The Wolf Of All Streets - Live With Peter Schiff | Crypto Town Hall

Episode Date: February 21, 2024

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Peter, what biohack are you doing? Are you in the hyperbaric chamber? Are you in the sauna? You've got to be doing something today, Peter. No, I want to go in the hyperbaric chamber. I was going to go in, but I got kind of tied up with some stuff. And so I just finished breakfast. I ate a little later than normal.

I lost track of the time. I'm taking a break from the hyperbaric chamber. I just got a pain in my ear. So I'm taking like a month break and getting my e checked so that one's a pause but I'm in the sauna now and then probably I just finished my gym session as well yeah I finished I did a half-hour sauna earlier this morning and I did my cryo chamber oh nice yeah I think I've skipped cryo for a while just way too cold so I'm being a bit lazy on that one. But I'll probably get it started again today. It was good to have you again, sir. Okay, what's up?

Well, actually, I want to know if Peter has the bunker. Peter, do you have a, have you built a bunker yet for the apocalypse? And does it have a moat of fire around it? Because that's what we were talking about right before you got here you know that's funny i mean i haven't but my wife is bugging me every day about uh about building a bunker so i don't know i mean i don't know if i'm that paranoid um but she's also saying i should get one of these silent yachts that just works uh all on um on solar so we can be self-sufficient at sea. So that's also a possibility. One thing I don't like about those solar yachts is they don't go that fast. I guess if it's

an apocalypse, you're not really in a hurry to get anywhere. Yeah, you might be pretty psyched to be stuck wherever you are. Well, we're in the Caribbean most of the time right now in Puerto Rico. They're worst places, certainly. So should we actually talk about serious things now, Mario? Good idea, Scott.

Now that it's 1047. So, Peter, what do you make of gold's movement at the moment? And what do you make of the sort of net outflows you're seeing in the gold ETFs at the moment? Well, you know, I think the sentiment is very negative in gold. I mean, obviously, there's a lot of hardcore guys that still believe in the trade, but they're frustrated by how long they're waiting. I mean, remember, gold was below $300 an ounce when this millennium began in 2000. And so from $300, $300 to over $2,000, that's a big move. In fact, gold prices have outperformed the stock market over that time period.

So gold had a big move up, and then it's gone sideways for a long time. And that's what's been frustrating, because gold is $2,000 today, or a little bit over. And it was just a little under $2,000 at its peak in 2011. So it's been a dozen years of consolidation. Meanwhile, we've had a lot of inflation, QE1, QE2 and QE3, 0% interest rates. People would have thought that a lot of inflation, price inflation would result from that and more money would go into gold. And so far, it really hasn't. And I think the main reason for that, apart from the fact that we did need to digest those gains,

is that the big money, the institutional money that might otherwise bid up the gold price, as well as more individuals, they still have confidence in the Fed that inflation is not going to be a problem, that the Fed is going to raise interest rates as high as they have to and leave them there as long as they have to, to assure that inflation stays at 2 percent. And to the extent that investors actually believe this fiction, that has been a big headwind for gold because the perception is, well, it means higher rates and that means gold prices aren't going to go up and there's not any real inflation. So people aren't buying gold, although inflation continues. I mean, you can really see that from the gold mining companies that keep reporting bad earnings because the cost of mining keeps going up so much due to the inflation that nobody thinks exists. So I do think, though, that sometime soon, the pretense that the Fed has the ability or even the desire to control inflation is going to end,

because the Fed's inflation fight is going to come in sharp contrast to its other mandate of employment or its unhidden mandate about financial stability or financing U.S. government debt. I think we're going to have a banking crisis. I think it's already started a financial crisis, a sovereign debt crisis. I think all these things are going to cause renewed quantitative easing. We're going to have a resurgence in the CPI that is not going to be met with any additional rate hikes. I think it's going to have a resurgence in the CPI that is not going to be met with any additional rate hikes. I think it's going to be apparent that inflation is here to stay. And then you're going to see a massive movement into gold. And it probably will start before that.

But that, you know, that understanding and that acknowledgement will fuel, I think, a parabolic increase to kind of catch up, you know, because gold should be a lot higher than it is. It's just being mispriced due to the outlook that the world has, the benign outlook for inflation that is incorrect. You actually pointed out that people aren't buying it and institutions aren't necessarily buying it, but we do know that central banks are buying it, correct? I mean, shouldn't that be the better indicator? Yeah, central banks are buying and the banks that are buying the most, the central banks, are the big exporters, the emerging markets and the countries that are

exporting goods. And they're taking their surpluses and they're moving them into gold. And if you look at countries like China, for example, the gold reserves that they have is just a tiny part of their overall reserves, maybe 3% or 4%, at least officially. Whereas the United States, 70% of our reserves are in gold. But these smaller countries still have a lot of gold that they need to buy and that they could buy uh and especially if the world is going to continue in a de-dollarization trend which i believe will continue and accelerate when you de-dollarize by definition you have to do something with your dollars. And to me, it doesn't make sense if I'm China or Russia or Saudi Arabia or India or anybody. And if I'm worried about having my

reserves in dollars because the US may retaliate, why move them to euros where the ECB can retaliate or pounds where the Bank of England or, you know. So if you want to have your reserves in a monetary asset that no other government can weaponize, then gold is the only alternative. And so I think that that's what de-dollarization means. It means that you're going back to gold because the dollar replaced gold. Gold was the reserve before the dollar. And so if you're going to get rid of the dollar, you just return to gold. And that's what they're doing. And so there's just tremendous buying because if you look at the percent of the world's gold supply that's owned by central banks, even after all this buying, it's still very low so they still have um you know a lot of buying to go uh and and so

the price is only going to go up especially when the foreign central banks have to compete with institutions and private investors who are tremendously under invested in gold i mean a lot of institutions endowments pension funds have zero allocation to gold. You know, once upon a time, it was standard to have a gold allocation in a portfolio. So I think that, you know, everything old is new again. And I think that you're going to see a return to gold as a portion of a portfolio, whether it's 5 percent or 10 percent or something. You know, that's a big move to go from zero, especially when you're talking about 5% or 10% of a big number.

Right. And the 60-40 portfolio, we know kind of in the past few years had one of its historically worst periods. But how did we get on that 60-40 portfolio in the first place? Why do registered investment advisors and institutions, why don't they now view hard assets as an important part of their portfolio? Listen to somewhere that gold bugs and Bitcoiners can all agree that whether you agree on the asset or not, I think we can all agree that 60-40 doesn't work and you need to own some kind of hard asset, correct? Yeah, well, I mean, I don't know where the allocation came from. It used to be a function of your age, like you'd start with 100. So if you're 60 years old, you're 60% stocks and 40% bonds. If you're 80 years old, you're 80% bonds

and 20%. It was like the inverse of your age. I don't know where the, you know, 60,40 became the number. But yeah, for 2022 was the worst year ever for that portfolio, because bonds got killed and stocks went down at the same time. So you didn't get a hedge. In fact, in many cases, bonds lost more value than stocks. So you actually lost more on the conservative part of your portfolio than you did on what's considered the more aggressive part. But, you know, I agree and I have agreed for a long time that when you have overvalued stocks and overvalued bonds, 60-40 portfolio makes no sense. I mean, you're just alloc of an equity-based portfolio, but you can't invest in the type of equities that are in most of these portfolios because they're so expensive. The PEs are ridiculous. The dividend yields are too low.

So what we advise our clients to do, we invest mostly in value-oriented foreign stocks that pay high dividends. The dividends that we collect on most stocks exceed the interest that we can get on most bonds. And we're underweighting bonds because I think worldwide, bonds are still not yielding enough. Now, at some point, when the yields move up, I can change my mind. But I still think bonds are not accurately reflecting future inflation, not just in America, but around the world. So I want to have a portfolio more concentrated in equities. And for the risk adverse portion, I'd prefer to own gold, because I don't think to get a 4% or 5% yield on bonds in a high inflation risk environment, I'd rather just hold gold you know then that whole that whole

bonds even though you're giving up the income uh i think your purchasing power is is far more secure and i think you know there'll be a lot less volatility i mean gold prices were down a bit in in in 2022 but a lot less than stocks and bonds i want to circle back to your points on de-dollarization it's an interesting take that it's a return to gold i tend to agree that it would make sense to be a return to hard asset but the central banks are buying gold but when you look at the way that the media talks about it or that retail talks about it de-dollarization is bricks or you know countries attempting not to use the dollar and pivoting towards trading directly in their own currencies,

which I find personally nonsensical. I mean, what are your thoughts on BRICS and the ability to de-dollarize in that manner by just simply not using the dollar? Right. There's two forms. One is just trading, you know, because right now you have, or what has been his recent history, let's say you got a country a company in india and a company in china and they're they're doing business with one another uh the buyer is paying the seller in dollars uh and they're quoting their prices in dollars and they're affecting the payments in dollars and and so de-dollarization in that sense would be invoicing each other in either RMB or rupee, right, trading in their own currencies or trading in a third currency that wasn't the dollar,

whether it was the euro or something like that. So there's the transactional de-dollarization, but then there's the reserve de-dollarization as far as what does the central bank hold as its primary reserve asset to defend the value of its currency? Because if you have currency that doesn't have any backing, what happens if the currency starts to collapse? How does the central bank protect the value? It has to buy back its currency units and shrink the money supply. Well, it needs an asset to sell to do that. Well, if dollars are your reserve asset and if you're India and the rupee is going down and you want to stabilize the rupee, you go into the market with dollars and buy

rupees. You use your dollar reserves. Now, the de-dollarization would be substituting the dollar for something else. And there you could substitute for gold, because now if a central bank is holding a lot of gold and its currency goes down, it can use that gold to buy back its currency. And so that's the other portion of de-dollarization in changing the composition of your reserves, going from dollars, in fact, going from fiat, which is you can have euros and pounds as reserves, but moving away from a fiat currency to back your fiat currency and backing your currency with real money.

So now we have to talk about the inevitable, Peter. Bitcoin spot ETFs were approved. You're a huge fan. The asset is finally getting credibility worldwide and you're super excited about it. Well, I don't think it creates any credibility just because there's an ETF. You know, the SEC has allowed the ETF. They haven't endorsed it. They haven't blessed it. In fact, Gensler made it clear that he wasn't this is not a recommendation of a bitcoin just because there's a a bitcoin etf uh it's if you want to gamble on bitcoin you can do it through an etf and wall street can make those you know that gambling available um but you know i i just you know don't think that people should be betting on

bitcoin i mean that's really what the etfs are for i mean it's almost an admission if you buy the bitcoin etf you're admitting you're not going to use your bitcoin in any way shape or form like a cryptocurrency because you can't do anything with it it's you're trusting a third party to store it you're paying a storage fee you don't have the keys it's not your bitcoin you're simply buying a vehicle that allows you to participate in the price appreciation of bitcoin if there is any or subject to the loss if it goes down uh but it defeats the whole purpose of a bitcoin in the first place which is to be away from Wall Street, to be away from counterparties, to be away from third party storage and fees and all that. So it's just, you know, most people who really are in favor of Bitcoin should be annoyed about the Bitcoin ETFs.

But the reason that they're accepting the same argument for gold, but can't you make the same argument for gold and gold ETFs? I mean, a gold bug obviously tells you that you should hold Bitcoin and custody yourself as protection. But then the ETF, you're somebody else's. No, not at all, because people are not buying gold as a currency. They're buying it just to store it as a store of value. And so the ETF just makes that storage more convenient. Because if you store the gold yourself, you still have to pay something. If I put it in my own safety deposit box or, you know, it's going to, the bank's going

to charge me something. If I get it delivered to me, there's a freight cost to mail it, ship it out, right? So there's some purpose that the ETF serves to kind of take away a lot of those transporting and other fees. But with Bitcoin, you don't have that. There is no fee. I can go online. I can buy my Bitcoin, put it in my wallet. It doesn't cost me anything. I don't have to pay anybody. But Bitcoin was sold to the public as a cryptocurrency to be used to buy coffee and stuff like that. So people aren't buying gold to use it to buy a cup of coffee. But so nobody who's buying the Bitcoin ETFs is buying Bitcoin for any of the reasons it was originally created for. They're just buying it to bet that the price goes up and then they're going to sell it. Right. Because if you have a Bitcoin ETF, it isn't even possible to use your Bitcoin to make a purchase. You have to

sell your ETF to get cash and then take that cash. So, you know, the real true Bitcoiners, you know, no, this is not what Bitcoin is for. But the reason the community is excited is because they think it's going to push up the price and make Bitcoin go up so that they can then sell their Bitcoin at a higher price to buy things that they want. Well, I do think, to be fair, that there's quite a few people who want to own it in a manner that they can't or couldn't before in a regulatory compliant way. I know when people initially were touting Bitcoin's advantage over gold, this is what they used to tell me. Well, gold, you need to store it somewhere. You need to pay

somebody to store it. You know, you have a third party Bitcoin. You don't need any of that. Bitcoin is no third parties, no storage fees. But now it's like, OK, now it has a third party and it has a storage that you've lost those those advantages that was i was i was you know involved in bitcoin at least knowing about it and arguing about it from the very beginning from 2009 2010. so i've seen the evolution how bitcoin has gone from a cryptocurrency to just everybody accepting that it's never going to be a currency it stinks as a currency it's too slow it's too expensive it doesn't work so now we've reinvented it as just something you buy and hold because it's going to go up even though you can't really do anything with it it's just going to go up because everybody believes it's going to go up and so nobody wants

to sell it and everyone's going to buy it and all i I see these ETFs are, this is an attempt to sucker in more money into the Ponzi, you know, into the pyramid. So you need more people to buy it and hold it, you know, to keep the price to go up, you know, but eventually it's just going to implode. It has to. Well, we do have a, you know, provable metrics on long-term holders and how long they've held and through how many cycles so i wouldn't necessarily take the argument that those people are all going to eventually flip and sell and send it to zero i don't see what scenario would make the true and listen maybe that's a religious fervor you own you own bitcoin right i own both gold okay but let's just focus on your bitcoin what do you plan to hold your bitcoin until you're great until you die

and then just leave your key yes so so you're not going to use any of your bitcoin you're just going to hold on to them and then when you die your children are going to inherit them that's the bulk of the idea yes and then what are your children going to do after you die? Are they going to do the same thing? Are they going to keep their Bitcoin? No, they're going to buy, probably buy that silent yacht, if we're being honest. Okay. So now, okay. So now, but in order to buy that silent yacht or anything, they have to sell their Bitcoin. Who's going to buy the Bitcoin from them? You're dead. So you can't do it. Well, I was sort of kidding. But listen, there are parts of what you said that I actually wholeheartedly agree with. I think that the currency aspect of Bitcoin's luster has diminished,

but not for maybe the reasons that you think. I think that that's a function of the proliferation of stablecoins, frankly. And it's been proven, and you'll make the same argument, that people around the world generally who maybe hardcore and early Bitcoiners believed would rush into Bitcoin to protect themselves against currency inflation or against, you know, predatory governments, what they've actually wanted is dollars, right? And they've gone to stable coins to do that. So that part of it, I agree with, but I don't think that takes away the luster of people who are buying an ETF or Bitcoin as a store of value or an inflation hedge. The evolution of stable coins, though, is going to be a stable coin that's stable to gold, because then you kill two

birds with one stone. You get the convenience of a cryptocurrency as a medium of exchange where somebody in America can instantly pay somebody in Australia for goods and services, like instantly and very inexpensively avoiding the banking system. You could do that with a gold-backed token. But it also gives you the store of value. And the thing that Bitcoin, again, they've reinvented Bitcoin as a store of value. And the thing that Bitcoin, again, they've reinvented Bitcoin as a store of value. But the problem is it can't be a store of value because you can't store what you don't have. Bitcoin has a price. It doesn't have a value. And a price is just a function of supply and demand. And what is somebody willing to pay for something? And what is someone going to sell it for? So Bitcoin has a price. And today, the price of Bitcoin is roughly, what, $51,000 of Bitcoin. That's where the market is.

But does that mean Bitcoin has $51,000 worth of value? No. Doesn't mean anything about the value. It's just that's the price that somebody is willing to pay for it. And you can't store a price because you don't know, you know, what the supply and demand dynamics are going to be at any given point in the future. Yes, Bitcoin's price could be a million. You literally know what the supply and demand dynamics will be. Well, I mean, the demand for anything can go to zero. The thing that I struggle here is I'm not necessarily disagreeing with your argument. I just don't understand how that's vastly different from gold, like why that only applies to Bitcoin. The price of gold can't go to zero because if gold got anywhere near zero, you know, jewelers would just start gobbling it up because they needed to make jewelry.

You know, chip manufacturers would gobble it up because they need it in their chips and in fact the cheaper the price of gold gets the more demand there is for gold because now people will use gold instead of copper right or whatever i mean as gold gets cheaper there's more and more uses for it uh and so it's a real you know thing you know you could take a look at a like a stock a company stock if you have a solid business the price isn't going to go to zero for the stock because as the stock falls, the value is higher. The dividends, let's say a stock is paying a 5% dividend. If it goes down by 50%, it's paying a 10% dividend. Somebody is like, yeah, I want that income.

I need that dividend. I mean, there's buying into it because there's an objective value there. But Bitcoin doesn't have value. It's not a commodity that you could use for something. It's not an income producing asset like stock or real estate. It's just a crypto token that sits there and does nothing. And if somebody wants to buy it, the price can go up. If somebody wants to sell it, the price will go down. It's all a function of what you perceive and what you're willing to do, but there's no objective standard of value. And there's nothing to stop Bitcoin from going to zero.

Now you're going to say, well, if the price of Bitcoin went to a thousand, well, maybe you'd want to buy more Bitcoin if the price went to a thousand. But a lot of people might just say, screw it. If it went from 50,000 to a thousand, a lot of people might just say screw it if it went from 50 000 to a thousand it doesn't work i don't want it i'm going to sell it before it goes to 100 right it's blown up right it's not like the cheaper bitcoin gets the more value it has it's almost the reverse if bitcoin falls a lot it kind of blows up the whole idea that it's a store of value that it's safe or something so it it you know it's a store of value, that it's safe or something. So it's a completely different dynamic. But I know that there's a lot of people that are caught up in the cult of Bitcoin,

and they just believe in it. And they've kind of tuned out all the naysayers as just FUD. But this is typical. This is human nature. This is how people react. There was an there was a very famous book, Popular Delusions and the Madness of Crowds. And, you know, Bitcoin fits that perfectly. Is there anything that would ever change your opinion? Well, I can't imagine. I was going to ask the same question. Well, it's certainly not going to be the price, right? Because I've had the same opinion on Bitcoin from a dollar to 50,000, right? So obviously the price is not a function of it. As I said, what I've told people, what would actually have to happen to Bitcoin is if I wake up one day and i go to the store and all the prices are in bitcoin uh you know if if you know uh everybody who i'm transacting with if i if i'm renting out

my office my landlord wants to be paid in bitcoin and it's not paid in bitcoin the rent is Bitcoin. This office is one Bitcoin a month rent or whatever, or it's half a Bitcoin. Where people are actually able to price, where people are making loans in Bitcoin. Yes, loan me a Bitcoin and next year I'll pay you back a Bitcoin and plus 5% interest in Bitcoin. If we actually can use Bitcoin as a unit of account and as a medium of exchange, if that actually is, then I guess I'd say, shit, I guess I was wrong, you know? But all I've seen in the entire time

that I've been critical of Bitcoin is gambling. That's it. All of the new use, all of the, it's all been to buy it to get rich. Buy it and hold it and hold on for dear life, hold old diamond hands, and you too can buy a Lambo. You can get rich. Bitcoin's going to a million. That's it. Nothing has changed. In fact, I think there was a moment in time back in 2017 where a lot of companies started saying, hey, we're going to accept Bitcoin. We're going to have all that is gone. There's actually, you know, no one even cares about it anymore except the people who own it. That's why people care about it, the people who own it, because they think they're going to get rich.

And all the people who own it are out there prophesizing trying to get more people to buy it right like they're like the harry kirschner's of the investment world you know they're all you know they they've got their movie projectors in their trunk and they'll come to your house and they'll show you a movie and they'll try to convert you into their religion but peter question when you were going back and forth with scott earlier and you asked scott are you what would you what will you do with your? Will you hold it till the day you die? Scott said, yes. Will you give in theory, what I'm going to do with my gold is eventually I'm going to use it. I'm going to sell it so I can buy food. I can pay my rent. And now who am I going to sell it to? I'm going to sell it to a jeweler because they need it. I'm going to sell it to a dentist. I'm going to sell it to a semiconductor manufacturer. I'm going to sell it to any one

of businesses that need that gold. You know, there's need. And I can actually sell it to another investor because he can buy it because he knows that he can sell it to a business that needs the gold. I mean, the reason I store gold as opposed to milk, right, well, milk can go bad right you know wheat you know and you know oil you know these things are are difficult to store i mean gold is a commodity that you could store a lot of value in a very small space so it's very convenient to storing it now bitcoin is convenient to store except you're not storing anything you don't have anything that anybody can use you just got a worthless string of numbers. Isn't the use case itself,

if someone believes, just believing it's a store of value is not enough of a utility. So if others believe Bitcoin has proven itself over 10 years and is incomparable to gold, as a store of value, the price has been going up,

it's outperformed other asset classes, it's gained, you could at least say it's gained a bit more credibility with the ETF. I think we can agree on that. Maybe not enough. Doesn't that become enough of a utility? No, because betting on the continuation of an irrational belief is not a sound decision to make.

Right? Yes. As long as people keep believing that something that has no value has value, then the price could, you know, could stay up or keep rising. But the risk that you take is that one day people lose faith. One day they stop believing. And, you know, the longer you extrapolate into the future, the greater the probability that that's going to happen. Like, are people going to

stop believing in Bitcoin tomorrow? It's possible, but it's very, very unlikely. I'm pretty sure that people will want Bitcoin tomorrow. Well, what about in 100 years? The odds are very slim that in 100 years, anybody's going to want Bitcoin, if anybody even remembers the name Bitcoin. So the question is, you know, obviously between tomorrow and 100 years from now, there's some kind of risk curve for when people will no longer want Bitcoin. But, you know, I don't know when that is. I don't want to gamble on that. You know, it's because it could be next year. I mean, next year is certainly possible at all. A lot can happen in a year. Maybe Bitcoin blows up and nobody wants it, you know. But it's all about faith.

Look how long people have had faith in the dollar. The dollar is intrinsically worthless now. Since 1971, the dollar has been worthless, but, you know, it's hung around. But the dollar has a lot more to maintain the faith, the faith than Bitcoin. But all fiat currencies will eventually go to zero. I mean, the dollar, if it's not backed by something, will eventually be worthless, right? The question is when. I mean, the dollar has lost 99% of its purchasing power in the last 100 years. So from where the dollar was 100 years ago, it's practically worthless right now,

right? If you buried, if somebody buried a dollar in the ground 100 years ago and you dug it up today, right? I mean, it's lost 99% of its purchasing power. But, you know, but Bitcoin, I don't think is going to be able to have the longevity because it doesn't have as much institutional and government support in the psyche of the country that the fiat dollar has. So one of the we'd say one of the main arguments when you can pay gold to Bitcoin as a store of value is utility. Gold has more utility than Bitcoin. Now, the first question I have for you has none. It has none. I mean, that's basically it. Has none.

Okay. So are you a believer in the concept of decentralization and the blockchain? Yeah. Yeah. I mean, I think the blockchain has value. I think there are various ways to use, as I mentioned earlier, you can tokenize gold and put the tokens on a blockchain and use the blockchain to represent ownership of real gold. And you can then transfer that ownership very, very, very easily around the world.

So, yes, I mean, there are use cases for a blockchain. And I suppose you could do the same thing with Bitcoin, although Bitcoin is not as efficient for that because of the cost of moving it around. But if you were going to tie certain things to Bitcoin, but you have to do something with it to add value to something else. You can't say the token is the value. Now, I can get it if you say, well, you need the token to pay the gas to effect the transaction. Then the token can have some value you say, well, you need the token to pay the gas to effect the transaction. Then the token can have some value. But of course, you know, there's all kinds of blockchains. There's 20,000.

I mean, you know, there's nothing special about Bitcoin. I mean, you can create a blockchain and there could be public blockchains, private blockchains. But you can't just create a blockchain. And the sole purpose of the blockchain is to have a native token that everybody gambles on. I mean, that's not value. That doesn't do anything. So if if there's value being created on the Bitcoin blockchain, would you then say that's enough utility to allow Bitcoin to act as a store of value? Well, you know, but a store of what value? I mean, you'd have to be able to figure out, you know, what that is worth, you know, and can you expect it to be stable over

time relative to what people would be willing to pay for that particular service? But nobody even questions that. That's not the point. People are saying Bitcoin is worth $50,000 just because. Just because it's a Bitcoin. And it's going to be worth more than that in the future because people are going to pay more for it. I mean, that's just it. I mean, there is no argument that it has value for any other purpose other than that it's scarce and more and more people are going to buy it. That mean, there is no argument that it has value for any other purpose other than that it's scarce and more and more people are going to buy it. That's the value. There's 21 million Bitcoin. And if all the money in the world wants to go into Bitcoin, I mean, that's what I hear now

about the ETFs. People say, oh, people are going to start moving their money out of stock market ETFs into Bitcoin ETF just because it's an ETF. All this money is now going to come into the Bitcoin ETFs. And the price is just going to go way up because there's only 21 million Bitcoin. Right. I mean, it's got nothing to do with utility or what it can do. It's all about the flows. Yeah. People are going to buy it. Well, what's going to happen if they don't? What's going to happen if the people that already bought the Bitcoin ETF decide they want to sell? They'll what? Who's going to buy all those Bitcoin and hit the market? So for an asset to become a store of value, first it needs to have utility and store of value becomes a function of that utility. To go back to that initial question, if Bitcoin does create that

utility as a blockchain where value is created on it, if it does achieve that and it solves issues such as latency, would you then consider this a path towards creating utility over time if price continues to be? If you're saying that Bitcoin has the potential to one day be a store of value, right? That's a better argument. Maybe one day it will be a store of value. But if you buy it now you're just speculating on something in the future it's not a store of value now and you don't know what value it ultimately is going to have and what that value is going to be worth you know the way you know gold is a store of value you can go back over the last 100 years 200 years thousand years and you can relate the price of gold to all sorts of things. You can

relate it to other commodities, wheat, soybeans, copper, oil, cattle. And you can decide, OK, over time, how much oil can I buy for an ounce of gold? How many bushels of wheat can I buy for an ounce of gold? You can get an idea of what gold is worth in terms of other commodities. You can also compare gold to financial assets. You can compare it to the stock market. You can compare it to the real estate market. And so you can have an idea of what gold is worth and when gold is expensive or cheap in relation to other financial assets or other commodities. You can't do that with Bitcoin. You can't say, oh, okay, what is, how many Bitcoins should I need to buy a bushel of wheat? Who the hell knows? I mean, you only have a 12-year history. And during the 12 years, Bitcoin was a penny and Bitcoin was 70,000. I mean, it's had such a wild, you can't come to any kind of metric.

But assuming Bitcoin could be around a thousand years from now, you may be able to draw these parallels and then figure out what Bitcoin is actually worth. But right now, there's no way. You're just gambling. If you're buying Bitcoin, you're not storing anything. You're

not buying it as a safe haven. It's not an alternative to gold. It is a speculative digital token. Now, maybe you're right. Maybe it will be a store of value at some point in the future, but it's not one now. So you're gambling on something that may or may not happen. So that makes it very different. That's why Bitcoin can't be a substitute for gold. People that think central banks will own Bitcoin, they'll never own Bitcoin. I mean, not in the foreseeable future, because it's not a stable asset. You can't hold your Bitcoin as a reserve against your currencies, because if your currency goes down, you have no goddamn idea where Bitcoin is going to be. Bitcoin could be crashing more than your currency. So I'm just going to be. Bitcoin could be crashing more than your currency.

So I'm just going to, Scott, I'm going to give you the mic. I'm going through the comments. If anyone has a question or comment for Peter, just put it in the comments bottom right corner. I see William, he makes a point that kind of relates to, Scott, what you were talking with Peter about. He says Bitcoin has utility as a financial instrument, although not enough, I admit.

We need to see in it more financial products outside of ETFs. So we need new financial products available in Bitcoin only. Your thoughts on this? I can take that a step further, Peter, because it was the next question that I sort of had. Even if you feel that way about Bitcoin, obviously, you have expressed that there's some value in blockchain. You obviously launched an ordinal at one point, right? So you understand Bitcoin as the base layer for that. What do you make of this sort of Cambrian explosion now of building on the Bitcoin network? I'll be honest, I find 99% of it's speculative, but what do you make of that as a part of the argument, even if you don't

believe the asset itself or the token has value utilizing that as the network with the highest liquidity and obviously the largest TVL? Yeah. I mean, look, I came out with that ordinal. I made an actual painting. I commissioned a painting, a golden triumph. And then we created 50 of these ordinals that could be on the Bitcoin net worth and, and we sold them, you know, and, uh, I just, I just noticed one of them sold the other day. I mean, so whoever bought it, somebody sold it. I don't think they're selling the original. When I originally did it, you got a signed, um, a signed print numbered print. Uh, and then you also got the ordinal that went with the print. And I guess, you know, people can do what they want if they can sell them together or break them up.

But I noticed that one sold the other day. It's like Magic Genie or some there's some website where you can buy and sell ordinals. And so, yeah, I mean, obviously, you know, there's an actual image, you know, you get a digital image of the painting, but I try to use it to authenticate. And I thought that, yes, you know, could you use blockchain to authenticate like ownership of real assets? Could a deed to a real estate be on a blockchain? Could title to your car be on a blockchain? Yeah. I mean, it seems like that would be a lot more efficient. You know, I always seem to be misplacing my pink slip or, you know, trying to find stuff. I mean, it would be nice if you

could sell your car. You didn't have to go down and, you know, the DMV, you could just sell your car and, you know, acknowledge it on the blockchain. And now the new owner just has your car and the blockchain recognition, you know, that you have title and you don't have to hire a lawyer when you do real estate to do a title search. If you had the entire history of the property on a blockchain that was verifiable. Yeah. You know, so I can see that happening in different ways to utilize blockchain. But none of that has to do with Bitcoin at 50,000,

right? I mean, it's like, they're two very separate things. You could have a real thing there beneath the surface. But right now, it's all caught up in gambling on the tokens. And it's become a mania in and of itself. And so there's hardly any way to separate it. And nobody wants to work on anything other than the tokens, right? That's where all the money is. All the money is creating tokens and selling them. These are other cryptos. Or for Bitcoin, all the money is in buying it or trading it or hoping it goes up. Now they're creating these ETFs to try to profit from other people. It's like the ETFs are the equivalent of casinos. It's more casinos where you can gamble on Bitcoin. I find it so interesting. Go ahead.

So we have, please, it's not just say please to me, but we have at least a path. So what I like in this discussion, Peter agrees that if there's enough utility on top of the Bitcoin blockchain, then in his mind, there is a path to a store of value, which I think is a fair argument. Now, obviously, I don't fully agree with Peter, but I think it's a very fair argument, Peter. Is that a good summary of kind of where we can meet in the middle, Peter? Well, I said there could be a store of value at some point, but also you'd have to be able to figure out what does Bitcoin offer in that respect that other blockchains that use different crypto tokens, whether they're a stable coin or a stable to, you know, a currency or stable to a commodity like gold or some other commodity. What does Bitcoin offer that's unique or advantageous to any of those other ones that would give it an additional value? value. Obviously, if Bitcoin was the only blockchain that existed and anything that was going to be related to a blockchain had to take place on that blockchain, that would be one

thing. But to the fact that there's an unlimited amount of competition, both now and in the future, that would also diminish its potential value and therefore its ability to store that value. I think you'd argue the size of the market, the decentralized nature, and obviously the provable supply reduction and fixed supply are arguments for that. But I do find it interesting that. Yeah, but there are other cryptocurrencies that have the same. Yeah, but that's useless without a network effect and without it's useless without the network effect that Bitcoin has. Yeah, but you could take another network and develop over time. I mean, it's just, you know, the longer the time period,

the more opportunity there are for more networks to develop. I'm going to take a couple of questions from the audience. Gabby is asking, do you own Bitcoin, Peter? No, I mean, I owned some for one point, and I didn't buy it. I had some gifted to me over the years, but it all got lost when the wallet that I was using, the company that had the wallet,

decided to just change something. Damn it. I think it dropped out for me, Scott. I want to know how much he had and how much he lost. I can hear you, but not him. Yeah, I know. I think it dropped out. But I like that the fact that we've reached some sort of middle ground. And I think his argument is not outlandish. I think there's some sort of middle ground. Even William put out a comment in the comment section. He said, it's balance, balance between speculation and utility.

And he agreed that, yes, we need to create more utility. But it doesn't mean Bitcoin is worth zero. It's worth, you know, depends, your belief in utility being created to allow a reason for Bitcoin to act as a store of value. Now, obviously, you can have a counter argument to that where the store of value itself is a utility can have a counter argument to that where the store of value itself is a utility. But that's where Peter disagrees.

Yeah. I'm just curious if Peter can hear us. Can you hear us? And can you speak? Cause I know he was out. Yeah. I think he was out of time. No,

he's, he's, yeah, no, he's out of time. He's still on stage. His phone just dropped out. He's,

he's got like three minutes. Yeah. What I heard, what I heard speaking to him was a huge NFT ball. That's what I heard. That's what on stage. His phone just dropped out. He's got like three minutes. Yeah, what I heard speaking to him was a huge NFT ball. That's what I heard. That's what I heard. One question I wanted to ask you is when does he think Bitcoin is going to zero? Because you did make the argument that his argument doesn't mean Bitcoin is going to zero tomorrow.

It could take a very long time for that to happen. You used the comparison to the US dollar. On March 12th. I'll tell you on March 12th of 2020 uh very temporarily and at least on bitnext it came very very close so on on that point i think it's a great discussion with peter um i always enjoy those back and forth and i like how you kicked it off with a macro discussion uh peter i don't know if you can hear us i think you're in the audience now i'll send you an invite to speak if it works for you to kind of wrap up and get your final thoughts.

But if it doesn't work, we'll give it a minute. But if it doesn't work, I think it's a good discussion. Let us know what you think in the comments, on the back and forth with Peter, on that middle ground where Bitcoin in his mind could act as a store of value. Do you see it create more utility? Yeah, I think it's interesting and people should give credit. The ethos of, the core ethos of Bitcoiners and what they believe actually aligns, I think, exceptionally well with Peter's beliefs. We just, I think, disagree on the asset that is

the solution. But every time we speak to him as much as he makes a good arch nemesis to Bitcoiners, I think Bitcoiners would agree with 98% of what he says. When it comes to that macro that we talked about, when it comes with the problems with the central banks, when it comes to needing a hedge, all of those things, those are common to gold bugs and Bitcoiners and many other people alike. So I mean, you can be triggered by the fact that he hates Bitcoin. That's up to you to believe what he believes or not. But I think we all agree on the core problems that need a solution. Agree. Cool. I mean, it's a good place to leave it. I love the discussion. Let us know what you think in the comments, bottom right corner.

I don't know what happened there. I had to stop working. Yeah, you're back, Peter. Perfect timing. So Peter, two final questions, because I know it's over time. First one, we've got another question from the audience. I can't remember what the handle was. When do you think Bitcoin will go to zero if you had to make a bet? That's from Roger Mayhem. Well, first of all, zero is a very low number. So, you know, even stocks that go bankrupt and in theory they should be at zero, they don't go to zero.

I mean, people trade worthless shares for pennies. So I mean, when it goes to zero, I think, you know, it could be a long, long time before nobody in the world is willing to pay even a penny for a Bitcoin. So I don't know. But let's just say, you know, below 100, right? I mean, obviously, if Bitcoin is below a hundred for all intent and purpose for anybody who paid fifty thousand dollars a Bitcoin it may as well be zero right I mean it doesn't matter if it's only at a hundred right I mean I guess you know um but I don't know you know I don't know I mean it surprises me to be honest that it's still as high as it is and of course now that it's got these ETFs, in theory, you know, that could extend this

thing for a while. But so I don't know. I think one of the things that's helping Bitcoin is the fact that gold is not really going up a lot, because the entire time that Bitcoin has really been on the radar, gold has been flat. And so that has allowed a lot of people to say, hey, look, this is better than gold, right? Gold doesn't go up and look how much Bitcoin has gone up. But I think if we have a period of time where Bitcoin is trending sideways and gold really starts to break out. Gold goes to $3,000, $4,000, which it could do, you know, very quickly. I mean, it could easily do that in any given year.

And if the price of Bitcoin goes sideways or goes down, I think that could do a lot to undermine this marketing scheme behind Bitcoin that, hey, gold is no good. Gold doesn't work anymore. You know, you got to buy Bitcoin because once gold is performing and that, again, is a function of central bank credibility, it's not a big issue in Bitcoin because Bitcoin has got nothing to do that. Bitcoin is going up because of its own supply and demand dynamics, its own speculative speculation and illiquidity and the concentration. I mean, almost all the Bitcoin is held by just a few really big people. Yeah, there's a lot of wallets out there, but the typical Bitcoin wallet doesn't have a lot of money in it as far as value.

You talk about a distribution of wealth. I mean, it's very, very unequal distribution in the Bitcoin ecosystem. You have, you know, what would you say the top 10% of the wallets, would you say they've got 90% of the value of the Bitcoin? I think that's probably fair. Yeah. I mean, so it's not going to work, you know, if you undermine the narrative, because you need more and more people to come in so that the big guys can get out and they have to slowly feed it into the market. But once the little guys that bought in lose confidence that the big guys can't get out. So final question i'll say i think i think we covered it i know peter has to go we're over his time so i want to be respectful of that so peter will you do will you go into the hyperbaric chamber after this chat probably yeah cool great way to end it enjoy the chamber mario is that you and peter are going to be here in a thousand years to tell us if Bitcoin's reached its network effect.

I don't think it extends my life that much. But if AI can somehow figure it out, you know, that's what my son, who used to be a big fan of Bitcoin, now doesn't really pay much attention to it. Wait, Spencer's not with us anymore? Well, he doesn't really care about it anymore it he's he's always you know spencer's not with us anymore well he doesn't really care about it anymore he thinks it's all immaterial because of ai he's like so oh you know he just thinks ai is going to make everything obsolete so i don't know i think he's a little bit overexcited about the way he was overexcited about bitcoin for a while but but he's he's moved He's lost his interest. But again, I would suggest that the people who are listening to this, to the extent that you own Bitcoin, just recognize that you own a speculative asset, and maybe it'll go way up, but maybe it'll go way down. And just

make sure that you don't have more in Bitcoin than you're willing to lose. And if you're not willing to lose everything that you've got in Bitcoin, then sell enough Bitcoin to the point where you are comfortable losing what you've got left. That's what you've got to do. You've got to take chips off the table if you're not willing to lose them. And hedge yourself by investing in some stocks. I like to look at my mutual funds or buy some gold or gold stocks and stuff like that. That's what I'm doing with my money. And so to the extent you want to put a little bit on the don't pass line of the Bitcoin gamble,

take a look at some of the things that I'm doing. Because I have the same concerns that a lot of people who are buying Bitcoin have. I am just taking different course of action to protect myself and profit from those concerns. And so if you have similar concerns, then you might consider adopting my strategy in part. You know, don't go all in on Bitcoin. So one quick question, peter and request for the audience for the audience let us know what you agree with and disagree with i want both if you can and with the discussion we just had with peter in the bottom right corner in the circle

in the comment section and peter would you do a space or a show with us in the future with spencer joining do you think he'll accept oh you know he's always been a little shy of doing these he did one i think so you could always reach out to him. Hey, meanwhile, if anybody's on this, everybody should try to follow me on Twitter. I've been trying to get up to a million followers and he's letting me thousand. It's been really slow. I keep losing followers at night and it's like months and months go by. I'm at 994,100 and change. So I need less than 6,000 to get to a million. So everybody who's on this call,

if you're not following me, follow me. Guys, we can do it right now. We can literally get Peter to a million right now. And then he's going to buy one Bitcoin if he gets to a million by the end of the show. Well, it's not worth that much to me. I'm not going to spend $10,000. You could sell it to some sucker, as you said,

a day later. Maybe I'll take a sap. How much is this Satoshi? Very much, man. Peter, it was a pleasure to have you. Thank you so much, you guys. Awesome. Bye, everyone.