socialist calls for wealth confiscation because we have a trillionaire now. I think many people are beginning to wake up and say, like, really, are you going to allocate those tax dollars better than Elon's going to allocate them in the free market? And it's highly doubtful. Yeah, the track record historically has not been strong for the U.S. government, frankly, you know, by itself or any other. And anyone who wants to can go run the math on if you just outright seized literally all the wealth of, you know, the all the billionaires that you hate so much and how long you'd be able to run the government for based on that, to say nothing of the downstream impacts that would have on anyone else's incentive to go create wealth.

Starting point is 00:09:28 I mean, it's not wrong, right? So in any case, yeah, like I think you said it well. I think there are brilliant people all over the world, to be clear, like there are right tail people in every culture and every country. But it's a question of like, how are you, which countries are equipping those right tail people to go do things like this, right? And not putting them in a position, to your point on Jack Ma, of being, you know, disappeared if they cross the wrong powers. um and you know just we got it up here on the screen i'll just read it out for anyone who's listening but it's a bill knutson quote that i think just really captures exactly what we're talking about and it's it's it's hard to quantify but he says there is in america a spirit that drives people to want to do different they are just ornery enough that they will not stay where the rule was laid down in that i believe you will find the greatest hope for america's future and again this is the guy who basically along with henry kaiser kind of made sure that uh the U.S. had the industrial armaments that it needed to win World War II kind of out of nowhere. So

Starting point is 00:10:23 that's not just like, again, a rah-rah America thing, but I think that all collectively frames up the geopolitical great game that is going on right now. And maybe to transition to that, we don't have to spend a ton of time on it, but this morning, Monday morning, we're looking at headlines that the U.S. and Iran have now reached a deal of some sort with various points that are allegedly fully agreed on by both sides. Still not totally clear if everyone actually knows what they're signing and is agreeing to the same thing but uh this friday we're we're going to allegedly have that signed and you know oil is now down to kind of its lowest level in the last few months uh just just hovering around 80 on wti on the back of that so you know this this could

Starting point is 00:11:02 be a big pivot point in the whole story but uh you know tbd hopefully we'll have a little more clarity uh next time we do the show yeah and as we as we speak wti is trading at 78 dollars and 74 cents. So below 80 now. We'll see if this is actually signed and both sides abide by what is laid forth in the agreement. I do believe I saw confirmation from the Iranian side that the deal is real. So here's to hoping that we get this signed on Friday and we can sort of move on from the saga. But to your point of things we've called out in the last year, it will be interesting if it is signed and there is no reversal on the ceasefire and calmer heads prevail moving forward at least for the short to medium term and it would it would signal i mean this war started what the

Starting point is 00:11:51 end of february so you have march april may half of june three and a half months of a war in iran and i saw an interesting commentary on this it's it's not going to appease the libertarians or the war hawks but it's just that it's not as tactical as venezuela but if we're anchoring to the national security strategy that we that we've talked about um that was released last november and if this does prove to be done on friday it would it would be a tally in the in the uh on the side of he's staying true to the national security strategy which is we don't want long drawn out foreign wars we want to get in and get out and just protect our interests so we'll see yeah hopefully i think i speak for both of those when i say hopefully that can actually

Starting point is 00:12:39 progress in that direction um but i think it's like it's to your point of the national security strategy it's it ties back to the stuff we just talked about before because if you were looking at the set of constraints and opportunities that the u.s is looking at and many of which we talked about on the show you know you're trying to walk this tightrope like what what would you be doing Well, you'd be leveraging every tool that you have, one of which is unique capital markets, unique depth of capital markets. We talked about that. You'd be leveraging your elons, giving them, you know, room to run and room to become the next, you know, Bill Knudsen's and Harry Kaiser's. You'd be leveraging your energy advantage relative to the rest of the world.

Starting point is 00:13:14 We've talked about that a ton on the show as it relates to the Iran war and kind of recentering a lot of energy infrastructure toward the United States, ramping up U.S. energy exports, getting WTI to be, you know, more and more of a focal point over Brent, Brent crude. You know, you'd be doing that to show the world that, you know, your energy-poor allies and your energy-poor neighbors, you know, need you, right? Like you'd be trying to leverage that. The next thing you'd be doing is you'd be leveraging your, for now, still dominant currency network effect. And I think we saw a couple interesting data points on that front last week with Besson kind of ramping up, Treasury Secretary Scott Besson ramping up talks of using seized Iranian assets to fund the reconstruction of the Persian Gulf. we'll see with with the deal we just talked about like it to what extent that will that will happen but i think the notable thing is that if they wanted to the u.s is in a position where they have access to a lot of seized assets and the ability to freeze assets that they can then go

Starting point is 00:14:10 mobilize however they however they see fit in the limit if they want to not there aren't downsides to that not arguing for that but i think a tweet like that is is a reminder to the world that there is a lot of uh latent leverage that the u.s does not typically exercise but can exercise within the dollar system. And the thing on the right that we have here is a quote from the CEO of Payments Canada, who last week gave a good speech, basically just acknowledging like, as she puts it, payments are economic statecraft and they are instruments of economic power. She highlights how, you know, four fifths of Canada's cross-border payments are routed through New York and U.S. correspondent banks and the vulnerability that presents for Canada.

Starting point is 00:14:47 And then I think I'll just highlight on the next slide too, briefly, we talked about it a little bit last week, but, uh, there was this really interesting article that I recommend people go read out of the South China morning post, which is an interesting like outlet for this. It's a Hong Kong paper, but talking about just the practical frictions and difficulties of actually de-dollarizing, uh, China, Russia trade flows and all of the like gaps that that leaves and trust issues that then need to be solved. And, you know, it's, it's, it's not as simple as, you know, pasting into like an Excel sheet, like use this currency system versus that currency system right so through the u.s these are all like the things these are among the things right

Starting point is 00:15:22 that you would want to be leveraging and kind of you'd want to be you know seeing if you were trying to recenter a lot of trade toward the u.s and if you were trying to you know regain a competitive foothold on a lot of the fronts where you're weaker yeah it's uh again the validation of why we're doing what we're doing here as it pertains to bitcoin i think there's a ton of value in a credibly distributed neutral settlement network. And I think we're prices climbing back up. I think it's across $66,000 this morning after hitting $60,000 last week. And I doubt it's because people are recognizing this, but I think it would be very, very silly to be short Bitcoin as this multipolar world continues to evolve in front of us. I think the value prop

Starting point is 00:16:11 of Bitcoin is only going to be better understood moving forward. But we digress. We will get to how the United States has a unique opportunity within Bitcoin specifically at the end of the show. But before that, another big sub theme of the last week is Claude's Fable 5, which is a sort of guardrail version of Mythos, which they announced a few months ago and held back from releasing it to the wild because it was deemed too strong they released fable 5 last week and it was relatively short-lived due to the fact that uh the u.s government was not happy with the the guardrails that that anthropic put in place because uh some of their competitors were basically amazon came out and said hey we found a way to jailbreak this and it can do all these

Starting point is 00:17:04 things they went to the government and said that and the government went to anthropic and said you need to take this off the markets we're using what were they using what was the justification uh sort of a weapons deep or oh um like export controls export controls yes and it seems like the anthropic executive team had some consternation with with the u.s government's posturing there and i just thought it was a very poetic weekend for for anthropic specifically Yeah, I think there's a lot more to be written on this story. And I can be convinced that the face value story is true. I can be convinced that this is the next indication of the government maintaining its kind of overreach posture relative to the story we talked about a few months ago with the DOW and Anthropic. I could be convinced it's all like coordinated kayfabe to justify greater regulatory capture of frontier models and to avoid open source distillation attempts. I could be convinced of a lot of different stories here.

Starting point is 00:18:08 So I'm not willing to necessarily commit to one. And I think people should consider this kind of a fog of war scenario. And I think there's a lot we can get into. And I specifically think it's notable relative to everything we talked about just now because one of the other things that you would want to leverage if you were in the U.S.'s position would be frontier intelligence, right? You've got largely like the frontier AI labs live here, open sources, making good strides. It's depending on who you talk to, three, six, nine months behind, whatever. But if you've got access to all of the gigabrains who are driving this forward, they all live in your borders. you know they're the compute that they that they own or that they rent whatever lives in your

Starting point is 00:18:51 borders that's if you're going to be taking the posture of the national security strategy we've talked about that's an advantage that the U.S. probably needs to uh yeah this is a good article too that's U.S. an advantage the U.S. would probably want to to leverage and I think that there are so I think it's it's it interplays nicely with everything that we're seeing and it's kind of what you would expect if we're right about the posture that the U.S. is taking I think that there's a lot that can be said, too, about Dario's post alongside the release of Fable and Mythos. I think it's very relevant to the constraints that the U.S. faces as well. And so we can get into that, but I'll pause there and let you kind of drive from here.

Starting point is 00:19:32 No, I thought Dario's post was actually pretty insane. It's basically saying the government moves too slow and we're going to release this stuff and they're going to have to catch up. That's how I took it. Yeah. I mean, I think that there's all that. There's a lot. It's a long post. There's a lot to dig into. There's a lot of, you know, Dario at Anthropic is, you know, is in the orbit of SBF and the effective altruist movement, which we don't really have time to get into here. Kind of a, you know, San Francisco oriented pseudo religion with some interesting viewpoints. But one of the big bugaboos has always been UBI and the need to move to like universal basic income.

Starting point is 00:20:05 and you know if you look at our ios post one of the big things that he is proposing is the u.s needs to the u.s government needs to do in response to things to fable and mythos and all these frontier models that are coming out that are only going to get crazier we're going to get to recursive self-improvement and we're going to have the paperclip maximizer that takes everyone's job you know we need to have uh what he calls pro-employment incentives so payments subsidies different tax incentives for companies to keep people hired even when they could make them redundant with AI and then also long-term what was it called macroeconomic support basically just like very broad-based like UBI to to offset the the impact of you know everyone losing their job

Starting point is 00:20:43 right or meaningful amount of people losing their job and we've talked before about how like whether he's right or whether he's wrong those both have meaningful implications for kind of the way that U.S. capital markets and thus like U.S. national security kind of run but if you take him at his word that he's like approximately right. And if you look at how Elon has called for similar things, you know, universal high income and Brad Gerstner, we talked about a couple of weeks ago talking about like an AI dividend. We talked about Mamdani, you know, moving to seize, you know, private property in New York. You're moving, it seems like you're really moving toward a world where there's going to need to be rightly or wrongly, or not there needs to be, but rightly

Starting point is 00:21:21 or wrongly, there's going to be a lot more social spending happening against the backdrop of debt to GDP being where it is. We've talked about that extensively and against the backdrop of social security now coming out and saying that they expect to hit a shortfall one year earlier than expected. So instead of 2033, it's going to be 2032. You'll notice last year, they said the same thing. So pretty much every year, as we go forward, they move, they move this up a year. So like the convergence year kind of works out to like 2029. So, you know, if that continues, so you've got all of Dario's social spending points being brought up at the same time that the US is basically in a very bad position on the balance sheet side. Now, you could argue that if

Starting point is 00:21:58 Dario is right, you're going to have massive GDP explosion and you can drive tax revenues off that to backfill and fund all of this. I'm not necessarily so sure that's exactly how it's going to work out. I think there's a lot we could get into to discuss that. But I don't know that's a foregone conclusion that GDP number goes up just because AI does a lot of stuff very efficiently. Right. I don't necessarily think that's true. So all that being said, that kind of hits on like the one constraint, the one big constraint that the U.S. faces relative to its advantages. You know, I mean, obviously, manufacturing base needs to improve, too. But the big constraint that everyone talks about and the right about is the bond market. Right. And so you're going to need to probably do things that would in isolation hurt the bond market if this AI future plays out the way that someone like Dario thinks it might, even if it approximates that. And so if that happens, right, and you need to do yield curve control, you need to get creative with treasury issuance, whatever the case may be, if you need a pro liquidity future, a pro dollar liquidity future, and you see that coming, like, well, what would you what would you do?

Starting point is 00:23:04 Well, first thing would be like we talked about before, you'd ring fence the dollar system, you put more controls on it, you'd try to make it harder for people to leave, and try to draw them in further with swap lines, whatever, make it a geo strategic kind of issue. And I think you'd also probably want to consider if you're doing liquidity expansion in some form, that you would like for Americans to be the primary beneficiaries of what that could mean in terms of where that liquidity could ultimately flow and land. And also, if people do on the margin try to defect from the dollar system, one place they may go would be gold, right? But another place they may go, I think, increasingly would be Bitcoin. So you'd ask, all right, if we're going down this strategy, thinking several steps ahead, would we perhaps like the U.S. to be the primary beneficiary of both incremental liquidity landing somewhere and on the margin people defecting from the dollar system? This is like meaningful tinfoil hat stuff. This is meaningful, like, you know, 5D chess stuff that is perhaps not being thought of.

Starting point is 00:24:03 But I just thought it's helpful to show and to land on where the U.S. sits vis-a-vis the rest of the world in terms of our Bitcoin holdings, half rate, etc. This is some really good work that River did late last year. Some of the data may be outdated now, but basically this is all effectively still true. And so I just think like to end my rant, this is a really interesting data set to keep in mind as you consider the, you know, third and fourth derivative implications of everything we've been talking about here that like and that's I think this is like why we keep coming back to Bitcoin. Like this is why we care about Bitcoin. One of many reasons, but like as it relates to all these macro threads, this is like why we keep ending the show on Bitcoin, because I think this can't be can't be understated. It all fits together. For those listening who can't see, we're looking at some stats that River produced last year, but they pose the question, how dominant is the U.S. in Bitcoin?

Starting point is 00:24:57 Around 40% of the total supply of Bitcoin is estimated to be owned by American citizens and companies. 94.8% is the U.S. market share of corporate Bitcoin holdings. 65.3% is the U.S. share of nation-state Bitcoin holdings. 70% is the U.S. market share of Bitcoin venture funding, and 79.2% is U.S. market share of spot Bitcoin ETFs, 36% U.S. share of global Bitcoin hash rate. So we are dominating, and I think we touched on this last week or the week before, the fact that Besant is still talking about

Starting point is 00:25:36 the strategic Bitcoin reserve, despite the fact that we're more than 50%, we're about 50% off all-time highs. And the fact that they're trying to push clarity through is when the market's in the dump for not only Bitcoin, but more so broader crypto is a signal that maybe behind the scenes, the administration does recognize that Bitcoin is a strategic asset that in the strategic market that we need to lean into. And I think this is something that we've been saying, not only you and I, but Matt and I on Rabbit Hole Recap, myself on TFTC for many years now, like if the U.S., if you believe that the fiscal situation has gotten off the rails and you need to think outside the box, think creatively on how to bring it back on the rails and maybe hit your wagon to something that's going to experience insane value accretion over the next few decades. there's no better wagon to hitch yourself to than bitcoin considering all these data points that the river highlights here like if you lean into bitcoin you foster the continued and accelerated adoption of of bitcoin as a monetary network due to the fact that there will only ever be 21 million bitcoin that means that the the purchasing power of individual bitcoin is going to go up

Starting point is 00:26:54 significantly and america is perfectly positioned to do that due to the fact that and i think this is actually a good tying of the knot of the the theme for the whole episode which is i think americans due to that spirit that lives in our bellies of uh just innovating being positive leaning into new technologies as they emerge i mean bitcoin's a perfect example of that i mean that the network launched in 2009 and by 2013 there was a pretty robust market i mean coinbase really led the way and i think within the united states individual adoption was was happening at a rapid clip over a decade ago and if the administration the us government in future administrations recognizes this i mean imagine if bitcoin were to go to a multi-deca trillion dollar

Starting point is 00:27:46 market cap or $100 million market cap, which I think we both believe is definitely in the realm of possibility. I would put high confidence in that happening. Eventually, the timeline varies depending on what happens. But if the U.S. leans into this as Bitcoin is going through its monetization phase, it's going to benefit massively. Yeah, couldn't have said it better myself. So hopefully people will forgive us some of the Pepe Silvia work that went on here. But But I do think, to your point, I do think it all fits together. So I think if you're bullish on Elon, be bullish on Bitcoin. We'll see you guys next week.

TFTC: A Bitcoin Podcast - Ten31 Timestamp: Ad Astra Per Nasdaq

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