The Wolf Of All Streets - Major Bitcoin Pump! Why You Need BTC Forever | Crypto Town Hall

Episode Date: October 20, 2023

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Hey Scott, how are you? I'm doing well, how are you? Good, I'll be on the move, so if there's background noise, please don't complain. I never complain. Yeah, too random. I was glitchy yesterday, which was a rare occurrence, but I couldn't seem to get space. Were you on the move yesterday? Yeah, I was in the car and just actually went down and met with Gareth Soloway in his office.

Oh yes, yes. We shot a show live with mike mcglone it was great it was awesome and then we went to uh i don't know a lot of people here probably know gary cardone his uh twin brother is grant cardone um gary had a uh great yeah gary had a casino night for for charity at his uh beautiful home on the water in saint pete so we went there with gareth actually ton of i had no idea anyone would be there. I'm just friends with Gary and wanted to say hi and hang out with Gareth. But there was a lot of crypto people there, actually. Quite a few people I knew from the mining industry in Texas. Actually, all the guys from

Hit Network, formerly known as BitBoy, those guys were all there, which was interesting. So it was quite a fun event. Two things. First, Gary's a really cool guy, very deep into crypto. Gary Cardone, Grant's brother, very deep into crypto, very smart guy, very nice guy. And HitNetwork, how are they doing now? I haven't checked their channels in a while. I have no idea, to be quite honest. I know a couple of those guys from the past who are more kind of superficially involved in the actual situation that everyone was covering. TJ was there.

I didn't get really a chance to talk to him. I mean, I think like everyone else, their numbers have probably suffered, but I would imagine they're building back. I know Ben's doing quite well with his own channels as well. So I think that it's nice to see that they can all thrive. Yeah. Oh, shit shit i haven't seen ben's channels at all i'm gonna check it out yeah he's doing great cool man he's right here

let me check my phone i don't know i know he's he's uh supposed to be joining for now but uh there's always at least one of the three of us is always in the glitch when you're trying to host there's there's always something i do have to say though the uh the when we started it was every single day you were wondering if you were going to get completely rub pulled on spaces and that doesn't really happen as much anymore where it just completely collapses i'm glad you're finally praising x for once yeah you know i have my moments there's few and far between i i i like a lot, but like anything else, it's problems. How are the markets looking? Good, man.

I looked at them today because my team messages me. Because since I do this show now, because I usually never predict prices, but since I do a show with you, suddenly my team thinks I can always predict prices. So I've always asked, like, Mario, markets are up. Why? I'm like, guys, let me ask Scott. The show's in an hour. Just wait an hour and I'll let you know so scott why are markets up it's it's hard to pin it to something specific but it depends on what market you're talking

about right because uh spy stock market's getting crushed um so uh spy is at 423 opened the day at 426. It's been kind of a sustained downtrend for stocks in general, even the QQQ under pressure. And I think the story there, as we've told to death, is yields, right? I mean, the bonds continue to crash. Yields continue to rise. I didn't actually check. Finally, if it hit, I believe the 10-year got to 4.999%. So basically 5% on the 10-year yield, 30-year over 5%. The two-year just ripping. I think it was around 5.3% last I had checked, 5.1%. I mean, that's just endless pressure, pressure on markets. And they're clearly really starting to feel it at this point, just seeing really these sort of sustained downtrends starting.

But the incredible story that everyone here is going to want to talk about is that crypto doesn't give a single shit. And I think that that's what we all want to see, especially in an environment like this. There's been a lot of arguments, obviously. I mean, listen, Mark, we're going to talk about this at length, buddy. I see Mark Yusko's here. You're my favorite person to have this conversation with. The crypto spring versus crypto winter and correlations and the endless narratives. You and I have beat the drum on the lack of correlation between Bitcoin and other markets

and took beatings for it constantly. And we've both stuck to that. And it's very clear. I mean, we're now at historic, even on short-term metrics, historic lows of correlation, right? Mark and I always point out things like, yeah, look at 10 years, right? It's been uncorrelated. Well, now you can look at 10 minutes, 10 hours, 10 weeks, 10 months. It doesn't matter. This asset's completely uncorrelated at this point. But a lot of people said it's only uncorrelated because stocks are doing fine. And if we start to see treasuries rise, Bitcoin, of course, is going to feel the pressure. And we just haven't seen it. In fact, Bitcoin ripping higher today than it did on Monday on the fake spot ETF news.

So we can go around the horn and we can talk about that, Mario. But to me, that's a huge story that we saw price rise even higher today on Friday than it did on Monday because there's no fake news pushing it this time. And what it is, in my opinion, is everybody saw what the potential is for this approval. And now you're seeing people start to FOMO in ahead of it, knowing that it's likely coming 90% chance by January 10th, according to Bloomberg analysts. JP Morgan just jumped in on that if you guys missed it and said the same thing in the news. This is now coming from everywhere. Mike Novogratz saying he thinks it'll be approved by the end of the year. The timelines are stupid.

It doesn't matter. We all know that it's just coming, right? You have Larry Fink on TV talking about a flight to quality and you're going to be bearish. It's nonsensical, right? I mean, and so at this point, I think that there's just a ton of optimism and there's good reason to be optimistic. And Bitcoin is just rising in the face of all of this. And to be honest, at this point, even today, although they're losing on their Bitcoin pairs, it's dragging altcoins up with it. Yeah. Scott, before we get into the serious business of the day, how's the hangover?

I'm actually, well, I'm exhausted, but not that hungover. Yeah, I don't really. I do my drinking during the day. I heard it was a fantastic day. I drinking during the day i heard it was i rarely do it i heard it was a fantastic i heard it was a fantastic night it was absolutely excellent the only problem was that uh yeah we we you know we're about two and a half hours from home and we had to leave at 5 a.m to get back to do all our shows and the kids and stuff so yeah i'm tired uh but not not so hung over luckily it was a lot of fun man um you gotta you gotta make the trip uh down to these parts and

meet all these people because i know you're friendly with them as well yeah for sure um yeah i mean i think what i think i love what you said at the intro i think it's a case of now like this is a spot driven rally this is not a futures driven rally it means that people actually really buy Bitcoin on the open market. And I think it's because the narrative has changed. You've got, like, JP Morgan coming out and saying, you know, Bitcoin ETF will be approved

before the end of the year. You've got Larry Fink this week. You've got Novogratz this week. It's like, you're kind of looking at the landscape and going, it's like, it's almost inevitable. And I tweeted something the other day where I said, you know, like, it's like it's almost inevitable and i tweeted saying the other day where i said you know like it's it's the the announcement by coin telegraph may have been a fake news announcement but it actually showed people hold it actually it was like a warning shot it prepared people to say hey like am i actually ready for this etf which is probably now almost

inevitable so i think that that's that's kind of like where it's going and then obviously there's a massive cash injection from china so you know china is flooding the market with flooding the money the market with money and so i think when you combine that you've got yourself i don't say the perfect storm what's the right what's the right way to say it i agree wholeheartedly yeah guys is there one I have, obviously we need to go to the panel because people want to hear us less, especially hear me less. But one question I have is the decoupling aspect. So seeing crypto decouple from stocks, at least recently, should we look into this? Is there much meaning to it? Is it related to the news, the XRP news yesterday?

Or is there more to it than just that? Could we see that decoupling continue? I think it's just, it's decoupled. I don't think there's a process of decoupling if the actual mathematical correlation is effectively zero. It is just not a correlated market. And so it's just a continuation of what we've known for a very, very long time.

I'm not saying there aren't things that can happen in a massive black swan where they will become at least temporarily correlated again. Let's talk to you, Sco, about it. Mark, you answer the question. No, you just answered it, right? Uncorrelated assets, that does not mean you're uncorrelated assets do not, that does not mean you're uncorrelated every minute of every day of every hour of every week. That's not the way it works. Correlations have periods of time where they rise to your point because of black swan events. And it's usually around liquidations related to excess leverage. So let's go back to the lockdowns in 2020. So suddenly gold bonds, stocks, Bitcoin, everything was correlated. They all went down together. Well, why? Well, because if you lock down the world, right, dumbest political decision in the history of political decisions, then economic growth is

going to slow and corporate profits are going to go down. And if you own stocks on margin, you're going to get a margin call. Okay, so you can't sell your stock that's down 50, 60, 70%. You got to sell your treasuries or your gold or your bitcoin and so they all crash while people you know fix their margin calls because it's an unanticipated event and then everybody says oh but look the correlations went up it's just a stupid argument uh correlations that are short, it's just a dumb calculation. People have too much time on their hands. But you're exactly right. And if you look at the 14 years, and let's say, fine, the first four years don't count. The first four years of Bitcoin was a science project. There

was no volume. There was no activity. Fine. Let's look at 10 years. Over 10 years, the correlation to bonds is 0.0, statistically sound 0.0, and the correlation to stocks is 0.15. That is the most uncorrelated major asset of all assets. And there's a logical reason for it. It's not because we want it to be. It's not because it'd be nice if it was. It's because stocks and bonds and currencies and commodities are highly correlated because they derive their value from the underlying technology, the network value, millennial adoption, and I use that term intentionally, it's about young people adopting the new technology. And that's not correlated to the other factors. There can be spurious correlation over periods of time. Anyway, I'll stop talking. I'm glad to get my confirmation bias.

Thank you, Mark. Go ahead, Tom, and then I'll go. Yeah, I love a lot of what Mark said there. You know, the thing for me is that Bitcoin's correlation has changed a lot over time, right? It's been a risk asset. It's been a risk off asset in certain periods. And the lifetime is so short that we just really haven't had the amount of data sets we need to look through rising interest rate environments, falling interest rate environments, different inflationary regimes, but we're certainly getting there. And what's really encouraging to me

was that this year, as we've seen the S&P basically be flat for the last six months, you continue to see sort of Bitcoin kind of keep chopping up. And in the recent risk-off environment, Bitcoin has performed like a store of value, which is really just solidifying the case in my mind and hopefully other investors' minds of that digital gold narrative, which I think Bitcoin would benefit from immensely, right? That we've been, we play around with a lot of narratives for Bitcoin. Is it potentially a payment mechanism? Is it a store of value? In my mind, this last few months has really solidified that store of value narrative.

And we'll continue to see that as we have potential risk-off environments going for equity markets and others. Well, the answer, Tom, is yes. It's both. And it's big B Bitcoin and little b Bitcoin, right? There's the network, which will become the global asset settlement layer for all assets of all kinds for the entire globe. Okay, that's going to happen. So that's different than Bitcoin itself as a store of value, digital gold payment mechanism. They are one in the same. And so the answer is yes, definitively yes. I had this great event the other night down in Charlotte, Bitcoin Charlotte and the Harvard Business School Alumni Association put on a debate on the future of money

with myself, Guy Swan on one side, and a banker from Fifth Third, and a central bank governor from the Richmond Fed, which was amazing that he agreed to do it. And it was awesome. It was awesome to just talk about the future of money and what literally is happening in real time as we embrace and adopt this superior technology. And the thing that people just, I don't know why it's so hard to understand and why people just don't seem to have any patience, but this technological evolution that's been happening since computing was invented, right? I mean, in the 1800s, we had physical machines that allowed us to compute, but we didn't have computers until the late 40s. And in 1954, we had an innovation called the

mainframe computer. And now businesses could actually have computers instead of just governments and then 14 years later some innovation around microchips and we had smaller computers and then 14 years later some innovation again and we had personal computers and then 14 years later there's an innovation we have the internet we have connected computers it's always 14 years because young people invent everything. Then 14 years later, we have another invention and we have the mobile net. So we have these little supercomputers we all hold in our hand and talk to each other with. In 2024, which is next year, it's closer now than ever, but it's still not here.

That's the beginning of the truth net, right? of blockchains the internet of everything it's just it's just amazing that people can't seem to just accept that technology evolves and we are going to move to this better technology and yeah it's going to cause disruption it's going to cause pain it's going to cause it's going to cause disruption. It's going to cause pain. It's going to cause, it's going to, you know, the thing I get excited about, it liberates 7 trillion with a T, $7 trillion that is lost every year. It's extracted from us by the trust providers, banks, brokers, accountants, auditors. All of that trust is replaced by truth bitcoin is truth bitcoin is freedom bitcoin is it is due it's going to liberate that seven trillion dollars when you unlock seven trillion dollars six to eight percent of global gdp and you put it back in the hands of human beings who are the most creative powerful force the world's ever known. It's just it's unbelievable.

Jago. I think people frequently get confused between uncorrelated and anti-correlated, so anti-correlated means that when one thing goes up, the other thing goes down, that's an anti-correlation. And a lot of people are expecting that when you say that Bitcoin is not correlated to other asset types, that it's going to do the opposite of those other asset types. But that's not what uncorrelated means. Uncorrelated means sometimes it does the same, sometimes it does different. But what you know about one asset doesn't tell you very much about the movements of the other asset.

Now, Bitcoin has remained over time very uncorrelated. If you look at the fullness of time, it's an extremely uncorrelated, not an anti-correlated, but an uncorrelated asset. Now, there's a really interesting aspect about uncorrelated versus anti-correlated. Anti-correlated assets are good as a hedge. You use them so that if one of your assets is going down you're hedged and you have a different asset which is going up uncorrelated assets are far more important they're used to improve your sharp ratio now your sharp ratio is one of the most misunderstood under discussed and most important aspects of thinking about your financial portfolio or your investments. The Sharpe ratio is an analysis of your risk-adjusted returns, right?

So, for example, stocks go up and down very, very significantly in comparison to bonds, but you make much more money with them over the long term, and they have a good Sharpe ratio in comparison to bonds. Another example, right, is real estate versus stocks. So real estate has, if you hold it for a four-year period, let's say, a Sharpe ratio of about 0.4. U.S. stocks have a Sharpe ratio of about 0.7, sometimes close to 1. So that's really good.

Now, the Sharpe ratio becomes important with Bitcoin in two ways. First of all, Bitcoin itself as an asset is one of the best and probably the best Sharpe ratio of any asset in the world. Right now, if you've held Bitcoin for a four year period, your Sharpe ratio, your risk adjusted returns are at two. That's unheard of. During bull markets, it's usually somewhere in the vicinity of three or four. Completely unheard of. And the other way that Bitcoin is really important is that as an uncorrelated asset, by simply adding it to your volatility of the of the of your portfolio. Right. So volatility cancels itself out because volatility is random if things are uncorrelated. And and when you average out anything and when you average out volatility, it goes down. Volatility goes down when you average it out. So by simply having two

assets you improve your sharp ratio now bitcoin is the best tool in the world because it is so uncorrelated because its sharp ratio is so high it is the single best thing that you can do to add to your portfolio that you can add to your portfolio in order to improve your risk-adjusted returns which really is the only measure that matters in finance. So that's what makes Bitcoin such a special uncorrelated asset. My God, guys, can we just end the space now? That was impressive. That was that. That might have been my favorite 20 minutes so far that we've ever

had of spaces. I know it can't get better what do you say ran before we go to mind your business that's the mic drop moment it's like that mic drop moment you know right and people do get that so confused uh everybody you know rails about your uh financial advisor comes sits you down and is off and says, 60-40 portfolio, guys. 60% equities, 40% bonds. When your stocks go down, your bonds are going to go up. First of all, that hasn't happened in the last year. It's been the worst time for the 60-40. But what Yago just described is the exact reason the holy grail of all investing is

to find something with idiosyncratic risk to put into your portfolio. And it's absurd at this point, even if you hate Bitcoin, that you don't have, I don't know, metals in your portfolio or something that is slightly different, even though that is a more correlated asset. He just articulated it so incredibly well. But what an asset like Bitcoin, even at a 1% to 5% of your portfolio can do if things go bad for everything else is astounding. And so it doesn't even matter if you believe in Bitcoin. You don't have to think it's going to go up. You don't have to care if it's going to go down. You just want it there because it might not do the same thing as everything else. Mind your biz. Go ahead. So definitely appreciate

all of this insight. And I mean, I have to, I have to just bring my ignorance to the forefront before I make my next comments. Cause I, I'm not going to be able to comment with that same level of insight into how to structure your portfolio. I'm the technologist, right? I'm the knuckle dragging guy who, you know, who, who will read a smart contract and white papers in depth and look at all that stuff. And I'm called in as a subject matter expert quite often for other people's channels so they don't say dumb things related to the tech. But what I will say is that the narratives, this is something that I can grok.

Something that I can get behind is the concept of narratives. And when it comes to Bitcoin in particular, Bitcoin proper, and like Mark was saying, the uppercase Bitcoin and lowercase Bitcoin, two different things, right? The network versus the underlying asset. There is a systemic risk when we become overly reliant on exchange traded products for Bitcoin. They do actually create something of an existential threat. It's a strange balance, right? The strange dance between the core utility of this native asset and this native network versus having it be easily accessible, right? By family offices and by your typical retail investor, who's trying to get some exposure and they don't know you can buy a very tiny fraction of a Bitcoin,

you can hold it entirely on your own, or they fear the means to do so. And, and so, yeah, when I'm not shocked that we're finally starting to see decorrelation between, especially Bitcoin, and other assets and other asset classes. But what does have me concerned is the shifting narratives that have been largely controlled by something by a quasi centralized steering committee. And so the, the control over that narrative, the initially being peer to peer payments. Well, okay,

cool. Who, who coined that phrase? Who, who desired for it to be peer to peer digital cash? Oh, well, Satoshi Nakamoto.

Well, where's this guy or gal or group or, you know, or NSA specialist or CIA, you know, task force. We don't know. We don't know where this initial entity

is gone. And we don't know what happened to that narrative. So the concept of Bitcoin becoming the ultimate settlement layer, I swear to God, I hope it happens exactly how Mark is laying out. I really do. I hope that it genuinely does become that ultimate settlement layer for all assets, real world assets, all kinds of tokenization of other commodities and securities. I hope that actually is the ultimate destiny of Bitcoin. It'd be super cool. The issue has been, that's just one stop in a long train of narratives that have kind of had their way with Bitcoin, unfortunately, started off as digital cash, moved towards store of value and sort of the so-called digital gold narrative after certain centralized actors started to become the

self-appointed steering committee for what Bitcoin was supposed to be. And I see, Scott, you're giving the hundreds there. We've seen you fall prey to the court of public opinion when Maxis decide they're extra toxic. No, never. Never. No. Right? Well, here's the thing. What I wanted to mention is just that Maxis are their own worst enemy because they cannot seem to agree on a narrative or on any kind of ambiguity amongst the narratives where it can be both, as Mark was mentioning before, where it can definitely be both,

where you have this decorrelation from other asset classes because it's genuinely unique and special versus them wanting to come up with a facile narrative that they think will get whoever their favorite investor profile involved and attempting to get access. So my concern now is that we have gone back to, like it's come full circle. We've gone back to the narrative of, oh, well, you know what? It's just tokenization on a network. Even Satoshi had mentioned informally in the forums, yeah, you could probably tokenize other things and settle them on Bitcoin. Well, that got erased by those centralized steering committees and those centralized planners for Bitcoin for a time. and in favor of a push towards these exchange traded products. Now we're finally coming back into the sort of cypherpunk ethos of

free and open source builders saying, no, no, no, no, we're onto something. We could start putting assets back onto this, fully ignoring the history that Tether launched on Bitcoin and nobody wanted it. So what are we doing this time? I'm a little bit concerned about that in that the existential threat of exchange traded products decreases on-chain activity. As you decrease on-chain activity,

you decrease on-chain fees. As you decrease on-chain fees, you decrease the health of that network. You literally strangle the goose that's laying the golden exchange trade club, exchange traded egg, so to speak. Yeah, not mixed metaphors there. I love all those points, but I will say that as much as I will be the one to go out on

the limb and say Bitcoin doesn't care about what's happening with the macro, I also, as long as we've been here, we can see that in the end, Bitcoin doesn't give a shit about the narratives from the steering committee either. Nick and then Nick. Yeah, that's a fact. If I can just briefly punctuate it then and just say, definitely doesn't care about the narratives, but there are some factors. There are, I think, some backstops to its utility and to its real value. And you're right. It's becoming outmoded, right? The Bitcoin facts don't care about the Bitcoin feelings, right?

The Bitcoin facts don't care about the Bitcoin narrative. But but there are some facts that backstop the value. Absolutely. We see some of you guys requesting that the stage is full. I know. And at some point, we'll have some people drop it and we will bring you guys up. So, Matt, of course, we know that you're supposed to be on stage and we'll try to make that happen. Nick and then Tom and then guys,

I want to dig a little bit more into sort of where we started, which is where this fits into the macro picture, especially since we have Tavi and Mish here. So we are going to head in that direction after you guys. Go ahead, Nick. Yeah, I'll just keep it short and sweet, hopping on the kind of narrative discussion because we want to move on to different topics. So I do agree with Tom that I do think that the narrative for Bitcoin in this cycle, at least

2024, is going to remain and become digital gold in the store value narrative just because with the Bitcoin spot ETF, it creates that nascence of uncorrelation of Bitcoin to the other stocks, the flight to safety, like Larry Fink said. And I think it's easy for those large institutions to sell that narrative to their generational wealth, their old money, if you will. It's just easy for them to wrap their head around. They've already done it with gold in the past. And now they can start moving some of those assets over to Bitcoin.

And going back to what mine said, you know, I think we have just like we have the big B and the small B. I think we're going to have a distinct separation in the community itself. You know, we have the Web3 and the people have been in crypto for a long time. And now we're trying to build back on Bitcoin and bring back that ultimate settlement layer ethos. But we're going to have this new institutional money who's just going to stick with the narrative of digital gold and store value, at least for this next cycle, in my opinion. And I think that is very beneficial for Bitcoin in the short term. But I do agree with mine that if you want to have this ultimate settlement layer, you want to kind of have this cyberpunk ethos, you want to utilize the actual technology and

its core technology of the money of the future, then we're going to have to move forward beyond this digital gold narrative once these Bitcoin spot ETFs are launched and kind of mature after a year or two. But I think that's the narrative we're going to see. Digital gold store value narrative is back and it's going to be back for the next year, year and a half, two years. And unfortunately, that's just something we're going to have to ride the wave of. But I do think it's ultimately very bullish for the short, mid and long term of Bitcoin value. I thought we were going to ride the wave of Elizabeth Warren telling us that it's only used for terrorist financing. It's funny to think that when all the data shows, you know,

the US dollar is used for much more nefarious things on much larger means, but I guess it's whatever the mainstream media wants to push, everybody wants to believe. Of course, listen, Tom and I'll go make your points here, and then we will move on to Tavi and Mish on the macro. Yeah, yeah. I'll be super quick here, Scott. Just wanted to add a few numbers to Iago's fantastic points and Mick's fantastic points earlier. So I did the analysis to look at 60-40 stock bond portfolio. If you did growth of a dollar from early January 2018, that's probably when the data set is pretty stagnant and more comprehensible for Bitcoin and Ethereum. You've gained 20% on a normal 60-40 portfolio. If you

had 5% Bitcoin, you would have gained another 4%. And then if you added 5% Bitcoin and Ethereum, you would have had another 10% return on that portfolio at the expense of about 1% more volatility. So the numbers bear out that it makes a lot more sense just to add these things, even in small quantities, to your portfolio, if nothing else, because the numbers say that it makes sense. Go ahead, Iago. So Bitcoin doesn't have a steering committee. In fact, what makes it so special, unique, and reliable is the fact that there is no steering committee. But I do agree with mine, and I want to add a little bit of nuance here.

It doesn't have a steering committee, but it does have a priesthood. And the priesthood want to pretend and tell people that they are the steering committee. But they have as much impact and control over Bitcoin as a bunch of witch doctors have over whether or not it's going to rain. So, you know, they get on Twitter, they do their little ceremonies about pretending to be maxis and having laser eyes, but they have no actual influence over Bitcoin. And that's one of the best things about Bitcoin. We have a really interesting moment happening in Bitcoin right now. We've got Ordinals, we've got BitVM, we've got Rolux, we've got RGB, we've got Taproot

assets. We've got more innovation, excitement and new technology being built on bitcoin as the reliable unchanging settlement there than any time in memory since 2014 it is an extremely exciting moment in bitcoin i was at a bitcoin builders conference yesterday in london and i haven't seen this kind of thing happening in bitcoin you go to bitcoin conferences, you hear talk after talk after talk of people getting on stage and moralizing at you or preaching at you. And that's all nonsense.

It's all boring. You've heard it all before. That's not the story anymore. And so I think that the next cycle is pretty much exactly as Tom described it. We're going to have a whole bunch of institutions who are way behind the curve talking about Bitcoin as digital gold.

We're going to have a huge number of developers working on turning Bitcoin into the ultimate, most reliable and most unchangeable settlement system. You just made me feel so much better once again about being a heretic who's been sacrificed to the gods of the Bitcoin priest so repeatedly. Much, much better. Tavi, I want to ask you, first, I think maybe the digital gold narrative, what you think about that for Bitcoin, but also just this lack of correlation that we've had, and then sort of your overriding perspective on what's happening with the macro in general. Well, thanks for having me. it's it's fascinating what's going on with bitcoin i have to say it's uh uh surprising me as well you know i've been following uh macro for a long time and

uh it's it's uh the situation with hard assets overall is is is i think it's the real story when we have this sort of market regime changes where either, you know, you can question if 2022 was a fluke or not. And I think it was. And I think there's growth to value transition, there's higher inflationary period, higher interest rate environment. And it's going to create a lot of changes in terms of asset allocation, but also other ramifications in markets overall. So, you know, this rising yields, you know, what don't we know today that we're going to learn a year from now? It's a very, very important question because the value destruction of collateral price among most of those instruments has to have some sort of knock-on effect in the global economy.

And if you think about the old days of macro and a lot of hedge funds used to make money on the large implosion of PAG monetary systems and other things, and I'm talking about especially the 90s in this case, where FX volatility was much higher. I think we're going back to those days. I mean, we haven't seen a deep bag of a currency or any major implosion of a currency system. And I'm referring to those large FX volatility events and not a gradual decline of those in a very long time. And just to offer a thought, when you have this collateral value decline of bond markets, you have to think about who are the large holders of those things. And that is central banks, right? Central banks, they're deteriorating the quality of what they hold as an anchor to their own fiat currencies. And so that is a significant risk right now to be the next shoe to drop. And again, if you're running a fund or anything along

those lines, hard assets is the only way to hide here. I like gold for many reasons. I actually barely own gold, to be quite honest, in my own portfolio. What we own is mineral claims in properties that have gold in the ground. Those things are in distress opportunities, not the miners. I'm going to make that point very straight. It's not the miners. It's the mineral claims on gold in the ground that is quite interesting to me, that is highly distressed and has a very high leverage when you get into a gold cycle and so to me this is this is sort of a you know an incredible environment to be deploying capital into something along those lines but being very

diligent on what are the things that could be the next shoe to drop in an environment where interest rates uh at least stay where they are i, just thinking about any analog of history, right? The 1970s is a great one. The 1940s is a great one. But even using the 40s, let's just use that one for a minute. Interest rates never surpassed 2.5% during that decade. You know, we're about, you know, we're crossing some very severe numbers today right now. And so, you know, relative to those levels. And so, where do we go from here? And if you think about what the Congressional Budget Office put out in terms of their estimates, we're going to have deficits at minus 6% of GDP for another decade.

Just use a 72 rule of calculation, you're going to see that we're going to double the debt in 12 years. And that's a conservative calculation and completely ludicrous if you think about it, because that's not including a recession. So anyways, those are my thoughts on all this. If you don't own hard assets, I think you're out of your mind. And so it's the time to be doing that. Right. I guess then the debate just becomes whether Bitcoin qualifies as a hard asset. But I will go ask the priests and see what they have to say about it. Mish, we can't talk about commodities without asking you to speak. Well, I've certainly enjoyed this conversation.

It's fascinating. You know, I speak in a little bit of a different language because I'm a storyteller and a teacher. And I've been doing this for such a long time. And we kind of talked about this a little bit the other day when I was on about how cryptocurrencies, particularly Bitcoin, became a member of my vision of an economic family, right, which includes Russell's as the grandpa, because it really dictates the economy in the US with the consumer behind it, grandma, retail and transportation, semiconductors, biotech, and regional banks. And then I added crypto and I've been thinking this

whole week, I added crypto a few years ago as this adolescent, and I've been thinking all week about how the whole regional bank sector and even some of the big banks that we're seeing here that have been under such incredible pressure, and this is after we had pretty good earnings, how that member of the family, particularly the regional banks member of the family, how do we kill him off? And does that mean crypto takes a bigger role in all of that? And so essentially, from my story, this whole idea of whether or not it's the rebel and the flight to safety, or it becomes the savior, and that it's the new economic pulse of how things move through consumerism. We don't know that yet. But that's really, so that's kind of what I'm watching for, is to see how that continues. of the banking system as we've known it for our entire lives, which could or could not include

currency, fiat currency, or I'm assuming that would include that, into this whole new way of consumerism through cryptocurrency. That's the biggest question in my mind. And so I'm looking at it as this story. The other thing I wanted to add, and I'll talk about commodities in a moment, but because that's the other story, right? Is Bitcoin more of a commodity or is it more of an asset in terms of an equity? And I think we don't really know that yet, although it looks like over this course of the week, if we're taking out that this is just optimism based on some kind of a spot ETF. And then there was a whole story yesterday about Grayscale possibly also becoming more adaptive. And that's, you know, obviously got an own issue because as of a couple of days ago, it still has a 12.5% discount net asset value.

So it's not necessarily, it's got 12% circulating is unbacked by actual Bitcoin. So that would have to actually come more into line for it to be really a value in terms of being a spot ETF. But let's talk about some of the other aspects of Bitcoin that we watch, which is some of the actual stocks related. And they're so lagging right now. That's what I'm finding interesting. MicroStrategy is probably the best and most in line right now with what's happening with Bitcoin, except that it's still slightly underperforming. If we just take a look at on a weekly basis, and we measure it through a 200 week, it's sitting right under MicroStrategy at 350, while Bitcoin, once it cleared 28.5,

actually cleared it. What does that mean? I mean, I'm not going to answer the question. I'm just asking the question. Maybe people who are more familiar with this can help answer the question. But that's one stock. Then if we take a look at a stock like Riot, for example, that is still really so well underperforming. Even if we look at Beto, which is questionable in that it's also a lag, that too is starting to move, but still so relatively underperforming. I'm not sure what that means. And I would love to hear from other people what they think about that. Mish, can I give you my quick piece? Please. Well, if we're starting to price in that a Bitcoin spot ETF is going to be approved and all the things that investors in markets that

don't buy spot Bitcoin have been using as a proxy for a Bitcoin spot ETF are going to lag, right? I mean, if people view micro strategy as the way to buy in your IRA exposure to Bitcoin. They're not going to do that anymore with a spot ETF. BITO is the futures ETF. Nobody's going to buy a futures ETF that's being forced to buy two month, three month, four month contracts to track the underlying asset if they can buy something that's literally tracking spot perfectly. So my theory there is that if you're anticipating a Bitcoin spot ETF, everything that people have been buying as a proxy to that ETF is going to underperform. That makes perfect sense. So in essence, what you're saying is that there's a rotation going on. Yeah, I just think that people for years have gotten into the habit of

buying even GBTC at a 30, 40% discount when there was very little hope that actually that discount was going to close because there was no spot Bitcoin ETF narrative at that time. People bought all these things and found all these creative ways to get exposure to Bitcoin, and they're not going to need to if this gets approved. Mark, I see you've had your hand up there for a while. I mean, there's a whole bunch of things that I keep wanting to raise my hand on. But I love Misha's point about killing the banks, right? I mean, it's a self-inflicted wound. You know, the central banks forced the banks to buy treasuries at, you know, 2% and 3%. And then the Fed jacked up interest rates, causing significant pain and suffering. And then, you know, the Fed also put up the backstop,

say, oh, but don't worry, we'll backstop you. So they're not dead yet. But the thing that's frightening, and again, if you're not terrified by this, you're just not really paying attention, is the ratio of bills to bonds at the Fed, at the Treasury, in terms of what they can issue to fund this massive deficit problem. And the deficit problem is a spending problem. It's not a financial problem. It's a spending problem.'s it's not a it's not a financial problem it's a spending problem it's a money laundering problem you know sending money to ukraine to launder it into you know defense companies that's just such a bad bad plan but to print money in this financialization regime that we've been in and and it all comes back to bitcoin in the sense that the white paper said you know we're going to peer-to-peer electronic cash right so okay that was the quote-unquote narrative um back to mine's

point but what's interesting about that is that quickly got replaced and and it kind of died and the maxes get all mad when you say this. And it got replaced with the digital gold. Well, why did that happen? Because it actually didn't die, right? All peer-to-peer means, it doesn't mean that we're all going to buy pizzas with our Bitcoin, okay? It can mean that.

But what it means is that we can exchange, we collectively, everyone, can exchange value without the trust industry, without a financial intermediary. So that's why we're in the then they fight you phase. That's why you got grandstanding of the AG, you know, filing a lawsuit against, you know, quote unquote crypto companies. They were defrauded by FTX. Right? Genesis didn't steal the money. FTX stole the money.

So ultimately, the banks need a smokescreen. They need a diversion to get people to forget that, wait a minute, we're not as important as we used to be. Because there's this technological solution which allows you to operate without us. So yeah, the banks are going to be killed. Some are going to kill themselves. Andp morgan can't own them all but if you want to go down the really sinister path maybe that's the plan all along is to foment fear and distrust of the banking system so you can introduce what you what you are going to try to convince people is the government alternative to bitcoin which is the cbdc god help us all from the uh from the uh nationalized bank of jp morgan of the united

states right 100 if you haven't watched mr robot you gotta watch it because ebucks it is life imitating art where evil corp is jp morgan and i mean it you know the show itself is pretty rough and there's a lot of violence gratuitously and and but the writing is spectacular and the story is fact it is just fact and and jp mor Morgan is evil corp. And yes, the National Bank of JP Morgan controlling the central bank digital currency, where they can turn our money off if we criticize somebody. It's the dystopian future I don't want to have any part of. At least we have Bitcoin. Simon, then mine it's got yeah um i think it's a really interesting conversation about this um stocks versus bitcoin and the intersection as well um so just wanted to continue a bit along those lines um so one of the you know if we hypothetically enter into an increasingly you know wartime world um and historically that has always had a negative impact on stock markets um with the exception of certain defense contractors um then what happens if we enter into a world where in where nobody trusts each other and

historically in um geopolitical environments where people don't trust each other, they settle with gold. But in this time, they choose to settle with Bitcoin. And Bitcoin goes through its uncoupling, decoupling, whatever it is we said. then you have an increasing Bitcoin utility in the decreasing supply with only about a million and a half Bitcoins left to mine. And then you've got these mining stocks with Bitcoin. And so if you get this contracting stock market with Bitcoin stocks that hold a lot of Bitcoin and benefit from the growth of Bitcoin, and then getting that back to the whole micro strategy

versus Bitcoin mining. Well, obviously, Bitcoin mining is a very efficient industry. It's got its difficulty rate adjustment. So therefore, as the price of Bitcoin goes up, that increases the number of people that are mining, and therefore it's pretty efficient and every two weeks it adjusts. But MicroStrategy is simply holding Bitcoin

on its balance sheet. And so you'd expect MicroStrategy to outperform mining stocks because of that adjustment mechanism because it's less of a proxy for Bitcoin depending on how they're managing. And I just want to add. They also have a business. People seem to forget about it, which was quite successful long before their exposure

to Bitcoin. But yeah, go ahead. Sure. And the mining companies also have to sell their Bitcoin in order to actually cover. And it's also an energy play now because they decide when to turn on or turn off the mining and reallocate it towards um some of the the efficiency improvement of um energy but one one thing i also wanted to bring to the market that's going to play obviously we've got the bitcoin etf so that will significantly reduce the fees for those that have historically used GBTC and that's a net improvement and finally you know

the biggest sin of the SEC was it didn't give any pensioners the ability to hedge before we enter into a more wartime type of environment and get more time to kind of get ahead of the halving which is one of the biggest sins of the SEC, I think. But there is also what emerges from these bankruptcies. So one of the interesting things is that FTX actually took a billion and a half of client money and invested it in a mining company, Celsius, borrowed against a billion dollars of Bitcoin and bought a bunch of mining equipment. And one of the things that's emerging right now is because of the chapter 11 bankruptcy code and full disclosure, you will know I'm many of you probably know

I'm a creditor in Celsius. And so therefore I'd be one of them. We're also just going to say, Simon, we're just going to give you a disclosure. He's invested in all of it, everything, all of it. So I will be one of the shareholders in this and I have been invited to be a board observer. But one of the interesting plays is that because of the bankruptcy code, we get to go direct to NASDAQ and there's going to be about half a billion dollars of mining equipment and $450 million of ETH staking into a NASDAQ private company. Sorry, public company.

And so that's going to create an interesting one. Because when you think about the different trends, you know, at the end of all this crypto stuff, I see tokenized securities. I see CBDCs. I see stable coins, which is an Ethereum play. And then you've got Bitcoin, which is digital hard sound money, like so you've got ethereum that's more like an equity you've got bitcoin that's more like a commodity put those both into a public company with some of these geopolitical trends and i think we're going to see you know all these different types of etf you've got

the etf that need to invest into all the Bitcoin companies, then you get the spot Bitcoin ETFs. And how is that going to all play out in a decreasing wartime stock market environment? I think it's going to be fascinating to watch. Yeah, we're in for a roller coaster coming for sure to see how this all plays out together and where really these products fit into the market. Mine and then Nick. So I love that Simon, I love that he brought up some of these sort of conflicting forces in the native asset side of the conversation. And that's where for me, I mean, that's where I live, right? It's where I think, it's where I advise, that's where I actually do the majority of my work. It's just thinking about the possibilities with the tech. Not so much getting some sort of derivative exposure to it, but the native asset.

And asking, okay, what realistically could happen as some of those scenarios play out that Simon just laid out? Getting into a decreasingly hostile environment, a more cooperative environment. And then also paying attention to the developments i think it was uh it was either otavio or tom that mentioned or yago it mentioned that there is stuff being built on bitcoin now right so there's there is there's more being built now than there have been in a couple of years and but again it is history repeating tether printed a billion and a half of uh of their stablecoin om OmniLayer protocol first. By show of hands, who here is using OmniLayer protocol today on Bitcoin?

Right. Spoiler alert. Zero. Nobody's using it, least of all Tether. And Stacks had its shot. Rootstock had its shot. Now we're hearing about new protocols. It sounds promising.

It really does. It sounds very, very promising. But we've seen multiple swings and misses at tokenization. And as was mentioned earlier, I wonder if that isn't by design. I wonder if there aren't forces at work that are attempting to make the Ethereum virtual machine seem like the only tokenization layer for all types of real world assets and all types of stable stores of value or stable units of account. Or that it'll happen on private blockchains, right? I mean, JP Morgan Onyx should not be ignored when you see BlackRock doing the first transaction on JP Morgan Onyx, which is sending it to Barclays, which is a tokenized money market fund

that can be used instantaneously as collateral and is sent faster and cheaper. Right. So I see what you're saying, certainly. Absolutely. Maybe there's a narrative to push it to Ethereum, but I think institutional grade from the National Bank of JP Morgan private blockchain may be a bigger narrative in that direction. No, that may absolutely be the case. But here's the thing. We know that you take that to its logical extreme and the fastest possible database. It's just a Lambda function on an AWS server. Let's just cut to the technological chase here. Decentralized ain't going to be the word. Yeah. Exactly. And beyond that, you've got AWS that for years now has offered you an RPC call back to Ethereum.

You can touch the Ethereum. You can write to the Ethereum network without ever actually setting up your own entirely native machine to do so. You can use AWS, and you've been able to for some time. And, of course, Google Cloud and the other competitors in that space, right? Public Cloud. You can use them to write data to Ethereum. But why is Ethereum the only game there? I'm submitting to everybody that, yes, these are still narratives,

and we're still being corralled towards this concept of Bitcoin being sound money and air quotes free, right? Free as in Libre, not free as in gratis, right? So being the more freedom-oriented network and then Ethereum is the one where we have all the, you know, have all the cool stuff, right? We've got our stable coins here. We may actually have bridges to CBDCs over here, but at what cost?

Well, we moved from proof of work into proof of stake. Who are the majority stakeholders? Well, still the Ethereum Foundation. Well, who controls consensus? The majority stakeholders. And there's maybe a reason that we're not seeing as much developed in a completely permissionless way on Bitcoin. And I just wanted to vocalize just one more time that I would love to see some of these stable stores of value, in particular, permissionless, over collateralized, right? Allowing for a CD, a collateralized debt position to then print some kind of stables a la,

you know, die, makers die. But on Bitcoin, why don't we have it yet? We've had the technology for a decade. Why don't we have it yet? Obviously, you must follow the incentive trail. There are incentives not to have it. Just wanted to throw that out there as well. Nick, I saw you had your hand up and then I'll go to you, Mish. Yeah, I had my hand up. I was kind of going off what Simon and you and Michelle were discussing pertaining to the crypto stocks. I agree wholeheartedly with you that people are going to the underlying assets itself or preparing their portfolio to go to a Bitcoin ETF.

And that's why we're seeing the rotation out of Riot, MicroStrategy, Coinbase, and then leading to what Simon said, where he believes that MicroStrategy, which is a company that is holding Bitcoin on its balance sheet, or maybe Tesla in the future, if they increase their holdings, have the potential to outperform the likes of miners like Riot and Mara, due to just how the competition in the mining space, how they can make revenues and the constraints they have. So I do agree with that. And I think to go a step further, I believe products, fee-based crypto products such as Coinbase could outperform even MicroStrategy and companies that just hold Bitcoin on their balance sheet. Coinbase is, as long as there

is regulatory guidelines here in the United States, all their competitors are gone. FTX exploded. Gemini is kind of irrelevant. Binance has been kicked out. KuCoin has been kicked out. And they have a product and a fee-based product for both retailers and institutional players. We've seen BlackRock come out and say that they're potentially going to use Coinbase institutional as a custodian, meaning there's fee-based tech on that. And we all know once retail comes back, they're going to go with what is easy, what is familiar and what all their friends use. And I still believe no matter how much, you know, us who have been OGs have been in the space who make fun of Coinbase or say their fees are too high. I still think Coinbase is going to be that fallback for many current and future users.

And I think they greatly benefit from a Bitcoin spot ETF and a lot of institutional players coming into the space just because they kind of have that notoriety, they have that badge of approval from the ecosystem. And I think we see some of those players use Coinbase. So I'll keep an eye on Coinbase. I think that it is undervalued here. And I think it has the potential to outperform the likes of the miners like Riot and Mara, and also the balance sheet holders like MicroStrategy, Tesla, and whoever else comes. Nick, because I'm so bad at practicing what I preach about diversification, Coinbase, for full transparency, is my largest equity holding.

I think it's going to be one of the top 10 companies on the planet. I still believe that. And I will put my money where my mouth is behind that assertion for a very, very long time to come. Mish, go ahead. Well, Nick, yes, and great segue. And yes, I actually also am an owner of Coinbase. So I just want to say, and I'm not trying to talk my

position, but and I have to go, but I just wanted to, as I've been digesting everything that people have been saying, again, I always like to speak in how I'm comfortable in the language I'm comfortable in. And right now, considering if we take the storyline of particularly regional banks, which by the way, I've always called the prodigal son of the economy, because right, what happens as we saw in 2008, and then again, briefly here in 2023, is they get into massive trouble and they ask for a bailout. That's exactly like the Bible story. If that is all on its death right now, it seems to me that we can really pretty much say, not when, but that it will happen, that Bitcoin will transform from this current dialogue of rebel, store of value, flight to safety,

into a real intrinsic way of dealing with the economy through some level of consumerism, whether it's banking or beyond. And that's kind of the story I'm going to stick with, because I feel like everything that I've heard everybody say sort of supports that. The last thing I'm going to say in terms of the rotation into a spot ETF is exactly that. If we do see mass adoption beyond an ETF, but more economically acceptable, or some kind of a substitute, if not a complete replacement of banking as we know it, then these other stocks will also benefit from them. And yes, Coinbase will be the top of my list and is at the top of my list. And I just wish it would break out of this range between 70 and 80. Once it breaks over 80, I think this thing can go at 115 real quick. That's kind of what I'm banking on is the risk reward here, I think,

is still pretty darn good. So yeah, I unfortunately have to go, but I'd love to come back another time and I want to thank everybody again. And you all have a great weekend. Mish, we love transitioning you over from the main finance spaces to becoming an authority in the crypto space. Well, I don't know. Well, I don't know if I'd say authority, because I listened to you guys. And I go, Oh, my God, just like a different angle, you know, it's a different perspective. Because, you know, you have to remember, I'm older, probably than a lot of the people here, not that I like to admit that, but it's true. And, and, and so I kind of represent an older generation, but I also have, we have people working for

us who are 25, who are all about crypto. And then listening to you guys, but really what I hope to bring more is, like I said, is if we step back in the macro that people depend on me for, is where does that fit in? And I think it's still evolving, but I think it's going to be more than just a hard asset at some point. And that's my contribution. I think I'll agree. Thank you, Mark. Simon, go ahead. So the point, I'm pretty sure I'm older than Mish, but that's okay. Maybe not. Look, this is an interim step. We're not going to eliminate the banks and the banking industry and fiat currency tomorrow. It's just, it's not, you know, it's not, not physical or, or practical. In fact, everyone listening on this call has money in the bank. I would argue

probably maybe, maybe there's one or two that don't, but vast majority have money in the bank. So it's not an overnight thing. It's like AI, right? AI is all the rage now. It's a 75-year overnight success story. AI has been around for 75 years. But I don't think it takes 75 years, but it's definitely not going to happen overnight. And, you know, I think the interesting point I liked someone was making about the tie, tie all the loose ends back on on ETH. And, you know, just one little thing I'll offer that I think is interesting. So when I first got introduced to Bitcoin way back when in 2013, I just Googled it, right? I said, what is this? And what comes up if you Google, actually, I was Googling Satoshi Nakamoto, not Bitcoin itself. But

what comes up if you Google Satoshi Nakamoto is intelligence central because nakamoto is the surname of japanese families from the central provinces and satoshi means intelligence like wait that that's that's way too close to the cia like nsa so i went down that rabbit hole a little bit and so you know a number of years ago a couple years ago sc Scott Stornetta, right, who with Stuart Haber coined the term blockchain in 1991, and is cited three times in the white paper. He's a venture partner of ours. And so I asked him, you know, what do you think? Is that possible? And immediately, like, no, nope.

Like, what do you mean? He says, well, the way you're thinking about it, in that there's some backdoor in Bitcoin, is impossible because of the air gap. Now, and then without even hesitating, he said, but Ethereum, there could be. And if you want to get really crazy this weekend, pull the threads on who's actually backing and behind XRP and Ripple and where that leads to the BIS. So anyway, I'll leave it. Yeah. I mean, notable, obviously, that XRP is

focusing heavily on building a platform for central bank digital currencies. Right. That one's pretty clear go ahead simon yeah um i don't think you ever replace fiat currency i think fiat currency just transforms into a new technology which is cbdc's and stable coins and the banks will be the the perfect ones to issue those and whether we do it on a public blockchain through staking, you just need to look at the Ethereum ecosystem since it transitioned from proof of work to proof of stake. It's now owned by the exchanges. The exchanges are the equivalent of banks in Bitcoin world. And now they all enter Bitcoin if regulators shut them all down because of their nefarious practices and then replace them

with institutions that they're more happy with. They're going to be the stakers. They're going to control the network. And we just get a new iteration of it. But the fact that the technology is not Swift and is Ethereum is interesting in itself. But then you've also got to look at the other trend, which is that the future of Bitcoin is transaction fees. We're not going to have blocks to mine forever. Proof of work is without a doubt the most important thing we have in the world for freedom, liberty and freedom to transact and freedom to protect ourselves from inflation and freedom to be able to send money and have a record of it so that you get a compromise with anti-money laundering laws.

So that if you commit crime, you create immutable records. And I think that's a net improvement to have an apolitical network. So proof of work is incredibly important. And I think this gives a segue to Yago, what he likes to talk about. But eventually, if we move to transaction fees, then we do need those use cases to occur on top of bitcoin because if we're pushing all of the transaction layers out to lightning network then what is going to need to be done on chain well we need those use cases we need the settlement layer and we need additional things that are going to increase transaction fees in order to incentivize proof of work well into the future beyond block rewards. Jago?

So we're not going to eliminate fiat. And that's not the goal. As someone who's building in the space, the goal is to create an economy which is an alternative to fiat because fiat, unfortunately, is destroying itself. I think Simon did a very good job of illustrating how this is happening right now right when the united states decided uh with europe to confiscate the dollars that russia had they reduced global trust in the dollar. They reduced global trust in the Euro. As more wars emerge in this era,

we're going to see reduced global trust. We already have been in the process of reduced globalization now for a decade, and the process is accelerating. So trust in fear, which is basically just the promise of governments, doesn't work when those governments aren't trusted by their people, which we all know is happening around the world, and certainly doesn't work when those governments don't trust each other. Usually, in circumstances like this, the world would turn to gold, but we have a better alternative now because we live in a digital age so we need something digital but also because

there is no need like the french were holding their gold reserves in the united states or the germans were holding their gold reserves in london when war broke out this is an extremely uncomfortable situation which is unavoidable with gold and And so Bitcoin really does represent a better alternative. I'd also like to continue something else which Simon was saying, which is the reason I've spent most of my time building on Bitcoin, when it was very attractive, easy, you know, there was easy money to build on Ethereum, is because I am concerned that Ethereum,

with its proof-of-stake system is basically tailor-made to be the extension of the fiat world, the extension of the kind of wealthy plutocratic control that we've experienced with the existing system. And there's no desire to replace the existing system with an even worse digital omni system. And also, I don't think that as trust in fiat is deteriorating, people are going to want to turn to something which is so similar to fiat. And that leaves us with what Mike was talking about. His concern is very valid.

He's saying, well, we haven't seen the emergence of an economy around Bitcoin because the technologies haven't been there. And I think the really good story, the optimistic story, is that that's changing in Bitcoin. It's not changing for no reason. It's changing because I and many other people like me

have been banging our heads against the limitations of Bitcoin and eking out new ways of extending the Bitcoin protocol. And there's a massive orange revolution occurring in Bitcoin technology right now, which is expanding effectively infinitely what we can do with Bitcoin. The cool story is that Bitcoin has been plodding along like the tortoise in the race. We'll continue to do so. And in doing so is the most perfectly reliable technology. It doesn't get bloated. It doesn't get more complicated.

And it continues to attract the people who are most closely interested in the technology, the developers. And there's a really interesting thing which I'm noticing now, which is more and more Ethereum developers are reaching out to me and saying, we're very concerned about what's happening in Ethereum. Nobody knows how it works anymore. The code has become so large

that there is no single person in the world who understands how it works. And it's starting to look like, you know, Microsoft version 7, right? single person in the world who understands how it works and starting to look like you know microsoft version seven right where where the bloat itself makes it impossible to change one thing without breaking another and so there's a migration of developers who are looking to build things for the future they want to build on reliable systems which are suddenly becoming available in bitcoin so we're seeing these two trends merge.

It's not going to happen overnight, but we're going to start seeing more and more stuff becoming available in Bitcoin. And I think within two years, Bitcoin is effectively going to be instantly scalable and we'll have the same kind of permissionless innovation with a Turing-complete system that other smart contract systems have. And the big concern that a lot of people have had around Bitcoin is how do we continue to fund Bitcoin and its security budget if there aren't more and more transactions happening?

And that is exactly how we solve that problem. But it solves the much larger problem of how do we create a true alternative to the existing fiat economy. And so I think we are at the precipice of seeing that real alternative emerge. And it's an extremely exciting and optimistic time to be alive. I agree. We're going to wrap relatively soon, guys. It's just been too good. And I want to end on a relative high.

Chris, I know you haven't had a chance to speak, and you've probably been sitting there absorbing all of this. Love to hear your thoughts. Oh, man, you know, absolutely, man. I think it's just one of the best conversations I've heard in a long time, you know, talking about Bitcoin and whatnot. I think a lot of great points were made. You know, I'm more on the trading side of it. I think an interesting point brought up was, you know, as the ETFs come out, you know, what is this kind of flow from these companies right now where people are trying to get Bitcoin exposure without actually buying Bitcoin? So you think things like MicroStrategy and whatnot, and how does that affect them as you kind of get these ETFs out? And, you know, so I know MicroStrategy, you know, if we watch them back in, you know,

at the height of the dot-com bubble, they were up there at the top, dropped down, almost wiped out completely, started coming back up. But, you know, the reality of it is by the time around 2014, 15 came out, they were so far behind all their competitors, right? Even now, I think they're less than 2% of the data visualization category. And so, you know, I think, you know, as far as investors and whatnot goes, I think if you're into companies like that for that exposure to Bitcoin, you know, without actually having to buy Bitcoin, I think you have to be concerned with once, you know, again, I'm going to say once the ETFs are approved,

I really think it's all but a foregone conclusion that's going to happen. And I think that, you know, you really need to be prepared for that because what happens to MicroStrategy when that happens and people start then, you know, really just stop buying their stock there because they're going to put their money into the Bitcoin ETFs there. And with them being so low down on the totem pole in that data visualization category, business intelligence category, how does that overall affect them in terms of that? So, I mean, yeah, I think everything everybody's saying here is absolutely fantastic. I think they're just absolutely great points.

I think it's a question of, you know, when, not if, and, you know, the effect that that's going to have on everything else. And so, yeah, that's where I'm sitting right now. Hey, guys, you'll see that in the title, we had obviously major Bitcoin pump, which we kind of talked about at the beginning, that led us down this incredible path, really, of talking about the importance of Bitcoin and especially in context of what's happening in the macro. The other part of the title is SEC surrenders an XRP battle. So I'll give you the 15 second is that the SEC basically dropped the case against Brad, Garlinghouse and Larson. But that does not mean that the case itself has

been dropped. There still is a case against XRP, but this is just one more example of the SEC capitulating and taking another, albeit small, loss against the crypto industry. I think it's worth celebrating every single time at this point the SEC takes any egg on their face from the judicial system or otherwise. In this case, it's a self-inflicted wound, which I think makes it even that much more gratifying. But just very clear that Gary Gensler and Elizabeth Warren and all of them have pushed far too hard in one direction, and the pendulum is aggressively swinging right back in their faces, courtesy of the United States justice system. So it's been a

lot of fun to watch, I think, for all of us. Actually, there was quite a bit of news to run through, but I think we're going to skip it because this conversation was just absolutely so incredible and I don't want to spoil it at this point. So first of all, thank you to all of the guests. For anyone who listens to this show, you've seen us go through a lot of evolution as to how we handle the guests. For anyone who listens to this show, you've seen us go through a lot of evolution

as to how we handle the guests, how we handle the topics, things like that. You'll probably notice that we've been really focusing on our personal favorite experts, the people that we individually as hosts and as a group go to for our own guests on our own shows, the one who we really look to for the great perspective, the great insight, and really to re-inspire us and sort of reinvigorate our hope for the future of this space. And so I say it once again, I've been saying this sort of at the end of every show, but the fact, anyone who we put on this stage at this point, listen, we'll have our misses, but anyone who we put on the stage at this point

are really people that we think you should all be following, paying attention to because, you know, their insights are the ones that we're looking to, to make our show better and to give us the insight to be able to talk about these things from a place of education and from a positive perspective. Also to that end, we have the big red logo that's hosting this space now. Amazing to me, guys, that we're getting back close to the numbers we were seeing on Mario's account. And we've only been doing this for just over a week on the new account. But please, please, please follow that account as well, because this is where we will always be hosting these spaces moving forward. That goes to anyone who is a guest or wants to be a guest as well,

because we need to be able to DM you to invite you on to the show. So I ask all of you to follow it. There are days, guys, I mean, it's Friday. Usually we're lagging. I'm tired, where it's like, let's just get this done. My gut instinct was to let this space as ride for three or four hours because I personally was just enjoying it so much in the conversation.

So once again, thank you to all the guests. Thank you to all of you guys for listening in. And we will, of course, be back on Monday at 10.15 a.m. Eastern Standard Time. That's all we got for you guys. Thanks once again. See you on Monday. Bye.