The Pomp Podcast - #1330 Mark Yusko | All Investors Want Bitcoin In Their Portfolio?!

Episode Date: March 19, 2024

Mark Yusko is the Founder, CEO & CIO of Morgan Creek Capital Management. In this conversation, we talk about bitcoin, ETFs, macro environment, opportunities, memecoins, and future outlook of the industry.  ======================= In this podcast, we dive into the revolutionary concept of PropyKeys, an application that allows anyone to mint home addresses all over the world on blockchain. PropyKeys.com is a part of the Propy ecosystem, that has a grand mission to make homeownership more affordable and user friendly. We will explore the journey of Propy’s founder and how this innovative technology provides benefits for homeowners, and for the real estate industry. Join us as we discuss the Propy’s latest collaborations, including Coinbase, and its new fun project PropyKeys. X (Twitter): @PropyKeys Website: Mint an address at propykeys.com. dApp: ⁠⁠⁠https://dapp.propy.com/⁠⁠ ======================= Get the freshest price feeds free for 12 months. Join Supra’s early integration program for zero-cost access to the fastest oracles and dVRF across 50+ blockchains: https://supra.com/pomp. Earn $1,500 by referring Web3 projects to use Supra services. The projects get the fastest services for free, and you earn $1,500 for every referral. Learn more at the link above. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Today's episode is with Mark Yusko, the founder, CEO, and CIO of Morgan Creek Capital Management. In this conversation, we talk about Bitcoin, the ETFs, the macro backdrop, why Mark

sees so much opportunity in this asset class, what he's been doing with Morgan Creek Digital, and where exactly he sees this entire sector playing out, everything from Bitcoin to the meme coins. There's a ton of insights packed into this conversation, and Mark does not disappoint. I learned a lot from this and I think you will as well. Here is my conversation with Mark Yusko. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his

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That's S-U-P-R-A dot com slash pomp. All right, guys. Bang, bang. I've got Mark here. Mark, I thought a great place to start would be inflation. the macro environment, everyone at the beginning of the year was super excited. Inflation is coming down. Jerome Powell is a genius. Let's wave the victory flag. Now, all of a sudden, we went from seven rate cuts going into the year to we're down to like three. And the market doesn't feel so

confident anymore. Inflation looks much stickier. How do we gauge? Could inflation come roaring back like it did in the 80s? Yeah, I'll take the under. I really don't think so. I'll also take the under on rate cuts. I don't even think we're going to get three this year. There's just no impetus for rate cuts. I talk about the pollution of the most recent period, right? It's like all the data is polluted, right? The data on price to earnings for the stock market, it's all too high. And people go, well, the last 10 years, but the last 10 years have been above average of the last 100 years. So it's just the data is polluted. And the same thing's true here of rate cuts or interest rate levels. People seem to think that zero was a normal interest rate.

We've had 247 years as a republic. We've had two very short periods of time where they pushed interest rates to zero right after the 1930s debacle with the Great Depression. And then again, here after the global financial crisis. That's not normal. 4%, kind of where the 10-year is right now, is normal. So this idea that somehow we need to go back to 2% rates just doesn't make any sense to me. When we see Powell looking at the data, as always, he's looking at backwards data, trying to make a decision today to predict the future. There's things like AI that have become quite popular. And I think there's this risk or excitement, depending on who you are, that we can replace tons of jobs, we could drop costs, it would be hyper deflationary force. And

so how much of that plays into their analysis versus they're like, yeah, maybe that happens, maybe it doesn't, I'm just gonna look at the economic data, and I'll evaluate it as we go. Really, really important question. And, you know, you asked a question that I didn't answer, right? Is inflation gonna come roaring back like the 80s? I don't think so. I mean, we've all seen the chart, right? The big spike, the drop, and then the second spike in the 70s. Part of that spike was a false spike in the sense that they were double counting. Volcker's Fed was double counting interest rates and that they were counting mortgages and interest rates. And there was this weird thing. And Mike Green has talked all about this in the past. So that was the big

problem there. So I just don't see that happening. And all of this deflationary pressure that you talk about comes from technological evolution. And technology is not growing linear. You know, Jameson Lopp put out the thing this morning, which is, you know, the Kurzweil chart. And it looks like this linear increase in technology and advancing and compute, but it's because it's on a log scale. And, you know, it's one of the things that drives me crazy all the time. Remember these hockey stick charts? Well, any long-term chart has to be log scale. You can't look at a long-term chart and, you know, you see like the interest payments and they look all of a sudden like, well, that's because you're looking at 50 years. You need a log scale because going from 10

to 20 is, you know, worse than going from 20 to 30. So all of that says, does Powell look at what's called hedonic price adjustments meaning if you know technology runs faster or like your your washing machine gets your clothes whiter that you know is deflationary in theory i'm not quite sure why that is but um and okay so my computer processes faster i don't type any faster i mean i still type at the same rate so i don't i know that there's some productivity enhancement and having more compute, but for certain productivity, I don't really see it. But I do think on the job front, on your question on AI, as people get displaced, as human beings get displaced, that certainly will change the dynamic of inflationary pressures.

My flip side, though, of that, my caution is everyone says that every new technological innovation is going to destroy jobs. It's true. Right. I mean, machines took jobs away from people who were plowing the fields or assembling things in factories. But here's the thing. We yes, we've destroyed millions and millions and millions of jobs through technology. But today there are more jobs in the world than any time in human history. In fact, so we'll create new jobs and that will reverse some of that deflationary pressure. And so when we're looking at people buying Bitcoin,

and I look at Bitcoin as the most free market asset, it is kind of the macro asset at this point. The Bitcoin ETFs are a big deal. There's the halving that's coming. And I think people are kind of just, you know, very small brain, hey, halving happens, price goes up. So they're kind of front running that. But also, and I've written pretty extensively about,

in 2020, you know, Paul Tudor Jones, Stanley Druckenmiller, these guys came out and said, hey, I bought Bitcoin because I think inflation is coming. And markets being forward looking, price ran from 8 000 to 64 000 then inflation happened and so i do wonder how many people if any are buying bitcoin because they think inflation is coming back and and coming back could be it's not going to fall as far as people think it could be hey it's not going to fall any further like this is the new you know kind of three three and a half percent maybe four percent

is like the new inflation level uh and then there might be even people who think like no we're gonna you know you turn it and we're gonna go right back five plus uh percent inflation but if that's the case like bitcoin is almost sounding an alarm right and saying hey people are worried and they may actually have a different concern than what the fed or others in the in the government have again so many so many important points to to unpack um first i think the narrative around bitcoin tends to to shift right you go all the way back to to the founding it was a peer-to-peer electronic cash so we're going to buy pizzas with it okay you know the guy did and but he says oh you're an idiot no no we should all thank him

and like bow down because he proved that this thing allow us to exchange value without a trusted third party awesome i mean amazing but it went from that narrative to oh it's digital gold okay fine um and gold is a inflation hedge and so these people say well if it's digital gold and it's better i'm gonna buy it because it's easy and i don't have to store it and i have to carry around these big gold bars with me okay fine um but i i i agree that it's digital it's scarce like gold. And I believe it's the monetary base for the future, right? Gold has been the monetary base for 5,000 years. And what I mean by that is all the central banks own gold, right? It sits at the base level and then they create currency on top of that, right? Money is an asset

that exists in the absence of a liability. That's been gold. I mean, sometimes it was silver and sometimes it was a few other things, but bottom line, there aren't that many things that exist in the absence of a liability. Currency, dollars, yen, euros, all are backed by debt. They have a liability, associated liability. So they're not money the way we think of money. So I think of the digital gold argument as the monetary piece. Like there's 12 trillion-ish of gold. Half of that is jewelry, artifacts, chalices, you know, gold leaf on the Golden Dome where I went to school, all that good stuff. That doesn't count. That's the commodity part. And gold was the one thing that for years was both commodity, which is kind of an inflation hedge, and currency, right? It

was money. And so that Bitcoin narrative was there. But now I like the narrative that Saylor put out there the other day that it's really digital property, right? It's property rights. And that means it's much, much bigger. And I keep talking about the fact that in the QE era, right? When money supply was expanding,

the price of Bitcoin, quote unquote, went up because we measured it in the thing that was devaluing. And this is the part, right? My sign over there, right? One Bitcoin is one Bitcoin. We'll always be one Bitcoin. We don't, you and I don't, I mean, you and I might, or Jason and I, we might, but the average person doesn't talk in Bitcoin terms.

They talk in dollar terms or yen terms or Bolivar terms. But if you lived in Venezuela, there really has never been much of a bear market in Bitcoin because the Bolivar was going down so fast or Turkey with the lira. so it's not that bitcoin necessarily gets better it just is is that the currency keeps getting worse but here's the thing the last year m2 went down in the united states only twice in 100 years has that happened and it happened in the last year well wait a second then then bitcoin prices should have gone down if we're restricting the dollar right we're not we're not creating as many dollars, then Bitcoin price should have gone up. But Bitcoin prices went up 200%. What

happened? Supply and demand. And this is where the differences come in that you can have a change in value of an asset because the currency you value it in is changing. I always talk about my house, right? According to Zillow, my house went up 50% here in Chapel Hill over the last two years. that's ridiculous that's ridiculous my house did not grow my house didn't get more efficient i actually had to put money into it to stop it from going you know wearing out the money got worse so it's a long answer and under that um this idea like the dollar is crashing against bitcoin uh or bitcoin is appreciated against the dollar um i think that the bitcoin community likes number go up. So they see this price increasing in dollar terms. So it makes sense why they would

talk about it that way. What has to happen for people to start talking about the dollar is crashing against Bitcoin? Like almost the inverse, right? I almost think of this like, what is your default position? And so when somebody says, what is Bitcoin worth? They quote it in dollars. At what point do you think people would start saying like, hey, what is the dollar worth? And they quote it in Bitcoin. Ah, it's great. Great question. So when do we become on a Bitcoin standard? I think it's actually a long time away. And the reason is, as much as I believe in Bitcoin being better money, I actually don't think anytime soon the nation states are going to abdicate their right to control their particular money. money right and look i don't know if you've ever had murray stall on the podcast you should have him on and he i say he makes us look bearish like how is that impossible right but but he makes us

look bearish because i i talk about this all the time to me bitcoin displacing gold as the base layer of money, easy. $6 trillion market cap, that's like, you can bank on that. That's totally easy. The next step, which is where the good money crowds out all the other money, and we start talking about, to your point, not Bitcoin in dollars or Bitcoin in yen or Bitcoin in euros, but euros in Bitcoin or dollars in Bitcoin, because it is the standard. There's a book called the bitcoin standard right then but that's inverse to gresham's law gresham's law says the opposite that bad money always crowds out good right gold is good money but other paper money always crowds that out people want to use the the bad money because i don't even understand the exact the

exact reason for Gresham's law, but it's a law, right? And if you look at history, that's what happens is people flock to the worst currency at the worst possible time. And that's why you get the hyperinflations eventually, Zimbabwe and Argentina and Turkey. So what Murray says is we're going to get a reverse Gresham's law. And this good money, this Bitcoin is going to eat all global currency which today is about 86 87 trillion just round it to 90 around it to 100 doesn't even really matter um trillion here trillion there pretty soon you're talking real money uh that one's harder for me because i i think we've seen how hard people are fighting just on the little stuff as you know bitcoin strikes to siphon money out of the banks right

We all experienced that with, you know, we saw the lenders pop up and people took their fiat, converted it to stable coins or Bitcoin and got paid interest in a zero interest rate world, which was unnatural. And the banks were like, 10 billion, who cares? 100 billion. Now we've got a freaking problem. Now we're going to make it illegal or unethical or and we're going to put people in jail. And there's still people in jail for writing code. It just boggles my mind. So I think it's a long-winded way of saying,

I think they're going to fight it really hard for a long time. And the smartest people are going to get that, and they're going to increase their exposure. I mean, look, you and I have been talking about this for a long time. Get off zero, right? Zero has always been the wrong number. How big that number is in your portfolio, So that's a debate.

So as we kind of watch that transition occur, El Salvador now has revealed that they own 5,800 and something Bitcoin. That's a lot more Bitcoin than people thought they had. It's about $400 million or so. It's a small country. It's meaningful to them in the sense of I think they do like $2.5 billion in kind of tax revenue and grants and stuff a year. And so they now are also taking self-custody of the Bitcoin and going to store it within their territory, as they described it.

Is that a wake-up call to other countries that now not only do they have a lot, right, in relative terms, but also they're taking custody of it? And so it reduces sanctions risks and all the different things that we've seen on that front over the last couple of years? Absolutely a wake-up call, right? And it goes back to this idea of what is money, right? How do countries, nation states become wealthy? How do they function and operate? Well, historically, they've embraced this idea of banking and the banks, you know, put the capital in one place and control it.

But then they adopt this idea of central banking, which goes back to the 1600s from the Dutch. And the idea of central banking is you put the good money at the core, at the base, and you own it. And mostly that was gold, right? We all have heard of Fort Knox. And everybody's like, well, is the gold really in Fort Knox? Like, do we really have gold backing our money? It's another question. We know the Chinese are buying.

We know the Russians are buying. we know el salvador had been buying and now they chose to buy this new asset and i think it is a wake-up call to all nations states to say well i own some gold in my central banks probably own some dollars maybe i own some yen some euros a few own some rem and b well wait a second maybe i need to own this this other asset that is now displacing value from this you know gigantic pool the challenge is all these other things yen euros dollars etc aren't finite so it's like the old you know doritos commercial crunch all you want we'll make more um can't do that with with bitcoin and And you can't really do it with gold.

I mean, gold, there's new mining that exists, but the amount that's lost or stolen or used in industrial uses roughly equals the amount that you produce each year. And so the stock relative to flow stays pretty high. You could argue that, well, at a high enough price, people will go find more of it in the ground. Yeah, yeah. But watch the gold mining stocks. They stink.

i mean so it's a lot harder than people think to go to go get that gold but it's not impossible at least right now contrary to popular opinion of satoshi gonna show up and give us 21 million more bitcoin um it's really hard to change the the supply it's not impossible but it's really hard to change the supply so i i do think other nation states are going to get a little bit of wake-up call which is kind of comical in a way that they're going to follow this little tiny country in in central america what about this idea that like taking control of bitcoin let's say saudi right uh or let's say um another country that is an ally of the united states uh but they're big and maybe we can also compare it with a country that is not an ally of the united states

and big it's one thing to want exposure to bitcoin's price like as an investment vehicle it's another to basically be buying bitcoin taking custody of it and like kind of throwing up the imaginary middle finger at the moment in case you know things pop off in the future um the etf introduces a way for them to buy exposure but not actually hold the bitcoin right and so there becomes this like very interesting thing where like a sovereign wealth fund could be allocating to the etfs getting the price benefit but also not stepping on toes on the geopolitical front where now you know the ambassador to their country for the united states hey what are you guys doing that bitcoin and so it becomes this like very interesting introduction where countries can

benefit without going too far of kind of the you know american uh you know empire uh kind of knocking on the door if that makes sense so again a bunch of really important points here so one is Because do countries, particularly America, view Bitcoin as a threat? And, you know, I think it depends who you talk to. You'd get different answers on that. America has the most to lose, right? And I just did a presentation on this politics and populism. So, and I went through the history of empires and it's really pretty amazing.

They all rise for the same reason, power. They all stall for the same reason, politics. And then they fall for the same reason, populism, right? Either you get kicked out like the French where, you know, they pick up the pitchforks and the torches and they come get you. Um, or you, you just fritter away your, uh, advantage like the Romans and, you know, each emperor, uh, not emperor, but each, each, um, governor inside, inside Rome would literally melt down the denarius and they were a hundred percent silver.

And then they would make more coins that had 50% silver, 25% silver. But then the soldiers would wake up and say, oh, I don't want this piece of crap with 25% silver. I want the 100% silver. So wages started to spiral. And at the point where you don't have enough money to pay your soldiers, guess what? The Visigoths came in and end of Roman Empire. And so all of this cycle kind of happens in the same way.

And so if we think about hegemonic currencies, in the earliest days, it was the Venetians, right? The Italians took the idea from the Portuguese monks and they became the world's reserve currency. Then the Portuguese took it back and they explored the world and then Spanish took them over. And then the Dutch created this central bank where they could print money out of thin air. and then it's gone on from you know france took over the dutch and then the uk took over france and then the america and that's what we have today and interesting most people know the story that in in 1971 now it's interesting in 1971 a lot of things happened in 1971 so one um they closed the gold window right nixon closed the gold window and went off the gold standard

Two, we, America, cut a deal with Saudi Arabia and said, all right, we're going off the gold standard. We need something else to back our currency so it stays the hegemonic currency that we signed in 1944 at Bretton Woods. So we want you to price all oil transactions globally in dollars. And they're like, sure, you protect us at all costs no matter what we do. OK, so we got a deal. So that was that was it. the wef also started in 1971 that's just a side thing so all those things kind of came together in 1971 kind of interesting right and you know i was riding around on my bicycle and you know my

little schwinn and and doing the evil king evil thing but so i think what's interesting about that is now we are at the point where there are threats to our hegemonic dominance and part of that is Saudi kind of said, huh, I kind of like what's going on over here in Russia and China with their alliance, and they're selling a bunch of oil, and maybe we'll price some oil in renminbi. And historically, anytime you tried to price oil in anything other than dollars, bad things happen to you. Iraq, bad things happen. Libya, bad things happen. So anytime you tried to price oil and anything other than dollars, bad things happened. Well, now oil is being priced in lots of other currencies around the world, mostly renminbi. So there's some stuff

going on there. The real risk is what if people start denominating, to your point, in Bitcoin? What if that becomes a global reserve currency like other currencies that are attacking this hegemonic dominance of the dollar? And that's where I think it can get really interesting. The problem is, if China does what they've done, what can we do? What we've done for the last two years. look at us tech stocks and look at chinese stocks right they were perfectly correlated perfectly correlated for a decade up until two years ago and that were two and a half years ago then what happened us went straight up china was straight down cold war 2.0 sanctions all this stuff and

the keyword is sanctions you can sanction another currency right you can say you can't convert dollars to such and such tougher to do with bitcoin because it's not controlled by a nation state so how do you sanction a non-nation state i haven't figured out how to do that yet that's why they keep yelling at it it's like you know old man yells at bitcoin so so it's interesting that you say it this way because there's this book um it is called the raven of zurich and uh It's this guy, Felix Somari, and I'll just read you kind of the first couple of sentences from the summary, which is Felix Somari, known in his lifetime as the Raven of Zurich for his dire but accurate predictions of the future, led a life of action as banker, social thinker, diplomat, and relentless battler for the integrity of currencies as the key to democratic survival. Now, this guy was around, you know, call it 20s, 30s, et cetera. The book is impossible to find.

It took me six months to find it. and uh it's not illuminating in like uh he is writing to tell specific lessons it's a memoir right but you can pull lessons out of it and one of the big things is he doesn't believe in nationalism because he says like that's like a mind virus basically that that makes a nation sick and they make ill uh ill-guided decisions out of patriotism not you know uh economics but But more importantly, he essentially says, look, the reason why I understood tops and bottoms and market cycles and all this stuff is because I understood currencies. And I could tell you the future of a country was determined by the quality of the currency. And so like, you know, back pre-internet, this was like a revolutionary idea.

This was the guy who understood it all and people would call him. They were really rich entrepreneurs, investors, even central bankers, et cetera. He was an advisor to all of them. And so when you think of that kind of overlay today, well, there's really only one currency that has, quote unquote, integrity, which is Bitcoin. And so in some weird way, it almost feels like it's not new, but also the way that we've talked about it, because everything is priced in dollars, is like number go up. But if you sit down and you basically say, look, there's currency, some of them have integrity, some of them don't. And maybe integrity also when it comes to a currency is like a spectrum, which sounds a little weird, but the U.S. currency may have more integrity than like the Boliviar, right? But still, compared to Bitcoin, everything kind of falls at its feet.

Oh, come on. Remember the phrase, right? Gold is the currency of kings. Silver is the currency of the peasants. And currency or money or dollars or whatever is the currency of slaves, which is a highly charged word, right? And we've all heard Jimmy Song talk about this, right? If you're paid in fiat, you're a slave, full stop. and and that what that means is your your wealth can be taken back from you through devaluation and absolutely uh this is right if you think about up to 15 years ago okay before the advent of this perfectly secure uh ledger that created And Eric Schmidt talks about this, and he says, what Satoshi Nakamoto gave us, Bitcoin, yes, but more importantly, the ability to have a unique asset in the digital world, right, because of triple entry accounting. And this goes back to conversations you and I used to have five, six years ago, that that innovation is why we're where we are and why we have this situation, which is, if you think about the wealthiest people in the world, the most powerful people in the world, what did they always default to?

Gold. Maybe silver, too, but gold. and yes people would would make money in their nation state but that wealth was a farewell imagine i mean i'm sure you've heard um wences casares right talk about his family in argentina they did very well they became wealthy and bang it was taken away through devaluation not once not twice, three times. So when he saw Bitcoin early, he got it immediately. I didn't grow up in Argentina. When I first saw it, I was like, it's interesting, but I don't really get it. But if you lived through that type of confiscation, you get it. And so I think

We're at this interesting crossroads where people who understand the difference between permanent wealth and temporal wealth are really flocking to the hardest money that's ever been invented. And it's a big statement. and a lot of people still don't understand what that means. They don't understand why it's such hard money and why it is this great store of it. Like someone this morning, right?

So prices fall 10% overnight because there's a bunch of manipulation in the futures market. Oh, by the way, oldest trick in the book, right? Oldest trick in the book. If you want to buy a lot of something, what do you do? do you go out and start buying it hell to the no you sell some you tell everyone how much it sucks you short it you push the price down so you can buy more at a lower price it's the oldest trick on wall street i mean i tell the story all the time dwight anderson he went to julian and said

hey june we should buy a bunch of copper here's all my analysis all stuff and june's like yeah that's that's great she's all right how much should i buy he's like no i want you to sell 50 million. And then I want you to tell the New York Times that we're selling. And I want you to tell everybody at Morgan Stanley how much it sucks. Then we'll buy after the price goes down. So this doesn't happen every day. But if you watch in the evenings or mid-afternoon, you get these ramps down. And that's people pushing the futures down. Here's the scariest part. There's a great chart that shows most of the gains in the stock market. Stock market's gone up a lot over the last five years. Most of the gains don't happen when the market's open

from 9.30 to 4 o'clock. The vast majority, and it's not quite 100%, but it's pretty close, happen overnight. All, this is crazy, all of the gains in the Bitcoin ETFs happen overnight. a hundred percent none of it's happening during the day because what's happening right before right before close the big dogs are selling naked in the futures market they're pushing the price down etfs have to buy they can only trade the last minute of the day literally right etf set a price the last minute of the day then they have to go get the bitcoin overnight um or or settle it the next morning so they're pushing the price down they're marking the price at the the close and then it opens higher and they capture all that gain for themselves

and this again this is not new and it's not unique to the bitcoin etfs watch most big stocks they kind of go back and forth and back forth during the day and then they gap open the next day or they gap down it all of the and that's just futures create uh irrational not irrational they create manipulatable markets right if all there was was spot bitcoin and you and i right if i wanted to sell you a bitcoin i actually had to have a bitcoin but that's not the case anymore with futures if i want to sell you a bitcoin all i have to do is write you a contract and as long as i go get a bitcoin before that contract settles we're good but if we cancel the contract before i have to go find a physical bitcoin and this is so what's happening yesterday evening two days ago

a couple days ago actually last friday you know when when michael and i won't say michael's doing this but he knows he's got to buy a bunch of bitcoin because he just issued a bunch of debt to go buy bitcoin would you rather buy at high prices low prices low prices i actually think it's black rock right they have to buy lots of bitcoin and you do follow um what's a c15 capital it's a thing on a guy on twitter i think it's a guy maybe it's a girl um i think it's called c15 anyway i should i should give the person credit but they started tracking these hundred wallets that were kind of new right before the ETF launch. And there's this one, he calls him Mr. 100. And again, I don't know if it's a guy or a gal, but Mr. 100,

who every day is buying. He regards, and this morning he said he bought into the dip last night. Well, of course, my belief that's somebody related to, it's probably not Larry himself, but somebody related to the BlackRock network. And if you knew that you had 10-ish billion of demand for your new Bitcoin ETF, you don't know where you're going to find that because there's not that much circulating supply ready to trade. So what would you do? Before the launch, because you knew when the launch was going to happen, they knew, you would go accumulate a bunch so you could sell it to yourself. And I think that's what's happening. So as these ETFs continue to perform well, there's going to be tons of excitement,

and or pressure on regulators to do all the altcoins? Do you think those will get approved? That's a very complex topic. My immediate answer is no. And why do I think that? Is I don't think the regulators would have approved the Bitcoin ETF if it weren't for the courts, right, forcing Gensler's hand.

Now, the flip side of that is I do think the person who's making that decision is BlackRock, not really Gensler or anybody else. I actually believe that. And look, I was wrong about this. I thought literally they were going to approve only BlackRock, right? I thought they were going to tell everybody else to pound sand and they were going to prove BlackRock and let them. So I think it's great that they approved all the others and, you know,

full disclosure, we own pieces, you know, because you and I invested with Jason in, in a piece of two of the companies that, that have, you know, part of the newborn nine. So that's exciting, but there's, there's no impetus for the SEC to go further because they haven't been forced. Now, the flip side of that is if BlackRock says, this ETH thing looks big, I can make a lot of money,

so I want that one. That one could happen. When you start getting down below that, I just don't know that the market caps are big enough for those other people to care. And that's, I think, how those decisions get made. And if BlackRock decides they want it, then it will happen. Because remember, Winklevoss twins created the idea for the ETF 11 years ago.

11 years ago. My mind is blown. And they said no. And then other people tried. You know, 21 shares and Bitwise and, you know, all these people tried. No, no, no, no, no, no, no. last june blackrock says all right we're in boom six months later i mean it didn't even take that long so i mean in regulatory i mean it's a long time in in life but not in regulatory time but

i i don't know i i don't it's kind of like why the sec has said everything's a security except Bitcoin and Ethereum, pretty much. But they haven't really enforced broadly. They very selectively enforced. I find it hilarious, right? Of all the ICO scams, of which there were many, they enforced against Kim Kardashian. That was it.

I'm like, okay, that seems like engagement farming. And then of all the NFTs, I mean, there are thousands of NFTs, right? They go after Mila Kunis or whatever her name is. Engagement farming. So I don't think there is a blanket, and they don't have enough. That's part of it. They don't have enough resources to enforce against everybody.

So it's possible the Ethereum ETF could get approved because it's big enough at $360 or $380 billion. I'm not sure what the market cap is now. Maybe it's $400, but that one's big enough. The other ones I just don't think are big enough to matter. What do you think about like the meme coins and the like long tail? Forget like an ETF, but just like in general. I've had a couple of people on the podcast recently. One of those couple people.

So like Arthur Hayes and Alex Thorne, both. It's like Bitcoin and meme coins like that is the market now. And Alex had a great point. He said, look, the middle ground. You don't hear people talking about innovation in DeFi or in infrastructure. or kind of, you know, a bunch of the narratives that I think people were like, okay, I get it. Like there's Bitcoin. And then like the natural extension is now you're going to go build a bunch of this infrastructure. It doesn't mean it's not happening. It's just that the conversation

and the narrative at the moment is very much like there's Bitcoin, the ETFs are helping that, et cetera. And then it's like full blown barbell other side, like everything is completely untethered to any reality. And it's like gambling. Right. And you see Travis Klain talking about the like financial nihilism and, and just like those two worlds seem so different than each other, but also it's coming from the same industry of like the most immense defendable value. And then like, let's go put a thousand dollars in, you know, some misspelled politicians name coin and hope that I wake up tomorrow and it's worth 300,000. Look, it's, it's, it's the oldest tale in the world right whenever there's money involved there will be speculation right and you

know there's there's a reason the wolf of wall street movie exists right that they used to pump and dump penny stocks to people and they were called boiler rooms in the 1920s literally because they were like in the back room with the boiler of the building because the respectable people you know dealing with real clients would never talk to these people but there will always be people who want to get rich quick always and whether it's selling them snake oil like literally putting water in a bottle and labeling it with a thing and you know going around on your horse-drawn carriage and selling people stuff to you know trade and wampum i mean that's that's been around for hundreds, probably thousands of years.

It just keeps increasing both in speed and scope because of communication. And you said this to me and it helped change my, you know, by the way, I need to thank you publicly, right? I mean, you changed my life and, and the power of podcasting, right? You have this great podcast, but, but you and I really, I mean, we met because of a deal but we really met and really started talking about forming more Greek digital because of Patrick O'Shaughnessy's podcast right which I think was like the shortest podcast you've ever done it was only like 26 minutes and but I remember listening to that going that sounds

like something I would say that sounds like something I did say wait a minute I need to meet this guy so that podcast changed my life so you know podcasting is pretty powerful but But you also changed my view the other day in that I've been railing against meme coins since they started. Because I'm like, this is stupid, right? This is literally Ponzi. So Mark Cuban and Elon Musk start this thing, and he puts it on his thing, and everybody buys it. Y'all do realize the moment those two guys leave, the price goes to zero, and it's last person out. is stuck with the biggest losses but they're going to make a ton of money

and but look in the period until the rug is pulled real money can be made now it's only real if you convert it back into something that you can spend right or or if if the technology is utilized in a way that has value. So I'll give you an example. So Doge, which I never really got, right? There was a guy who bought Parler. So, you know, the alt-right kind of Twitter version thing. And he said, you know what?

I'm going to make Doge the thing that you can tip people with inside Parler. Like, okay, if that happens, capital I, capital F, if that happens then i gotta say that all right doge has some utility never happened so i right now it's literally number go up people want to buy it but you got two big whales maybe there's more than two but you got two big whales that if they ever sell y'all are in big trouble so but you said here's one here's one part of it that i think is interesting uh doge right now has a 23 billion dollar market cap right is doge the most successful video game that's been created in the last 15 years yeah yeah well you said it you said it's it's it's monetizing attention and i thought i

thought that that that's just exactly right and so yes because what what you've done and actually i'll i'll push back because i actually don't know what the market cap of niantic is the pokemon probably is the most i think the value of pokemon broadly is like 100 billion um but that's more than just niantic i mean yeah niantic it says nine billion nine billion dollar evaluation in november 2021 niantic yeah so so doge would be would be bigger but but i've given niantic probably you know eight and a half no i'm just kidding around um a bunch of of their market cap because because my son got me playing that silly game with him during lockdown. But it's amazing because they own everything, right?

And this is the beauty of read, write, own. And I've been shilling Chris Dixon's book, and everyone needs to read it. And it's amazing that, you know, Web 1 offline information, Yeah, you can get it, but it was just Encyclopedia Britannica up on the internet, Wikipedia. Okay, great. Web two, okay, now we're talking read, write, interact, but you post your picture on Facebook and they get paid. What the hell is that?

Or I play a game and I pay them real money. I convert fiat into, and I own these little things, but I don't own them. I can use them and I can play with them, but I don't own them. in web three now we collectively the users can own and so in the web two world doge to your point is this successful game that people can convert now the difference is it's not a single company that owns that 23 billion it's all the players but the question is how much is it actually if you converted it right if everybody wanted to sell and convert back to fiat how much would it be worth not 23 billion how fast would it fall i

don't know um and so i do think that pepe you know jason's project uh i don't know if he was the originator but he's he's he's big into pepe and uh even had a cake with a frog face on maybe although you know what jason i never know what's real and what's not i i assume he had that cake and it was real but uh sometimes i don't i don't know but uh three billion bucks i mean from nothing how fast would it go back to nothing if everybody wanted to sell i don't know yeah well i i think uh i'm not gonna buy doge right but i also don't play video games so it's kind of like you know some people are super excited about that some people aren't um and then i also think there's this like uh this whole trend of rage buying which um is uh if you almost

think about um occupy wall street there was rage right people showed up in zuccotti park and they they wanted to protest and all this stuff the same way that we went from the physical world like protesting wall street uh or i'm sorry uh bank runs and people would get in line to take their money out now we saw a silicon valley bank people just go on their computer a couple clicks bam they take their money out like the speed at which these things can happen in a digital world i think that zuccotti park is now digitally like in crypto and people are rage buying they're literally saying i know you think this is stupid but that's why me and all these other people are going to prove to you that it that we can make money doing the thing you think is stupid

Amen. I think it's a great analogy. And look, Dumb Money, one of the best movies I've seen in the last 10 years. I loved it. I mean, it's not as good as Maverick, but it was a great movie. And look, he's such a great writer, Ben Messer. I mean, and Bitcoin Billionaires is a great book. But this is a great movie. And it's exactly as you described. it was a movement is is a movement still going it's a movement and there's a there is someone talked about this that i think is really interesting they said the boomers and i'm a boomer right and all my brethren and sistren have controlled the last 50 years they control the government they control all the decisions they made these entitlements what's an entitlement It's a promise you make to yourself that you don't fund and you ask your kids to pay for. Awesome. It's great.

I'm going to pay myself all this money. I'm not going to actually put any money aside, but my kids will pay for it. Okay, great. So price of houses went up. Price of stocks went up. Well, did they? Actually, I love the chart that shows S&P up 5,000 times. but after inflation it's like 500 because it's money illusion the money just got worse and worse

and worse right when i was growing up a candy bar cost a quarter now it's like three dollars i mean crazy stuff gallon of gas 33 cents now it's four dollars and 33 cents same gallon of gas that's money illusion but now the zoom not the zoomers the millennials and and the the gen xers and gen y created this thing and now they're extracting the wealth back from the boomers who ruined it right you can't buy a house you've been tweeting about this right the average person can't buy a house my daughter and son-in-law in here in chapel hill they moved back they can't buy a house it's just ridiculous and all of that wealth was concentrated in this very small number of people and it's like vanguard vanguard says you can't buy the bitcoin etfs and all the people on online

oh you know leave vanguard and they they suck and and vanguard is like yeah you keep yapping because actually i don't care about you because you don't have any money i care about all the boomers who don't want us okay stock bond cash very buttoned up wear the tie they have all the money now but here's the joke all of us boomers every single one of us you know are going to pass and that 37 trillion dollars is going to y'all right it's going to that generation and so this i do think it's a movement i do think it's hey we're going to show them but three billion that's like it's like four and a half minutes of nvidia stock which is in everybody's 401k, which is making them have the ability to, in theory, retire,

although the average 401k balance isn't enough to retire on. But anyway, I agree that there is this shift. And now we got the boomer wrapper, the ETFs, so that the boomers can buy this thing that they're never going to get a ledger. They're never going to hold their own keys. well then they don't own bitcoin tell my dad that he doesn't own bitcoin that's just he owns he thinks he owns bitcoin he doesn't give a shit what you tell him he thinks he owns bitcoin so he's happy i have three minutes left what is the thing you're most looking forward to over the next six months oh that's a good question um the thing i'm most looking forward to is is a vacation with with the family. But in the investing world, I'm most looking forward to the realization by

the people that I hang out with the most, the institutions, that everything we've been talking about for the last five years, that this is technology, that this is an evolution of technology that that blockchains are a new computing platform that that what we're talking about is right and real because what i've endured over the last three four years is people saying ponzi scheme don't talk to me about this you've lost your mind go back and do your job and i kind of think we're on the precipice so i think inside the next six months the average person, the light bulb is going to go on and they're going to say, oh, yeah, I get it. I understand that this new technology is a really good thing. So I'm probably looking forward to

that the most. I think that's a great place to end it. Where can we send people to find you online or find out more about Morgan Creek? So I'm easy at Mark Yusko on Twitter, which I'll never call X, by the way. We did just start a new Digital Currents weekly roundup podcast. If you want to watch something just to not to go deep, but to go kind of what's going on during the week. So at Digital Currents and Morgan Creek Capital and Morgan Creek Digital are easy to find. All right. We'll do it again in the future, my friend. Thank you. Always great to be together.