The Wolf Of All Streets - Bitcoin To Go Up By 100% A Year & The Real Reason Why BlackRock Invests In Bitcoin | Preston Pysh

Episode Date: August 6, 2023

I have finally had a chance to have Preston Pysh as my guest on a podcast, and I can’t be more excited for you guys, because this is truly one of the best conversations I have ever had! BlackRock’s pivot to Bitcoin, El Salvador, MicroStrategy, Worldcoin, and much more - you will understand what really is going on in crypto and why Preston is so bullish on Bitcoin. Preston Pysh: https://twitter.com/PrestonPysh  ►► OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!  👉 https://www.okx.com/join/SCOTTMELKER ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #trading  Timestamps: 0:00 Intro 1:07 Is BlackRock good for crypto? 11:10 Lightning Network 14:20 Money is broke 16:50 Building on Bitcoin vs other blockchains 22:22 The El Salvador experiment 23:25 Bitcoin to go up by 100% a year 28:00 Who can understand Bitcoin and who can’t 31:50 Bitcoin to dematerialize the need for gold 36:30 Worldcoin 42:30 Clownworld 44:40 Why Bitcoin pivoted on Bitcoin 48:40 Why no one followed MicroStrategy & El Salvador? 54:10 Wrap up The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

We should expect Clown World to continue to peak out. We're not at peak Clown World yet. Bitcoin is going to dematerialize the need for gold. That Bitcoin is going to keep going up by like 100% a year, which I do. I buy into that idea. You and me both. They're going to be crying for it, but now they're going to aggressively start to win the game. I started this incredible conversation with a simple question, which was effectively, should we actually be cheering BlackRock coming into Bitcoin? Or is this effectively the evil empire from Star Wars coming to take over our beloved asset class?

That sparked an incredible conversation with one of the greatest thinkers in the Bitcoin space, Preston Pysh. You guys have to listen to it. We talked about WorldCoin, Bitcoin, El Salvador, MicroStrategy, and a number of other topics. The guy has just incredible perspective. I can't wait for you guys to listen. There's something I specifically wanted to ask you about, which is, should we be cheering BlackRock or should we be appalled that BlackRock is coming into Bitcoin? You know, I look at it as any exchange that's come along to date as far as their interaction and how much they're custodying.

And, you know, the lesson is really simple. If you rehypothecate, I don't care who you are. It could be the small guy from, you know, eight years ago. It could be the FTX that just recently happened, or it can be BlackRock that people think, you know, they got 12 trillion of assets under management. It could never, ever, no matter what happened to them. It can and it may. And people just need to realize that they're dealing with something that is truly immutable. It doesn't matter which government entity you bring or which step we get higher on in this timeline. It can still happen to any entity. So that's the word of caution. I think a lot of people

that are concerned, I think it's totally warranted. I think it's healthy to debate it and talk about it. I was up in Nashville and I was having a conversation and David Bailey was there and he brought up an interesting kind of spin to a threat that BlackRock could potentially have. So BlackRock has so much assets under management. What if they went in and started trying to take a controlling share of equity of all these mining, because you have so much mining happening in the US. What if they come in and they start just literally owning all of this publicly traded equity around mining companies, and then try to jam down the throat of all these mining companies to start censoring blocks or to, let's say they forked the code and they're trying to

move to whatever, right? All these mining companies are then mining that chain. So there could be a threat there, right? I personally think that one of the things we've learned over the last decade with Bitcoin is that once entities start taking a position and start participating, they quickly come to the realization, hey, it's just easier to participate. We're much more financially incentivized to participate and to not try to do nefarious things and bang our head against the wall. And I think BlackRock is going to be no different. Now, their agenda may be different. You got government commingling that happens with these really large financial banks. So maybe this is a little bit different. And I don't think I'm giving you a straight answer to is it good or is it bad? But I guess what I'm really trying to do is just kind

of define it around all the different arguments that people can make. I don't know which one is the most valid or which one we should be concerned with. I will say this. I think in the short term, it could be extremely bullish to the price action. Yes. I was going to agree. I was going to say it's good for price, I think, would be the consensus. Although that could also surprise us.

We've seen many cases where we think something will be, quote unquote, bullish for price. up being a being a sell the news event i i don't think that's the case here and i think it's good for it's so true by the way mainstream adoption right i mean it's good to bring in more people the question then becomes are they coming in for the right reason and are they going to come in through the right path as you said my hope would be that blackrock introduces them much like many other things have and then then a year later, they understand they need to go further down the self-custody rabbit hole that you somewhat described at the beginning. And they end up holding their own assets and their own keys. I find it funny when people view a BlackRock, certain politicians, even anyone who was largely hated

by this community, all they have to do is say the word Bitcoin or like buy one. And all of a sudden we love them. And BlackRock is the leader of ESG in the world, which is something that Bitcoiners have been railing against endlessly. But now BlackRock maybe is the good guy.

So I don't know if it's cognitive dissonance, if we're just looking for allies. It's just, it is a very interesting situation. I don't think there is the good guy. So I don't know if it's cognitive dissonance, if we're just looking for allies. It's just, it is a very interesting situation. I don't think there is a simple answer. Yeah, I think a lot of people have felt the pain of the price action over the last year and a half. It has just been a brutal ride. And I mean, we've had nearly 100%

since the start of the year, which has been amazing. But for people that were maybe buying at that top that we saw, close to 70,000 or wherever it was at, I think a lot of those people that were buying at prices that are higher than right now are really wanting to see some type of big event that gets them back in the green from where they maybe were originally buying. And so they're quick to just latch on to this is good. This is going to pump my bags.

And therefore, I like BlackRock. And I think people that have been around for quite a while and are really kind of knowing the monster that we're kind of up against here, look at BlackRock for what they are. And I mean, they are a absolute powerhouse, incumbent, financial, the biggest, completely co-mingled with government. Executive branch, legislative branch, judicial branch, BlackRock. You need to be very cautious,

concerned with being excited about this entity, right? Like very concerned. So yeah, I would just put it that way. One of the things that I think is an interesting topic to kind of like just bounce around is just so you have lightning and you need Bitcoin holders to open these channels. So if we warp ourself 5 to 10, 15 years into the future, and you're now having Bitcoin used for AI, immediate settlement, micropayments, all this kind of stuff, you're going to need a lot of these channels to be opened up. And if you have a lot of self-custody Bitcoin in some of these ETF vehicles, now you're

going to get into this really interesting dynamic where you've got this custodian who's supposed to be one-to-one matching all this spot Bitcoin, but you're going to also have these people that own the shares and they're going to be wanting some type of yield kickoff because they're going to be seeing people that actually have self-custody to their Bitcoin, their opening channels, they're getting fees for routing and things like that. And so you might have this really interesting dynamic where you start to get ETFs that are competing because some are producing some type of fee by loading bitcoin into channels for this what i would suspect would be a massive amount of demand for something that has no fees that immediately settles like that's where i

think a lot of this is going and it's just it's something i think important to think about right now and what that means um with all these coins that are going to be potentially custodied inside of ETF vehicles. Yeah, I never considered that the coins being custody inside the ETF vehicle could theoretically be used as nodes or to power lightning or assist the network. I figured that especially with what we've seen with Prime Trust and FTX and all the custodians of the crypto space that we would probably see regulation that would require very strict one-to-one held, not touched, not utilized. But it's a really interesting concept. I hadn't thought about it at all. Well, and what's interesting is, let's say Coinbase, you name it, whoever custodian, they're still sitting on those keys for all of those coins.

So it's not like they're lending them out. You're not lending them out when they're in a channel. You still control the private keys for those coins, even though you're opening a channel to another node. So there's a situation where definitions that we're used to in finance really don't apply here because the technology is something that we've never seen before. So there really needs to be some conversation. I think there needs to be conversation now as to what that is, what is quote unquote right for customers or what's safe. I think the hardcore people would just be like, well, if people can't read a prospectus and realize what's actually happening, well, that's their problem because they didn't

self-custody and they trusted somebody else and they didn't know what was actually happening. And get the legal people and the SEC and everything as far removed as possible. And then you have others that would obviously argue a more regulatory, take care of the common person who can't understand all that side of it. So I'm not arguing one way or the other. I'm just, again, just trying to define it for folks. It makes a lot of sense. And it sort of circles back to the idea that is perpetual in Bitcoin is that we need to do a much better job of educating people. Because I guarantee if you take that very idea to a BlackRock or a large financial institution, or you start talking to legislators and regulators about it, 99% of them are going to think you're speaking a foreign language.

Yeah. Well, they're not even going to... The concept of, I'm still... Because I still have custody of this thing, but yet it's being used. How is that even possible? There's no way that's possible, right? But it's real. And that's how it works for anybody that actually runs their own node and actually opens their own channels and watch the coins get routed around on these abacuses. That's how it works. It's pretty crazy. That's the world we're moving

to. Yeah, it certainly is. Do you think that Lightning can scale to mass adoption? I guess I would ask as is or the path that it's heading on that it could actually get there. Because I think we know that Lightning is efficient, it's cheap, it's fast, but to some degree, you can't move huge amounts on it righthko Yeah. I definitely think it can. It may not mature in a way that some Bitcoiners would like to see it mature. And what I mean by that is, so we truly have, I think, decentralized layer one. If you want to self-custody, it's pretty straightforward to do it. I think it is. For a person who truly wants to take self-custody, they can do it. When you get into layer two, you get into a situation where I think it's technically much more difficult for a novice or a person off the street to actually self-custody and use layer two in a way that they're running

their own node and they're opening channels and all that. I think you're jumping to a technical hurdle that is going to force a lot of your everyday person. If you took 100 people, 95 to 99 of them are going to just go to a turnkey solution and say, just solve all that for me. I don't want to have to do all that technical stuff. So I think it scales. I don't think it has any issue scaling. It's just for a person who says, well, everybody's got to be self-custodying. We can't move the ball forward unless on layer two, everybody's still using a self-custody solution. I think that it may not play out the way that a lot of

Bitcoiners may want it to. Now, if I was going to argue in a direction with myself, with what I just proposed, things like FETI and some other technologies with Fetamance is a way in which people are much more taking control of self-custody, a solution on layer two without trusting a custodial BlackRock or big bank that is offering these services, these immediate settlement services and wallets or wallet of Satoshi. It doesn't even have to be a big bank. It's just some type of central entity that's managing all this backend stuff in the keys, Fetty kind of offers an alternate solution for that that's much more turnkey, like way more turnkey, but not fully there with respect to running your own node

and opening your own channels. So yes, I think it scales, but it might not be in a manner that your hardcore Bitcoin maximalists would really prefer. But that's where we're at, right? That's the technical solution. That's kind of where we're at with a lot of things regarding Bitcoin, right? I mean, there's never consensus in the community. I think most things don't happen the way that a certain side of that community wants it to. But I think that they also vehemently defend

the protocol and the asset class, which is extremely important. And they've been there from day one doing so. So I get it. This is the thing that I would say with all of that. Right. We have a massive, major, unprecedented global issue right now. And it's the money's broke because there's no peg. And I would argue there's no way for all these countries around the world to come to some type of agreement to set a peg where they would trust each other as to not debasing against it or doing underhanded things. No country trusts any other country in the world right now. They're incentivized to cheat. I mean, let's be honest.

Right. Even if you got all the NATO and all the BRICS nations together and said, we're going to do this gold, none of them would buy it. None of them would believe each other and so you're in a situation where something has to emerge as a peg that everybody can agree upon right and you don't need immediate settlement to solve this fundamental issue right you just don't you need immediate settlement with gold when we had a gold standard. So we know that historically to be the case.

10 minutes is plenty of time to solve this issue of the really big chunks of buying power and capital to settle. And so the reason why I guess it doesn't concern me or I don't think it's an issue that you might have these centralizing forces kind of happening on layer two is because layer one is not compromised in any kind of way. And the reason we're seeing clown world is because we need a solution for layer one, not layer two. So I think that's really super important for people to keep in context, like the really big picture, if you really zoom out, like the inherent problem that's being solved for is absolutely still solved for with all of this that we're talking about. I agree with that. And I think that that segues nicely to the idea of things now being built quite more frequently and aggressively on Bitcoin that were being built on other layers. And again, that's been controversial to some degree. Obviously, people have different opinions on meme tokens and NFTs on Bitcoin, ordinals brc20 but with the base layer solved i think we're seeing

people come to the realization that if you can build these things that are on other protocols on bitcoin it's on a much more secure ground yeah so i'm obviously not a fan of a lot of that stuff and and that's fine a i can't change the code the way it is. Nobody can. So if you don't like it, well, tough because it's already in the code base and all these things are already possible when they've been demonstrated as possible. And I'm of a firm opinion that the economic incentives of getting block space will naturally solve whatever all of that is. And if people are creating meme JPEGs or whatever, and there's a global demand for people to buy these monkey pictures or whatever it is, well then so be it. So be it. I have a lot of

faith in free and open markets and that bitcoin layer one actually represents free and open markets and if people want to keep putting these things on there and burning through millions of dollars to do it um i'm just i'm pretty confident that after a certain amount of time that's gonna that's gonna wear thin and it's gonna run out and people are gonna find that what they really want to to possess are those digital units that represent uh you know a scarce amount of digital units that represent real value now what i will say is um i'm very similar to sailor sailor's been pretty outspoken about letting layer one kind of mature and like get some tech maturation and like, hey, if we do need to work as a community to try to convince everybody that a consensus update is needed, then so

be it because of some technical situation or something that really is compromising layer one. But I think we need to be very reserved in trying to do updates just because we did this over on protocol, whatever, or we discovered we could do this over in this other thing. Because what I'm really concerned with is introducing technical risk into layer one that compromises the so what in the real problem statement, which is every country on the planet can't get around to a settlement layer that we actually agree with and the world's going mad and it's turning into clown world as a result of it. And everybody's, it's a race to the base and

treasury markets are on the cusp of total insanity. We cannot destroy the one and only thing that I think exists in the world that can actually resolve that. And so we have to proceed with extreme caution. We need adults in the room, engineers, to caution against introducing more technical risk into layer one at the expense of, well, I wanted to do this smart thing and this gee whiz thing that has nothing to do with pegging money, right? Yeah, I agree with that. I love your point about it being the free market and that block space, if it is at a premium, there's a reason for it. And if people are willing to pay for it, then they should. That's my take on it as well. I don't even see a need to make a judgment on what it's being used for, because as you said, the market will sort it out. And I believe I've

said many times Bitcoin's last free market on Earth. The only problem with that, of course, is that there are people who don't yet understand Layer 2 or Lightning who were using Bitcoin because it was relatively cheap and fast to send it to other countries. And then all of a sudden it became not so cheap and not so fast unless they wanted to pay the same premium that a millionaire printing an order for fun is willing to pay. Yeah. And I think a lot of those friction points that are going to pop up here in the coming, call it five to 10 years, is just a function of this transition that we're going through, this legacy financial system to these new rails. You're going to have actors that can come in here and just cause turbulence.

And you just have to have confidence in the market incentives that are there will naturally work itself out with time. And knee-jerk reactions are very dangerous for where we're at right now and how, in my opinion, how we're sitting in a great position with where the protocol's at and everything that's been built on layer two to solve immediate settlement.

I mean, to be able to go to El Salvador today and like, I mean, everybody knows the story of the person just like taking the picture of the QR code at a McDonald's like, hey, can somebody buy me a cheeseburger? And like within seconds, it's paid for and they have no idea where it came from. That is a massive, like unbelievable feat when we take a step back and think about transmitting value through any border immediately, all of that is just so fascinating and so important and a perfect demonstration of what is possible with this technology. Have you spent any time in El Salvador? I haven't actually been down. I haven't, but I'm going within the coming year.

Amazing. Because I'm actually really curious to see how that experiment, call it, I guess, is going because I hear such mixed reviews. And unless you're literally on the ground, I think you can't really get a sense of what it's really like. But I mean, in general, it seems like it's only a good thing, what's happening. Well, this is how I would describe it, Scott. I'll put my engineering hat on. So we have proven out as a community that all of this is possible, that we have a proof,

a demo, that it's being used in practical use, and it can scale. This can be replicated anywhere in the world with incentives that are going to match if the demand would pick up for immediate settlement services like this, that you have this incentive structure for people to open channels and all of this can scale. Where I think people are getting confused when they look at El Salvador, and I've heard those arguments, we're like, that's a failure. What's going on down there is a utter failure because it's not actually being used. And so what I would say back to that person be like, yeah, because today in its current form relative to the legacy financial system, Bitcoin is a savings technology, right? It is not something that I want to go out there if I buy into this idea that Bitcoin's going to keep going up by like 100% a year, which I do. I buy into that idea. You and me both. Because I know the debasement rate that the rest of the planet fiat currencies are going to go

through. That's why I think it's going to go up relative to those currencies. But what I think a lot of people just for whatever reason can't wrap their head around is the entire planet's expenses are denominated in those fiat currencies. They can't afford when their disposable income, if they even have any, right? What percent do you think that is, Scott, that actually has disposable income? One. One percent. If I had to guess, maybe I'm wrong, but I mean, optimistically, five. I would call it one. I agree with you, but let's just say it's 10% of if you lined up 100 global citizens off the street and you lined up 100 of them, 10 of them are actually even making money they can save. The other 90 literally have less money the next day and the day after that because they

have no disposable income. So we're going to then go to those 90 people and we're going to say, you need to be saving in this thing that has 70% annual volatility or more relative to the local currency that you got to pay all your bills in. Right? is going to say, oh yeah, I'm going to convert this money that I got to pay all these bills in, that I'm losing every single month into something that's more volatile and introduce more pain into my life by owning it. They're never going to do it. And so when you look at El Salvador and we would look at that specific country, what people actually have disposable income down there to be using this more volatile currency for payments. If they have any disposable income, they want to save in the thing that's going up by 100% relative to their local currency and not spend it? It's that simple. I've said in other interviews, Bitcoin is for net

producers. If you can actually make some type of in excess of your work and you want to save it, you want to save it in Bitcoin, right? Because you can already pay your bills at the end of the month with whatever you're retaining in local fiat to pay those expenses. You're not out there spending that stuff. So going back to my point on El Salvador is a perfect demo that once we get far enough down this path where people are now getting their bills denominated in Bitcoin because it's starting to take over because it's so obvious. It's not 100% debasement rate relative to Bitcoin. It's now 500% or 1,000% on an annualized basis because that's where this is all going, whether people like that or not. Don't want to believe it. I don't care whether you believe it. That's where

we're going. There's going to come a day where that's the case. And then businesses are going to start saying, no, pay us in Bitcoin. We don't want that fiat because it's debasing too strongly. And that's when you're going to start seeing the pickup in immediate settlement in the demand for it. And then you're going to start seeing all these people that are sitting on large swaths of Bitcoin, the net producers of the world. They're going to start loading their Bitcoin into these channels because there's going to be demand for the fees. And that's how it takes place. So the tech's there. The demand isn't. It makes sense that the demand isn't. It shouldn't be based off of how everything's denominated in the world. And the only thing that I think is

going to change that is the debasement rate against Bitcoin is going to become that much more profound. Yeah. Only wealthy people have the luxury of worrying about storing value. That's right. Net producers. Yeah. I love that. The way that you articulated it, because it's that same idea. Saylor even said that something to that effect to me in an interview. But you can't, to your point, you just can't tell a person who's living check to check who can't even make it check to check how to save or what to save. This is an important delineation between rich and net producer. So when you look at Michael,

Michael built this billion-dollar enterprise from literally nothing, from the ground up. He was the person behind the growth and the value creation of that company. When we think about somebody who just amassed a billion dollars because daddy was rich and his daddy was rich and it was handed down. Do you think that person is going to understand Bitcoin out of the gate? Of course not, because we know statistically that generational wealth never lasts more than two generations. That's right. Almost ever. There's a few families you can obviously point to that generational wealth has succeeded. I don't have the stats in front of me, but they're astounding when someone has handed something

and does not create that wealth themselves, how fast it's unappreciated and wasted. There's a massive difference between a Jeff Bezos who literally created Amazon from nothing. The guy understands how to create value in a free and open market and understanding how to try to preserve that and what inflation does against the bottom line as you're managing inventory on your balance sheet. All of these things, a real net producer understands those. A net consumer doesn't understand any of it because they're just in consumption mode or they can't outpace. They're at a break even or they just can't produce more than they consume. that when we look at the consolidation of equity and we look at the consolidation of buying power that has happened around the world through this fiat experiment, there's so many people that are sitting on huge amounts of wealth, but I wouldn't consider them net producers. I would consider them like parasites, right? They're not going to get it. They're not going to understand Bitcoin until way later in the timeline.

You know, maybe they come in at like when we're at parity with the dollar, like dollar value to Bitcoin value or whatever. They buy the top of the next cycle or the cycle after that or the cycle after that. And then they rail about how Bitcoin just stands because it's dropped from 350 to 100. Bingo. Bingo.

That will happen. Oh, yeah. Well, and it already does happen. You see all these people that are out there just like, oh, Bitcoin's the reason why all this insanity is happening. No, you got that one backwards there, you net consumer parasite. And when you zoom out and look at the price in the past without watching the price action that's in between, $30,000 Bitcoin is pretty awesome. Oh, yeah. I mean, it's going to

be such a small number relative to where this is all going. When Michael says it's going up forever, he truly means. I know it's a meme. Or everything else is going down forever, but yes. That's right. Everything is going down relative to it. And add another three zeros at the end. It's all meaningless because you can keep putting as many zeros that you want on the end of the number, and it really starts to become meaningless at a certain point. A lot of people have pointed circling back to Wall Street and BlackRock to the fact that we had this sort of, I'll call it temporary correlation with the stock market or inverse correlation to the dollar, whichever you want to view it as.

Not the case now. Very clear that Bitcoin is sort of traveling its own path once again. But a lot of people fear that with a BlackRock or a Fidelity or a Schwab or a Citadel and all these people coming in and getting involved, that it could actually squash the volatility and we would not see that upside because it's being treated or traded like other Wall Street assets. Does that concern you at all? So let me answer your question in kind of a weird way. If you told me today, Preston, you can't buy Bitcoin. You are banned from buying Bitcoin, but you can buy anything else or you can own anything else. Do you know what I would own? I would literally own the top seven

companies out of the S&P 500 is what I would buy. And I would treat that as if that was my savings technology store of value uh and so when people are looking at bitcoins performing literally just uh if people want to know why uh on my twitter account just recently i posted a chart that compares the top seven companies on the s p 500 to the s p 500. They're carrying me. I mean, this entire rally is seven companies, effectively. These seven companies, because this is another way that people can kind of think of why I would answer that way, is, and I use this monopoly example a lot, but imagine at the very end of the monopoly game

and you have this one dominant player that's winning against the other three players, And now you're introducing quantitative easing, which means they're putting money into the game to that one player. And then they basically have a bunch of cash to buy whatever remaining equity is left from the other players. Imagine that at that moment, you're this fifth person and you walk over to the game and somebody's like, all right, so if you could invest your money right now in any of these four players, which one would you pick? It's such a no-brainer that that person who's winning the game is going to not just continue to win, but now they're going to aggressively start to win the game.

Right? And that's what's happening in these quote unquote free and open markets right now. continue to win, but now they're going to aggressively start to win the game. And that's what's happening in these, quote unquote, free and open markets right now. Bond investors are going to get wiped out completely, smashed. Equity holders are going to do okay. The top equity holders are going to dominate the game because it's just getting easier and easier for them to gobble up anything that is actually producing real value or has the potential to create a lot of growth. They're just going to gobble it up on the spot. Because as you push more and more fiat into the game, you're just making it easier and easier for them to totally dominate. So I guess that's how I would answer the question is, I think you're going to continue to see a lot of correlation between the top seven companies in the S&P 500 and Bitcoin. But Bitcoin is still going to dominate relative to those top seven companies.

Bitcoin is going to dominate those top seven companies. I agree. I think there's two things that I take from that. One is that I'm a little, I'm not going to say I'm surprised because I would give probably the same answer as an investor, not as a maximalist or not because of a deep seated passion for an asset, but a lot of people who are Bitcoiners would have answered gold or real estate, some sort of hard asset. I think Bitcoin is going to dematerialize the need for gold. I think so too. I think Michael shared that. Yeah.

Similar to like, so Lynn Alden has talked about this a little bit where silver has really been kind of dematerialized as far as its use as a money, as a layer two kind of money. And the same way that that's happened to silver, because when you look at the multiple for silver over the last 100 years, it has just fallen off a cliff. I think you're going to see the same thing happen with gold through the coming 10 years, where whatever monetary premium is being placed on gold, I think you're going to see the same thing happen with gold through the coming 10 years, where whatever monetary premium is being placed on gold, I think you're going to see it wither away. And you're definitely going to see it wither away relative to these top seven companies on the S&P. Yeah, I've seen people make the argument that gold demonetized silver,

and now Bitcoin is effectively going to demonetize gold in the exact same way, which is what you're describing. The second thing that I took from what you just described, that process, that monopoly game, I mean, that also, looking back, describes how we've ended up with such a massive wealth gap in the country in the first place. Totally. Totally. And where a lot of this really starts to accelerate from where we're at right now into call it the next five to 10 years, is you're going to start to see the public demand UBI. They're going to be crying for it. And as the government supplies it into their hands, you're just going to see all of this accelerate. It's all going to really... Whatever we saw with QE being the tool that was

just exercised over and over again for the last decade, you're going to see the implementation of both UBI combined with QE, which is then going to turn to yield curve control, is just going to whatever you saw through that, it's going to be twice or three times or four times as fast once you start doing what the public is going to start crying for, which is UBI. It'll be really interesting to see how easy that is with a central bank digital currency, if that happens. We actually are seeing quite a bit of talk about UBI

and the technology to allow it. You're basically talking about quantitative easing for the individual, right? Just send it directly to the person to simulate the economy. But we've got talk of central bank digital currencies where they could literally airdrop your stimulus right into your wallet. But B, the hot topic this week is WorldCoin, right? And they're saying, scan your iris, we'll drop you a coin that we can't tell you the use case for yet. I don't know if you've actually read it on the terms and service of the site, but it's relatively astounding.

And that will eventually be used for UBI. It's literally listed as one of the use cases would be UBI. And when you read, what is WorldCoin good for? It says it gives you governance over WorldCoin so you can get a vote on the future use case of it. It could be a payment method. It could be, and they don't, it's not even defined yet. Give me your take on world coin.

The money, so world coin equals money of net consumers, right? It will become the money of choice for net consumers. Bitcoin will become the money of choice for net producers. And so what this is leading to is this battle between people who can't produce more than they consume, insisting that they pay for goods and services from the net producers. And the net producers are going to say, we don't take that here. That's where this is all leading to. And you're going to see WorldCoin probably, I suspect it's going to be more popular than Bitcoiners think or realize. But it doesn't really matter because the people who are going to want WorldCoin are the net consumers or the people that are not adding value, net value to the society. And it's going to be interesting to see how the governments kind of like latch on to this WorldCoin thing. Hopefully they don't.

And hopefully it's way worse than I guess where I'm expecting some of it to go um with its adoption and that it just turns into like any other shit coin it just like withers away that's what i'm hoping happens but i guess i'm taking it i'm taking it i'm taking it seriously you have to take it seriously yeah i think i mean the people behind it you have to take very seriously that they're very serious about it and whether it in its current form could proliferate and become that popular. If governments decide that this is the asset that they will use for this process, that could be very scary. Why create this CBDC in our own country if we can utilize a world coin. Yeah. You're going to find that all the BRICS nations will not even entertain world coin. Because think about it. If we're going to break it down by nation states,

the net producers of the world, those countries, they're going to look at them like, not only no, but hell no. Your net consuming nation states is where this is going to be most popular. Because it's free money. Because it's a handout. And it's this fake, you don't have to do anything. You just get it. How in the world is anybody... Yeah, you have to do something.

You have to scan your eye and give them your biometric data. What I find hilarious is that they've pitched it. And I didn't intend to even talk about world coin, by the way. Yeah, it's an interesting topic. But they pitch it as for every person of every race of every financial level in the world. And then it says not available to American citizens, people in any country banned by the EU, the United States, North Korea, Iran, you know, right? And so you already just knocked out a few billion people, even just for regulatory reasons and in countries where they're just not going to allow it anyways. In the United States, they're going to want to scan your orb and not give you the coin. I mean, scan your eyeball with the orb and not give you the coin. I think they're doing that exact thing here in the state. And I

think the only reason it hasn't rolled out here is just because the regulatory ambiguity that Sam doesn't want to deal with. But if there was some type of regulatory clarity there, you better believe they'd be rolling that thing out right now here in the states as far as issuing these tokens. So yeah, I find the whole thing to be very concerning. I think it's something that people need to take serious. I think it definitely fails in the end because nobody's going to want to accept something that can just be handed out. There's no proof of work behind the units. And that's going to lead to failure. Already trading at 21 times the valuation that the VC is invested in it at as well. I found it really interesting when I started to dig in. I don't know what it is currently today,

but the day after it launched, it hit a $28 billion fully diluted valuation. It was at 21 at one point. I mean, you're pushing on... That was higher for a moment than OpenAI and ChatGPT, Sam Altman's other company. That was the fastest company in history for adoption. And WorldCoin launches, and the day it launches, it's worth more than OpenAI. It's a scary world, man. It doesn't surprise me. We should expect Clown World to continue to peak out. We're not at peak Clown World yet, unfortunately.

I think there's plenty more Clown World to come. And so as insane as that sounds, we should expect it. And we should expect, I mean, just think about the speculation that's going to occur in these markets over something like that. You're going to have just in all the marketing that comes with that speculation, like it should all be expected. What we saw in this last bull market was maybe just an introduction to the insanity that's about to play out on the next run, right? I agree. People keep saying, we'll never see altcoins running like that. And I say, you guys don't understand humans. People are always going to look further down the risk curve for the bigger opportunity and spend their money gambling to do it. I've been there in the past. You know what I mean? I've partaken in that. I don't hide that at all. Much more

Bitcoin-focused now than I once was, obviously, even though I've always considered myself a Bitcoiner. But people are going to go absolutely insane in the next bull market when they turn the printer back on and the stimulus starts coming in. They're going to gamble the same way they have in the past. That's why every cycle is bigger than last. It's not going to stop now, in my opinion. No. Yeah, I think people need to be prepared and expect craziness. Get ready. Yeah.

We kind of talked briefly, obviously, WorldCoin can't do it in the United States because of regulation. A lot of people seem to be very fearful of the regulation that might be coming. I think that's a fair assessment. But what nobody seems to be talking about is that Bitcoin kind of comes out clean on the other side of that, in my opinion, regardless of how aggressive it gets for, quote unquote, crypto, for the exchanges, for the custodians, for protocols being deemed securities,

whether we like it or not. It seems like nobody at this point is calling bitcoin a scam or saying it's going to zero it seems that at least it's the shining sort of beacon that's made it through all of this nonsense and is now being considered a very legitimate asset i think uh going back to the blackrock piece so you have have BlackRock. It's this biggest, you know, pumper of ESG that around the world. I mean, they were like the prime person pumping all of this stuff, this ESG stuff. So the fact that they have done a 180 on that,

I think is really, really big because of how commingled they are with the US government. I can't speak to any other governments outside of like they're commingling with the US government. Why is that important? And why would BlackRock be so willing to pivot in such a massive way with bitcoin consuming so much electricity and it and it's viewed as like this uh you know it's consuming the world's electricity boiling the oceans man boiling the oceans so here's here's my you know and i might be dead wrong about this but if i'm black rock and i've got all this fixed income on my books and I can see what's brewing here,

it is a scary, scary situation for that entity as they're sitting on these just massive tranches of buying power that are literally sinking ships, trillions in sinking ships, if you see something that could possibly be a salvation to that in the form of Bitcoin that's actually truly decentralized, that some other country, some other Sam Altman business can't step in and control and change your destiny, all of a sudden that entity becomes, the BlackRock entity, becomes one of the biggest proponents of this thing called Bitcoin because it actually bails them out and saves them because they've got so much buying power tied up in fixed income, which is going to a goose egg. I find that to be an important thing to maybe wrap our heads around why maybe we're seeing that swift change and why we're seeing them maybe latch onto it because maybe they're

actually seeing it for the life preserver that it is for that asset class. I hope you're right because the critical side of me says they just see an opportunity seeing it for the life preserver that it is for that asset class. I hope you're right because the critical side of me says they just see an opportunity to make a whole lot of money. And ESG be damned because we know they don't actually care about the environment. And I think, honestly, Scott, I think that's the real reason. I don't think they view this as being a global debt jubilee, which is what my opinion is, is what's playing out. But maybe that self-interest saves them. That short-term focus of the description that you gave, I think is really what's happening. But maybe as they continue to get on the path, they actually start to see that this is the only thing that can actually save those sinking ships.

Right. It's the micro strategy path, right? And it's interesting because when Saylor first started buying Bitcoin, it kind of triggered that bull run. Then we saw Tesla obviously come in and Square. I was a bit surprised. And I know now that it's largely for accounting reasons and the way you have to do your taxes. But I was surprised that we did not see more companies following. Saylor had that February, I think he had that conference with 2000 CFOs and all of these companies were going to add Bitcoin to their balance sheet.

El Salvador, we haven't really their balance sheet. El Salvador, we haven't really seen another country follow El Salvador. Why do you think that we had that first initial burst, but we haven't seen much follow through? Michael answered this question. I think it was Hodl and Breedlove. There was a group of them that sat down with him at his house and they and i think it was hodl that asked them this exact question and michael's response was uh interesting in that he was saying you know this put a huge target on my back to do it in the in the manner that i did it and he he implied that there was other people that are buyers, but they're just not vocal and they're doing it in a much more private kind of way. The other thing that I would say, at least on the corporation front, is very few corporations these days are actually still controlled by a few people. Can't get it past the board.

Michael was in a unique position to basically unilaterally say this is what's happening. Exactly. So yeah, when you look at the shares of all these major companies, they're so distributed and decentralized from the voting to get everybody to get on board and convince the board. I had the chance to talk to some of the board members at MicroStrategy. And just talking to them, they were like, yeah, this took us... We chewed on this for quite a while to try to wrap our head around what the hell it really was and what it would mean for our company. And this is a board that I would say is really open to ideas that are out there and they're willing to put in the hard work to try to understand it. And I don't think most board members... A lot of board members just

want to show up and get their check for 250,000 for attending their meeting four times a year or whatever it is. A lot of boards are not like the MicroStrategy board, let me tell you, at least the large cap company. So I think that that has a lot to do with it, Scott. It's just wrapping your head around it and then the decentralization of the voting rights and stuff like that. Any surprises that we haven't seen more nation states? I also think El Salvador was in a unique position, much like MicroStrategyrostrategy by the way because they're a company that uh utilized the us dollar as their currency and did not have the fear or the threat of their currency being devalued or attacked by the united states as a result of doing this so they were one of the few countries i would say

they could take that risk because they are dollarized. Preston Pyshko Yeah, I totally agree. And here's what's so exciting about it, though, is MicroStrategy in particular has done it in such an illustrative way. It wasn't like they put 10% of their marketable securities into Bitcoin on their balance sheet, because that would really kind of mask the true performance, right? They like pushed all the chips in. They're like, here's a demonstration on what happens if you put any of this on your balance sheet, right?

And I can only imagine on the next bull market, what's going to happen to the enterprise value of MicroStrategy from the day they took a Bitcoin position to whatever that date is in the future, because it's going to be so unbelievable. And then on the El Salvador side, it's not as illustrative of an example as the corporate one that Michael's putting on full display. But you're seeing countries like El Salvador that are so, and Alex Gladstein's book is a must read, they're so penalized and just handicapped by the World Bank and IMF structure. economies are truly franken economies because of this monocrop agenda that comes out of that conglomeration, NGO, whatever you want to call it, that they're going to see El Salvador really kind of taking on this path where they have their own sovereignty. They can stand up to these what seem to be insurmountable institutions. And they're going to put on full display to all these other countries like them to start to adopt this as a legal tender currency inside of their nation states.

Yeah, I mean, I remember when Argentina even floated the idea and the IMF basically said no loan if you say Bitcoin again. So it is insurmountable odds for most of these countries. It's truly the signal in all of the noise in the world is their response to little El Salvador that if you say the word Bitcoin, like, I mean, you can't get a higher signal situation than that right there. Well, I got to say, say man that was an amazing conversation and after you go to el salvador you promise you'll come back and tell me how it was hell yeah man yeah i would love to i'd love i really want to have that conversation i've had it a couple times with people sort of superficially but i haven't really gotten someone that i know and you know really respects uh take on what's happening down there. Where can people check you out and listen, of course, to your show?

Yeah, so I have a podcast. We study billionaires as the feed. We cover a lot of traditional markets, but I cover Bitcoin specifically every Wednesday. I'm active on Twitter. I'm definitely active on Nostr. I'm trying to use Nostr more often. But yeah, that's where you can find me.

And Scott, always a pleasure chatting with you absolutely incredible conversation you uh you you revitalized me after a very long day which is a hard thing to do so i i appreciate it man i hope we can catch up again uh soon in person absolutely Let's go.