The Wolf Of All Streets - Texas Proposes BTC Reserve | Crypto Town Hall: Chat W/ Axelar

Episode Date: December 13, 2024

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testing testing one two three can you guys hear me having some serious serious glitch issues here came on a speaker was sent back to listener then my mic didn't work then well here we are anyways and we're gonna have a friday that's reminiscent of a monday because i've got two of my macro monday favorites here mike mcgillone and dave weisberger so i get to put perfect perfect bookmarks on the weekend. I'm glad this is working. I thought we were going to have to shut it down. Always a glitch. Never a dull moment when it comes to X spaces. We got Bitcoin trading above $101,000 American dollars. It's almost like we've forgotten the bear market of a few days ago and bitcoin continues to

push higher dave we'll start with you and then uh we'll we'll uh get into price action any general thoughts uh even though we've shared them repeatedly on what's happening right now bitcoin showing tremendous strength here okay it wasn't letting me on mute. Can you hear me now, Scott? Yeah, so you're having the same glitch as me where I just click on mic and nothing happens. Cool, go ahead. Well, you know, it's working after a fashion. I mean, look, you know,

I think we are in the coiling spring moment. The otherwise known as the irresistible force meets the seemingly immovable object. The irresistible force is mainstream adoption by large financial players who aren't fucking around and aren't going to FOMO themselves in, but are buying, you know, whenever there's a chance to buy. And we've been seeing that through, you know, pretty much all of this time. At the same time, we got crazy people who jump in and try to FOMO it up. But if you look yesterday and today, first of all, you know, the liquidations are way down,

but that's not remotely surprising because I'm checking right now. I mean, we've been at 0.01 or within spitting distance of 0.01 on the main Bitcoin funding rate for two and a half days that just to put this in perspective the time before that when we got over a hundred thousand it was 0.03 to 0.04 which is three times the cost this for those who don't hear listen to the show regularly is the rate that long holders have to pay short holders and perpetual swaps where a large amount of arguably the lion's share of Bitcoin trading volume takes place. The other place that that is true is in the CME futures market. It's a different method mechanism. But once again, that premium is slightly down.

The time before the first time it went over 100,000, it went to 0.1, i.e. more than 10 times the rate. So when you get those sorts of very high financing rates, it is right for the market to be triggered to a liquidation cascade. It doesn't mean it's always going to happen, but it's right for it. That is not the case now. So now we've had two days where, you know, the market has been going, you know, woohoo, over 100,000, don't blow, you know, and basically kind of cycling right around this with an ever shrinking volatility around this level. So that's what that's the setup. Now, the question is, what happens next? Well, my personal belief is at some point later this month, we start our next leg higher. And we do

so because I think that we are winding down the amount of supply, I don't think we're gonna get a 60 minutes report convincing boomers to sell what they bought or or not to buy or any other crap that's going to happen. You know, if there's a black swan as a black swan, but outside of that, I think that we're setting up for for a next move. Personally, I hope it takes a little while because you know, for personal reasons, I'd like to accumulate some more. But, you know, it is what it is. That's what I think

is happening as far as Bitcoin, which is completely idiosyncratic relative to the macro economy. I want to be clear. I think we are on the verge of Bitcoin delinking, in a sense, from what people term as recessions. Go ahead, Mike. I know you have to jump in on that because we spoke yesterday on Market Mavericks, and you think that the Bitcoin top is likely in here at 100. It's going to be a leading indicator on the way down and that it's definitely correlated. So let's talk about it. Well, there's a lot of risk in picking tops in massively bull markets. And I divert to Dave. He's quite bullish at this major milestone.

So I'm writing my outlooks for 2025 for energy, metals, agriculture, and broad commodities. And at least two of the three I have to, or four, three of the four, I have to include Bitcoin in the first sentence, like you can't analyze copper anymore without saying, well, US stock market has to go up, which means Bitcoin probably needs to lead the way. Same thing for crude oil, the biggest risk for crude oil, the US stock market goes down, what's the best leading indicator for that now, this is all part of that paradigm shift on November 5. So I'm very reluctant to be bullish at these levels, partly because it's the lessons I like to learn in ETFs and commodities. And Dave's pointing out about all that people are going to buy it. I've heard that for decades in commodities.

And the thing I hear from RAs is, yeah, show me the earnings. And there ain't none in this highly speculative crypto asset. And it's just the things I've always seen it. And, you know, people things that really get people mad at me, 2017s and some of the other peaks when even 18 on the way down, when I just pointed out some of the silliness of speculation, I just look over at Dogecoin at $60 billion, the same as BNY Mellon. Yeah. Good luck with that one.

I got to look back from the future and say that was silly. So to me, now we're at the stage that we've had a tremendous year in the stock market and Bitcoin on a hundred day basis, the most highly correlated it's ever been. So to me, now we're at the stage that we've had a tremendous year in the stock market. And Bitcoin on a 100-day basis is the most highly correlated it's ever been. And Dave always tells me that that's going to change. And everybody tells me that's going to change. I mean, I just here check back to some of the things I wrote four and five years ago. And yeah, someday it's going to.

But it hasn't shown signs of it yet. So to me, the next year is going to be about the big test. First of all, Bitcoin has to keep going up for risk assets. If we get that wonderful situation where Bitcoin actually outperforms, that's why I shouldn't say outperforms actually goes down when beta goes down. I'm sick goes up when beta goes down or doesn't go down as much on a risk adjustment basis. That's a situation that really kick in I think the real risk money on the war on the planet. So this, this is really that uncorrelated.

But right now, I look at it's just leverage for a beta. We have the most expensive equity market in most of our lifetimes, and it's going up on momentum, and it's hard to pick tops in that. But at some point, this whole hope and realization that this new government we have coming in is this is probably the bit of the speculative extreme stage the question is what do you want to do about it so the thing i like to point out in on the whole annual basis we still have the rock beating stocks s p 500 speeding the s p 5 i'm sorry gold's beating the s p 500 that's a bit of a signal of issues uh on the day we see

on in a global scale certainly from a commodity side commodity view we see pretty severe deflationary forces kicking in that's before tariffs this is pre-running just look at that chinese 10 you know 178 um it's the lowest ever it's heading it's actually the 30 year in china now is actually below japan's those of us who remember trading jgbs gosh i hate to say it uh yeah it's been 20 years ago. Remember, we've seen this before. So in the macro for me, Bitcoin has to keep going up. And that to me is a risk.

And now that I sense it, but it's bullish. Anybody who bought it in the last few years and made 10x, the first thought they should be thinking is profit taking. I'm not saying get short, but that's the prudent thing to be doing. And particularly as we head towards the end of the year. And it's been a wonderful rally. It's been a great move. It's been a great run. And I think at some point, you're not supposed to get beat too much.

I'll just push back one thing Dave said about the Quilt Spring. Quilt Spring really happened. Scott, you nailed that from around 60 for like the last four months before Trump was elected. Now, this is just a couple of days, 100 grand. So I'll end with this for next year. The first standard deviation movement means Bitcoin can easily get to 140,000 and it can easily get to 60. But the concept of getting to 60 and virtually on people in this chat and crypto people is just so anathema. I think that's the risk. And I think prudent investors are not piling in this highly speculative digital asset here.

Here's one key thing that's happened the last four years. We've had outflows in gold ETFs and massive inflows in Bitcoin. Yet this Bitcoin to gold ratio seems to be stuck around this 37, 38 level. They're always just the lead to stock market. Now it's lagging. And I'm still worried about that one. Mike, if the market cap of Dogecoin concerns you, how do you feel about Farcoin being $694 million today? Well, there you go. So right now we're at this stage. I remember making, you know, feeling like an idiot in 1999 and starting in 2007, really getting the feeling of an idiot and being told I was,

which is always the best signal. And it's just the key thing we're going to look back from history. There's just massive speculative excesses in here. It's great. Nothing wrong with speculative excesses. Just know what you're buying and selling. And to me, Bitcoin's obviously different. But we used to say there's 10,000 wannabes. Now there's more than a million wannabes. And, you know, these are signs that, but it's a wonderful environment. Got the Fed easy next week. Great. Wonderful. It's how, how is this going to work out?

Yet we've had the biggest, you know, just like virtually every measure of risk assets are probably near 97 percentile. And if you go back 50, 20, this is just not you know play the momentum use it for futures quick quick stops but overlaid in your portfolio now with bitcoin the time to do that was when i was on 10 20 30 or so in the last 20 years now it's where you're getting the retail um you know the the people that who at the retail people i remember from my short career in markets since the 80s where you're supposed to just be careful when they start asking the questions of how and what to buy all i have to say scott is thank god for people like mike um because look there's a lot of of truth in what he's saying when it comes to a bunch of assets. I mean, I agree with him. I was

early before the GFC. I got caught out in the internet bubble, etc. So I do understand a lot of what he's saying. But I think when he's talking about Bitcoin, he's just way off. I think that there's a very big difference between Fartcoin or Dogecoin for that matter, and Bitcoin. I mean, I was going through the list on Grok this morning of major financial players who have gone flipped from this is bullshit to this is a real asset that should be in your portfolio. And to say that that isn't going to change things,

it's crazy. And we're talking Druckenmiller, Paul Tudor Jones, Ken Griffin. Dalio this week. You know, Ray Dalio Abigail Johnson I mean we are literally talking about a who's who in financial money running and then basically on the only other one on the other side is is who's ever running Vanguard these days and Jamie Diamond and and uh I don't know JP Morgan though JP Morgan offers the services so I i i will be willing anyone want to take the other side of

this bet that every one of the top uh top firms in fact probably everyone every broker firm in the united states is going to go through a gold rush to apply to finra to be able to trade spot bitcoin on behalf of their customers in 2025. they will all file because they were all rejected many there were there were hundreds that were rejected uh over the last five years and now we know there's gonna be a new sheriff in town so I think the day after Paul Atkins takes the spot that'll happen this is this is not remotely priced in you know uh Teddy is Teddy on here uh just sent me the thing about Texas I mean Dennis Porter's been doing some great work.

People cannot or should not be looking at Bitcoin the same as Fartcoin. I'm sorry. I do agree that within the crypto sphere, it's one of the reasons we have all season. We have all season because people get tired of waiting for Bitcoin to go up by a few percent in their opinion, and they're looking for the next 100x or 1000x which is you know it's it's lottery ticket buying but that's not where the money is coming in to bitcoin and so that that that divergence is real this time in a normal alt season bitcoin would have would have paused uh you know 10 000 to go and would have looked very very different than it does today i like someone other than me to talk, but I think that that's at the core of what's going on here. So obviously, Dave, you point out the fact that there are

catalysts that are not priced in. I remember when we were having the early conversations about Bitcoin spot ETF approvals and Larry Fink going on his roadshow, we said, man, imagine the day that Larry Fink inevitably comes out and says everybody should simply allocate 1% of their portfolio to Bitcoin. How big that would be from a guy managing, what, $12 trillion in assets, who's one of the most powerful people in the world, who people look to. That would have been such big news at the time. That literally just happened. And they said 2% to 3%. BlackRock just put out an entire paper this week that said people should be allocating 2%, I believe they said. The CEO of Interactive Brokers said 2% to 3% into Bitcoin.

These are the largest institutions on the planet saying that everybody should have an allocation. And even a year ago, we were saying it would be amazing if everybody just recommended 1%, Larry Fink included. Recommending 3% is three times that amount. And when you start talking about money moving in the trillions, when you're talking about the investable assets in the world, a 3x recommendation is a huge deal versus 1%. We also have French Hill taking over Patrick McHenry's role, the financial committee in the house. I don't think yet again, we could have a better advocate for the industry in that position. I just see a lot of tailwinds. I don't disagree with Mike on the level of froth. I mean, I've had two random people I went to high school with reach out to me this week, which had not happened, asking if they sell their cars to buy meme coins. Not kidding. And so those signals are coming back into me for

the first time. But first of all, the market can stay irrational much longer than you can remain solvent. So it can go much, much higher on that euphoria. That's just, to me, the beginning of it. But more importantly, the fundamental underpinnings cannot be denied. I mean, Texas proposing a Bitcoin reserve, people laugh it off as, yeah, just another state. Texas is like the seventh largest economy in the world. It's bigger than France, right?

And so if France was making headlines, adding a strategic reserve, or even proposing it, it's not law yet, that would be huge news. Texas gets shrugged off because it's, quote unquote, just another American state. But these are huge, huge, fundamentally shifting pieces of news if they happen. You have the president of the United States transition team saying that Donald Trump will view the price of Bitcoin as a marker for the success of his presidency the same way that he does stocks and that he wants to see $150,000 Bitcoin in the I think, at recognizing the top singles in March. I said that the top was in very vocally, very unpopularly because of what was happening in meme coins. But we I think we have a much more fundamentally strong situation now.

Dave, I know you agree. Well, obviously, we said it together and people gave it to you. Said does hate mail. Like, what do you mean? Why are you and Scott saying that the public is going to stop? I mean, stop i mean you know it's like well i call it as i sees it i mean the only thing of the things that you mentioned that i think you know disturbed me and i think i think it was like either fraught you know fred or carlos gave the thumbs down or the whatever thing emoji i mean the trump thing annoys me because i i'd strongly prefer him to just you

know focus on governing rather than making these pronouncements. But look, his inner circle are all Bitcoiners and to ignore that, uh, when they have the power of the federal reserve and the power of the treasury behind them and the most obvious trade in financial history in front of them, uh, is crazy. And what, what, what am I mean by the most obvious trade of financial history? I mean, if you're looking at making money for the government, and you think that something is 10 times undervalued, you don't tell people you're going to buy it, you buy it first.

And then you tell people that you've bought it. I would be beyond stunned if we're sitting at these levels, you know, come, you know, February, if that isn't what's happening, right? Now, I think the market's still going to try to front run them. I just don't know that they're going to be successful. You know, it really does set up a very interesting dynamic. There's no question about it. A lot of people would say that, and I'm assuming this would be Mike's position, that this is the front running. Mike, is that correct? That all of this news I'm mentioning, that's why we're at 100? Oh, well, it started on December, I'm sorry, November 5th. But the things I Oh, well, it started on November 5th. But the

things I insert, I mean, Dave and I, we love bantering, getting along, but the bullishness I hear from him and how it's different and how successful the Trump administration is, you just have to put your hat on and say, yeah, good luck with that one. Yeah, I'm not saying get bearish, but the extremes are pretty bullish, certainly from Dave and certainly for complete success of the News & News administration, what from Dave and certainly for complete success of this new administration. It's going to come out swinging with tariffs, which probably means that corporate profit issue, at least initially, which probably means that maybe we might get that elusive 10 percent correction in the stock market. And maybe Bitcoin won't go down 30 percent. That'd be wonderful. But just think of what everybody's thinking and listening and hearing to this.

Everybody's completely assumed that this new administration will be completely successful right away without bumps in the road. Yeah, good luck. I'm going to end with one thing, because we're talking way too much, just as back and forth. And that is, if it wasn't for people like Mike, I would be terrified. I hate being a rampaging bull in a market where everybody is equally bullish. Frankly, the price, there's a lot of skepticism out there, and that's healthy, and that's how markets actually rally. They climb walls of worry. I mean, Matt Hogan just tweeted, when Bitcoin hits a million, investors are going to look back and wonder how they missed such obvious signs, including, and he lists off a lot of the stuff I've been talking about. I happen, I happen to agree with him, but it's the reason is because there are a lot of people out there who are skeptical.

And we just had a 60 Minutes piece that was absurd. But it just, you know, we made these comments. Bitcoin is only for crooks again. I mean, I can't. And there are a lot of contrarians. Larry Summers came out and said that the idea of the Bitcoin Reserve was insane. Obviously, he was the chair of the Fed, I mean, of the Treasury, right? And Bloomberg had an opinion piece, which a lot of it I agreed with from an ex, I believe it was a

Fed president of the New York Fed. There still is, to your point, a lot of healthy skepticism wherever it's coming from about a lot of these topics. Go ahead, Carlo. Yeah, I 100% respect Mike's take on this. Obviously, seasoned investor who sees patterns and recognizes them and calls them for what they are. But from my perspective, I think I have to agree with Scott and I have to agree with scott and i have to agree with dave in the sense of when you have nation states uh clamoring about the need to accumulate when you have a state the size of texas talking about wanting to accumulate when you have ray dalio actually giving a nod to bitcoin ray dal Dalio, from my understanding, is a pretty conservative person

who tends to look at the downside of things very closely in assessing his risk tolerance. I just don't think there's enough Bitcoin out there. I mean, I don't see how, even if we experience a correction, even if the post-inauguration euphoria, the expectations are not totallyphoria, the expectations are not totally met. The stock market corrects. I have to agree with you, Scott. I think that might be a breaking point where Bitcoin finally decouples because people are looking at it more and more as a risk off. And now you have governments considering it a risk off. There's never been an administration like this that has come into power that is seriously questioning whether we should put all our

eggs in fiat. This is unprecedented. Scranton, you haven't had an opportunity. What are you thinking? Well, good morning, everyone. Hey, can you guys hear me? We can. Well, on the lighter side, I should have messaged you, Scott, when this happened to let me talk before Dave and Mike, because I'm a big fan of Mondays and I had a great bit I could have done representing both of them. Is it about Farcoin? It wasn't, but it was just they hit every single thing from Dave saying he agrees with Mike 99.9% of what he says, except he couldn't be more wrong on Bitcoin.

And from Mike going into the Chinese bond, the only thing I didn't hear was Mike talking about Bitcoin and beta and Dave using his two biggest catchphrases that he always uses. But I love, I love that. Go ahead. You speak them, speak them into existence. All right. Well, you know, the reality of the matter is, yeah, the reality reality is and the simple fact of the matter is is and i i know you've heard me say this before but i'm gonna say it again bitcoin is an option on its own future adoption oh so uh it was great uh getting a chance to hear them speak and uh in fact i uh um i actually forgot what i was gonna say because i'm so excited about listening to those two go back and forth. But, oh, this is what I was going to say.

And I wonder how they would respond if Bitcoin goes to $2.50 this cycle, as Dave has called, and I'm agreeing with him there, but then drops 80% as it always does in the cycles, as Mike keeps calling. Can they both say at the end of the day, they were right? I think that's up to them. I got to comment on that. I mean, here's the issue I have. And I mean, I get the bullshit. And on October 5th, 2020, the thing that hit the tape for me from Bloomberg allowed me to publish it was the Bitcoin's going 100 grand. It was at 10 then. Okay, I got it. Now that was when most of the people in Bloomberg never thought I was an idiot for saying it. Now, it's just a problem. I just looked at my family and said, is everybody bullish? Yes. Is there great reasons to be

bullish? Yes. Are we at 100 grand? Yes. Okay, next trade. To me, it's been a great trade. It's an inherent issue that one thing that McMaster pointed about Trump is he's an inherently contrarian. It's an inherent thing of being starting in the trading pits and commodities is I'm inherently contrarian. And that was great back then. Now I have to say, yeah, well, all right, everybody's on board. I have to look for the next big trade. And it just, this is not exciting to write about for me because everybody's on board.'s i have to think of what's the next key thing to write ruffle people's feathers and hopefully a couple years it works out so that's the key thing it's just everybody's on board now that's great it worked next teddy i saw you had your hand up welcome thank you your first time yeah hi how's it going i i just you know think that everyone's on board

the trade now is a little bit silly to say like This is still very much a contrarian play. We got Bitcoin Twitter, crypto Twitter, where people are talking about super bullish aspects of corporates and sovereigns and things like that. But the reality is 99% of the world is not invested in Bitcoin. So to think that everybody's on the trade is a little bit naive, in my opinion. And I still think that this is a very strong contrarian trade to the norm. And Bitcoin still has a lot of potential upside because, you know, we just saw, for example, with Microsoft the other day, the vote of the shareholders was less or just over 0.55%. Yeah, just over half a percent. You know, I think that kind of speaks to is everybody on the trade or not? You know, 99 and a half percent of Microsoft shareholders

are not on the trade. So I just was kind of giving a little bit of pushback there to what Mike is saying. You know, I really don't think that that we're even close to being able to say everyone is on the trade a lot of people definitely came into the trade you know effective november 5th when trump was elected super bullish the the way he's been positioning this i think there's also another group of money another group of people that are kind of waiting to see what actually happens once he's inaugurated and you in that first, let's say, three months there, is he actually going to be able to push for a strategic reserve? Now, if that means the coins that they already have just become custodied as Bitcoin strategic

reserve, or he pushes through Congress a plan that is implemented to continue to buying Bitcoin, either one, I think, signals to the world that this is something that's going to continue to buying Bitcoin. Either one, I think, signals to the world that this is something that's going to be here to stay and we're going to see other sovereigns start to buy Bitcoin, regardless of if the US government is buying a million coins or not. I think that there's another flow of capital

that is kind of still sidelined, waiting for the confirmation that there is a Bitcoin strategic reserve. And if that, in fact, does happen, you know, the price could easily double from here. Yeah, I guess the question is, is simply holding the Silk Road Bitcoin, which it seems the Biden administration is still doing its best to sell before Trump has the opportunity. But if there's still Bitcoin left on the, you know, owned by the government, if simply holding it and not committing to buying more, but calling it a reserve, is that sufficient for the game theory to kick in of other central banks being forced to buy because the United

States has it on the balance sheet? I think that it is. I think that the signal alone is strong enough, like the understanding that this is not something that's going to be sold over the next coming years, assuming that that's what's the nature of the strategic reserve. And then it shows future intention, right? You have an opportunity to front-run future million coin buy by the U.S. government, which is basically what they're insinuating by moving those coins into a strategic reserve. Why wouldn't you take that opportunity? It kind of seems like it doesn't

make much sense to think that way. The Bloomberg opinion piece that I was referencing before, I'm kind of operating on my phone here, but it was by Bill Dudley, who, as I said before, was the, I believe, the president of the Fed Bank of New York. A Bitcoin reserve would be a bad deal for Americans. As I said before, this is also kind of echoed by Lawrence Summers in his interview. But he made an interesting point that we have talked about here, but maybe worth kind of discussing, is that if the United States government is going to buy Bitcoin, he said that would be inflationary because obviously we'd have to print more money to do it. The irony of printing money to buy Bitcoin should not be lost. Right. I would actually agree with that. But at the same time, there have been people like

Michael Saylor have talked about, you know, selling the gold reserves in order to buy the Bitcoin, which would not be inflationary to the dollar um and if you do if you are forward looking and you believe that you know gold is a way of the past right like peter schiff has been yelling about bitcoin from you know the basically from before it was a dollar and he's been completely wrong the entire time you know there's there's a coming there's there's a change coming, right? Boomers are kind of on their way out here. They don't understand the future of the technology, the future of the economy, things like that. And gold is a way of the past.

So if we can get the U.S. government, of all people, to kind of recognize that and make a shift, There is no inflation based on money printing. There is no money printing necessary. They can sell the gold to the people that want it and they can buy the Bitcoin and you're trading the past for the future. It sounds like one of the smartest things that we could do. What I find really interesting actually is that obviously we've seen even Jerome Powell now sort of parroting the Bitcoin as digital gold narrative. I mean, that's definitely sticky. At this point, we have the classic RIA 60-40 portfolio, 60% equities and 40% bonds, which perhaps is changing. But now we have, like I said, Larry Fink and BlackRock and others saying a 1% to 3% allocation to Bitcoin for them in the form of

the ETF. In all that time, we've actually surprisingly never had any of these people recommending an allocation to gold that I'm aware of. Mike, maybe you can answer that. In all your years, why did gold or any kind of, I guess, hard currency or hard asset never make it into the portfolio? is it simply because they can't make as much money on it i mean i was one percent gold never put in earnings it's there's no website i mean about it's it's store value it's everything i hear from rras for decades now oh show me the earnings show me the upside i can't you know i get the magnitude seven i get the us i can hold spies and jews and get the upside of this innovation of the American technology machine.

This bottom line is earning. So yeah, I understand Bitcoin's different. Get it. That's a key thing I wrote about the ETF comparison. We're pushing $130 billion total tracking Bitcoin ETFs. The tracking gold ETFs have been stuck at $220 billion for four years. They've been outflows, partly because why buy Bitcoin? You need to buy stocks.

I don't disagree because that's looking for all upside. But isn't the holy grail of a portfolio manager to find something, and you won't agree that it is idiosyncratic, but maybe gold is, that you find some small percentage to allocate to something that potentially is idiosyncratic and is not correlated. And even if stocks rip and that thing goes down, it's actually good for your Sharpe ratio because you have something that's traveling in a different direction. And gold has been the narrative. That's been the narrative for gold for years, forever. Well, it's much more Bitcoin. I completely agree with that. I mean, it's three times the volatility. So you can get the big, you know, why waste that 1%? But 1% Bitcoin can get a lot more upside and potentially risk the downside. But you get something that's going to affect your portfolio. And what's the problem 1%? It could be 10% in 10 years if it works right, which is the

whole problem, which is what I mean, in a good way. But we've had that, you know, and finally it's in the mainstream, but yeah. So that's been the key thing is earnings. I just seen this in commodities forever. RAs have always told me, yeah, forget this commodity index. I can go buy commodity producers, forget gold. I can go buy the producers. I haven't done very well, but, so it is basically earnings is the bottom line. You just don't have that in, I mean,

that's one little difference with theory. There's potentially some earnings there. Yeah, it was in the title before and we removed it, but it was conjecture for Matthew Siegel. VanEck, who we love, is on the show all the time. But when Microsoft rejected the Bitcoin vote, the language used in that rejection was really exactly what you're talking about, Mike. They said we wouldn't add something that doesn't really have yield or some sort of expectation like that. And that led to speculation. It's just speculation that eventually they could allocate to Ethereum ETFs if those Ethereum ETFs end up with staking and a yield. So I think that kind of supports what you're saying. I'm glad you mentioned it. It's one of those human nature things I've loved in this space. It's just so much cool nomenclature I've learned from so many cool words like hopium and boomer rocks and stuff. And it's just a double-dog

daring I'm seeing from people like Michael Saylor now pushing back into one of the best investors in history, Warren Buffett, for being heavily in cash. You've seen that. Those of us who've been in the business for more than three decades, you see that and you say, just be careful but you know i get it this calls everything about bullishness it just there's there's a lesson i learned in trading pits you don't mess with that you don't tempt the market gods and there's some people in this space who are really tempting the market gods yeah i mean i i think i've said this on this show before but we'll make it brief but i mean sailor took a year to buy his first 100,000 Bitcoin. He took two weeks to buy the last 100,000 Bitcoin, obviously, at a much, much higher price.

So no question that his strategy is brazen and is seeing an uptick. Whether that is tempting the gods or not, I can't speak. I'm not one of the market gods. But there's no question that he's not showing any level of fear here mike yeah there you go i'd love to hear other people's comments but that's the key thing is um i guess i one thing i've learned speculating in markets is i can make a lot of money and i learn how to lose a lot of money too so that's why you should be cautious at 100 grand and not be the first one. I would, I would say just look at, look at micro strategies, um, top holders,

right? Like look at the top 10 companies that are invested in micro strategy. And if that doesn't give you a little insight into the money behind. Teddy, I don't, I don't disagree. I'm sorry to interrupt, but I believe most of those are passively investing on behalf of their investors and index funds, right? I mean, we always get this narrative that BlackRock owns so much of this miner or BlackRock owns this much of MicroStrategy, but that's because BlackRock is buying indexes on behalf of their customers who are buying the index. There's no active. Larry Fink isn't saying when you don't, 10% or 20% of microstrategy, whatever the number is. No, no, I agree. I agree with that. But what I am saying is that that's where the money is. These different companies, BlackRock, Citadel, look at the top 10, look at the top 15 holders, Chain Street, that's where the money is. So regardless of if it's the fund saying, okay, we're allocating this money for you. No, I'm not suggesting that.

I'm saying that the clients that work with these funds, BlackRock, et cetera, are the ones with the money. So if that's the top allocation, the people with the money are making the decision to buy this stock. And there's a reason why. They see the financial engineering that's going on at MicroStrategy. They see that Michael Saylor has figured out a way to tap into the corporate bond market, which is a huge market. People talk about corporates buying Bitcoin. People talk about sovereigns buying Bitcoin. Once you start accessing corporate bond money, this is a $300 trillion market. And he's just barely scratching at it right now.

Now we're seeing other companies kind of follow suit. Today, Riot, one of the miners, bought $550 million worth of Bitcoin through a corporate profitable note at 0.75%. Like this is basically free money that these companies are getting in order to buy Bitcoin. And the, the, the bond issuers love it because the vol on these trades is,

is insane, right? Like micro strategies, ARR is 120%. These corporate bond issuers are used to getting 3% to 5%. And all of a sudden, there's somebody in the game that's like, hey, you want to trade the vol, you give us a billion dollars and you get $200 million out the back door guaranteed right away. That's never heard of before. The amount of capital that is going to be standing in line waiting for Michael Saylor to be like, here, take my money and go buy Bitcoin is, I would think, in the multi-trillion, if not even more. It's going to be insane. And I think that'll potentially cause a face-melting type move on Bitcoin. Fred? Yeah, I just wanted to add something from a few minutes ago

that Teddy was talking about. And Scott, you made a point about if the government buys Bitcoin and has to print money to do it, how inflationary that is. And I just wanted to counter that by saying, one, there's so many moving parts, but two, if Doge actually can get something accomplished in cutting waste, it can unlock so much money that can go to Bitcoin that's otherwise wasted. And just as an example, before I was doing crypto law, I was doing a lot of personal injury stuff. I still do. And I have to work with CMS, Medicare to whenever somebody gets hurt and they're on Medicare, then Medicare says, I want a cut of the money that you owe us. And that system and me dealing with Medicare for years and years is so vastly inefficient and such a ripoff to Americans. You could easily cut 20%

of that budget and streamline it, and it would be two times better than it is today if you had the right people in there. So there's so much untapped money that could be converted from government waste to Bitcoin that you really don't have to worry about it getting too inflationary so long as you get that efficiency. And all those cuts don't matter when your debt's going up a trillion every three months. But if you're going to just print a little more to buy something that actually is deflationary and goes up against the dollar, it's the better expenditure of that money. Danish, we must have summoned you with something that we were saying here.

If you decide to jump off on stage after having a speaker invite for like 45 minutes and then they start talking about health care, it's like know, a kismet that you showed up. No, no, I just was going to make a comment around BlackRock owning a lot of microstrategy. BlackRock owns a lot of everything. So I really don't think it means anything whatsoever. It means 0% in terms of decision making. I think if people want to own microstrategy as a leveraged trade on Bitcoin. That is the decision that humans should be allowed to make on their own. It's the wrong decision, in my opinion. I think it's trading way above MNAV, which is just an opinion. I think a better self-custody Bitcoin and hold on,

because Bitcoin alone is enough. I think there's no need to leverage on top of that. But that's just a personal opinion. I bitcoin is built uh much better than microstrategy ever could be that's a personal thing yeah i like you had to you had to qualify that see if you were doing that on your spaces in the morning you wouldn't have qualified it seven times but now you know you're talking to a bitcoin audience you don't want to see the comments so you're very polite i appreciate that client teddy yeah no i just i understand the perspective of people that are very focused on MNAV, but there's a lot of things going on here at MicroStrategy that are not just the Bitcoin that they hold in their treasury, right?

They have figured out a way to financially engineer increase in Bitcoin per share over time. Every single year since they've been created, the total Bitcoin per share has been going up. So if you think that all of a sudden that's going to stop, then sure, the MNAV becomes very important. But if you believe that the ability for MicroStrategy to continue to increase the Bitcoin per share into the future, then really the MNAV is explained in the fact that you are getting an incremental increase in Bitcoin per share that you hold. It's not like the Bitcoin amount stays the same. So a lot of people talk about the MNAV, but I think that the market is pricing the mnav appropriately on the basis of the

accretion of bitcoin for the dilution through the atm and the convertible notes that we're seeing but we don't do that um sorry i'm still recovering from covid i guess we don't yeah we don't we don't do that with treasury stocks in general we don don't actually do that with stocks across the industry. And I know that this is a little bit different because it's holding an asset. But a real estate company that has a bunch of real estate property that does not actually generate income every month, again, it's not income generating right now, it's not. And so it's just increasing accumulation. And people are, in my opinion, leveraging it, are looking at it as a leverage trade. And as long as there is continued upward momentum, which I believe there will be for the next six to eight months, you know, again, I've been very bullish. I know some people on the stage actually disagree with the next six to eight months prediction. I think the parabolic move has yet to happen. But once the parabolic move is done and we go into the expected ranging slash decrease, which nobody wants to admit,

but happens as Scott has explained to me, every cycle. When that happens, this strategy could be the narrative that brings the price of Bitcoin down. That is how this works. Every four years, I've been studying this because I was such a skeptic. I needed to be able to argue with you guys. And so I've been studying this. And then it obviously got converted. But I think it's one of those things where we have to be careful about leverage trades in an asset that continues to grow. Obviously, it's going to look good when it's going up. It's just it's not even going to look bad when it's going down. It's going to look bad when it's going down slowly over time. That's when the leverage trades really get killed compared to the underlying assets. so i mean right i

would agree mostly with what you're saying about leverage right but if you pick any two points in time since micro strategy started their their bitcoin buying for their strategic reserve um you know strategy and you you pick bitcoin and you compare the two no matter what period of time it is micro strategy has outperformed Bitcoin. Yeah, I think there's a fair point for Josh. By the way, I love Saylor, right? I'm a huge fan. I think what he's doing right now is incredible.

But if it outperforms on the way up, it usually does the same on the way down, right? Yeah, but what I'm saying is that- If there is a bear market, the leverage plays have historically underperformed Bitcoin on the way down. That's not exactly true for MicroStrategy, though. That's the point that I'm trying to highlight here, right? Like we saw MicroStrategy reach new all-time highs when Bitcoin did in March of 2024, right? Bitcoin

pulled back, MicroStrategy stayed kind of flat. So people are expecting because Bitcoin's going to pull back, MicroStrategy is going to do the same. Well, it's just not necessarily true. Like we could see a major pullback, 70%, something in that range, like we have in years prior in the four-year cycle kind of theory. I'm not denying that. I just think that we could also see alongside that an equivalent pullback of Micro strategy, but at the same time, Saylor's not stopping buying Bitcoin. So if he continues to buy Bitcoin, even if the MNAV is trending down,

it doesn't necessarily mean it's going to equate to a greater loss in percentage terms. Teddy, if we see that drawdown, the pull in Bitcoin price, do you expect MicroStrategy to go down more than Bitcoin?

Dry powder. Listen, I'm playing devil's advocate because it's my job. Like I said, I'm a huge fan of Bitcoin and MicroStrategy. You don't forever have dry powder. If you can't raise any more money and people aren't interested

in those notes at some point, I don't think they dry powder if you can't raise any more money and people aren't interested in those notes at some point. Or if they're, you know, I don't think they'd be forced to sell. Well, we saw in 2022. I think we have to be intellectually honest. There are scenarios, even if it's a, you know, slightly over a non-zero chance that something wrong can go with a strategy like that. I think actually the more interesting conversation, by the way, than who owns MicroStrategy stock is who owns the convertible notes. That's, yeah. Who is giving them 0% interest rate? And by the way, then who owns MicroStrategy stock is who owns the convertible notes. That's, yeah.

Who is giving them 0% interest rate? That's the thing that I don't, who's willing to buy that? Well, the 0% interest rate isn't really the important part of the trade, right? The premium that they can arbitrage for the profit. I get the convertible note. But even with convertible notes, usually there's an interest rate associated with that. So the fact that these, I think it's largely because these houses that can only trade bonds need access to something, like they only trade corporate and other types of bonds.

They want access to things like this. And so it's the early adopters that are coming in. I just don't think it's sustainable to continue to do 0% interest rate bonds that convert at a really significant price clip. And I think that's the other big part about this that people have not factored in, which is this is not a bottomless well. At some point, people are going to start, especially if Bitcoin starts really struggling, we're going to see interest rates go higher. Will he stop selling bonds if interest rates go higher?

The second is their stock price might go down. Are they going to start selling more stock? Therefore, yeah, Bitcoin per share is going up, but that's because the denominator effect. So there's a bunch of other things here i will tell you in general when you look at financial companies if we treat them as a very good financial company then it the mnav is overrepresented and so we're going to see the multiple on on on bitcoin holdings go down over time now bitcoin continues to skyrocket and we're wrong um which i'm hoping because I really like to have my number go up like every other human being in history. I think, you know, I'm OK with that.

Then, of course, micro strategies are a great example of good arbitrage. But guys like to act like this is not a levered trade i just think is a mistake you should know what you're getting yourself into so for example it's always it's always been a levered trade and and which doesn't necessarily be bad and sorry i didn't i thought you were done all i was gonna say is but most people on this stage uh do not have all of their bitcoin holdings via proxy through micro strategy like it's okay to have a small portion of your holdings through micro strategy. You're just doing a portion of your holdings to leverage trade. But like, there's people out there that are literally just playing Bitcoin through micro

strategy. You are wrong. You need to fix your strategy. It's a crazy thing to do. That's a crazy thing. I think I know, Teddy, I know you're laughing but i think even michael saylor would tell you to own bitcoin yeah no no i'm just laughing because you know it's uh it's outperformed bitcoin over the last four years it's outperformed bitcoin over the last year it's outperformed bitcoin over the last month it's outperformed bitcoin over the last six months yeah yeah teddy i think it's just fair to you know listen the the other like nuance there and once again i agree with you i'm doing the donish thing where I have to, you know, how dare you say something negative? It's not. But this strategy has ramped up massively and they're much more highly levered now than in those situations. Danish says is not endless. Like, again, it's a $300 trillion well of corporate bonds, and this is the only way you can

get a better return than 3%. What are we at? Four Mondays in a row of multi-billion dollar purchases for MicroShare? Yeah, and the only reason that might not happen this Monday is because of the inclusion to the queues. So, I don't know if you guys have spoken about that much, but you know it.

Yeah, we've touched on it kind of over the days. Yeah, so the ATM isn't allowed to take place once Michael Saylor has strategic information that the QQQ has put MicroStrategy in it. So that could be a reason why we've seen price kind of trend back up and not be so suppressed because there is no ATM going on right now. Once the announcement happens, which will be at the end of day at market close today, if they were in fact added to the QQQ, which I think they will, next week, I think you can assume that the ATM strategy will continue,

and you might see further price suppression. But I also think that there's going to be an inflow of capital from people that are more bullish on MicroStrategy now that it's in the queues, and it could kind of be balanced. But basically, my thoughts are once the ATM is done, there's no immediate dilution there's still 18 billion dollars in corporate notes that he probably has lined up ready to go um and q1 2025 micro strategy over a thousand dollars is is not a crazy estimate in my opinion the key word was probably but yes uh i I just think like you can be bullish. He just hasn't had any trouble, you know, like the last one he was going to do at two and a

half billion, it was oversubscribed, right? Like I'm pretty sure. And they've always been oversubscribed. Yeah. Because again, people are trying to get access, right? I have to note, by the way, just, just quickly to wrap up, we have Georgios from Axel on stage. I do want to chat with him, but this is one of those conversations, we'll get there, where we're just running longer because the conversation's great and friends keep jumping up. And so we got Brian and Gary now up here. It's hard for me to stop the conversation because I've really, really enjoyed it. It's nice to have sort of fresh voices. I mean, Brian, Gary, you both jumped up. We are going to wrap this part of it up in a few minutes.

But I would love to hear both of your thoughts, because clearly whatever was happening on stage compelled you to jump on Brian and Gary. I'll leave it to Brian to go first before beauty. discussion. I sometimes have a hard time, you know, like, as a long term strategy, seeing what the appeal of, of micro strategy is over just, you know, owning, owning your own Bitcoin, or even owning like iBit ETF. I get that it's leveraged. But you would think that the it's trading at multiples of what the underlying Bitcoin is at. So like, I don't know, like maybe I'm just not looking at it correctly. But for me, I who have I've held Bitcoin for over a decade, I don't really like the idea of, you know, putting a ton of money in micro strategy versus just, you know, holding it in Bitcoin. Cool. There's more for me to buy. Awesome. I like it.

Guys, I just wanted to Scott, I wanted to remind you when I first met you, I told you that when when this thing triggers off, it is going to be like a waterfall. And we are, I have never seen a front-running opportunity that has lasted this freaking long. I mean, we have another six to nine months to beat four or five governments to the punch. And I've never, ever seen an opportunity like this. I would love someone to talk me off the ledge, but I continue to be awestruck by this opportunity.

Hey, Gary, I'm looking at you. You triggered me to go back through our text messages. And I got on October 18th, 2023. This is long after we met, but on October 18th, 2023, there are long after we met, but on October 18th, 2023, there are so few sellers.

This motherfucker is going to go parabolic at some point. And then December 4th, 2023, we obviously have conversation in between there. Hold on to your ass, bro. None of us have ever seen this. Yeah.

I don't just in case anyone was wondering, I've got the, I've got the, I've got the receipt. I really don't think anyone has seen this before ever. And I think we're all grossly underestimating this. But like, I don't think you can quantify this. Where do you stand on like, you know, if you wanted exposure to both Bitcoin and MicroStrategy, how would you allocate?

I plow into all of it. I can only share with what I've done, which is where I can't buy Bitcoin, I go and buy MicroStrategy. And I bought some miners. I wish I would have bought MicroStrategy. I've always believed that synthetic mining of Bitcoin is the most efficient way to mine Bitcoin. It's a horrible business to be in the farming business. Like when I think about the miners, I'm like, hell, I might as well be a farmer in the middle of nowhere. I have no, you know, like it's really good to see them being able to adopt the micro strategy convertible note play but uh yeah we have core scientific marathon and riot i think all uh actively doing that now so they clearly see they clearly see they clearly see the glitch and i'm assuming that was code for you

saying like in your equity portfolio or some sort of retirement account where you can't get exposure to spot bitcoin you're finding other ways to get exposure to Bitcoin because you're effectively all in. Yeah. And if I can liquidate anything that's sitting in a financial institution, whether that's a mortgage, whether it's, I mean, just any kind of leverage I can look at, can I sell anything? And if it's sitting in a legacy account, I can't move it into Bitcoin immediately. And quite frankly, I have a lot of Bitcoin now. I like having 3% of my portfolio in something that could supercharge this. I'm playing with the casino's money at this point. And for me, this trade has not run out. There is nothing about this trade that has matured think anybody on Wall Street or anywhere else has

ever seen anything like this. I would love somebody to tell me when they have, but I have never seen it. It's hilarious, Jake. Go ahead. I was just going to say, like I said, I've been here for a while. And every time you'd have a run-up like we've seen, and this run-up pales in comparison to past run-ups, there would be that inkling in your head saying, oh, but this could happen and it could plunge back down to where it started. This is the only run I've seen where I don't have that. I think that the possible good news and the FOMO of whether it's central banks or state governments or corporations starting to get in greatly outweighs any possible negatives. I can't even

think of, short of quantum computing cracking the encryption, which isn't going to happen anytime soon, I can't think of anything that could send this thing back down to the $20,000, $30,000 games. Well, first of all, I have to say that by all of you all saying this, you are jinxing the crap out of it. Oh, I know. Right. So thank you for that. Number two, it's because we are about to see the parabolic move that everybody that's been here before is feeling this. But we know that once we get to the parabolic move there will be a it won't stay up forever there will be a pullback there'll be a pullback from like 250 guys like it's not gonna be a pullback from here we're not going back as kamala likes to say we're

not well yeah i'm sorry i had to do that brian's up here i had to do that I apologize I'm sorry no comment but I was going to say that the really important thing guys is what Gary said Gary is a Bitcoin bulls bull and he said 3% MicroStrategy there are people

here that are listening they're going YOLO on MicroStrategy, but Gary is holding most of his wealth in Bitcoin, not in MicroStrategy. And I want to be clear that Gary is a bull's bull. So just take that into account that it is a lever on top of your Bitcoin. Bitcoin is wealth. You got to have your own self-custody Bitcoin before you go all in on these lever trades. Take a portion and do a lever trade. Be smart about portfolio management, but don't go nuts and put all your money in micro strategy when you have this great asset that has actually tested multiple cycles and executed well.

Josh, I think virtually everybody agrees with that. So funny, Gary, you talk about your portfolio. I think I tweeted it recently, but I kind of joke that I have a well-diversified stock portfolio of MicroStrategy, Coinbase, and Iron. It's like any other exposure I can find creative ways to accidentally buy Bitcoin or exposure to it. I have. And Gary, listen, you and I talked. I was going to move right down uh next to you we're working on it and we were talking about hey whether you know at this point in the world and your brother was contributing like buy

or rent a house right and you were like you'd be fucking nuts to buy a house buy bitcoin and rent a house right damn right bro i you know, to your point about your lack of diversification, Scott, because I think it was a little kind of funny, funny, ha ha. But what industry do you have as much intense knowledge on than this one? And why would you fucking go into another industry you have like 1% knowledge of versus this industry where you can pick up a phone to anybody in the world in crypto and go, hey, am I crazy, man? You can literally ask anyone, is this a stupid move? Like, I don't know why someone would go into an ETF in medical if they have no interest in medical or no knowledge of medical.

Yeah, we have edge. I mean, we have edge, right? And it's, you know, Mark Yusko always would say, it would come on my shows, we'd say, you know, we talk about diversification all the time. You get rich with concentration, you keep yourself rich with diversification when you have to worry about that, right?

But, you know, this is one of those rare, I think, opportunities where if you have edge and knowledge, you can take a shot and have a much higher percentage, you know, plus EV chance of winning. Teddy, go ahead. Yeah, I just wanted to speak to a potential drawdown because it seems like, you know, that is the, you know, consensus that, you know, we've seen four-year cycles, we've seen 70%, 80%, 90% pullbacks from all-time highs, and that has to be the way that it goes this time. I've been in Bitcoin since 2013. I've seen the cycles. I've felt the drawdowns, trust me. This time, could it be different? I think that there is a greater chance that it could be a muted drawdown and one of the reasons why i believe that is because the financial tools that are now

in place for us to use such as trading options you know you can take a hedge on your position and you don't need to sell as much of it. Now, if there's a significant amount of people in the space that have a large amount of Bitcoin, wanted to start to take a hedge at, let's say, $200,000, $250,000, whatever, they're able to do that by buying puts. So instead of needing to sell 50% or even 20%, 30%, whatever percent of your stack that you would have otherwise sold to kind of take profits and maybe plan to rotate back in or use them in some other way, now you have the opportunity where when you think the top is in, you could sell 5% or use capital

from somewhere else to buy puts against your position. There's not going to be as much selling this time as there was in the past. And I'm not saying that we're in the super cycle. Michael Saylor talks about the next 10 years are kind of up only. He doesn't implicitly say it, but you can kind of gather it based on the Bitcoin gold rush thesis. And when we saw the gold ETFs come live, there was eight years of up action year after year. So to think that we're going into the banana zone, it's great to kind of talk about. And it might feel like that because we go from 100K to 200K over the next 12 months. But that doesn't mean that we're not going from 200K to 300K in 2026, 2027, so on and so forth. So I just think that don't get caught off on the

wrong side of the trade thinking like, oh, I need to take profits. I think hedge accordingly is definitely the way to play this when you do think the quote unquote top is in. But I definitely do not think that we're going to see pullbacks like we did in the past. Maybe we will still see- Shouldn't that also mean muted upsides? I mean, shouldn't that dampen volatility in both directions? I think it will dampen volatility in both directions. I absolutely believe that. But I think that that could mean that we see a 40% CAGR or 30% CAGR over the next 10 instead of a 60% kegger that is from 100% up and 50% down swings. We could just see a slower, more gradual climb to a million bucks, which will bore people like crazy,

and people will be selling and get caught off guard. And it's just the market doing what the market does. The speculative DJ money will find a home then. And if Bitcoin becomes slightly more boring, then it's just going to feed the altcoin coin market. The top will be when someone like Michael Saylor decides to take convertible notes out to buy Farcoin. I was going to say, Far coin is the new coin apparently it's a bit like i mean i i didn't it's like 700 million uh market cap right now it's bigger than

like build a bear i mean it's when you when you look at like the companies that these main points are averse if you want to make that false equivalency it's just absolutely absurd guys this has been an incredible conversation and you know uh we, we have Georgios up here from Axelar, which is a project I actually like invested in, bought when it launched years ago. And so when I heard that you guys were coming on, I'm really, really psyched. And I don't think that you and I have ever spoken. But first of all, you're an amazing guest. So what do you think of this entire conversation

before we pivot more to talking about you guys? Thank you, Scott. It's wonderful to be here. And yeah, I couldn't be more bullish, honestly. I can hear you. Can you hear me okay? Yeah, we can hear you. Okay, okay.

I'm going to have to drop myself, I think, and then come back up. So I'll be right back. George, as you can keep speaking, I'll be right back. Please, but yeah, and then come back up. So I'll be right back. George, as you can keep speaking, I'll be right back. Please. But yeah, that was a wonderful conversation. I was thinking I don't own enough Bitcoin and I do own a big part of my portfolio in Bitcoin.

So thanks, everyone, for the very informative chat. And yeah, Scott, Scott is reconnecting. Scott's coming back. Scott, I'm just passing back to you. And as I'm coming back, I'm a speaker. I can just stay connected. Scott's coming back. Scott, I'm just passing back to you. As I'm coming back, I'm a speaker. I can just stay speaker. It's fine.

Or I can try to get co-hosts. But all I saw was like laughing face emojis and I'm wondering exactly what I missed in those few seconds. He said he should own more Bitcoin. That's right. That means our job here is done. We're great. But so we obviously talked about how that capital kind of flows down to all coins.

This conversation has been very, very, very Bitcoin focused. But I think that in this cycle expectation that we all have, there's also a cycle of it. There's also going to be endless narratives about things outside of Bitcoin. I think they might actually start to dominate. But Georgios, I mean, you guys have really been beating the drum for years on interoperability. It's something I also was beating the drum on for a long time is that we're going to get all this block space, we're going to get all these different chains, but eventually, if they start to silo, we're going to have a big problem and they're going to need to be interoperable. So maybe you can just tell us because that's what you guys do. You can give us

the brief TLDR, but then I kind of want the state of interoperability and bridging right now once you do that. Absolutely. And let me start with some background and the motivation for why we started building Axelr. I feel like that's going to be helpful for a lot of the audience. Me and my co-founder, Sergey, have been in the space for about eight years now. We both studied at MIT and we were part of the three-person founding team for the Algorand blockchain. At Algorand, we built one of the first

proof-of-stake blockchains in the space. It was a little bit later after Ethereum was launching and about the same time as Solana or Avalanche. And once we launched Algorand, we came to a realization that there's going to be many blockchains. It's impossible for a single blockchain to scale and satisfy the needs of any real world applications today.

And if you make an analogy of a blockchain as being a decentralized computer, if we look in web two, there's billions of computers, but there's only one internet and this is what axelar is solving for blockchains for decentralized computers they are all in silos and you as you mentioned scott they are isolated from each other and as a user if i have my bitcoin if i have my btc on the bitcoin blockchain how can i use it in defy on ethereum to get a loan against it? So with Axel, we're connecting on blockchains.

We do expect that there's going to be more than a million blockchains for various reasons that I'm happy to go into. A million blockchains? And the end goal, especially with AI, you know, coming up, AI doesn't care about user experience, right? So it's going to be really, really easy

for users and their agents to navigate as many blockchains as possible as long as Acceler does a job and makes it easy to move between them and pass information between them in a very fast way. Why not? The sky's the limit. I think we all, you know, bridge in the last cycle kind of became a four-letter word, right?

We saw these kind of like wormhole hacks and problems with those things. Is that, you know, what's the state right now, as I said, of bridging? And, you know, how is that going to look when it becomes, I guess, the UX UI is improved and it becomes just kind of, you know, the underlying technology of interoperability. You're exactly right. Bridging became synonymous to hacks in the last four years. And this is what we noticed when we were starting out. There hadn't been that many hacks in the space. That was like almost five years ago at this point.

But it was pretty evident to us that everyone was cutting corners. You could see solutions like multi-chain and many other bridges where they were all claiming they were decentralized, and they would even have some fake dashboards with validator names. If you are technical, it was pretty obvious to tell that these are not real dashboards, but for the vast majority of people, you could not know. So they were stating that, oh, there's a decentralized validator set that's using a threshold encryption scheme for a validator set to collectively secure your funds. But as it turned out, it was the founder just holding a ledger in their back pocket.

And as we saw recently with earlier in the year what happened with MultiChain, the founder got arrested and God knows where these hundreds of millions of dollars that were on their platform went. So with Axelar from day one, we made it a point to build decentralized technology. The same technology that secures blockchains outside of Bitcoin, Bitcoin proof of work. Most of the other blockchains today are based on proof of stake technology, and we built Axelar in the same way. So when you're passing a message or bridging an asset across different blockchains through the Axelar platform, you are trusting for your security a fully decentralized validator set. And these are the biggest validators that already validate Ethereum, Solana, Shui,

and many of the biggest blockchains. So you get similar level of decentralization to the other blockchains we connect. And that's how you counter the most common attack vector, which is this centralized multi-sigs that virtually everyone else in the space is working on. And what's remarkable is that to this day, three years since we launched Acceler, we're going to have our three-year anniversary in January. No one else has built a decentralized platform for moving assets or information across chains. Everything else is still either a fully centralized custodian

or a very small multi-sig of a handful of nodes. So Axel is an order of magnitude more decentralized than everything else on the market today. I mean, my next question was going to be, how is it different from all the other protocols? But I guess that answers it. So leaves us, obviously, like I said, I was pretty early on you guys

and believing in this generally. What are you shipping now? What do you look forward to shipping, I guess, in 2025 that's going to continue to sort of improve this experience? Because this has got to happen in this cycle. Now, the game is all about scaling to as many chains as possible. We see the emergence of a lot of non-EVMs.

Solana is doing great. Shoei is doing great. Ripple and XRPL, we have a very close collaboration and we're going to be launching an integration very, very soon. So with Axelr, the next step is just connect as many blockchains as possible, especially all of the non-EVMs that are very hard for everyone else to add. And just to give you a sense of Axelr's advantages when we're adding chains, because Axelr itself is based on blockchain technology,

it's a blockchain connecting blockchains, you can connect chains to it through a single point of integration. So when we connect the Ripple's XRPL to Axelr, we only have to do a translation once from the XRPL VM to the Axelr VM. But once an asset or information lands on Axelr, we can forward it to any other chain that Axelr connects to. So we have this hub-and-spoke architecture where you create a connection to a new chain once, and you can access the whole

ecosystem. Is that Interchain Amplifier? What's Interchain Amplifier? That is Interchain Amplifier, exactly. Meaning that Axelr, because it's a blockchain, we're now launching smart contracts on top of it. And we have many different teams that are working to integrate their chains into Axelr.

So with SWE, Mistan Labs allocated some engineers to roll out the connection. For Solana, we have an engineering team that's independent of the core developer of the Axelr network. And they've been working on the Solana, we have an engineering team that's independent of the core developer of the Axelr network and they've been working on the Solana connection for a year. For XRPL, for Bitcoin, it's the same thing. So thanks to the Interchain Amplifier, we created an ecosystem of developer companies around Axelr where they can build connections independently and once the connection goes live,

it is compatible with the rest of the ecosystem and everything else that has been built. So it's going to be very, very scalable. And we're rolling out this upgrade as we speak. Some of the first non-EBM integrations are going to go live in Q1. How are people using this? Who's using it?

Is it retail? Is it mostly projects like B2B? What's the main use case? I'd say there's two customers for this technology. First of all is the developer. If you're, for example, an asset issuer or an application developer, and you want to be able to access users from other chains,

you can integrate with the Axelr technology so that your asset can be accessible on five or ten chains. And the second part is the actual end users of those applications, where if you're using an application and it is integrated with Axelr, you are going to be using Axelr under the hood without even knowing. So the goal for Axelr is to be an invisible technology. Everyone in the world using it, but they shouldn't have to think about actively using Axler because that's not great for the user experience.

Another good use case here is that we're working with Ripple on an XRPL integration, and they are going to be launched in an EVM chain. And they want to bridge over XRP from the XRP ledger to the new EVM chain so that people can use it to pay gas. All of the users of that chain are going to be using Axelr under the hood. But again, we want Axelr to be a visible technology the same way that... It's plumbing. You're building the infrastructure

for people to actually do the things that they need to be able to do, which has been a huge problem in this space, obviously. It's all about user experience, right? Making Web3 usable in a world with millions of chains that's completely fragmented. How do we make it usable? And again, it goes back to many different computers and the Internet. You don't actively have to think about the internet when you know you're doing your day

to day job but everyone is using it so assuming that we kind of continue through this cycle i mean i guess regardless of that but you know we're still getting a ton of tension on crypto and things continue to ramp up like what are your predictions for 2025 i'm not really talking about price predictions obviously i guess more for adoption of the actual technology and how much will this actually be used because in the past years, it's obviously been a promise of things to come that we never really saw that meaningful level of adoption. For interoperability, my prediction is that around 8% of all transactions are going to be cross-chain.

Until recently, there were only a handful of chains that people were doing things with, so there was not as much interest in bridging across chains. But now we see so many different non-EVMs, there are so many incentives in different ecosystems and so many reasons for people to use different ecosystems. So the cross-chain activity will explode and 8% is my target for 2025. Long term, I believe that 25% of all transactions are going to be cross-chain. So that's prediction number one around interoperability. And the second one that is more of a hope rather than a prediction is that

we finally managed to get the savings account primitive into the hands of billions of people in the world. And Scott, as I'm sure you're familiar, there's a lot of people, especially in the emerging world, that are holding stablecoins, particularly Tether, because they get inflated ridiculous amounts every year if they hold their native currencies. And those people today, they are forced to hold dollars. There's no way on saying to hold a robust savings account, but with the tokenization of treasury bonds, and we see a lot of companies over the past year,

like Ondo, Hashnote, and many others, even BlackRock, with their own Biddle fund, they tokenized the equivalent of a savings account on chain. And as people start trusting those new products more and more,

my hope is that everyone in the world will be able to access a savings account, which is just impossible today. So how can people keep up with what you guys are building, get involved? I'm sure you want to talk to developers, but what's the best way for people to keep following you? Absolutely. So we're very active on X. Please follow our Axelar X account and my personal account as well. All of the documentation is on the website.

I don't know if there's a way to drop links here. I'm happy to drop a couple of links, but everything we do. Go ahead. Everything we do, you can find on our official documentation, our website, our X account, it's like two or three places, right? Official website and the X account. And that should be more than enough. The documentation is very simple.

If as a developer, you want to try to integrate your application with Acceler, you can get started and send your first message 10 minutes after reading our documentation. If you are an asset issuer and you want to take your asset cross-chain, we actually recently launched a front-end where you can go, enter your token address,

select the number of chains, and in one minute deploy across all those blockchains. And the magic thing is that you don't even need to be a developer to do that. It's a no-code solution. It's available on EVMs today, and it's need to be a developer to do that. It's a no-code solution. It's available on EVMs today. And it's going to be available very soon for SWE, for Solana,

where launching asset cross-chain has been a big pain point for people. So our goal is let's make this developer experience as simple as possible and allow people to be on all the chains without an option. I love what you guys are doing. I'm really looking forward to seeing more of of it obviously come to fruition in 2025 georgia thank you so much for your time um and for you know sharing your thoughts with us i'm sad that uh gary and grant went off stage brian i was going to ask you to get your brother up here and then we were going to have like a twin argument or fight or something. Get the altcoin daily guys up. Could have had six people on stage, all twins.

You know, we actually agree on Bitcoin, though. So I don't know. It will be pretty boring, I think. OK, so next time we'll put you on stage for a political. Gary's back. I summoned him. See that? There you go.

And you guys, you know, you live kind of in the same part of the country. I was just saying maybe you know for charity or something we could get a wrestling match krassenstein's versus cardone's you know i i think we have probably he has probably they probably have the weight advantage but we have the age advantage so i don't know how that'll go age before beauty my friend sorry that's what they say all right gary uh see we got you back up any final thoughts here uh i'll let i'll let my bank my bitcoin bank account fight both of them how's that the crashing scenes are very early man i don't know they might be quiet

i i bet you they they stopped buying bro okay brian stacking fucking hard. When I'm convicted, dude, I'm convicted. I'm as convicted as I could possibly be. I actually have not bought Bitcoin since 2014. I haven't really sold much either.

Gary, that's a pretty big lead, man. I don't know. Or we could add a bet. I would like to get your brother up here we could have said like which one of you is going to sell another piece of real estate for Bitcoin faster I think Gary has more real estate than I do

I think Grant might be winning in that department I'm not sure what do you think Gary I'll sell my brother all my real estate right now in exchange for Bitcoin. Bring it. Every drop of real estate I have, I'd sell for Bitcoin right now. And I would do it at a discount to the market, by the way. In case we can broker any deals here on the way out, anyone in the audience listening that wants to buy some real estate for Bitcoin, we got your guy here. Scott, you've been in my house. I mean, I got to believe it's not a bad pitch.

I have high conviction that everyone here would enjoy living in your house. That's exactly right. We got to get you to Tampa, buddy. Got to get you to Tampa. I'm holding an event January the 5th. I'll be there. And the promotion is going to be make Tampa, St. Pete, and Clearwater extremely rich with Bitcoin. We're going to invite like 500 families, all the old people that haven't been pitched Bitcoin correctly. It's going to be ARK, Saylor,

an ETF guy. And we're just going to bring the whole value chain together for about five hours and try to invite a bunch of local old people and explain to them why they're missing the boat. Their advisors aren't treating them properly. So we're going to do it. I think it's the right time to push really hard in this industry. We're going to get Bitcoin on the Federal Reserve this year, dude, in 2025. It's amazing. If there's one thing that St. Pete and Clearwater have, it's a lot of rich old people. Totally.

And none of them are in Bitcoin, bro. Yeah, absolutely. And the dog sends us off, guys. I got to run. Thank you so much to all our guests george us again uh for axel r gary brian you guys were great uh additions these shows are always the best i love our regular guests of course and you guys actually count but it's always the best when the conversation gets so good that a bunch of friends start jumping on stage because they just have to have to be a part of it so uh this space went a lot longer i was kind of apologizing to the staff in the

background but i was having fun so we had to let it run uh that's all we got for you guys today we'll be back on monday 10 15 a.m eastern standard time give everybody on stage a follow and everybody have a great weekend later guys bye