The Wolf Of All Streets - Trump Wants To Buy 1,000,000 $BTC | Crypto Town Hall

Episode Date: March 12, 2025

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Morning, everybody. Welcome to Crypto Town Hall, every day on X at 10, 15 a.m. We have a great panel. I'm super excited to see a bunch of friendly faces. And we have a lot to talk about. I just like to make the intros as awkward as humanly possible, but let's dive into it right now. Obviously, we have this sort of title story right here. Trump wants to buy 1 million Bitcoin. Okay, actually, what happened is Lummis reintroduced the Bitcoin, the strategic Bitcoin reserve bill yesterday that was first introduced right around Bitcoin Nashville and announced there. But the news there, not only is it now been reintroduced,

which indicates that there's some tailwinds behind it, but that she says very clearly that Trump is behind her plan to buy 1 million Bitcoin in five years. I guess we can discuss A, what we believe the odds of that happening are, and B, perhaps a deeper conversation about whether people want the United States government to own a million Bitcoin. So yeah, Tom, I think you were just raising your hand. You jumped in and started. I jumped in and started. Yeah. I think this plan has effectively zero likelihood of progressing. I mean, it's extremely risky to purchase or even the headline risk of purchasing that much of an asset that has

this much volatility is not going to sit well with most of the American people, particularly if you have to think about some allocation of tax dollars to this. I forget exactly how she wanted to fund it. There were remittances, I think. Yeah, which I don't know, you could argue you could use for other purposes. But I think the broader point is like, I don't understand her argument that we're going to wipe out the national debt with Bitcoin appreciation. I mean, at some level, you have to sell this Bitcoin. And if you have to sell this Bitcoin.

And if you have that much Bitcoin in terms of value and selling it will markedly reduce the price. I guess it's like a marketing tactic, but as like an investment strategy, I think it's just kind of silly. Like if we want to hold it for like strategic purposes and because other countries are going to front run us and have Bitcoin and we don't, et cetera, like I think all those arguments make sense. But yeah, I think the likelihood is pretty low.

And I think the argument is kind of thin. Anyone else want to take the other side of that or agree? I generally speaking agree with that. I don't like the idea that we're holding an asset that can effectively be weaponized at some point in time by other players in the space, but at the same time, hey, I like Bitcoin and, uh, I'm not totally opposed to it either. I think it's important to just keep in mind that like Bitcoin's immune to this, right? So it's not like we need it.

It's not like Bitcoin was invented to like not, you know, okay, it only works if governments don't get involved. The point is, you know, do what you want. Maybe it's a good idea. Maybe it's not, I wouldn't want, I don't think taxpayer dollars should be, you know, buying up an asset that is so speculative at this moment. But I love the idea of not selling what they have. I don't think taxpayer dollars should be buying up anything. I think they should be paying down the

debt. If we have extra money. But yeah, go ahead, Dave. Yeah, I think that's the key point, right? You know, you don't spend any money that's coming in you want to pay down debt but the US government owns a lot of other assets a Version of this bill that that caps what the US government could own at a million That doesn't force buying but recognizes Bitcoin by law as an asset That is ownable by the federal government alongside land and gold and silver, etc. would be an interesting compromise. Politics works in funny ways, but for the most part, very rarely when something new

is introduced, very rarely you get the whole thing done. The real question is, will the EO which said that the most important part of the executive order is establishing Bitcoin as a strategic reserve asset. Those words mean a lot to a lot of different people. Getting that enshrined in law would mean a lot. So the question really is, will they end up in a compromise that's rational. Going out and trying to buy it and telling the world you're doing so is like the world's stupidest trade one could do. If you're going to buy it, you should keep it secret and then tell the world you bought

it or at least tell the world you bought half of it. You certainly don't let everyone run in front of you because we all know that's exactly what would happen. Gary? Yeah, I would say I don't think this is a zero chance. I mean, I think Loomis is going for the whole, she's going to go for everything. I would actually take the counter that we'll end up with something. And if you really think it through, I mean, these are not stupid guys at this cabinet. We have major problems.

And I don't think you work your way out of this problem by using the same old tools we've used every time before. If you really risk scenario this out, there's very little risk to the US government for doing this. I mean, there's very, very little risk. Maybe some brand or marketing risk, but other than that, what could go wrong? I don't see the gentleman made a comment about other party risk. I don't know how a world or miners could take advantage of a situation where we're acquiring a shitload of

Bitcoin. So I don't think it's zero. And I do think we'll get something. We may not get the million. Thanks. Tom, you're the one who obviously was saying zero. So what do you think? Yeah, I just don't think each one of these bills is like, some of them are more symbolic than anything else. The ones that are actually getting a pass take a large amount of... This is why Tom Emmer is the whip, whipping all the boats together, getting all the people aligned, having all the potential pork that each constituent wants in this bill. I don't have to see any of that with this particular

bill. I would strike this one as symbolic more than actually functional, but that's great. I mean, symbolic is great. I would be very happy if we did perceive some of this. I just think it's unlikely in terms of actually the nuts and bolts of the US government. Yeah. I think it should be noted, Tom, that getting legislation on the books, even if it echoes what was put in the executive order, is huge because executive orders can just be overturned by a future president. It is important that we get some sort of loss on the books. So, Michelle, cheer for this, whether we agree with buying a million or not, if we want there to be some sort of reserve. Duane, you had your hand up.

Yeah, thanks. Good morning. I mean, in a lot of ways you could, this could be perceived as a sentiment play that, you know, basically the administration wanted to throw a cookie to the, you know, to the Bitcoin investors, to Bitcoin enthusiasts, and also as a way to separate this from a, you know, a crypto reserve or the strategic reserve, you know, in some, you know, in some ways so that you have like a pure Bitcoin play for the government. Also as well, I believe one of you mentioned the timeline as well, right? To acquire one million over, you know, the course of five years doesn't really mean a whole lot in real terms, you terms, because you're going to

have a change in administration, etc. So to have something out there in regards to laws and have something substantial makes a lot of sense, just in regards to some of the disappointment in regards to the strategic Bitcoin reserves. So I think this play made sense in terms of, you know, in terms of the consumer crowd that the administration is trying to attract here or try to keep happy. Yeah, that makes sense. There were some other hands up and then we glitched and they went down. So whoever had their hand up, go ahead and jump in. they went down. So whoever had their hand up, go ahead and jump in.

I think it was nobody. Yeah. I'll just say, I don't, I don't want the government owning shitload of bitcoins. Like I'm not saying that they're going to, you know, that instantly makes them able to take it over, but the US government owning, I don't know, like five, six, 7% of all actual Bitcoin that's out there right now, when you take out, you know, the Bitcoin that's out there right now when you take out the stuff that's been lost forever. The whole point is that this is supposed to be outside it. I don't think it actually does that much.

You're not going to pay down the national debt with it. We're at $36 trillion and you're talking about acquiring a few hundred billion dollars worth. I don't see the upside. I see plenty of downside for Bitcoin as a thing. The only potential upside I see is, and I think there's two reasons you see people really advancing this. Obviously, number one is you have a lot of people who want their bags pumped. I think the second thing is there's a lot of people who believe that it's a way to lock in protection

for Bitcoin from a future democratic administration or anyone else who is not very pro Bitcoin. And if the government holds billions and billions or a trillion dollars worth of it, they're not going to move against it in the same way. I think there's some validity to that thing. And I'm fine with the government holding some amount of Bitcoin, but the idea that we want them owning a million or two million coins and, you know, can approach in 10% of everything that's out there, I think is just not good for the Bitcoin ecosystem in the long run.

But in sailors, sailors about to have 500000. Yeah, and I think that's bad, too. I don't I don't like one person having control of that much of it. I think it is both bad from a governance perspective. And I think it undermines the entire idea of this being the basis of a world financial system. There's a certain iron to the fact that the wealth of Bitcoin is far, far more concentrated than any other form of wealth in this world. And look, I'm not arguing for redistribution here, but I don't

think that it's good for it in the long run for it to be overly concentrated. Well, like a lot of other things, it's better the more people hold it, the better it is for everybody, you know, as long as everybody has a little bit of skin in the game. But I think that the million Bitcoin is more for, you know, an optics thing because a million is a big, beautiful number. Everyone loves a million. It's wonderful. It's the best number of Bitcoin.

But yeah, I think that's basically what's going on here. Jim, that was pretty good. I didn't know what you were doing there at first. I was like, why is he changing his voice? Then I realized you went full Trump. I thought Trump showed up. Trump is here. That's me.

Honestly, sorry. We're just hanging out together. It's great. Crazy. me. Honestly, sorry. We're just hanging out together. It's great. Crazy you handed him your mic. Speaking of Mike, Mike McGlone. How are you buddy? Good. Hello. I'm enjoying the conversation, particularly to Trump impersonation. That was good. Yeah, that was really good. Obviously, we can talk to death the odds of this happening, but we're going to, I think, get more clarity as we see how much support there is for this bill and what it means. But I do want to discuss the fact, obviously, since we have you, that we've had nothing but quote unquote good news and every single day the stock market seems to open and Bitcoin

has a little pompo overnight and then we drop right into US hours. I think we're topped at like 84,500 here. We are like 82,500 again and Ethereum just absolutely dying on the vine. So very hard to find any catalysts that are actually moving price at the moment. I think Alex nailed it. People just want something to pump their bags. I just love some of this nomenclature I've learned from crypto people. And that's the key thing is really changing the space. Every single conversation we have now is what the government's going to do to

make crypto prices go up, virtually all of them. It's just that's the kind of I see. I think what happened with the election in the pump up to December marked the peak of the rally and we're in a bear market. And I'll ask the question I asked about a month ago with Ethereum approaching 2000, what stops Ethereum from going to 1000? I mean, it looks like it's on track to be flipped in by tether. And that's to me, number one, that's indicative of the awesome technology that the dollars, you know, tokenization of US dollars, next are treasuries, next are most risk assets, but it also shows the fallacy

of rapidly advancing, just way overpriced tokens, I mean, I can mention a few of them, without any reason to be so highly priced in a bull market of the stock market. So here's a key thing I wanna point out is, so I do think Ethereum's heading to a thousand now, 2,000's resistant. It's just normal trading There's nothing with that nothing wrong about that. It's also has

You know, it's just indicative of where things are going But then I look over at the macro on the year so far the US stock market Capitalization has dropped almost four trillion dollars. That's nothing. I mean, okay four trillions a lot It's more than 10% of GDP, but for the stock market, it's nothing. The point is, it's such a big number now, that's all that matters. The US stock market has to go up for risk assets to go up. And I think that's what's happening now.

We're finally seeing a really good reason for it to just revert. This is not a bear market, it's just reverting excessiveness, which has been led by cryptos and Doge. Significant austerity I've never seen before and the tariffs are good reasons for that to go. So to me, the whole thing is tilting to a bear market,

meaning stock market, cryptos, bond yields going down, eventually in crude oil going down, things like that. I just don't know what stops it at this stage. We're just getting started. And even today, CPI numbers weaker than expected, but it's nothing. It's really from February It's the ones that kick in after we see a little more destruction of wealth now If we don't see that that's wonderful that should be led by cryptos and to meet cryptos that telling us you're gonna see more

Destruction of wealth only because we created so much so in the macro big picture. That's my view I still think we're going lower. I think the next stop for a theorem is a thousand resistance is 2,000 and Far as Bitcoin, I don't, you know, obviously it's digital gold, but here's the trends. It probably is going to approach 90% dominance of the space. I mean, it's what was the recent peak was around 75%. And yesterday, it was actually with stablecoins included, but yesterday was actually the highest close for Bitcoin dominance this cycle.

So, there we go. That's a bull market. That makes sense for digital gold. But again, I know people don't like when I use the word, but there was one cryptocurrency launched in 2009 and now we're 2025 and by some measures, there's 12 million. So, I look at it as we've had our peak expect to be trading the bear market sell on rallies. And by the way, have a lot of fun trading because it's the best

trading casino on the planet. That is Dave, I was like, I was gonna call Dave whether his hand went up or not, but you didn't raise your hand. So look, we've had a lot of conversations this week about comparing what's happening this March to March of 2000. And I think that Mike and I are finally, I think what Mike just said is softened from Monday

and is interesting because it's very similar. The difference is if in March of 2000 or in 1999 and 2000, there were like 14, 15, 15,000 internet company stocks that could be traded. You couldn't create millions. And to create them was hard. Most of them were in the OTC markets, didn't stop trading desk people from plying into stuff. My favorite one is Net Taxi, which was Swan Valley snowmobiles that became hundreds of millions of dollars. And it was kind of like the shadow of Pumped Out Fun. But let's take the craziness out and look at and zoom out for a second.

What actually happened? Well, what actually happened was stocks like Amazon were punished because people thought it was a bookseller and Bezos was delivering on his vision. He was able to raise a couple of billion dollars, which mattered a lot more. Money was a lot harder to get back then. I don't know in terms of real financial inflation, but probably that would be like raising $20 billion today to build out his entirety of his just-in-time shipping network and all of the warehouses it needed to build. And Amazon went down 90 some odd percent from its peak and ultimately became one of the

greatest wealth creators in history of people who actually held on. At the same time, and there were other stocks back then that became significantly valuable, and others were being built that were held only by VCs or people in private, Google, etc. The total wealth represented by the internet is orders of magnitude higher than it was back then even at the peak. What was happening, however, was a lot of the companies that existed back then went to zero. And this is where Mike and I agree. And I've said this before. I mean, there may be a meme coin that can achieve escape velocity by creating some sort of economic value base in its community, get used like a blockchain

like if Doge ever was used as payments inside X or whatever, but otherwise, $20 billion? Hell, I'm not sure it should be worth more than $20. But when you get to other meme coins, I just don't see the value at all I mean, it's the kind of thing it really is beanie babies. They'll go up. They'll go down eventually they'll trend towards zero the same way pets.com and the thousands of OTC stocks did but at the same time the winners in the platform wars the winners that actually power global payments that power

new tokenization strategies that power You know deep end and game fine and all the other various things there will be an enormous amount of value created in the internet of value And people are going to try to get in front of it and the difference in crypto and stocks are You get almost immediate access to it. So stocks are, you get almost immediate access to it. So Ethereum, I don't know if Ethereum is going to be worth zero. Is Ethereum MySpace? Maybe. Or is Ethereum going to ultimately be a big use platform? Maybe. Is Solana Facebook when Ethereum was MySpace? Maybe. These are all the questions. And when you're looking at this, you're going to see significant Bitcoin

dominance as a lot of the crap gets driven down to zero. And I said crap, I really should have said farts, because that's the one that really, to me, signaled that along with Trump and Melania and Libra signals the death of meme coins as far as I'm concerned. But the point here is a rotation is happening inside crypto. Everything happens faster now, but it still takes time and you need to be watching the tea leaves. I don't see Ethereum dropping as inconsistent with Bitcoin rallying, if in fact it's because of the fundamental tech. Now, if their upgrade goes well, who knows? And I'll let other people talk now. We can keep digging into this,

but I also wanted to highlight some news that I think it just broke, or certainly just hit my timeline and posted it. The Cantor Fitzgerald, obviously that's Howard Lutnick, partners with Anchorage Digital and Copper for new Bitcoin financing business. But here's the kicker.

Institutional investors can use Bitcoin as a form of collateral for loans. We've been talking about this as the future of Bitcoin and really a huge catalyst for the space for a long time. I can't speak to what size it is. I'm doing more research right now, but lending your Bitcoin as collateral so you never have to sell it like any other asset in your portfolio unlocks a massive, massive amount of capital. So I would love anyone's thoughts on this. I think that this is actually quietly very big news.

It'll go completely unnoticed in the market, but this is very, very big news. Scott, I'll bounce in there. This is most certainly happening. In fact, the Bitcoin I'm buying right now is through one of those lending protocols. So it's working. It will only get better. So I agree with you. This is really going to be unique when you don't have to sell your Bitcoin, you can lean

into it. The rates have come down. I started looking at these deals about a year ago. Rates were obnoxious. They were so ridiculous. And there's still some rates out there that are very high. I don't think these guys are going to survive. Rates have like literally gone over 50% discount to what they were initially offered at. And I've heard rates lower than what I'm getting.

So I think you're going to see a lot of movement in this space. The lending, if we can get lending done, it changed, it really, really changed the game. One thing I just wanted to respond to Mike, Mike's such a confident guy in his speaking capabilities and judging the markets. You made a comment, Mike, about oil slipping further from here. You know, we haven't seen oil prices at this level since I think October 21, COVID kind of era. Granted, there's no demand, but I can't see oil dropping a lot more here. I mean, that would be suggesting a really deep recession.

I don't know if you have any comments on that, but I just don't see how that happens in this environment. Well, Gary, I'm happy to get teed off, but let's say Scott wants to go there for a minute to be given my oil view. No, no, yeah, go ahead. Gary, obviously, Gary's history is in the energy business as well. So I'd love to hear this conversation.

We can circle back to lending in a minute. So have you seen the movie, the series Land Man? I kind of enjoy that. Will Promiscuous was the fact of oil is it always goes to its cost of production and that the US is $56 a barrel. Every day that goes by, we have excesses of supply from the US, Canada, Guyana, Argentina, you just name them down the list,

and OPEC, and decrease in demand from China. In the meantime, we have a significant paradigm shift, and I mean, my EV's 11 years old, and most vehicles sold in China now are an EV. So declining demand, increasing supply, technology's overwhelming. That comes from also what I see in the grain belt, massive oversupply, because we can create more with less every day. But the key fact is for about 20

years now, every time oil gets above 100, it drops to below 40 or near 40. So I made that call. Totally agree with you. I made the call over a couple years ago, it's going to 40. I've been wrong. It's just taking longer than I expect. I still think it has to go to 40 to really bottom this whole pattern. So yeah, a recession is part of it. Trump's kicking it in. And also we have a very motivated government says they want lower energy and lower yields. And to me, trends are all in their favor. Yeah, just a couple of things.

One, the cost of production in the Middle East is not 56, right? It's more like 65. So they're scratching their face. Look, you could be right, man. If demand just like drops, I mean, we do have an immense amount of fossil fuel, but I just don't see it getting into the 40s again. That is a very deep... And if it does that, I don't know how all you inflation guys are going to hold your position because that means that you're having a massive deflationary event. Mike's not an inflation guy. It's great for the consumer.

Nobody's even talking about this. We've had crude oil drop $20, and people are like, oh, the end of the world has come. It's like, yeah, prices are falling everywhere. So here's my prediction by time we get to the midterms the average Gallon of gasoline will cost about two bucks right now It's about three bucks Trump will evil say he made that happen and he will be right because the trend was always going that way anyhow, the key thing about Commodities they always go down because they went up and they went up a lot and they're heading down now the question is what stops it I fully expect this to coincide with the stock market. Maybe drop another 10%

God help us which means 30% in Bitcoin. God help us, but this is normal stuff And key thing is to think about any type of commodities is start with China start with one key indicator from China You can't mess with that's that government ban yield at 10 point at 1.85 percent in China That's indication of severe deflation. Now. The key thing is these are cgbs. I traded jgbs Japanese government bonds 30 years ago I remember I'd seen this before except it's much worse. So it's global. It's macro cryptos are in the head of the scale They're leading us back down and our president is very motivated for this to happen. Also, a key thing to remember about tariffs, so just end with the key facts of tariffs. Our total trade deficit is about a trillion dollars. It's big to the highest ever in the last data, partly because of people front running.

So if you take 20% of that, say tariffs, that's 200 billion bucks, big deal. Right now, the stock market's down $4 trillion this year alone. If it just drops half of what it did, went up last year, which means, what is that, about $6 trillion, that's 20% of GDP. That's severe deflation. And by the way, Jeff Booth, the big Bitcoiner, the one who really pushed back in China and really loves Bitcoin, pointed this all out. Technology's severely deflationary and it's accelerating rapidly.

That's part of crypto. The thing is, here,ary and it's accelerating rapidly. That's part of cryptos. The thing is, here I'll end with this. Anybody in this chat ever see that movie Fantasia, The Sorcerer's Apprentice, when the apprentice tries to do a spell to create more broomsticks to help clean up the area and he creates too many and it becomes, you can't stop it. I think it's from a Goethe poem. That's what's happening in cryptos. We've unleashed the Sorcerer's Appters apprentice and we're just creating too much supply.

Dave. God, I just got to laugh. It's the same things. I mean, there are three fallacies in what you just said that have to get challenged, yet there's a lot of truth in what you just said. Let's go to the truth first, just so you see we know not being unfair. The wealth destruction is extremely relevant. We know that there is an enormous correlation between the wealth effect and consumer spending. And if you had a perfect world, if you're Scott Besant and you're trying to engineer a terming out of the debt,

you kind of don't mind what's already happened. You just don't want it to accelerate. And so you're looking for people talk about soft landing the economy He wants soft landing and consumer inflation and would like to get back to asset inflation led by bonds So we know that and a lot of what you're describing is that but come on I mean every time you would let you toss off the 30% beta. Just look at this week's trading I mean for Christ sakes, Bitcoin and Nvidia have been almost perfectly correlated until today.

Bitcoin went up yesterday when everything else was going down. I mean, just stop. I mean, this three to one thing is taking into account ups and downs and betas. Anyone who's ever run a risk book, and trust me, I've run a 15 factor correlated multi-billion dollar risk book and trust me, you know, I've run a 15, you know, factor correlated, you know, multi billion dollar risk book for quite a few years. It's just just that relationship

isn't true. There is it's not like factual. And so just stop with that. I mean, you want to talk about what what could lead what could not lead could crypto lead? Yeah, sure. The last thing is about supply. You and I agree the supply is insane. The supply is going to wash out the type of supply. People aren't stupid and there is a very big difference between Bitcoin platforms and things that are just made up by people on pump.fund. Those are different things. That's not creating supply. There is lots of competition in platforms. Absolutely. There's lots of competition. A lot of these things. There's basically, other than the deranged XRP army, there is no competition for Bitcoin. And I say that because I know I'll get a lot of pushback, but I get tired

of sparring with them on occasion. It's deranged when Patrick Ben-David goes on with these stuff and talks about thousand dollar XRP, which by the way I would love because I own some. But come on, this supply comment, let's understand it's no different than it's not like the IPO business in the United States when the IPO started cranking like crazy and a lot of people credited that with popping the internet bubble. Those are still real companies. They may have been bullshit companies, but they were companies. It's a lot easier to create crypto. So of course you get all this extra crap. bullshit companies where they were companies. It's a lot easier to create crypto so of course you get all this extra crap. Okay so I got to respond. Dave, I love our banter. I'll start with a question. On the year total

return S&P 500 is minus 5% and Bitcoin is down 13%. I call that beta to the S&P 500. I will continue to do it because it goes down more. It has a much higher volatility. It's a very high correlation. So the for you is, let's say that's gonna be 500 per chance, maybe it ends the year down 20%. Where do you think that's gonna do for Bitcoin? Yeah. Okay, two, is the question gonna be? Not sure Dave heard the question.

But. Oh sorry, the NASDAQ is down almost 10% and there's lots of stocks in the Nasdaq that are down more than Bitcoin are. So you're picking on, you're choosing it. Bitcoin is still correlated with technology because it's trading technology. It's in a lot of people's minds. Now I personally think that will be linked, but it is still, it is undeniably going to

be correlated much more with the NASDAQ but I don't see how you get nine point six one six percent versus fifteen percent as a three times beta I'm sorry my math skills are just a bit different than that when I learned math that was you maybe you know one point five one point four I don't know and and it could be just timing so to me it's correlated to the NASDAQ, there's no doubt. Will it stay that way? I'm not sure. NASDAQ, at the end of the day,

the stocks are still tied at least somewhat to expectations of future cash flows. And I say somewhat because there's a lot of story stocks involved in technology and people pushing things out further in the same way that we look at aetherium and others where there's no way to justify their valuations on the basis of anything but the future you use the word hopium whatever future expectations is fine but Bitcoin is different and I just don't see the math being that way okay simple question end

of the year S&P is is down 20%, where's Bitcoin? It's an interesting, it depends how it gets there. If the S&P is down 20%, but the long yield is sitting around two and a half to three percent, I think Bitcoin is probably higher than where it is today. Okay, I'll take that bet. If long yields are down, we're not going to get that. We're not going to get that. The problem is, is that isn't going to happen. So we could bet all sorts of scenarios. OK, exactly. I think Bitcoin matters more to what's happening in technology. And in that scenario, they have to be down 20 percent.

Where's the Nasdaq down 40 percent? What's your guess? So when I say that, as far as the S&P, well, probably closer to that, yes, because it typically trades about almost two times the volatility annualized. And that's why I just point out the fact is Bitcoin trades about three times the volatility S&P 500. That's where I get that three times. Ben, I like to say to tee you off, you're funded tee off because you come up with some

great stuff. But that's the key point. Just the fact you say it's not gonna happen That's what I was said to a lot of crypto people when what you know Just a few months ago and it's when people completely disagree about normal reversion Then you have to worry about normal reversion. Remember I have to admit there's a few you know I in some some of us who did very well in 2000 very well to say 2008 Missed some of the long-term upswing, but I'm telling you, this is one of the best reasons I've seen for mean reversion, normal reversion markets ever.

Cryptos are just in front of the space and Bitcoin's the most widely traded. I understand. I just don't think, well, there's two things. I don't think that Bitcoin and crypto are the same thing. And I will always say that. And two, S&P down 20% effectively what you're expecting there is liquidity to be continued to be dropping. I think the S&P down another 10% causes the fire hose to come back on. And the fire hose will disproportionately affect Bitcoin.

That's why I think it's a question of path dependency. The day that the S&P, if you told me that the S&P dropped 10% in a day and we hit it started to hit circuit breakers. Yeah, that day Bitcoin will be absolutely disastrous. If you look three months later from that, if the S&P maybe it doesn't get off the mat, Bitcoin will get off the mat faster and move. If let's say, if you rally 5%, at that point, the beta might be 10x, not 3x or 15x or 20x. So it really depends on the scenario. It is very path dependent, and that's why I say what I do. But yes, if you ask the question, if it ends the year down 20%, and that means that in

the last week of the year, it just cataclysmically dropped. And that's where the drop happened. Yeah, Bitcoin would be down if it went down 25 percent. They turn the liquidity spigots back on. The S&P slowly started a rally. Bitcoin would rally up a lot more and ultimately be higher. That's my point, which is exactly what happened in 2020. So let me just I'll close your very simple on it. This is big picture macro.

The last time in history that we had a similar stock market cap to GDP on the way up was in 1929 and all that mattered, and we all know that all that matters when the stock market goes down, I like to use the term beta, Dave doesn't like that, that's all that matters. So I'm just pointing out this is all that matters right now to me in terms of analyzing markets. If the stock market keeps going down, it's all that's going to I'm pointing out, this is all that matters right now to me in terms of analyzing markets. If the stock market keeps going down, it's all that's going to matter because of the wealth destruction. So I just threw that number out there.

That's what we have to watch is that's why, and cryptos are just a good leading indicator. And that's why I look at Ethereum is when it broke below 2000, it was indicating that you're not supposed to buy the dip this time. But we'll see. But overall, it's the macro. I agree with you on Ethereum, but for totally different reasons. Quickly, we actually have some more really interesting news which I'm diving into.

We're excited, it's pinned above from Binance. We're excited to announce the first ever institutional investment in Binance by MGX. I believe that's the Abu Dhabi sovereign wealth fund. Is that correct? I think so. This is a significant step in advancing digital asset adoption and reinforcing

blockchain's role in global finance. The 2 billion investment is also the single largest investment into a crypto company and the largest investment paid in crypto. Wow. That's pretty big. $2 billion investment into Binance. I'm curious as to why Binance is actually taking on capital considering how much cash they have. Guess we'll have to unpack that one deeper tomorrow. We can further go back to the yield conversation. Gary, I had a question you mentioned before and I was reading the news. Did you say that you're actually doing this with Cantor Fitzgerald? You're actually doing the lending yield? I missed it, but Gary, Gary, I'm not sure if you can hear me,

but David, you can jump in. He didn't mention what name. He said he's doing it though with an existing lender. As a matter of fact, we're also in talks. Centaurus layer one is in talks with a number of lenders, not only based in the United States, Switzerland, and elsewhere that their mandate is to go ahead and lend against crypto. So there definitely is. I think people in the lending world, in the fixed

income world understand that this is the next place to go. If you're smart about how you go ahead and hedge your risk, it's a good business that's going to certainly have utility takers and grow. So, I see it, certainly it's going to be done on a retail level, which I won't comment on, but on an institutional level, I think it's going to go ahead and happen. And I think it's good. It obviously goes ahead and allows the market to go ahead and expand in terms of, and that kind of goes back to um a different point but it you know the point that mike made earlier by the way is that the real nick cannon that's listening to this show um just curious real nick cannon yeah

yeah excellent lunch to token uh not long ago for Wilden out, I believe. So he's excellent. Different spaces. So in any event, you know, wanted to mention Mike's point earlier, McGlone about pumping bags. Look, speculative assets require some bag pumping. And that's because everyone's speculating about their future value with respect to, you know, the the the bag pumping by the US government, I get the argument in terms of, first of all, fundamentally how it's a little bit different than other investors,

institutional investors, even pension funds, even sovereign wealth funds investing in Bitcoin. Also, in terms of the process, it's unlikely that because of how divisive this is at the ultimate level, front page of the paper type of level US government, how unlikely that is. I do believe that regardless of what happens with the US government, as Cynthia Lummis has said, I agree with her, you know, we're likely to get some movement out of the States. And I think the other countries in the world will go ahead

and take notice of that as well, whether the US government does it or not. And I think, by the way, our government is doing an excellent job of going ahead and teeing this up as best they can. I mean, at the end of the day, you know, whether they have the numbers or not, it's just going to be a factual thing. They'll do their best to get the numbers. But I think on, you know, on a broader level, there are more and more adopters. California, by the way, just the last point, California just came

out, state legislatures went ahead and endorsed Dom Bay for CalPERS pension board. Now, Dom Bay is known as being a Bitcoin first nonprofit, proof of workforce head. The fact that he would be a member of that pension board clearly shows that in the eyes of lots of people, even left-leaning California, Bitcoin does have value and is going to be an investable asset for the long term. I don't think the reason they're bringing him in is to go ahead and load the boat with Bitcoin. But on the other hand, go ahead. Go ahead. I would say Texas is very close.

They passed the Senate 25-5. It'll pass the, I mean, there's all indications that it'll pass the Congress and that ABIB would sign it. But Scott, Scott, if the bigger news out of Texas would be if Texas teachers or Texas and the pension funds. Absolutely. And those are based upon whether Bitcoin is an investable asset. What David just said is the key.

I know I'm harping on it. Don Bay, but wait, let me just say this. Don Bay is Bitcoin wait, let me just let me just say is Don Bay is Bitcoin. Why is not radio? He is not radioactive in the eyes of California, California legislators. That's a big deal. You're paying anyone who's paying attention to Gavin Newsom recently, as much as well, you know, I will keep my personal opinions out of it. He has absolutely been pivoting.

And into him, having seen what happened in the last election, embracing the crypto community is an essential, literal essential if he wants at any chance at 2028. So if you think that there's even a slight chance that California isn't, that he isn't gonna try to push California towards embracing the crypto community, you're not paying attention. And these are very, as David said, this is not a small thing.

Very quickly, just I found some clarity. So MGX, the company that's investing 2 billion into Binance is basically owned or controlled by the Abu Dhabi Sovereign Wealth Fund, but it is not the Sovereign Wealth Fund itself. Just for clarity there, but it is not the Sovereign Wealth Fund itself, just for clarity there, but still absolutely monster news. The yield conversation, I don't think can be stressed enough personally. I mean, I know we have Bill Barheit on here all the time. Obviously, Abra came through all of the contagion of the last bear market, pretty much unscathed.

All of them had to spend a whole lot of money to do it. They have those lending products. Gary, are you back? I want to ask you about this. So I'm gonna- Yeah, I'm back. Yeah, so I was kind of doing research while you were talking,

but you were saying that the rates have largely come down. I know that they're usually variable with these lenders like floating between seven to 13 ish now. And they're generally doing loans at like a 30% LTV, something like that. Or that's what they would recommend as safe. What are you seeing? I'm just curious, like, what the rates are and how this is comparable to say, you know, taking a loan against your securities portfolio, you know, on Schwab. Well, it's still not as easy. And the reason it's not as easy or as cheap is they, you know, it's not offered as widely. So they I had to look, I'm paying more for this money than I will pay in the future.

There's no doubt about it. Like these rates literally started at 15. And like you have very little custody control and now they're at sub eight, they're in the sevens. If I go through a deep financial, you know, if I give all my financials to this particular particular entity, I'll get better terms and I'll get twice the amount of lending power. Again, I'm starting to play with this, right? So I'm learning how it works, how you got to pay interest on a monthly basis. That's the cash burn. Most Bitcoiners don't want to deploy cash into a

call center. But for some of these, Gary, yeah, I'm sorry to interrupt, but like when I spoke to Bill about it at Abra, I mean, a lot of people view these as sort of lifestyle loans. And if Bitcoin on a long term basis outperforms your interest rate, you basically never theoretically pay it back. Like the loan just pick up. Right.

Well, you'll pay you'll pay the interest, but you know, you're borrowing money. It's call it seven and a half, eight. And if Bitcoin performs like I'm not using this for, by the way, this is not for me for buying a car like to me, that's not. Yeah, I'm buying Bitcoin. Yeah, it's to buy more Bitcoin. Exactly. And then you can redeploy the Bitcoin. So at least a percentage of that helps the loan itself. But I mean, I think I was doing the math. When Bitcoin was 100 grand to be round numbers or something,

if you took a loan at 30, 35%, something like that, basically before you even had a hint of your first Bitcoin being liquidated, you needed a 50 plus percent drawdown on Bitcoin if you never even added further collateral. That's right. That can happen with Bitcoin, but if it's not all your, and you can add more collateral, these are pretty safe. And if Bitcoin goes up, your LTV just drops. But bottom line, I guess, getting out of the weeds here, Gary, and telling people why this matters, this is buy, borrow and die.

Like for anyone who doesn't understand what wealthy people do with their assets to make sure that they never pay taxes on selling things. This is how they do it. This is the piece that Saylor talked about in his early analogies with Manhattan. That was on my podcast first. People bought Manhattan and then they borrowed against it. My brother, he just keeps borrowing against all these assets. We're getting there, guys. This is very, very early stage.

I mean, we are getting to the point. I asked the question once to my brother, Grant, if you couldn't borrow 80 cents on the dollar for every $100 million asset you bought called real estate, what would the price of real estate be? And the real question is, what is the real price of Bitcoin when I can borrow against it? Because right now, Bitcoin is priced at today's price, has no future value whatsoever, and

we just assume that everyone's going to be paying cash. And that's just not accurate. We're going to lead against this like every... Totally, dude. Sell pressure is going. Just go away. Yeah, I to me like this, you know, I can't say that the news specifically from Cantor Fitzgerald is the big break. But the fact that we know that this is the trajectory and will happen, I just think that people are not accounting for the importance of if Bitcoin or it's in an ETF, but imagine if even your actual Bitcoin at some point is just another asset in your larger portfolio and you can

borrow against it as a part of your entire portfolio. Right. And it's just another asset next to your securities or your real estate or whatever. I mean, it's just nobody's going to sell it ever. And nobody who has it with size is going to sell it ever, I should say. Go ahead, David. Yeah, Argentina, where I spent a bunch of times, business-wise, they don't have a mortgage market. And so, when you go there, it's really breathtaking to see where real estate values are,

how real estate is valued, you know, without any, you know, leverage. And the same thing goes here. I think the growth, look, the asset class is still not, I don't think stable enough for the lending to be explosive, you know, in the immediate term, it's gonna get there and it's just gonna come in stages and whether it's this cycle or the next cycle

where there's a greater sense of stability in terms of the pricing, also in terms of valuations for things other than Bitcoin, it's eventually coming. It's just a question of when. It's not an if question anymore. My mic stopped working there for a moment, but I left it at Gary, your brother's here in the audience.

Try to get him up here and talk about it. Otherwise, I mean, I think that this is absolutely the future. It's just one more step in the institutionalization of Bitcoin. I just have to imagine if we're seeing this announcement from Canter that it's not going to be far behind that we see it from Bank of New York, Mellon, State Street, Goldman, et cetera. Maybe I'm wrong and a bit too optimistic, but I think that that is absolutely coming. I think it's just another asset. Scott, you're definitely right. I mean, the thing that the revolutionary folks need to watch out for, the folks that I'm speaking to about lending, that yes, they come from

fixed income backgrounds, but they're not lending powerhouses. The question that those guys need to ask themselves is with the regulatory environment now loosening massively and banks being given the green light to get involved in crypto in every way, shape, and form, whether they're going to blow into this space immediately and destroy the upstarts because they have all the infrastructure, they have all the know-how. I mean, this is just another asset to go ahead and lend against. They know how to do that.

It doesn't matter whether it's a rock or whether it's gold or whether it's a piece of real estate or a security. This is what they do for a living is go ahead and give leverage on assets. And so I think to your point, I do think that the big money center banks are going to go ahead and get into this as quickly as they can. Before we wrap up, David, I want to ask you a question, because obviously you own a company in Canada.

And the primary use case at this point is obviously, as you've said, investing in Ethereum, sort of like a micro strategy, but Ethereum largely and future other assets. Worth asking you what you think of, obviously, Ethereum's massive underperformance at the moment. Yeah. I mean, certainly it's not good for me. I mean, I'm the one that funded the initial purchases of Ethereum, so I'm down a bit. Thank God I DCA'd on the way down. Look, I think coming from a distressed

turnaround or structuring background, I hope the Ethereum Foundation is in the midst of that. There are a lot of initiatives going on with respect to how to reposition Ethereum. I think a lot of the excitement surrounding Solana has been, I'd say, juiced by everything that happened with meme coins. Whether the fact that Solana is faster and cheaper goes ahead and dethrones Ethereum. Ethereum is going to have to get itself out of its own tailspin. I don't think it's about Solana being degraded that all of a sudden lifts Ethereum up. Nevertheless, I think the smart contract layer one story, and by the way, we have permission to invest in and stake both Ethereum and Solana.

So we started to go ahead and add Solana as well. And that would be, you know, the purpose of the capital raising that's going on right now. And then we're going to go ahead and get a bunch of other layer ones added to our portfolio. So I'm not, you know, the thesis behind this was not to go ahead and pick a winner in the horse race this early in the race. I think there's a lot of rounds still left to go in terms of certainly layer ones, but even when it comes to smart contracts.

And so, you know, we want to be a more actively managed portfolio of these things. If you look at the static portfolios that are out there in terms of big, large-cap cryptocurrencies and those funds, they're overwhelmingly Bitcoin and then very small pieces of ETH and Sol and then go down the list for a couple more. And the outweighing in most of those is to ETH as opposed to sole. And I think that this is something that changes day by day. I think that the sector needs to be traded more actively

than just going ahead and rebalancing a portfolio every so often. And obviously the staking component is incredibly helpful as well versus the ETFs. The gumming up of some of the ETF activity here because it's coming all too fast and too furious obviously helps us in terms of there probably won't be much competition for a little while. But certainly dismayed, to go back to your but certainly dismayed,

to go back to your question, dismayed by the performance price-wise on Ethereum. Obviously read all the commentary about how it's way, way oversold and is it primed for a boost. I think at the end of the day, until Bitcoin leads and certainly cracks 100,000, I don't think, again, I don't think we get into a real conversation about, well,

is Ethereum gonna get back to its glory days or is it done with? I think in this environment, it's really, it's irrelevant to go ahead and discuss that while the entire space is under price pressure. Yeah, we're gonna move towards wrapping. Just another piece of news I think worth highlighting is that the company rumm-bolted by 188 Bitcoin.

So we do have other notable companies actively adding Bitcoin to the balance sheet. We know that states are coming to add Bitcoin and potentially obviously the United States and other central banks. Amazing conversation today, guys. Great panel, I appreciate all of you. If you're listening out there, please follow everybody that we have on stage. They're amazing. They deserve

your attention outside of when they're just up on this panel. They're up here for a reason. It's because we really enjoy their perspective and insights and their absolute budget. So if you do anything today, follow all these guys. Otherwise, we will see you tomorrow. 10 15 a.m. Eastern Standard Time for another edition of Crypto Town Hall. Peace, everybody. Have a good one.