The Wolf Of All Streets - DEBATE: Crypto Skeptic vs Crypto | TradFi vs Crypto | Crypto Town Hall

Episode Date: November 29, 2023

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Yeah, Scott. Yo, yo. Pretend I'm not here, yeah? I'm not going to be talking. I'm not going to be co-hosting a space where we're talking about Epstein, just to be clear. Whatever, man. I know nothing like you. I'm trying to get my AirPods to work.

They're not working great. Do I still sound all right? You sound fine. So please tell us everything about Epstein. I have no opinion, no comment. I hear he had an island. I hear something. How did he come into crypto?

I'm sure through very reasonable and randy you there i'm here bro how are you sir yeah good good scott just dropped out so scott decided today we're going to talk about epstein and crypto not sure how you don't know the story something to do with cco and epstein that's story for today. It must be a dry news day. Well, Scott is bored. But what did you talk about in your show? It was a boring, dry news day. I mean, we spoke about,

I showed them how to turn $13,000 into $600,000 and how they can do the same. Quite a high-risk strategy, but I mean, I demoed the strategy. I mean, we looked at the market as I said, we're still looking for a bit of a correction here. Yeah, I mean,

that's pretty much Coinbase and how Coinbase has been flying. On the correction, what would change your, we tried to ask you this yesterday before you jumped off, what would change your position? How important is a 38K nothing nothing would change even if we break 38k and go up to what past 40k yes there's when you know you can't have a market that just goes up forever

and if i look at all the previous uh pool runs we've never had more than two we've never had more than 202 days without a correction and we're in 145 days we're at the top end we're starting to get into the top end of correction territory so look every every bull market must have a correction and i just think that we we just have to it's been too good for too long and uh i must i still think we're still in a raging bull market don't get me wrong i just think that raging bull markets need corrections yeah i think it's just important to be really clear about time frames red right i mean to you know you could say i think for an investor there's no reason to think about starting to like selling anything in mass right now if you're aggressively trading yeah if you're talking

about you're talking about selling to buy lower which is a very risky proposition for people who don't know what they're doing but but the correct one for traders potentially. Correct. So I'm just saying, if you're looking to buy now, I don't know if it's the best time to buy. If you're trading, I would take profits on all the stuff that's not part of your core portfolio. You've got some great opportunities to take profits.

I would take those profits and live to fight another day. Yeah. those profits and live to fight another day. Yeah, Bitcoin hasn't really been giving the dips in classic Bitcoin, in classic Bitcoin bull market style, right? I think all coins they do, right? They get the retracement when Bitcoin moves. But man, Bitcoin, if you've been waiting to buy, it always seems to be that your bids are probably 1,000 or 2,000 lower than wherever the bounce comes.

Just classic Bitcoin where the, I think max pain has been the sidelines, you know, on this run up. Yes. But I think, yeah, Scott,

as I said, I've been here before. I know that this is a long-term game and I know that a lot of people actually land up losing money in a lot of people actually land up losing money in a, in a bull market because, because of these dips and because they get caught off guard in dips. And I'd rather be prudent. And that's exactly what I'm doing.

Right. I agree with that. I'm closing all my frothy positions. Yeah. And I think, you know, A, that's a result of leverage, right? It's like if you get wiped out, you don't live to play another day and i think b is because a lot of people just buy that the last big red candle and then they uh sell after the 30 or 40 percent dip only to see that coin drop another two or three x from where

they bought correct correct correct i don't i don't want to play that game. I've done that a million times. I don't want to play that game. I saw your tweet the other day, maybe four or five days ago, where you basically outlined all the sort of positions you had accumulated really at the bottom and how you've been fully deployed. Now you're saying hopefully this is the first market where you've nailed it.

I think that you may have. Yeah, look, you've got to nail it on the top and on the bottom so i think i did nail the bottom or close enough which is surprising because i'm not actually good at catching bottoms um but the next part is to actually nail the top that's the that's the the the the big one like and i think yeah yeah i was gonna say interestingly yeah i was gonna say interestingly, this time, or maybe every time, it's just people are so emotionally detached by the time it happens. You had, I'm not saying the dead bottom, right? We're not saying the dead bottom, but the relative bottom, you had forever to buy it in this cycle. Yes. And most people didn't, because most people didn't. Right, of course. Because it was going down to 12,000 or all it's had another 99% to bleed. But I mean, if you even just said, hey, listen, this may not be the bottom,

but I'm going to buy because I believe prices will be higher in three years, right, with that longer view, you couldn't miss. I'll give you my entries because I actually did tweet them. My entries on Bitcoin, my average price in this cycle was about 18,200.

So I didn't catch the bottom, but good enough for me my solana was 1380 is my average entry into seoul my average entry into roon is um uh $1.45 um my average entry into injective is $5.52 my average entry did you i have a question about that yeah that's stupendous i have a question about that. Yeah, that's stupendous. I have a question about that. Did you, because I did, did you buy Bitcoin on the way down or were you basically out of the market entirely from the top to bottom and then started accumulating? No, no, no. I accumulated the whole way. The whole way. I accumulated...

Okay. So that's like kind of like you're at your bottom, but yeah. Under 20,000. Every time we were under 20,000, I just accumulated. I had like a like a rule oh but i'm saying you never bought it like 42 on the way down or something like that under 20 000 and my i was accumulating and i haven't bought much bitcoin since so like that's why my average price remains at like 18 000. again i'm not trading these positions i'm just these are just positions that i'm holding forever kind of thing uh i just think that's really impressive because i think you know there were there were very uh consensus supports on the way down from 69 where people didn't think it was going below 20 you know myself included yeah we did and it's paying dividends but again it's like i know i'm also not getting excited because i also know that the game is not about how much

money you make that's garbage it's how much money you end up taking out of the top. And I've never, ever managed to catch the top. So I've maybe caught the bottom now, but I've never managed to catch the top. I want to understand, get the thoughts from the panels where Alex and Chris, your thoughts on the markets now, but also what was your strategy over the last few months, how did it work out for you guys? Well, for for me was was actually quite fine i actually bought a lot during the fdx crash because there was some coins so big discount that i just couldn't resist you know so i it it was like a like a coin flip you know it was

like either i buy it here and i'm fine or it will go lower but the likelihood that it would go lower was really really really low you know so that's why for example i bought solana between um i think my average price is like it's a little bit lower than rants like 11 12 something like that because i bought a lot during that fdx crash a rune i i was a little bit later than him i bought like at a dollar 80 uh injective three four dollars um what what else did i load big on um i bought what's yours what what are your what are your thoughts on the markets now maybe it's a better question for the for the audience like do you expect to retrace as ran said uh overall yes but i think what we are seeing right now is just a shakeout so i i think 40k plus first then major nuke

so and that that can go as low as to find major nuke yeah i was gonna say define major nuke yeah no what do you view as a major nuke uh sorry yeah so i i think that if we go like to 27 28 in the worst case so we might stop around 30 32 something like that so but only once we were above 40 wherever it's going to stop you know nobody knows could be 40 could be 42 it could be 46 48 and and from there then a massive move to the downside it sounds it seems like a very popular view by the way the move above 40 kind of 42 and then back down to 32 i'm talking about this for for a really really long time you know so when you go to my channel you see that i'm talking like for months already about that yeah i'm not saying i'm not i'm not

saying there's anything wrong with it yeah everyone yeah i got you i got you everyone's calling from the from the app or from for the app first and i think uh you know you know when i heard this last i heard this last when people were calling for the hundred thousand dollar bitcoin before a correction to 80 by the way well yeah i i remember when when plan b got us all all um all uh um hyped up about a hundred thousand dollar bitcoin that's the last time i heard so many people being so sure of something i agree chris yeah uh you know the first thing man let me say we've had corrections you know I agree. Chris? correction, which was all that sideways from April through October. So I kind of disagree with the idea that we haven't had a correction yet. That was a correction. I think, again,

I think we're heading up above 40 and potentially up to 50 before we get another bigger, longer term kind of pullback like we just had. So for me, until the market actually shows something different, I think we continue looking higher. And then that pullback comes back to where we are right now and everybody panics and it's like a meme where you're excited on 38 on the way up and you hate. Yeah, yeah, exactly. I mean, if we're hitting 40 42 you know or especially if we're getting up around 50 i mean uh i i don't think i don't think we see you know maybe maybe 32 at the most um but i think that that 192 day uh sideways correction that we had that we just came out of

i think that becomes you know the ultimate support there i think we don't get beyond that um at that point especially if we get that move up ram you still fear the etf rejection right that's the other consensus trade that you think could rock this it's not etf rejection it's one of three one delay one of three etf trades the first thing is gbtc etf gets approved gets approved first and way ahead of the others. And then you've got that overhang of the people that bought at a discount, which can sell into the market and capture that discount and capture that premium. And JP Morgan wrote an article the other day, and I think in the article, they said something like there could

be a $2.7 billion overhang. I didn't read the maths, but there is definitely an overhang. That's the first concern I have. The second one is that somehow they delay the ETFs past the 10th of Jan. I don't know how because I'm not a legal expert, but they find some loophole to delay the ETF beyond the 10th of Jan. That's another reason for me why the market may nuke. Yeah, and the third one was that it gets approved, and then for the first couple of days, there's no inflows, or not aggressive inflows. And the third one was that it gets approved.

And then for the first couple of days, there's no inflows or not aggressive inflows. And then the market goes, well, hold on a second. This is like really like what kind of ETF is this? You know, like this is an ETF where there's no money going into it. And then Bitcoin nukes. And then over time, people say, oh, Bitcoin price has gone down. And therefore, I'm going to start buying it. And then the ETF gets its momentum.

So yeah, those are the three scenarios that I see that could nuke Bitcoin in and around January. And again, if we don't get it, I'm also perfectly cool because I've got all my long-term positions. And if we do get it, I'm also going to be prepared because I'm going to have some cash on the sidelines.

Okay, I love how quiet you guys are. Alex, are you there? Scott, I think you're having technical issues. Hold on, Scott. Scott, can you hear me? No, no, we're fine. No, you're fine. Alex, no.

I didn't say I'm having issues. Scott is having issues. Yeah, Scott has got issues. Alex, where do no, I didn't say I'm having issues. Scott has got issues. Yeah, yeah, Scott has got issues. Alex, where do you stand on this? It seems that a retracement makes sense, though Iran still sticks by its position of a raging bull market. Where do you stand on all this? Am I allowed to say I have no clue? Yeah, of course, because at least one of us is honest.

I like your answer the most. I have no clue. There have been some interesting points. I think that the rally in Bitcoin, in a way, has helped to set the ETF up for inflows. In a way, the setup has almost been a self-fulfilling prophecy. Because if Bitcoin was at $20, grand and going lower and an ETF launched, I don't think it would gather that many assets. But in an upward trending market, I think that there are a lot of people who are paying attention. I think probably this grayscale overhang is overstated. So obviously, like in the past year or so, it's traded a lot. And I'm sure that

plenty of those people have been buying it, are arbitragers who are looking to buy it at a discount, hedge out the market risk, redeem it now when it turns into an ETF and capture that risk free spread. And that would be an enormous win for those investors. But I also think a lot of people who bought it were just punting on Bitcoin at a discount. And if Bitcoin's going higher, they're probably not going to sell when it turns into an ETF. And I think on the other side, that the ETF inflows, I think are probably understated in terms of what people's estimates are. And I brought this up on the show before. But you know, in Canada, we do have some precedent for this, like Purpose launched its Bitcoin ETF in an upward trending market in the spring, winter spring of 2021. And it gathered, I think, $2 billion in the first six weeks. So the rules in Canada are that any ETF needs to

be owned at least 50% by Canadians. So you couldn't say, well, that was just all Americans buying. We know at least half was Canadian. So that's like a billion dollars or so of inflows for a country that whose capital markets and buying power let's drop out as well it's like a 15th sorry yeah sorry continue i thought you dropped out oh just simply simply so like you know i mean everyone's got their own back of the envelope math there's nothing special about my calculations here but like i think that the the magnitude is in that 10 billion dollar plus range and i'm just like speculating based on what we've over what period although i don't know if i missed it alex you did drop out but over what period of time and how long would it take for us that that thing got to a billion dollars in 24 hours the canadian thing and within six weeks it was it

two bills so this is not like over a year or something this is over a short period of time i cut the canadian one or BITO? The Canadian one. To $2 billion in AOM in 48 hours? No, no, no. A billion in 48 hours. $2 billion in like the first month. A Canadian ETF?

Because BITO was the fastest American ETF in history to a billion dollars. And that was like 48 hours. So I didn't realize there was a Canadian ETF. BTCC-B. So that's the purpose Bitcoin ETF. Yeah. Well, I've got my terminal in front of me. I'll try and look it up.

I'm not doubting you. I just had no idea because we always tout that BITO was the greatest ETF launch in the history of the United States, crypto or otherwise. And it wasn't even that fast. It was extraordinary. The ETF guys we all follow on Twitter were like, whoa, what is happening in Canada? So we have, you know, we have some experience with this stuff. When was that launched, Alex, the Canadian one? February of 2021.

It has 1.8 billion CAD now, which is significantly larger than BITO. I think BITO AOM just repassed a billion again or something. Just so the fact is correct here,

the Canadian ETF took seven weeks to get to a billion USD. Seven weeks. It might have been CAD. Maybe it was CAD. Yeah. It was seven weeks to get to a billion USD. Okay. Well, still within an order of magnitude.

I thought it was two billion. It may have been Canadian dollars, though. It may have been. But, though. It may have been. But, Joe, where do you stand on that same point? The inflows, the expected inflows, do you think you're underestimating them when it comes to the ETF? Long run, yes. Short run, no. You know, people

don't FOMO buy on the date other than retail. They're going to build slowly positions. You're going to have a ton of folks that get into it and get exposure over weeks. But, you know, I tend to favor that. I don't think it's going to be an epic sell-off, but I think a ton of people are positioned with extreme hopium for the ETF. And they think that they're, I think they're going to be disappointed in the first 48 hours when there isn't FOMO buying. You'll get a pop for sure. There's no doubt about that in my

mind. To me, I think people are talking about levels of where things are going to peak out, but there's so much emotion and hopium in the market right now. I mean, I've been in Bitcoin for years. I've never seen this sort of universal bullishness across the board. Even in bull markets, there are people that are constantly trying to call the top, and I just don't even see it here. Even the bears have kind of gone into hiding on Bitcoin. So to me, I think it marks a short-term top. It doesn't need to be some epic sell-off. I think it's far more significant, and I disagree with Scott and others on the panel here, what is happening with the equity market coincident to what's happening to Bitcoin. I mean, if the equity market is marching much higher, you're going above all time highs and Bitcoin's rally is going to continue. But vice versa,

too. If equities peak out and they start to sell off in Q1, I expect Bitcoin to follow suit. Scott, is your mic back? Yeah, my mic is back. I thought Alex had lifted his. So I was like, yeah, yeah. Because I'm just looking something up because I don't know who the last speaker was. We talked about the AUM. And I'm not sure if we were just looking at so this dual class, there's the Canadian dollar in the US dollar class. So there's two different like if you go on Bloomberg, you'll see different assets for different classes. Whereas if you go on the website, you see the consolidated number. So I just want to double check the AUM number because I do recall a billion

within the first 48 hours, 2 billion in the first six weeks. I'm not sure if we're only looking at one kind versus both kinds. So I'm just double checking that right now. Yeah, I want to move on to Michael. Are you there? Michael Green?

Yeah, I'm here. Michael, we've had you on the space a few times and you've had your fair share of criticism of crypto. With the recent developments, especially when it comes to Binance, is the sentiment, and Sam being found guilty, is the sentiment slowly shifting when it comes to grad find? Do you think the ETF will make a big difference? It's good to have John Deaton here as well. Go ahead, Michael. So, I mean, the quick question is, is the ETF going to effectively provide a mechanism for many more people to buy into Bitcoin? Or does it indicate a acceptance within the institutional space?

I just want to clarify what the question is. The latter, the acceptance. I mean, my general sense is that people still look at Bitcoin and they see a speculative asset that they don't entirely understand and nobody's really certain about it. Myself included, candidly, that we've seen a level of fraud in the industry. We've seen a level of criminality in terms of the prosecutions, whether it's Binance or others. It certainly validated many of the concerns that most people had. And yet at this point, I think we're kind of sitting here saying, you know, well, if the regulators are going to let it through,

it'll ultimately have to live or die on the basis of its utility as compared to the speculative component. But, you know, 10 years in, I'm still looking at this sector and saying, where is the really interesting application coming other than the money laundering components or the pure speculation dynamics? I'm just I'm still not seeing it. And I think many in the institutional space are treating it in roughly the same way, saying, you know, it is what it is. Before I go into all the other use cases when it comes to blockchain, if you look at the most obvious use case right now, just focusing on Bitcoin as a store of value. Is that a use case that's starting to be accepted more widely? You know, we heard what Black, what Fink has been saying about Bitcoin and his stance on the asset. Are others gearing that stance?

Again, I'm not really seeing it. I'm not seeing a huge rush to adopt it. I'm not seeing the demand from the registered investment advisor space. And I'm definitely not seeing the demand, again, from the utility space. If anything, it feels like people are starting to open up discussions around things like,

well, maybe Solana is actually better or other tools, other vehicles are better. No one's comparing Solana to Bitcoin. They do different things. That's like comparing Amazon to gold. They do different things. That's not the narrative. I'm all for healthy debate, but we must also keep it factual. Just to be very clear, that was actually not a debate. That was a statement.

So what I was saying is that there's a lot of discussion exactly as I think Joe Carlos Otto was. We don't allow bullshit false statements on our spaces. We're very happy to have bullshit. But that's just given the data. Hold on a second. When you make a statement on our spaces and the statement is not factual, it's absolutely bullshit. It ruins the credibility of our spaces, unfortunately.

Yeah, but I want to call it. But what you're saying is that you've got someone that's respected in the traditional finance space that's critical of crypto. Instead of listening to what his criticism is and then kind of giving a different viewpoint, I wouldn't just call it bullshit and say, hey, you shouldn't be welcome to the space but otherwise we should become that probe it going everyone just fully but every discussion with it but now then you know that he tell him an apple's afraid to tell him what the use case how it's different one of them is a store of value one of them is is you know other utilities

that discuss the difference between Ethereum and Bitcoin then moving on Solana versus Ethereum but if you've got every single person on stage right now, including us, are pro-crypto. We're all pro-crypto. We got one who's not. Michael Green. But let me maybe correct him.

So you cannot compare Bitcoin to Solana and no one compares Bitcoin to Solana. No one ever says that Solana is better than Bitcoin because they're two completely different things. It's like saying a bicycle is better than a car. It's two completely different things. They're supposed to do different things with different use cases. And no one in their right minds or no knowledgeable person in the world is comparing Solana to Bitcoin and saying Solana is better. So Michael, we'd love to

understand more of that comparison and what you mean by it. Is it Bitcoin versus Solana or you mean Solana versus Ethereum or you mean Bitcoin's use case as a store of value is no longer, is not gaining traction in the TradFi world, and instead they're starting to move out other use cases like Solana's and Ethereum's? So to first of all agree with the correction, right? I understand that Solana is more directly comparable to Ethereum. Ultimately, it is focused around the transactions, although I will remind you that Bitcoin was originally a payment-to-payment transaction service. It has failed in that front, so it has been morphed into a store of value. At this point, it is a speculative store of value. And when I was referring to the fact that the use case dynamic, I was actually highlighting

the dynamics of Solana, right? That people are increasingly saying that you will see the use cases gravitate towards things that are more specifically designed for speed of transaction, lack of latency, etc. And those comparisons are absolutely being made. Blockchain remains a tool that is designed for recording transactions. And Bitcoin is simply the token associated with that. Whether it becomes a speculative store of value or retains that dynamic is something to be decided in the future. So, again, I just actually strongly disagree with the criticism that was being leveled in the framework that nobody compares the two because they actually do compare all cryptos as speculative stores of value or appreciation vehicles. So you're saying they compare the both use cases, Michael, rather than conflating the use cases of Bitcoin and Solana before going to John? Is that fair?

Again, imagine a two by two matrix, right? There's a speculative store of value, which Apple, by the way, is the same thing. Apple is a speculative store of value. Is gold a speculative store of value? of value is gold a speculative store of value because it is gold a speculative store of value it doesn't have any use cases does it's gold speculative store of value well it does have some small use cases but absolutely i think i don't think there's any question is there a store of value that's not speculative again when you take the term speculative and you assume that i'm using a disparaging term, remember, I am indeed a speculator, right?

I don't actually treat that as a disparaging term. All speculators. Right. I'm just trying to understand what the qualities of the store of value. Wait, let's ask the following. Do you agree that we actually need stores of value in the world? Yes. Great.

And what do stores of value protect you against? Again, it depends on what you're actually trying to accomplish. So the dollar is a store of value. It is a quote unquote stable for very short periods of time that allows you to put something in your wallet and transact with anonymity in a variety of different ways. Bitcoin has some of those characteristics. It is perceived as offering a store of value because it has appreciated over time.

That is no different than Apple. Bitcoin is not broadly accepted. What makes the dollar a store of value? You said the dollar is an effective store of value. Can you just maybe highlight to me why you believe the dollar is a store of value? What makes the dollar a store of value. Can you just maybe highlight to me why you believe the dollar is a store of value? What makes the dollar a store of value? The dollar is a store of value because it represents a tax credit for the US government. Because it represents a tax credit for an insolvent government,

it's a store of value. Okay. So you've made a statement now about an insolvent government, it's a store of bad news. Okay. So you've made a statement now about an insolvent government. How do you define insolvency? Debt that they can never repay, pretty simply. It's in their own currency. Of course they can repay it. Okay. By destroying the value of their own currency. We've seen how that works. We've seen how that works in history. You've got Greece, you've got Argentina, you've got Zimbabwe. Those are great case studies of what happens

when that happens. The country goes to zero. It goes insolvent. When did Greece go to zero? Don't remember the year. William, I see your hands up. Maybe you can help me fill this in. Well, I'm just listening to that small debate

which is happening between the two of you right now. I think the issue with crypto, and I want to riff a bit on Charlie Munger. He said very famously that all intelligent investing is value investing. You must value the business in order to value the stock. So if you take that and try to apply it to crypto, the issue with crypto is that it's very difficult to intelligently value what we have. So I think the question is not whether anything is speculative or not.

The difference is that in the traditional markets, it's a lot easier to know how to intelligently value something because we have all these metrics and we've all agreed upon them. But in crypto, we're still debating what is the right metric for Bitcoin? What is the right metric for Ethereum? Is the total value locked the one we need to use or not? Why is Solana less than this? So we're still debating all of that because we have no standards for valuing these crypto assets. And that's really why this debate is difficult to be had for that reason. Michael and then John. No, I mean, I think that that is reasonably well articulated, although I would just highlight that in any situation, we have to think about a frame of reference in terms of how we're valuing something. And so in the case of Bitcoin, when you talk about the value of Bitcoin, if it has value as a utility token that facilitates me engaging in transactions, which could include transferring large sums of money across various geographies, then I have to actually be able to think about the cash flow that

is generated associated with that asset. Otherwise, it is a pure speculative asset that I have to assume somebody else is willing to pay more for in the future, again, not based on any cash flow or utility characteristics. In the case of a US dollar, ultimately, I'm valuing it on the basis that somebody is going to need it in order to settle a tax liability in the future. It has been declared by a government that has the ability to monopolize force within a certain geographic region, which candidly extends to many parts of the globe, that it will be forced to be accepted for the settlement of debts, both public and private. That does give it value, right? You can dispute whether or not the government will be able to enforce those contracts in the future that could degrade that value. But currently, when I look at

something like Bitcoin, I'm not sure how it generates cash flow for me, other than the ability to sell it to somebody else in the future. And so that's why the news flow and the dynamics in terms of the discussion on Bitcoin are focused on who is the next buyer. And, you know, the ETF is interesting, right? It certainly creates, it makes it easier for some people to add to these positions and they might add to these positions. They tend to chase momentum. They tend to chase price appreciation. We know that these are all components and we assume that there's positive news flow associated with something that is going higher in price. Those same characteristics were also true in 2020 and 2021 when it turned out that an unbelievable amount of fraud and deception was occurring in the space that everybody was convinced was you know 100 moving to 100 000 and a million

in the time period that it's now at 38 000 and everybody is incredibly enthusiastic about it at 38 000 i i just don't you know again like is it interesting is there something interesting within the crypto space and within the tokenization dynamics and within the dynamics of fully digital securities? I'll say it over and over and over again. into a world of very thoughtfully structured securities and, you know, what can be thought of in no other way really than, you know, truly digitally native securities that carry far more information and far more capability to direct cash flows associated with them. That's super interesting. And I think a lot of what is being done in the space is actually preparing for that world. But again, I, you know, I've seen nothing other than the fact that Bitcoin has gone from 13,000 to 38,000 to suggest

that it plays a meaningful role in that universe. Go ahead, respond to that. Go ahead, Zach. So I think that there is a thread in crypto, which talks about especially the RWA, real world asset folks who think that what crypto is useful for is just serving as a ledger for real world things, whether those are stable coins that represent dollars or tokens that represent securities or debt or stuff like that. I think that sort of misses what the real innovation in crypto is, whether you're talking about Bitcoin as a way of creating a monetary asset, right, which is speculative, it's like gold, it doesn't have cash flows. But the consensus mechanism, the fact that it's not reliant on the state is the important part.

I think there's an analogy, if you look to other parts of crypto, and what people are trying to build with decentralized autonomous organizations, or decentralized finance protocols that disintermediate third parties, where the innovation here and where the value comes from is the fact that like, if I'm creating a company now, the state of the art is to create a Delaware C Corp, where, you know, I can get people together around a common purpose to bring capital together, because of the monopoly and violence by the state in the US, because of the precedent set by the Delaware Chancery Court, because we have these centralized institutions. In the future, can we recreate this instead of relying on the state by using game theory and cryptography, by using multi-signature

wallets, by using smart contracts, stuff like that? I would say right now, there's not a lot of evidence that that's working, right? And the place is ripe with scams and the financial incentives are really bad and VCs have been very predatory in a lot of these that that's working right and the place is ripe with scams and the financial incentives are really bad and vcs have been very predatory in a lot of these areas but in terms of what we're trying to do uh i think it is more than can you just represent real world things on a blockchain it's the blockchain is really a step function change in terms of the way we go about economic objectives. So so very quickly, again, I think you and I are saying something very similar. I'm not sure that I would say the blockchain is a step function change in the way that we value

things. I agree with you that the richness of detail that can be embedded in a tokenized security is far beyond that that can be embedded in a traditional security. A traditional security like Apple stock, for example, carries legal meaning under a U.S. court of law. You could have a very different definition. And I actually, this is one of the reasons I spent, for those who know my other work, I spend a lot of time talking about the dynamics of passive and index investing. Because one of the reasons I'm so concerned about that is it's effectively robbed the universe or the, you know, the ecosphere of securities from a lot of the interesting features that used to exist. You never find preferred stock now.

You never find significant quantities of convertible debt, et cetera, unless things are actually incorporated within an index. They don't really exist in any frequent way because of the preference that is being provided to that. I think the digitalization of this is actually one of the interesting opportunities. And ultimately, I think as we move away from a Vanguard dominated world, you're going to see more and more of that. And I think it's super interesting and super, super valuable. On the flip side of that, right, blockchain, meaning an append database that is broadly distributed, so that we don't rely on a single entry or a single entity to maintain the sanctity of that. I definitely think that there's value in that component. So far, the blockchains

that we have been exposed to, by and large, have been very computationally intensive and very slow in their processing, primarily because the focus was on avoiding a single point of failure, right? Whether that continues to be the case or not, I don't think we know. A lot of people will point to things like Solana or Ethereum and say, well, they're centralized, right? They have an element of centralization to them. That may or may not be the fail component of these, right? But I think the most interesting component about what's happening is almost exactly what you said, which is this issue of do we rely on the state or do we rely on other mechanisms to enforce effectively a method of organization? I think that's a super legitimate question.

I think that actually is a really, really legitimate question. I'm not convinced that it comes through the anarcho-capitalist dynamics of something like a Bitcoin, but it could, right? And we also, you know, kind of need to stop and think about how this technology change changes how we interact together as a society. Do we decide that code is law? Or do we decide that there are elements of, you know, a trial by jury of your peers? Or do we decide that a single, you know, individual dominates the whole system? Do we live in Elon's world? We've not had serious conversations about this in probably 300 years. And I think we're starting to have some interesting conversations about them. It's just currently

dominated by people who, um, I would argue are thinking more about tearing something down than building something up. And I realized that that's overly harsh, particularly directed. It's an individual like probably who just spoke, who sounds like their heart is very much in the right place. Um, I would argue the Sam Bankman Freeds and, you know, CZs, et cetera, the world don't have that characteristic. John? Yeah, I think we need to separate crypto, Twitter, and those in crypto versus the general public. And the statement was, oh, I hear out there in the real world that Solana might be better than Bitcoin.

Those statements are being made of people outside of crypto. If you've been in crypto for years, like land, you're never going to mistake Solana and Bitcoin. But I can tell you, I'm just talking to state legislatures, people who don't own Bitcoin, and you know what the questions they say? They still say, isn't Bitcoin used to fund terrorism? And I hear that Bitcoin's own technology and you need something else. The general public outside of crypto, Twitter, what is it, less than 2%

in the world own Bitcoin. And so I think we got to be careful when we try to impute those that have been living in this space to the knowledge of the general public. Those are two very different animals. I think that was well said.

Joe. Yeah, thanks. So a couple of things. Number one, there are many investments out there that people buy purely for speculative reasons, as everyone in this room knows. That alone is not a knock on Bitcoin. People buying Nvidia stock right now, where its earnings are, is a speculative investment. Does that mean that AI will not come through with the ability to change the world and the ability to improve productivity? Maybe, maybe not. It

doesn't matter. It's really irrelevant from an investment perspective. So the knock on Bitcoin and other cryptos is speculative. It's kind of saying something without saying anything. With respect to Bitcoin and its current valuation, any market participant who's truly honest and looking at what it offers currently and its role will recognize that you're buying Bitcoin at its current valuation because of its potentiality, because of what could occur. And Zach and Mike, to some extent, have sort of outlined this argument. You're speculating on the fact that Bitcoin, through layer twos, layer three solutions, through continued technological development,

through all the infrastructure that's out there, through the removal of the single point of failure that Michael's talking about, that that could eventually provide an alternative monetary system. It's effectively like a call option, right? If you're buying it right now, it's current violations, you're expecting to some extent that the widespread adoption will continue, the network effects will continue, and that something will come of it down the line. And there's nothing wrong with that. You know, VCs invest in potential outcomes all the time. And I think Bitcoin is in many ways similar to that. But it's far from a guarantee, right? You can't you can't assess the valuation based on current cash flows like you would, you know, traditional

equity market. But, you know, there are examples all over the place of people that are speculating on things based on what the world will look like 20 years from now, not what it looks like today. Anyone else have further thoughts on that? Mario want to move on to buy that snooze? Anyone else? Yeah. on that? Mario, want to move on to Binance news? Anyone else who has further thoughts? What are your thoughts, Scott? I think that John kind of nailed it. I think really threads the needle.

It's hard sometimes to not be in the echo chamber and think and assume that everybody understands everything to the same degree that we do. I think it's actually been a huge problem for mainstream adoption is it's almost like the crypto space needs a new PR agent, right? We just don't really know how to speak to people. I've talked about this a lot. The vernacular that we use, the catchphrases, it's almost like we have an entire dictionary of our own that nobody on the outside probably understands. I mean, even at the very basic level, I've said, if we're still talking about NFTs as NFTs, then we don't have not reached mainstream adoption. If we really have to talk about

how blockchains work, we haven't reached mainstream adoption because it should be the underlying technology in your phone or the computer or the internet that you don't think about that you just use and just works. That's when we'll know that we've actually reached, I think, all these people. I mean, POS, right? I mean, that's a piece of shit where I grew up. That's not proof of stake. POW is a prisoner of war. It's not a proof of work.

I think it's just very confusing to people what all of these things mean. And so I don't think that there's anything wrong with this argument. I just think that John's probably right. You're an average person. We've seen it, guys. I mean, last cycle or even the first cycle I was in, people would buy Litecoin on Coinbase because they didn't realize that they couldn't buy a fraction of a Bitcoin. It was a huge narrative. You would go on Coinbase, you'd say, well, well shit i can't afford a bitcoin at nineteen thousand dollars but i can afford a litecoin right and so i i don't think that uh i don't think we should be dismissive of the fact that people don't really under understand this space as well as we do i mean most people don't understand any technology if you ask the

average person explain how tv works they're going to struggle but that's my point that's my point we we for some reason in this space we still expect people to understand how it works. Right. And we, they're not going to be here until you don't even have to explain to them anything, because it just works. Right. And it's underlying, but it's not, it's not a communication issue. Okay. Ask them how to explain how the internet works. Ask them how to explain how their car works. They're not going to be able to get through any of those with any high degree of proportion to the population. So the real issue is just make it work. Just make it better. Just make it functional. And there are not only technological barriers to it. There's regulatory barriers, right?

A huge reason why crypto is not used as a payments network is because of the taxation issue. That has nothing to do with technology you cannot you kind of fix that issue uh by a more innovative technological solution you have to confront it head-on in the actual lawmaking space to say we need to treat this uh more favorable from a taxation perspective that's a huge barrier for payments in crypto so I agree like the same we through previous cycles we argued about how great it would be to buy coffee at Starbucks with your Bitcoin. Right. That was always kind of the meme. Who the hell wants to, quote unquote, sell their Bitcoin to buy a cup of coffee and then have a taxable transaction to do so?

Right. I assume those are the kind of things you're alluding to. Yeah. But Scott, that's not fair. Then when people get on the stage and say, well, Bitcoin's not being used as a payment network. When they're when they're saying that, it's really kind of ridiculous because why would you? Why would you use an asset that's appreciating like this as a payment network when taxation is so disfavorable? Yeah, 100% agreed.

John, I saw you were trying to jump in. I was just going to say, how many of us got text messages from people, even that we didn't know that well when Bitcoin hit over 50 grand? John or Scott, is this the right time to get in? Should I do Bitcoin? messages from people even that we didn't know that well when Bitcoin hit over 50 grand John or Scott is this the right time to get in should I do Bitcoin now those people believe Bitcoin's dead because of the prolonged bear market and so I just think we have to uh appreciate the fact that the

general public is is back in 2009 or 2010 for many of us. Yeah, I think that's absolutely true. I mean, the more I think about it, I think that there probably are quite a few average people who just see a news headline on Solana or something similar and think, well, that sounds like they don't know that it's so different and say, that sounds like it's going to go up faster and buy that instead of Bitcoin. I do think that that probably is a problem in the mainstream. Simon, you've got to have thoughts on that. Yeah, I think the average person, if you speak to, you know, sometimes we have to get outside of our crazy world. But if you speak to the non Bitcoin crypto person, I think they still see an absolute shit show. They see FTX. I mean,

we've still got more headlines. This whole Huobi, Poloniex, Tron, Justin Sun thing, we got that coming. Probably got a few more and they just want to get whatever they're going to do with Tether stable coins. And then we've got the ETF. So I think they're just trying to get those final headlines out. Binance is another one that will be all fresh. But the average person just sees an absolute shit show that's full of frauds that's disappearing going down. And as soon as they realize that Bitcoin hits or starts approaching new all time highs, you then start getting all those

Facebook messages and your auntie and your grandma and everyone and they're like they all come back it happens even even timing even even the binance news all of us in crypto talking about it as good news in the traditional world everyone's saying crypto's dying because what happened to binance which we that's probably true but they don't look at yeah they don't look at the details. And they just make that statement. Right. Or they see stories like FDX, Shaquille O'Neal, Tom Brady, Larry David getting sued for promoting FDX or Cristiano Ronaldo getting sued for his involvement in promoting Binance. Which, by way, like that was the original title here, the most non all of those cases, but this one in particular is some of the most nonsensical stupidity that I've seen in a long time. And that's saying a lot when you live on planet

Earth with other humans, but it's basically... Oh, sorry. Yeah, no, I was just gonna say, if you look at it, actually, I tweeted earlier, and somebody shared a comment that was actually hilarious that I'm trying to find. This is what the person said when I tweeted about the Cristiano Ronaldo story. So a non-U.S. citizen promoted an exchange not allowed to provide service to a U.S. citizen and U.S. citizens get to sue him for using a service they aren't legally allowed to use. And that's literally exactly what's happening. This is three Floridians. It's always my fellow Floridian Florida men who are suing everybody for everything or doing stupid things.

But suing Cristiano Ronaldo for his NFT partnership with Binance when they literally can't even use Binance. Yeah, Bitcoin has always been an asymmetric information investment. It's always that cycle of adoption. And you know, so many people, they just think that I think the most common thing for the last 15, well, 13 years that I've heard is have I missed the boat. And they always, they're always looking to get into crypto because they think they missed the Bitcoin boat. And then they're getting in and out based upon the news. And they're always looking to get into crypto because they think they missed the Bitcoin boat. And then they're getting in and out based upon the news.

And they always come in at the top of the bubble. And they always sell out and capitulate at the bottom of the bubble. And if in that process, you discover that there is something interesting here, then each year and each cycle, individuals more countries and more companies realize holy shit there is actually something interesting here and they i think they always end up at bitcoin in the end and that's just been the story for 13 years and i think there's so much more people to go through that cycle and discover that and that's the interesting yeah yeah for better or for worse simon and then

this is not an endorsement of these things but i think that you could make the argument that of all all the bitcoiners in the world by trying to convert people to bitcoiners things like nfts being on saturday night live and elon musk talking about dogecoin have arguably brought in as many people eventually they've wrecked a hell of a lot more have arguably brought in as many people eventually, they've wrecked a hell of a lot more people, but have brought as many people into Bitcoin eventually down the path you just described as anything else. Yeah, I think you're right. It's a bittersweet, right? One argument is that when it was just Bitcoin, we all had a cohesive message. There was less confusion. There was less people getting, you know,

wrecked on things that won't survive long term. And then, you know, one school of thought is that you've destroyed a bunch of fiat wealth because people got into crypto in the wrong side of the cycle and didn't learn the lesson. But a percentage of them would learn the lesson come back. And then every time you know, even like the whole ICO bubble, what was the ICO bubble in the end? Yeah, it was it was a horrific time in

the history of our market in the end. But what did it actually do? Well, it took a bunch of people that were never going to buy they were these were the people that were never going to buy real estate, they could never afford to deposit. They were playing credit card debt for consumption. They were never going to buy gold, because it seems like something only their grandparents do. They were never going to buy stocks and shares, because they never got past, you know, spending less than you earn and investing the difference and having enough left over to bother opening a Fidelity account. And so some of those went into Robinhood and various other things.

But the vast majority of what came out of the ICO pump and dump in every cycle was a bunch of people that never gave a shit about investing. They were going to recycle their debt until eventually they could have got a mortgage or something. But they started thinking about investing because somebody said to them, hey, have you seen this NFT? Have you seen this thing? And it took something that was interesting to them and made them say, right, well, how do I get more money to invest in these things? And then eventually, if they persist, they end up at the right place in the end. But I think it brought in a generation, the whole market is a generation of investors that were never going to be investors, because they just didn't have a financial product

that that they were intrigued by or inspired by or even if they got wrecked. And that's what I think it does. Investors are speculators i speculate well there you go i mean you're gonna become the next one there's no better path so i would yeah i was gonna say there's no better path than uh going from trader to investor to passionate community member in crypto exactly they all started as crypto speculators and if they go through the the path they'll end up as Bitcoin investors and understand hard money. They'll go through that journey.

And there'll be a bunch of securities once we go through the next cycle, and it'll be a bit more regulated. But then there'll be regulated pump and dump schemes, just like there is in the pre-IPO market. The cycle repeats itself in TradFi. It's just the people that do it and the financial institutions itself in TradFi is just the people that do it. And the financial institutions that benefit from it, just slightly change and everything gets more expensive

because you have to factor in the compliance into the cost. And then it crowds out the non accredited investor and it just goes through the same cycle in TradFi. But you know, we've just got to factor in a bunch more cost. Yeah, Mickle and William. All the same scams, they're just a slightly different flavor. Skinned in a new flavor. Exactly. Mickle then William.

Yeah, the conversation moved on a little bit from what I was going to say, but I just wanted to make the point I actually had the opportunity to talk to someone who has a business where he's providing software to traditional firms, and he works with some pretty big firms, and just utilizing his centralized software to integrate with NFTs on the back end to try to solve problems some businesses are having. And I just asked him the simple question, because he's getting to meet with a lot of these companies who are interested in some degree to using this technology in a way that's easy for them. And I just asked him, Hey, what is the sentiment like now? Right. Are people, um, more open to adopting this technology? Have a lot of their fears been dispelled after a lot of this fraud and a lot of this, um, this, uh, crash

we've seen over the past couple of years. And he's like, no, it's, it's gone significantly backwards. He said it was much easier, uh, to actually talk about a lot of this stuff in like 2018. And it's a lot of the narratives that have been created in our own industry that have really like held back everything. So I think it's just really important to understand. I think a lot of times we spend time pitching the growth of this industry to ourselves and people in the cryptocurrency industry, and not enough time really educating people who are outside of it and resistant to learn. It's just shocking to me that after all this time, all this years, people who are working with these traditional firms are noting, hey, it's actually getting worse from where it used to be not better.

Well, I think that's actually just very quickly to chime in. Like, again, I want to reiterate, that is the sentiment that i'm picking up as well i understand the enthusiasm around the recent price rally i understand the enthusiasm around the etf but i'm just not seeing anyone in the real world take significant investments in that space michael but do you think the etf could change that i've asked that question earlier but i want to ask it again if the etf gets out, will that... No, there's plenty of options for people to invest already. Michael, look at the data. Look at the data point.

I want to go to Hector right after. Listen, we should look at actual data that we have to look at. The NASDAQ survey that's in the NASDAQ, I posted this when you made this comment, you know, more than a half an hour ago. They said financial advisors, 72% of them more likely to invest with an ETF. I mean, that's just you can say it's a bad survey. That's fine. But it is one of the few data points we have trying to gauge, you know, whether there would be real world interest in an ETF vehicle for Bitcoin. Hector?

Again, I just want to emphasize this. 72% being more willing to invest. Again, the primary dynamic in that is saying quantification of who is going to step over that that uh barrier and actually make the allocation i i disagree with that slightly i think anyone that owns bitcoin at this stage has got no interest in buying an etf so the market cap of the etf is going to be directly proportional to the amount of money that was locked out of the market in tax efficient retirement plans and various other things. And new people that never knew how to buy Bitcoin and never want to learn how to buy Bitcoin that will buy the ETF instead.

I can't see any what I don't know. I don't know the use case apart from yeah, maybe you're about to pay your individual tax and you decide to put it in a an ira so you convert some of your bitcoin over to an etf and then it's a more tax efficient structure but i think the vast majority is is of the etf side so we can just look at the the market cap of the etfs and we can just look at the volume in the etfs and i think a massive part of that's going to be new it's not going to be people taking their Bitcoin and buying an ETF instead. There are probably some people, Simon, but I think largely you're right. I do think there are people, though, that have gotten pretty shaken by self-custody

and things they've seen and probably literally just want to put this in their Schwab account and call it a day, honestly. I'm not saying that's right by any stretch, but I think that there still are a lot of people who signed up for Coinbase originally, kind of put it there, don't know what they're going to do with it and may favor a structure like that. But I do think 90% will be a new influx. Yeah, Scott, will you be able, this was the whole, this was the whole black block remember, right? Or whether you do in-kind and cash. So if people can take their Bitcoin and get easily to the etf uh that's gonna happen i'm not sure about that structurally it's a great question that's a great question like could you actually convert your b effectively convert your

bitcoin directly right yeah because you'd well you'd have to create a taxable event because you're going to reform you're going to not necessarily into a security right not not necessarily it depends on how it's held but you could theoretically do an exchange in kind into a security, right? Not necessarily. It depends on how it's held, but you could theoretically do an exchange in kind. And you reckon that could be tax-free? There is a scenario under which that can be accomplished.

It's challenging. It would require an extremely large investor and it would not necessarily happen within the confines of the proposed ETFs, but there are mechanisms in for ETFs for that. Well, then Simon, you're 100% right,

because nobody's going to sell their Bitcoin, take the taxable event and then buy the ETF. You're 100% right then. So let me just ask the question quickly. Practically, what do you think is the difference between a spot Bitcoin ETF and a futures-based Bitcoin ETF? Well, the futures-based Bitcoin ETF has wildly underperformed spot. So I don't think there's even a question there, right?

I mean, even just the very basic idea that it will closely track the price of the underlying asset. When they launched BITO, we were talking about this at the beginning. Obviously, it did a billion, I think, in the first 48 hours. It was up to about 2 billion in a matter of weeks.

And there weren't even enough futures contracts for them to purchase. They had to go out to 60, 90, I think even at some point 120 days just to fill the demand, in which case you're obviously not tracking the price of the underlying. So it's wildly underperformed the price of spot Bitcoin. So I think even that alone... Yeah, it also is a stupid way of doing it if you want to invest into the bitcoin philosophy you might as well support the spot etf because that will lead to new volume in the underlying um which which then has an impact on price rather than um so i yeah i mean i don't know if people are going to be that sophisticated but

if you're using blackrock and they've got a spot Bitcoin ETF and it's in your Fidelity account, I think it would be in the interest of the industry to make the user experience where they're more likely to buy the spot ETF rather than the futures ETF. I guess my question is just to what extent do you actually think that that matters, right? From a retail investor standpoint, BIDO has been a moderate success. It's about a billion and a half dollars in AUM, generating somewhere in the neighborhood of $15 million worth of fees for pro shares, right? That's a winning ETF in a lot of ways. But it's not a runaway success by any stretch of the imagination.

We have tons of ETFs that access markets through futures that are quite successful. And the underperformance of BIDO relative to the cash base is not a function so much of the futures as much, much it is a function of the contango that exists within the futures, right? So you're paying more for forward construct, you know, within the futures, right? So you're paying more for forward construct. Up 85% versus up 129%. I

know that that's huge, but for the vast majority of people, I just really struggle that the issue is access to an ETF or a mechanism to buy this. Maybe. Can I ask you? It's not about that, Michael. It's about perception. That's the whole thing that drives it. It's about the perception of what it means for the SEC to approve a spot Bitcoin ETF, as opposed to futures contracts at the CME in a vehicle. That's it. I agree. I think that is actually exactly how I led with it, right? I mean, this is a relatively big deal from a regulatory framework. It becomes a really interesting question. You know, the SEC has been dragged kicking and screaming through this process. We'll see if it actually drives significant retail participation. Can I ask a question? I think there's a lot of skepticism around that as well. If you have a Bitcoin, those products that you're referring to, are they available just as widely?

Is there going to be no difference in terms of who can access that? Or is there going to be a difference? I don't know the answer to that. I mean, I'll just give you a really simple example, right? I mean, futures is the basis for all of the VIX ETFs. They're quite a bit more popular than the Bitcoin ETFs. Does anybody really care if I offer a strategy that is tied to futures as compared to replicating those futures through actual variance swaps? There's just no evidence that there is.

Do you have the data of that for the gold ETFs for all those types? Is the data there for another product? When you say is the data there, the data there for what? The popularity of the gold ETF absolutely was significant, but more than anything else, it caused the d rating of all the gold equities yeah as in um the the demand for the spot etfs versus the futures etfs does that exist for other products like have you studied those uh so i mean i'll give you a really simple example um when you look at products that are futures based as compared to spot based, for example, TLT, they're dramatically more popular than many of the spot based products that are actually holding the actual underlying cash components to them.

They're just easier to trade. The benefit associated with them is the liquidity. that may not be the case in bitcoin and you you could be 100 correct that the you know that the underlying dynamic of money flowing into the cash as compared to a cash settled instrument creates a positive impulse around the price of bitcoin that could drive increased interest i don't think anyone's disputing that i guess actually exactly why the SEC has been so skeptical about this. I would love to just counter Michael's argument for just a second. You said that there's like no use case specifically for Bitcoin, but I just wrote a pretty long post about this. Essentially, Americans are incredibly spoiled and they have a very narrow viewpoint. The use case of Bitcoin is

the use case that we're seeing adoption for it. Corrupt governments that hyperspend and basically wipe out savings of their entire country, Venezuela, Zimbabwe. So those are the people that are really adopting Bitcoin en masse. Americans, we have a bank on every corner, our dollar is super strong. So that's really the use case for Bitcoin. All this other stuff, speculative store of value, that's kind of a narrow viewpoint of Americans because we're spoiled in general. But the other aspect of Bitcoin and it's a big use case is custody, right? So right now we have a fractional reserve lending. We saw Silvergate or all these banks go down. If we see any sort of a bank run,

a fraction of what we saw in FTX on any of these banks, PNC, Wells Fargo, that have a loan ratio that's insane, 95%, 90%, we're going to see the exact same thing that happened in 2008. And we're going to have to bail it out. But we just printed printed 25 trillion dollars that's the use case of bitcoin custody of your assets it's scarce uh that's that's the real use case and i don't see how you can't see that after what we've seen happen hector what do you think um if the primary use case is to uh self-custody your coins. You can only have 600,000 people a day self-custody. So to think that this in these emerging countries, Argentina, Venezuela, whatever you wanna say, are gonna have an opportunity to front run

the Americans, the Australians, the Europeans in the ability to self to store assets on this network. It's kind of the complete contrary. Like, it's not even possible technically for it to do it. And you can't say Lightning, you can't say anything else because they are all subject to the main chain. So to think that its own use case, its primary use case of store value huddle and never sell it,

it can't even achieve that at a global scale. So why are you saying that this is the use case for Bitcoin when today it's not even possible? It is possible. It breaks down into Satoshis. It is possible. What do you mean? No, no, it's not possible. There's 600,000 possibilities per day. 600,000 people get the opportunity to put their transaction

on the chain in one day. That's it. No, no, I think we need to keep it simple and not be lost in the weeds here. The best use case is that we're trying to build a better financial system. That's it. Everything else is what's going to help that to happen. And we need a lot of products,

whether they're ETFs and so on and so on. But the issue right now is that this industry is not trusted currently. and we need a lot of products, whether they're ETFs and so on, so on. But the issue right now is that this industry is not trusted currently. Can I echo in what others have said earlier? And I want to sound like a broken record. Right now, we need to get rid of the bad news first. My news feed is still 50% bad news, the regulatory headwinds, people or companies getting sued, scams, DeFi exploits, and then buried in there is some good news.

So we're not going to be able to get people to listen to us until the bad news is maybe 5% so that we can regain the trust. I do think that William, that people will view, the mainstream will view a spot ETF from BlackRock as good news and a wild endorsement of the industry. There's been bad news. There's been bad news in this space since almost day one, right? Virtually, you've had nonstop bad news plaguing the markets. And it's increased in quantity, sure. But I think that has not prevented

many people from adopting or buying bitcoin well i would disagree because the frequency today is quite higher than it was before we used to always say yeah but the bad news and the bad stuff is very small it's like and on a bigger stage yeah and on a bigger stage william it's mainstream spreading that bad news. Yeah, I mean, we used to say about the web, yeah, there's pornography and bad stuff. But then we would say, oh, but it's very small because there's like 99.99% good stuff. But right now, I cannot say that the bad stuff is only 1% in crypto. If it was, or even 5%, even 10%, I'd be happy.

It's a lot more than that. And we need to bring it down. Scott, you brought up BlackRock. As far as interest goes, once that BlackRock and Fidelity are approved, let's say they're approved in the first half of January. Do we believe that BlackRock and Fidelity's marketing and salespeople are just going to stand down? Or is we're going to see Larry Fink 2.0 getting on TV and CNBC and selling the shit out of it to drive up? I vote 2.0 all day. And not only that, I think that 1.0 is gathering AUM in the background before they launch, right? I don't think that BlackRock takes the reputational risk

of launching a spot ETF. This is conjecture, of course, a spot ETF, and then has like 50 million of inflows in the first week. Yeah. So yeah. And Larry Fink is arguably one of the five most powerful people in the world. He doesn't go on his Larry Fink 1.0 roadshow willy-nilly without a plan. He's not on mainstream media knowing that his words can rock financial markets, making claims like that crypto is a flight to safety unless he has a very direct plan to monetize that in the future. I could be wrong and this could be exaggerated, but there's just no reason for him to take any reputational risk here on a failure

unless he knows exactly what's going to happen in the future. 100%. I think that we got to go back to Joe's comment. It all comes down to time horizon. If everyone thinks that, you know, Bitcoin is going to shoot up to 200,000 because of the announcement of the ETF, they're going to be wrong. But that doesn't mean long term that when the financial advisors who are not thinking Bitcoin right now start following suit of the Larry Finks of the world. So long term, I think the demand will be there. It's all about time horizon, like it always is an investor. Also, you just got to remember that RIAs, I'm not saying there's going to be a tremendous immediate demand for this, but they do what gets them paid. And right now, there's no way with real fiduciary responsibility for them to recommend Bitcoin to their clients and actually make a fee doing so. And an ETF would allow that. Now, once again, I'm not making the claim that that means billions are going to flow

in from those people immediately. But at least if you know the mind of an RIA, you know that they're all about the fees and giving them a product to be able to do that, even if it's just for the ones who understand to push that 1% allocation to their clients could make a huge difference over time with a scarce asset. Mario, I think we covered it. What do you think? Yeah, we did. I think... Has Hector jumped in yet? Hector jumped in quite a few times.

Hector declared in the comments that the only Bitcoiner on stage was Michael Green. So I guess Hector can finalize. So I immediately said, Hector, you got to come up. Go ahead, Hector, you want to wrap it up for us oh i was just my question was more so what is the value proposition that these people are going to make to to make an allocation of one to five percent like if you're not buying the actual bitcoin you're buying it you're buying a derivative of shares that is then handled by a manager who then sells them to pay off whatever of the fund requirements so you're basically selling bitcoin over time as it goes up uh what what is the actual value prop of wanting to own it like besides the fact that people on the internet are telling you that it's a scarce store value but none of its actual i mean isn't that isn't that argument like an infinite

regress for every asset i mean you can make that i mean everything is just perception no no because i can make an argument i can look at tes. I can be like, oh, cars are trending towards electric. This idea of electric cars are cool. They're efficient. I can make a case for that. I can actually buy a car. I can. There's people who actually own cars. There's a demand for them. iPhone, Apple, Microsoft, Office, all that stuff right here. Like the main use case that you guys have laid out of the store value isn't even being done through ETF. It's done through. It's a derivative that you're buying a share of and they decide whether or not to sell it. Yeah, that's echo chamber nuance, I think. And I don't necessarily disagree with you in principle, but I don't think your average person who buys any ETF is thinking about the fact that it's a derivative, the way that you just described it. I think that there are plenty of people out there who either are interested in Bitcoin, but are afraid of self custody or afraid of all the negative things they've heard, or who be literally want to buy it, but for some reason, they can't. We know that a number of institutions

obviously can't just go buy spot Bitcoin, they could buy an ETF. I'm not saying they will, or that the demand is there. But I don't think you can argue against the fact that a spot ETF gives a vehicle for those who now want to or will in the future to gain exposure to this asset class in a manner that they are comfortable with or feel is safe. Right. And I think that's the underlying. Now, you're making the argument like, what's going to cause that demand? What's going to get them in?

I don't know what's caused the millions of people who have bought Bitcoin in the first place to do it. There's obviously an argument there, right? It's the same. But that's growing. That's only growing over time. That's only growing over time. You got to set up the entire idea that there's a lot of artificial happening here in this space that we've now been privy to the past couple of years. So besides that, and not many actual people doing it.

So, and so in the grand scheme is like, people are gonna eventually question, why should I be buying this thing? And if there is no reason besides, oh, it's a scarce asset with 21 million. And if we wanna talk about humans, the reason is because price will go up and that'll make them think the price is gonna go up

the same reason that people buy everything. I've always said the best marketing for Bitcoin is price going up, sadly. Sure, there's no unique value prop is what I'm saying. The first thing is just another speculative asset that people can hopefully buy into and then sell and whatever, do their thing. Yeah, it's another thing. But there's no unique value proposition here. I'll give you the unique value proposition of Bitcoin. So firstly, there will be reasons to hold it in an ETF

and there's reasons to self-custody. People will have very different reasons. I imagine in my idealistic world, more would go to self-custody, but owning things has tax implications. Spending things has tax implications. And so all these things factor into people's decisions, convenience, technical literacy.

But now we've got two ways to getting into the market. But the reason to own Bitcoin is there's only ever been three reasons. And that still continues to be three reasons. One is that it's money you can own. And when you every single year, we get more reasons why you want to own something. And obviously, it has tax consequences. But when the bank when banks when you realize, you know, the when you one of the biggest use cases is when you try and spend it when you spend over $10,000, the user

experience is very complicated and tricky, especially when you go into larger transactions. So that's the second case, which is money you can actually spend and create an immutable record of it on a blockchain, whatever the value is, wherever it's going. And the third is that it does have a fixed supply. So therefore, you can combat money printing. It's money you can own, money you can spend, and money that has a fixed supply. And there's many different reasons why people would want those different use cases. And when we can sit here and speculate and say, no, no, it's all about the global south, not having access to bank accounts. Well, what about the global north having a banking system that is unstable? We saw that this year. So many people do it for many different reasons.

But one thing is clear, every single four years, significantly more people want to own their own money, spend their own money, or have a fixed supply of money and hard money. And that has been proven. And I think it will be proven for the next four years and the next four years. And every time the price goes up and down, people say, oh, have I missed the boat? And when it crashes, this just keeps happening time and time again. And at some point, the last people, which will probably be the Federal Reserve, will capitulate and say, OK, now it's safe enough. Now is the time. And that's the that's the theory.

But in the words that you speak of, like, let's say the American public, 150 million people work as the American workforce in the United States. They get paid every two weeks. They want to hodl Bitcoin. They hodl Bitcoin once a month because that's all they're capable of. They do one to five, 10 percent, whatever you want to do. Any percentage, they want to self-custody that. That is 2.7 years worth of transactions in that one instance, not even including the idea of the employer paying them the money to then go buy the Bitcoin. Right. If the employer paid them Bitcoin and they've got Bitcoin and then they want to self-custody. That's 2.7 years. Sorry, is this a scaling debate?

Yeah, we're not going there because we have to wrap, guys. I appreciate it. Okay. I think we've beat this one to death. And I don't think we're going to solve the value proposition for Hector. Who is a Bitcoiner, I believe, right, Hector? Are you pushing people into all Bitcoins? Is that the philosophy? I'm pushing into the idea that Bitcoin should be for everyone. Okay, so it's a BSV pitch, yeah?

It's a Bitcoin pitch. It can be happening on anything. On Simon's point, the other aspect is censorship resistance. Like nobody can tell me who I can and can't send Bitcoin to. But if I try to send $25,000 anywhere, unless it's like a sanctioned account or whatever, you know, but the biggest thing is like, I can send it to whomever I want. And privacy is going to be more and more hard to attain. That's a big part of the value proposition of it. You know, every transaction you have is being tracked by your bank, by CIA, government regulation, you know, everything is being tracked.

That'll be true of our Bitcoin transactions in the United States as well, unfortunately. I agree with you, by the way, but, you know, the IRS is going to want to know, or FinCEN, that you sent $25,000 to someone regardless of how you sent it. At least as an American. Unfortunately. But you can send it. The other way you have to do it is, like he said,

terrible user experience at a bank. You have to set a wire, create memos, wait two hours, have a meeting with a representative. With Bitcoin, it's literally just give me your address.

Yeah. Which is why for another day we can have the spaces on why stable coins are the killer app of crypto because you can do that even easier with a stable coin. But I'm going to let us wrap up right there. Mario, we're good to go. Thank you, everybody. We'll be back tomorrow, 1015 a.m. Eastern Standard Time. Thank you for all the guests. We love the robust argument and conversation. Everybody follow our guests, please, because if they're up here, it means we like them. All right. That's all we got.

Thanks. See you all tomorrow.