The Wolf Of All Streets - Invest As Much As You Can In Bitcoin | Brian Estes

Episode Date: January 21, 2024

Brian Estes, the CIO of Off the Chain Capital, tells how he became a Bitcoin believer and explains why you should cut your extra costs and invest in Bitcoin. Brian Estes: https://twitter.com/BrianEstes32 ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/ ►► 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 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 1:17 Bitcoin ETF 4:00 Selling pressure 7:15 RIA 12:00 The value of Bitcoin 15:53 Owning Bitcoin vs Bitcoin ETF 21:00 Boycott Vanguard 25:45 Financial advisors system is rekt 27:55 Does Larry Fink believe in Bitcoin? 29:40 Jamie Dimon vs Larry Fink 33:19 We need education about Bitcoin 36:25 Busting myths about Bitcoin 40:00 Why Brian is so passionate about Bitcoin 44:00 Bitcoin will be the next monetary system 47:12 Debt problem 50:37 Invest in Bitcoin 55:31 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.

Brian Estes and I have been trying to connect to have a podcast conversation for almost two years, but the timing now is perfect. Brian used to be a registered investment advisor, an RIA, and he makes the case in this amazing conversation for why RIAs should be putting all of their clients into Bitcoin, even if they don't love and necessarily understand the asset. We talked about this, Jamie Dimon, Larry Fink, the ETF approvals, what it all means, and of course, the importance of Bitcoin in this epic conversation. You don't want to miss this one. You mentioned to me that you were a registered investment advisor, which all of a sudden has

become this incredible catchphrase that probably most people in Bitcoin had never heard of. And now it's all they want to talk about because of the Bitcoin spot ETF, obviously. First, I mean, let's talk about the approval itself. It was a long time coming, over 10 years since the first ones were filed for by the Winklevoss twins. How big of a moment is this for this industry to have these products approved? Yeah, I mean, like you just said, it was 10 years coming. Cameron and Tyler filed for the first ETF when Bitcoin was sub $100, right? I think it was at $82 when they filed for their original ETF. And it took a

lawsuit by Grayscale to actually make this happen. So I think the industry needs to thank Grayscale for pushing on this. So, you know, it went to an appellate court, three judges decided that the SEC was being arbitrary and capricious and ordered the SEC to allow the ETF, to allow the grayscale Bitcoin trust, GBTC, to uplist to an ETF. It was already an SEC reporting company already. And so it was just that one additional step to have daily liquidity and that the SEC was blocking. So now that was done, the SEC decided to allow more or other ETFs to launch too. So they approved 11 of them last week. And they're off to a great start. Just in the first three days, they traded over $10 billion worth of trading volume. And so just to put that in perspective, if you look at the largest ETF launches over the past three years, and look at the trading volume of those last year, it doesn't, you know't get close to $10 billion. And these traded $10 billion in three

days. So this is a big event. Right. I mean, the largest ETF launch in history or the most successful was actually the Bitcoin Futures ETF, Bitto, which did a billion in roughly 48 hours. GLD was the only one other than Bitto that was more successful than BlackRock's ETF in this case. And BlackRock, as you said, is one of 11. So you're talking about BlackRock competing with 10 other companies for their launch and got to a billion dollars in less than four days. Interestingly, you said that we should thank Grayscale, which we absolutely should. They took the SEC to task. They won that case. Gensler and the SEC obviously begrudgingly approved these as a result of that. Gensler didn't really seem very thrilled to have been forced into this position. But there's been

an overhang as a result with the launch, right? Because GBTC converting to an ETF has caused quite a bit of selling pressure and obviously some muted price action. Many expected to see a huge boom. But if you really dug into the data, it was pretty impossible that that would happen with how much GBTC was going to be sold and then how much Bitcoin would hit the open market. I think it was, we're recording here on a Thursday, it was $450 million this morning, $800 million just yesterday. So what do you make of that sort of forced selling pressure in this case? Yeah. So Grayscale made the business decision to reduce their fee from 2% a year to 1.5% a year.

But the other 10 ETFs, they're closer to 0.2%. So if you're in a tax-free account or a tax-deferred account like an IRA, it doesn't make sense to hold Grayscale because you could sell it and convert it over to BlackRock or Fidelity or Franklin Templeton or Bitwise and one of these other ETFs and get a lower fee structure. But there is a pretty good chunk of money that's at Grayscale in GPTC that's taxable and that has a large gain on it. So it doesn't make economic sense to sell it, pay the 20% capital gains tax plus the Obamacare tax, which takes you up to close to 25%, and then to save 1.3% a year. So that doesn't make economic sense to do it. So I think there's going to be a bifurcation in the market. So what we're going to have is GBTC as the trading vehicle, because it's the most liquid with the deepest market. So big institutional traders could invest a billion dollars and get a billion dollars out of it pretty easily because it's very liquid.

Whereas the other 10 ETFs, they'll be more of like invest for the long term and not really used for trading. And so I think that's how what Grayscale is thinking is that we have this premium product with a very deep liquid market, and we could justify 1.5%. And the other 10 are basically on a race to the bottom on the fee schedule. Yeah. And I think there's another element to the selling pressure, obviously, which was all of the people who are trading that discount, right? There's a lot of people who bought GBTC at a 50% discount, 40, 30% discount, finally seeing it effectively go to NAV, right? So this was their time to exit regardless. Well, there are a lot of people that bought it at a 50% premium too, right?

And so they went 50% premium, 50% discount. That's true. The Widowmaker trade that buried... Yeah, they're probably like itching to get out at, you know, whatever cost. So, yeah, that was the widowmaker trade of the last cycle that buried effectively BlockFi and Three Arrows Capital and the rest of them, the premium that they thought would never end. Right. And so to your point, I think GBDC will probably remain the core trading vehicle around this, but that people are going to probably invest in the other ones. But I want to talk about the RIA aspect. So we've seen these approved. There was, again, a sort of misconstrued sentiment

that we would see these immediate huge inflows from institutions and from retail. But the reality is, A, we have companies like Vanguard and Merrill Lynch who aren't even offering these on their platforms, which is worth discussing. But also RIAs, this is a brand new unlock. They may not even have been aware of this, and it's going to take quite a bit of time for them to be educated

and actually start to offer this to their clients. Is that true? Yeah. And I need to put out a disclaimer. So I'm the CIO of Off The Chain Capital. We're an SEC registered. We're an RIA. We're registered with the SEC um before running off the chain um i was an institutional equity broker um i was in the industry for 23 years and so i i want to talk to the investment advisors that are out there and to the rias that are out there because i i was there you know i used to you know be in that business and when i first learned about bitcoin in 2014 i i thought it was a total scam. And coming from traditional finance, you know, I thought it was like a pump and dump scheme or

some sort of, you know, I just, you know, I just thought it was a scam, you know, but after reading the Satoshi Nakamoto white paper and really diving into it and to understand what Bitcoin is, I realized, you know, 10 years ago that we are going to rebuild our entire financial system on blockchain technology. And Bitcoin is just the very first blockchain. And I think it ends up being the monetary layer of the world that we'll build different layers on top of. But this is very important technology that financial advisors and RIAs need to understand. Because when you look at the data, the data tells you that if you're a fiduciary, you need to have an allocation of Bitcoin in your client's portfolio. And so what do I mean by that? back to January 2018, the Federal Reserve, the St. Louis Federal Reserve Bank put out a white

paper in January of 18 that said one of Bitcoin's best use cases is as a diversification tool. And what do they mean by that? They mean that by adding a small amount of Bitcoin to an investment portfolio, it diversifies it, it increases what's called the Sharpe ratio, which are the risk adjusted returns. And by doing that, it's a benefit to your clients. And so, and most, you know, like I said, financial advisors and RIAs, they're under fiduciary responsibility to understand that. So if they haven't taken the time to actually dig into the research and understand why Bitcoin is beneficial for investment portfolios, like I said, they're under fiduciary responsibility to do that. And it's very important to understand that adding a small

amount of Bitcoin increases that Sharpe ratio, which is the job of financial advisors. You know, they need to make investments that increase the risk adjusted returns. And it's not only the Federal Reserve that says that, it's also BlackRock. BlackRock came out with a report about, I think it was about six months ago, looking at the efficient frontier of how much Bitcoin you should have in your portfolio. And based on the efficient frontier, their number is 84%. The optimum amount of Bitcoin in an investment portfolio of Bitcoin stocks and bonds is Bitcoin 84% of the portfolio. So naturally, no one's going to do that. But you should consider allocating 1% to 2%.

Zero is the wrong number. Yeah, get off zero is one of my favorite sort of idioms from the Bitcoin space. Mark Yusko says it all the time. I think it's such an important point that you made for both RIAs and retail investors. You want assets that have idiosyncratic risk in your portfolio. And I've used that argument actually recently. I have a co-host on a finance Twitter spaces that has nothing to do with Bitcoin and he absolutely hated Bitcoin. And through six months of sending him that exact same data you just described, I finally got him to buy it,

even though he still hates it because he understands that it's uncorrelated. So my new argument to people is you still need to own it even if you think it's a scam and start there. Yeah. But it's also important to dive deeper into why is it uncorrelated? There are lots of things that are uncorrelated to stocks and bonds. But what the Federal Reserve said and what other studies have shown is that the reason it's uncorrelated is because it's valued differently. If you look at the value of stocks, they're valued on PE ratios, price to book. If you look at bonds, bonds are valued on credit risk, duration, interest rate risk. But when you look at Bitcoin, Bitcoin's based off of scarcity. So you look at a stock to flow model. You could also base

Bitcoin's value on the network effect or Metcalfe's law. So we have a model that uses Metcalfe's law to determine the value of Bitcoin. And when you start to look at these different models, the value Bitcoin and compare the models to value stocks and the value bonds, that's why it's uncorrelated. Because network effects like Metcalfe's law and stock to flow ratios that measure scarcity, those are unaffected by PE ratios and credit risk and interest rates. So when you add an asset that is valued differently than stocks and bonds, that's what increases the Sharpe ratio and adds that risk-adjusted return to the portfolio. It's interesting because to a lesser degree, gold has a similar effect, and I rarely see RIAs diverging from the 60-40 portfolio.

You would think already that they would be at a 60-38-2 with some other kind of hard money asset or some kind of other uncorrelated asset. But we still effectively have this 60-40 portfolio, even after seeing how poorly it's performed in the last couple of years. Why is that? Well, there's two reasons. So when you break it down, if you look at the financial advisors that work for the banks, so Merrill Lynch is owned by Bank of America. Wells Fargo Advisors is owned by Wells Fargo. So Wells Fargo and Bank of America, they don't want Bitcoin to succeed. It jeopardizes their business model.

And what do I mean by that? Well, Bank of America and Wells Fargo, they're correspondent banks, and they generate a lot of fee income, billions of dollars a year on just moving money around the world. Well, if you could do that with blockchain technology, and it's basically free to do that, then that revenue disappears, just like the revenue to Blockbuster disappeared when, you know, when streaming came along, and the revenue to Kodak film disappeared when digital cameras came along, and the revenue to MCI and WorldCom disappeared when voiceover internet protocol came along. So these banks know that. So they're not allowing Merrill Lynch and Wells Fargo advisors, those advisors there,

to offer Bitcoin to their clients or Bitcoin ETFs. The other part, you have Edward Jones, Stiefel Nicholas, these other brokerage firms. The reason they don't like Bitcoin, in my opinion, is that it jeopardizes the utility of a financial advisor. Because if you could earn dollars and store that in Bitcoin, which is, in my opinion, the best store of value humans have ever created, then you don't need a financial advisor anymore. You don't need someone to tell you what's your allocation between stocks and bonds and how you pick stocks and what portfolio to have. And you just don't need financial advisors anymore. And so there are tens of thousands of financial advisors in the United States. And I think their jobs are in jeopardy

because once people understand that, well, really the simplest thing is just own Bitcoin. You don't need to own real estate and stocks and bonds to preserve your time and your effort that you took to earn those dollars. You could just plug it into Bitcoin and sleep at night. Agree. And that then gives us the sort of confusion maybe that will exist in the mainstream between owning Bitcoin and owning a Bitcoin spot ETF. So do you think that these ETF products are a general benefit that they'll send people down the rabbit hole and eventually they'll get to self-custody? Or do you think that they could be a bit of a Trojan horse or a threat to the underlying asset or to people finding it for the right reasons? It's both. So what I'd recommend to people, and this isn't financial advice, but what I'd suggest is that if it's in a taxable

account, just own Bitcoin directly. And there's an added reason to do that. So one of the people running for president is Robert Kennedy Jr. Part of his platform is to make the conversion of Bitcoin back into dollars tax free. And so it puts it on par with other currencies like the euro. And so if that happens, then we can invest in Bitcoin, own it, and then convert it back to dollars when we want to spend it and not pay taxes on it. You want to own that directly. You want to own Bitcoin directly. But if you own Bitcoin in an ETF, an ETF is a security. So when you sell your Bitcoin ETF, which is a stock, you'll have to

pay taxes on it. So in my opinion, it's better to own Bitcoin directly rather than owning it through an ETF. The other benefit of owning it directly is that you keep the power out of the hands of these big financial institutions like BlackRock. I don't think it's anyone's best interest except BlackRock's best interest to accumulate a lot of Bitcoin. And so I think there could be a possibility that if BlackRock and Fidelity and these big institutions control a lot of Bitcoin, that they'll have undue influence on the future of Bitcoin.

And we just don't want that to happen. So I just think it's better to own it directly if you can. But there are institutions, endowments, foundations, asset managers that can't self-custody Bitcoin. So basically, own it. The ETF is their only option. So if that's their only option, then you have to do that. But like I said, in my opinion, it's better to own it directly. Yeah. And 401ks and Roth IRAs for retail, people are going to want to trade the ETF in there because obviously there's going to be the tax benefit to doing it, I think, in that manner. I think the

more cynical side as well of what you were saying about RIAs is that they've never been able to recommend Bitcoin because they couldn't make a fee on it, right? I mean, there is the fact that obviously they have a fiduciary duty. They're not going to send you to Coinbase and tell you to buy Bitcoin and send it to self-custody. They couldn't have done that. But now they can at least make money on recommending Bitcoin, which they could never do in the past. I mean, isn't that part of the pitch to RIAs right now? Put people in 1% of this, you get paid. Yeah, finally, you put it in their RAP account and finally get paid on it. But I did work with a number of large brokerage firms 10 years ago, back in 2014 to 2016. I was an early investor in Coinbase.

And I was tasked with the job of finding brokerage firms that would want to work with Coinbase so that they could invest in Bitcoin in their IRAs. And then Coinbase would do the execution, custody the Bitcoin, and use what's called level three and level four networking to display that Bitcoin on the brokerage statements. And I went to a number of the very large brokerage firms and met with their C-suite executives to pitch this idea, and they didn't want anything to do with it. So, you know, and still today they don't offer Bitcoin. You know, Edward Jones, Stiefel Nicholas, you know, Wells Fargo advisors, you know, Merrill Lynch, they're not allowing their clients to invest in the Bitcoin ETFs. And, you know, I think that, I mean, I hate to say this, but these financial advisors and these firms

aren't doing their clients a just service. And Bitcoin's been the best performing asset class 12 out of the 15 years. When you add a small amount to a portfolio, it's proven it increases your Sharpe ratio. And so there's no reason not to add Bitcoin to investment portfolios. And in my opinion, like I said, they're doing their clients a disservice. And if clients are at these firms, I would suggest that they start looking around at other firms that are looking out for their best interest. You may not know this, but I actually started the hashtag Boycott Vanguard, and we got it trending with tens and hundreds of thousands of people using it. Because the minute I saw that news, I immediately took my one account that I did have in Vanguard and

transferred everything to Fidelity. But people don't even have access to these products yet. I mean, Vanguard is a huge brokerage firm. The ones you mentioned are huge. So we can talk all day about how important it is. People can't even get them unless they're going to literally leave their brokerage and transfer to another one like I and many other people did. But it's a huge problem. What do you make of Vanguard's decision to come outright and say, we're not going to offer these, they don't align with our investment philosophy, you can't buy them here, and then to even retroactively go back and delist Biddo, which they curiously offered for all these years, which is a futures product that didn't even track

the underlying asset and was more volatile and risky for customers. Is there something more nefarious here? Or is this just them drawing a line in the sand? Because it doesn't seem to make much sense to me. Yeah, I don't think it's nefarious. I just think it's a business decision. And in my opinion, it's a bad business decision. And there are consequences of the business decision. So it's a free country. And if people want to own Bitcoin and Vanguard doesn't offer it, like you said, transfer to Fidelity. Fidelity was very early into this industry. Abby Johnson is a leader and hardly anyone ever talks about her.

She's the CEO, the ceo of you know the president of fidelity you know they started mining bitcoin back in 2014 trying to understand what this technology is all about they've been experimenting with it and they figured it out they figured out it's the best store of value humans have ever created and so they're you know they're allowing their clients to you know own bitcoin you Fidelity. You could buy it directly at Fidelity. You could go into Fidelity ETF and you could invest in the other ETFs at Fidelity. Fidelity is an oasis for people that value freedom and Vanguard's not. So, you know, let, you know, let the chips fall where they may, but, you know, I think he made the right decision by transferring from Vanguard and, you know,

moving your money. And I'm a big fan of Jack Vogel, the founder of Vanguard. I mean, he, you know, you know, but the current, you know, Jack passed away and the current management of Vanguard, I think they're misdirected. They're misdirected. I'm just curious when it became the job of a brokerage house or one of these large financial institutions to gatekeep and to pick winners and to decide what their clients can and cannot invest in, especially when those products become literally released, regulated by the SEC. They've given the stamp of approval by the government. They're trading on the same exchanges as everything else. And they're obviously are offering much more volatile and inferior products. It just doesn't make any sense to me.

Well, I was in the industry for a long time, for over 20 years. And I could tell you, and I hate to say this, but the system is rigged. I was in that industry. I was a retail stockbroker for a few years, and I was an institutional equity broker. And then I ran my own investment advisory firm. And I just got sick of how the system is rigged against the little guy. And I'll explain how. So when I was a financial advisor, the investments that are offered through the investment firms, they're basically pre-approved. And they're not pre-approved by the compliance department. They're basically

pre-approved by the government. There's an overriding regulatory agency called FINRA. And if FINRA doesn't like the investment, the brokerage firms can't offer it. And so as that trickles down, you're basically, if you're at Merrill Lynch or a FINRA-regulated brokerage firm, you're basically only allowed to invest in investments that the government approves of. And so I think that's where it stems from. I think it's a top-down approach and the government doesn't like Bitcoin and they want to slow down the adoption of it. And all that's doing is hurting the people, the investors who have accounts at Merrill Lynch and Edward Jones and Cephal and these FINRA-regulated investment firms.

My glass half-full approach, not with Vanguard, certainly, because they've made their stance clear, but with a number of them and certainly with a lot of the RIA platforms, is just they're waiting for the dust to settle to understand these products, to educate themselves now that they're launched. I think from our echo chamber, it's easy to expect that they would have done their due diligence before these things even launched. But most of them were probably just waiting to see what happened, I would imagine. If that is true, for the RIAs who do want to offer this, who do anticipate being able to, do you think it's a matter of time, three, six months,

nine months, they start understanding these, having conversations with their clients? Or do you think a lot of these are just going to be outright dismissive until the end of time? I don't know. When I hear some of these CEOs at the brokerage firms talk, I hear it all the time. It's like, well, we're a strong believer in blockchain but not bitcoin blockchain and i was like okay you don't get it you know bitcoin is in my opinion is the only true use case for blockchain all the other ones are experiments right now you know bitcoin is a store of value it's a way to take your time and your energy and your talent that were used to create dollars and save them over time and space. And it's the best form of money humans have ever

created. And you should ask your financial advisor one simple question. How many hours have you spent studying Bitcoin? And if it's less than 40 hours, you need to find a new financial advisor. It takes at least 40 hours of study to understand what Bitcoin is and how this is going to change the future of finance. And if it's under 40 hours, you need to start shopping around for someone who understands what Bitcoin is. Right. So my optimistic side says they're going to start doing the work now that that Bitcoin spot ETF is approved and that a lot of them are going to get there just like we did. Well, let's hope. I mean, you were dismissive from the beginning.

The smartest and most powerful names in Bitcoin and in finance were dismissive from the beginning. The smartest and most powerful names in Bitcoin and in finance were dismissive from the beginning. Saylor was dismissive from the beginning, Paul Tudor Jones, Bill Miller, Larry Fink, right? I mean, in 2017, I think Larry Fink said that crypto or Bitcoin was just an index of fraud, something to that effect. And now you have Larry Fink, who I would argue is one of the most powerful five people on the planet, on a literal roadshow on Bitcoin's behalf right now. Now, do you think that that is, it's probably going to be both. Self-interest, because he's offering this product. I don't quite get there because they have $10 trillion in assets under management. This is a drop in the bucket, even if successful. Or do you think that he's been truly orange-pilled?

No, he understands. When you hear him talk, he was dismissive at the beginning, but the data doesn't lie. When you look at the numbers and you see how Bitcoin benefits investment portfolios, then it opens your eyes. And it's not just Larry Fink. It's the Federal Reserve. The Federal Reserve Bank of St. Louis was saying this six years ago. And now Larry Fink understands and eventually everybody will understand that. I don't repeat myself, but when you add a small amount, like 1% to 2% of your investment portfolio to Bitcoin, it increases those risk-adjusted returns. It increases that Sharpe ratio. And that's what's most important to an investment, to a portfolio. You want to increase those risk-adjusted returns as much as you can. You got Larry Fink on one hand, who is obviously

one of the most powerful people in the world in finance. And on the other hand, you have Mr. Blockchain, Not Bitcoin, Jamie Dimon himself. He was just interviewed actually at WEF this week. He looked extremely flustered that he was being forced to talk about Bitcoin once again, but he literally did that stump speech. There's a future in the technology. We use it to move money fast, tokenization, but Bitcoin's a pet rock and has no use case. What do you make of Jamie Dimon versus Larry Fink? Yeah. So Jamie's talking in his book. He's another one of the ceos of the correspondent banking system jp morgan makes billions of dollars a year off moving money around the world and he understands as clear as day that

bitcoin so i take those fees and drive them close to zero just like you know like i talked about just like what happened with internet or what happened with long distance phone calls and what happened with film and what happened with streaming when Netflix came out and put Blockbuster out of business. So just to dive a little bit deeper into that, the world spends $2 trillion a year on moving our money. So these are fees paid to banks, to PayPal, to Visa and MasterCard, $2 trillion a year we as humans pay just to move our money. Blockchain technology and Bitcoin

is going to drive that $2 trillion down 99%. And that's just what's going to happen. And so JP Morgan and Jamie Dimon, they're trying to protect that fee revenue. And I don't blame them, but that's what he's doing. He's just trying to protect his base, his fee revenue. And so he badmouths Bitcoin because of that and you know when i saw that interview you know and i know they can't ask this question because he would never come on the show again on cnbc again but when he was saying that bitcoin's used for money laundering and sex trafficking and you know all these nefarious activities i mean just look at jp morgan jp JP Morgan has paid $38 billion in fines since Jamie Dimon's been CEO. And what are the fines for? Well, the fines are for sex trafficking.

Epstein's banker. They were Epstein's banker. Yeah, they were allowing Epstein to sex traffic and they provided the banking to do that. You know, what else did they do? Oh, they they they, you know, banked Bernie Madoff. Yeah, they had to pay a two billion fine, two billion dollar fine for Bernie Madoff banking Bernie and allowing all the corruption to happen. So J.P. Morgan isn't, you know, it's like the pot calling the kettle black. I mean, you know, they, you know, they're the ones that are banking a lot of nefarious activity.

And when you look at the amount of, you know, bad things that get banked with Bitcoin, it's, you know, when you look at the studies from chain analysis, it's less than one-tenth of 1% of the Bitcoin transactions. It's very, very minimal. So there's no comparison to saying, would Bitcoin be used for nefarious activities versus the US dollar and versus JP Morgan? I mean, it's just a drop in the bucket. And when you listen to his speeches,

it's like, you're not talking about Bitcoin, you're talking about dollars. That's what you think naturally, if you're a Bitcoiner, and you're just projecting, like you said, sex trafficking, Epstein, their biggest fines are for money laundering. And he said twice in a row that the only use case of Bitcoin was for money laundering. I mean, the hypocrisy is astounding. But the thing is, unless you really know and you understand, 99% of the people who are watching these mainstream networks and watching him on CNBC or watching Elizabeth Warren give her speeches in the Senate, just spreading fake news, they believe it because they don't know better. How do we educate people to understand that what they're saying is outright lies? I mean, Elizabeth Warren, we know, has claimed that it's being used for terrorist financing of Hamas. She quoted this huge number, 80 million or something.

Quickly, it was pointed out it was false. The Wall Street Journal article that quoted it retracted it from an article, and she went scorched earth and doubled, tripled and quadrupled down on the narrative after that to try to file Senate bills. And all she talks about now is terrorist financing. Most people are going to believe that. Right. But I think eventually the truth comes out. Yeah. Just like, you know, we don't hear about the ESG narrative anymore about Bitcoin, how it's bad for the environment. Because the truth is finally understood. Because Larry Fink was the king of ESG and filed for a Bitcoin spot ETF,

pretty much blew that out of the water. Yeah, but Bitcoin is actually good for the environment. There's a company called Caruso Energy. What they do is they cap the flare gas coming out of oil pumping. And they use that flare gas and convert it over into electricity and mine Bitcoin from it. What you normally do with flare gas is light it on fire and burn it up in the atmosphere, which is terrible for the environment. So when you look at stranded sources of energy from hydroelectric dams, you could use Bitcoin miners, co-locate them with the

stranded energy, and then you're using up this waste product that's sitting out there. So Bitcoin is good for the environment. And just look what happened in Texas over the last couple of days. The Bitcoin miners scaled down their mining activity to allow more electricity to come onto the grid to power the electrical needs for heating because it's cold down there right now. And so Bitcoin miners are the guardians of the grid. They're the ones that are providing that cushion in the grid, that flexible demand so so that people, you know, their energy use or their energy prices stay stable. And so they're able to flip off their miners, you know, within a minute and allow more electricity going to the grid. So, you know, these miners provide an economic incentive to build more renewable energy.

And so they're, you know, Bitcoin is actually very, very good for the green energy ecosystem. Do you think then that it's just a matter of time, as you said, that we dispel each one of these myths one by one? I mean, the electricity, you know, boiling the world's oceans, more electricity than the nation of Argentina. Recently, they said that it took an entire swimming pool to mine a single Bitcoin. Like you said, those narratives are dying. But we have these other circular narratives. And right now, the terrorist funding one seems to be the biggest one. Do you think that eventually they just become dispelled with time and education? Or do you think any of these can actually stick? I mean, I'm concerned that when you have these

people speaking to this audience that a lot of these narratives will stick. Well, they stick in the short run until, you know, until the time and the truth comes out. So, you know, just going back to the ESG thing, you know, a lot of that information came from University of Cambridge about three or four years ago when they released their, so it's the Center for Alternative Finance at Cambridge that released a study that basically said that Bitcoin's energy use is excessive and it's why I use up a large portion of the world's electricity in the future. And I'm an alumni of the University of Cambridge and I reached out to them and I asked to see the data. And so I worked with them

to refine the data. They had made a glaring mistake. They were looking at only energy that is in front of the meter and not behind the meter. And so behind the meter, energy is like stranded electricity at a hydroelectric dam. That electricity never reaches the meter. And so but once you incorporate behind the meter analysis, and they're the numbers drop. And so their most recent study that just came out a couple months ago, corrects that information. And so they actually said we made a mistake four years ago, when we came out with our original estimates. And now it looks like, you know, Bitcoin is actually good for the environment. It, you know, balances out the grids.

And, you know, it does, and the carbon footprint on Bitcoin is minuscule. I mean, it's, you know, it's very, very small compared to other types of, you know, you know, consumption of electricity. When you look at the total electrical use of Bitcoin, it's 0.0001 of all the world's electricity. When you look at the total electrical use of Bitcoin, it's 0.0001 of all the world's electricity. So even if you flip it off, it doesn't save the world. It's 0.0001 of the

world's electricity. It's such a minor amount that it's just insignificant. Yeah, I'm waiting for the war on Christmas lights and washing machines if all things are created equal. And to your point, all electricity is not created equal. If it's wasted, it shouldn't even count at all. Right. So you bring up washing machines. I mean, a great example is if you look at the amount of electricity used to mine Bitcoin, it's about equal to the electricity used to dry your clothes, electric dryers. We don't have to dry our clothes. Put them outside.

When I was a kid, my parents used to hang the clothes out in the clothesline. You know, a dryer is optional. You don't have to use a dryer, but we choose to use a dryer. Well, if we want to be environmentally friendly, why don't we just all hang our clothes out? Well, no one's going to do that, right? I mean, it's convenience. And, you know, but, you know, we don't tell people to get rid of their electric dryers. Yeah, it's complete nonsense.

It's interesting. We've spent about 40 minutes talking about Bitcoin already, and we've only talked about why it's good for your investment portfolio primarily. And we haven't really even dug into why Bitcoin is so important in general. The real underlying reason, we can get the RIAs there, I think, on getting people to put it into their portfolio, but we then need to get people to understand why they want to actually own and hold this asset. I know you've been a huge advocate, have made some incredible speeches and podcasts about why Bitcoin itself is important. So I would love to get the revised version of that. What got you into Bitcoin in the first place and why are you

so passionate about the asset? Yeah. So, I mean, I mentioned this a while ago, but when I read the Satoshi Nakamoto white paper, the first time I read it, I just, I didn't understand it. Second time I read it, it kind of clicked a little bit. But then the third time I read it, I just could see as clear as day how the legacy financial system is going to be rebuilt using blockchain technology. And that's what got me passionate about it. I don't want to say I could see the future, but I just understood. I just understood that this is the future. And so I decided to sell my practice. I was running a financial advisory firm at the time. I sold my practice, took all that capital and started building blockchain companies back in 2014, 2015.

And, you know, it's 10 years later. And, you know, looking back, it was a good decision. But back then, it seemed like a very, very risky decision. I mean, it was, you know, a lot, it was a good decision. But back then, it seemed like a very, very risky decision. I mean, it was, you know, a lot of ups and downs and pain. I've been through three Bitcoin halving declines of 70 to 80 percent. But, you know, that's just part of the deal. But, you know, where we're going is that, you know, not only is Bitcoin, you know, the best form of money humans have ever created, it's the most moral form of money humans have ever created. And what I mean by that is this fiat system that we're

on, and what fiat means is by decree. When you have a dollar bill in your hand, those used to be backed by gold or silver certificates, but now they're not backed by anything. Back in 1971, 53 years ago, President Nixon took the U.S. off the gold standard. So we've been running an experiment for 53 years. For the 10,000 years before that, our money was backed by a commodity. It was either backed by gold and silver, or before that, it was backed by shells or salt or stones. It was some sort of rare asset in our local community. And this past 53 years compared to 10,000 years, it's an experiment. This experiment is failing. And the reason it's failing is because

the government doesn't have the discipline to stop printing more and more money. And so when you print more money, it dilutes the purchasing power of the existing dollars that are out there. And so it takes more dollars to buy the same thing. And that's why prices keep going up. Our money's been diluted. It's like diluting wine with water. And when you look at sacred texts and the Bible or the Koran or the Torah, they all say the same thing, that we should have just money. And having a money printer is like having your thumb on the scale, and that's unjust. All the religions say that it's against God's will to have an unjust weight and measure. And the money printer is an unjust weight and measure. And so once you dig into what money is really about, you'll find out that the fiat system is

corrupted. It's unjust. It's immoral. And that we as humans will eventually opt back into a commodity-based monetary system. And I believe that system is going to be Bitcoin. I think Bitcoin is going to be the next monetary system that humans will opt into, just like we were on a gold system for 3,000 years. We've seen countless fiat currencies collapse, but we haven't seen the fiat system collapse, obviously, as the dollar continues to be the global reserve currency. Yeah, absolutely. But do you think that's something that happens in our lifetimes? I mean, we talk about Bitcoin as the future global reserve currency.

Is that 10 years, 100 years, 1,000 years? I don't want to see a collapse. No, nobody does. But in my opinion, we will have a managed decline. And there's nothing that's going to be able to stop it. The government doesn't have the discipline to stop printing money. They have to print. And if you look at the balance sheet of the United States, we're $34 trillion in debt, but there's over $130

trillion of present value of unfunded liabilities. We don't have the money for that either. So these are promises the government's made to retirees, Medicare, military, Social Security. These are promises that we've made. We have $130 trillion of present value of unfunded liabilities. We don't have that money. So where does it come from? It's going to be printed over the next 30 years. So our debt at a minimum is going to grow from $34 trillion plus another $130 trillion on top of that. So in 30 years, the dollars that you have today, they're going to buy one-tenth of what they could buy today. Or the money that we have today, we'll buy one-tenth 30 years from now.

So when you look at like a car, you know, cars today or, you know, average cars say $50,000. Well, the average car in 30 years is going to be $500,000. You know, if the average home is $500,000, the average home in 30 years is going to be $5 million. And the reason is that money has been diluted. It just takes more of those dollars to buy the same thing. And I think what's absolutely insane that people don't talk about as much is that that debt was $31 trillion six or seven months ago before they raised the debt ceiling. We've added 10% to it in seven months. Well, that's a scam. So there's no debt ceiling. Of course. They call it a debt ceiling. But when you look into the actual verbiage, what it says is that there's no debt ceiling. And the debt ceiling, instead of a dollar cap, it's a time cap. So they changed the definition of what a cap is. So instead of capping it at a dollar amount, they capped it at, there's a

certain date in 2025. I forget what month. So we could spend as much as we want, take as much debt as we want until year 2025. And I know it's more complex than this, but A, adding $3 trillion in debt in six months is absolute insanity. But you talk about the need to print money and the inevitability. We also have the bulk of that debt financed at much lower rates and coming to maturity soon and is going to have to be refinanced. So don't we absolutely have to force interest rates down and start printing money to even be able to service any of that debt in the future, which we already can't service now? 100%. Yeah. I mean, you take $34 trillion times 5%, you got a little bit over $1.5 trillion of interest expense. Which is almost double the military expenditure, which will be the second line item on the budget, correct? I mean, at 850 million. And we don't have that money either,

so that has to be printed. know it's like I'm a pilot and you know those are called death spirals you know when you get yourself into a death spiral there's no way to get out of it and we're in one so it's not a matter of when it's just a matter of

or it's not a matter of if it's just a matter of when it's you know so and like I said I hope it's not sudden because there'll there'll be a lot of chaos if it is a sudden crash of the financial system so you know my hope is that the government can manage it and and slowly allow people to opt out of this fiat system and opt into the better system, which is the Bitcoin standard. Are you surprised at all that the, at least to the public facing metrics, that the economy has remained this strong and that the stock market has remained this inflated throughout the last year or two through this sort of hiking cycle?

No, because when you have diluted dollars, they chase things that can't be printed. You can't print more Apple stock. In fact, Apple is using their dollars to buy back their own stock. So there's fewer shares outstanding. So the value of the remaining shares go up. The same thing with land. You can't print more land. So land values continue to go up. You want to take your dollars and put them in things that the government can't print. So that's land, stocks that buy back their own stock and companies that buy back their own stock, Bitcoin, gold. You want to own assets that can't be printed. But benefit from inflation effectively. The problem, of course, there is for the 99% to

live paycheck to paycheck and don't have the luxury of putting their money into anything. Right. Yeah. And you see that with credit card balances going up. just over the past three years, credit card balances are up 40%. There's $1.6 trillion in credit card debt in the United States. There's over a trillion dollars of student loan debt. There's over a trillion dollars of auto loan debt. We've become debt slaves. We've become slaves to the banks. People are struggling because they can't afford their daily expenses, so they borrow money to survive, and then they end up in a death spiral too. So what is your average person who does live paycheck to paycheck supposed to do in this environment if they can barely afford to buy Bitcoin, save anything, buy hard assets? How do you get off the wheel? Yeah. I mean, the best thing to do is what my

daughter does, what I advise other young people to do is, you know, carve out what you can and put it in Bitcoin. You know, my daughter saves a hundred dollars a week using Venmo. She has a, you know, and Venmo, you go Venmo, tap crypto and you could buy it by Bitcoin right there. It's very simple. And she puts a hundred dollars a week into Bitcoin and she doesn't make that much money, you know, but she lives a frugal lifestyle and she takes, you know, that extra and saves it. And, you know, if she does that for the next 20 years, she's going to be

very wealthy. And so it takes sacrifice. It's, you know, it's like, you know, you have to, it's called deferred gratification. You know, you have to, you know, give up the vacation, give up the nice cars, you know, you know, eat in instead of eating out, you know, you just, you know, I mean, I mean, I, I've had a successful life, but my car is eight years old. I don't want to go buy a new car. I just don't want to do it. I want that deferred gratification. I'd rather have more Bitcoin than a new car.

So you sacrifice where you can, and you take $50 or $100 in a week or, you know, as much as you could afford and just, you know, opt out of the current financial system and opt into the new system. And if you do that for the long term, do it over a 10 year period, it should be very beneficial in my opinion. So it's about having a low time preference, even if it's only $5 or $1 or $10, you need to put something away. Right. Yeah, make your own tea instead of paying $4 for a tea at Starbucks. You know, I mean, it's the little things. The little things add up. You know, when my wife and I were first married, we used to clip coupons.

You know, we'd get the Sunday paper and we'd sit there and go through and flip the coupons. So we go online now. If you shop at Target, get a Target credit card and they give you a 5% rebate. Just look for the nickel and dime here and there. If you save 5% at Target every time, take the difference and invest here and there. If you save 5% at Target every time, take the difference and invest it in Bitcoin. You do that for 10 years and you should have a nice pot of money there.

I just laugh mentally at the irony of if you asked your government as an individual what you should do, they would tell you that exact same thing and then you see what they do with their money. Imagine if the government behaved in the manner that you just described, we wouldn't need Bitcoin at all. Well, it's not their money. That's the nice thing about being a politician. They get to spend other people's money.

You know, we're coerced into paying taxes. You know, if you ask people, like, would you want to pay taxes or don't want to pay taxes? Most people say, no, I don't want to pay taxes. I want to keep 100% of the fruits of my labor and I'll allocate them. But we are forced to pay taxes or we go to jail. And then those taxes go to the people that didn't earn that money. And they allocate that money to things that we don't agree with. And, you know, you know, one of those things is war. You know, they take our money through direct taxation, but also through inflation, through printing money, and they go and conduct unjust wars. Scott, if the government came to you and said, we want to take 30% of your net worth and give it to the army to go fight a war in a foreign country, you're like, I think I'd rather keep the 30% of my money.

But what they do is they just print 30% more dollars and they secretly take it from you and you don't have a choice. And then they go and kill people with that money. Yeah. People forget that if you ran out of gold in the olden days, your war was over. Exactly. Yeah. 100%. That was it. I always joke that you get Jerome Powell and the Fed, they make these comments that we need the labor market to soften so that we can improve the economy and all these things. And then imagine Jerome Paul walking down the street and asking individuals if they'd be willing to give up their job for the economy. Yeah. Kind of the same idea. Well, I'm really glad. So you and I met, I think, 2022, maybe at Bitcoin Miami at a dinner, I think, with Steve and those guys from Valkyrie. I've been trying to do this for a long time, but I think this was the perfect timing to do it because the ETF just came out last week,

and we were able to have the conversation about why this is so important for people's portfolios and why RIAs specifically should listen to this conversation and do exactly that. So I think it was really fortuitous timing that we finally got to do it now, and I'm hoping this will reach that community. Yeah, thank you for having me. I appreciate it. Yeah, Brian, we're going to definitely do this again down the road. Absolutely loved having you, man. Where can people follow you after this? Keep up with you. Yeah. So I really don't do a lot of social media. But the one place I am on is on Twitter. So my handle is at Brian Estes 32.

And then, like I mentioned, our company is Off The Chain Capital. If you go to offthechain.capital, there's a contact sheet there to contact us or contact me or our team. Perfect, Brian. Thank you so much for your time. Really appreciate it. Really enlightening. I think the audience is going to absolutely love it. All right. Thank you, Scott.