We Study Billionaires - The Investor’s Podcast Network - BTC250: Is This Bitcoin Bull Market Over w/ Tuur Demeester (Bitcoin Podcast)

Starting point is 00:00:00 You're listening to TIP. Hey everyone, welcome to this Wednesday's release of the Bitcoin Fundamentals podcast. Today, I'm joined once again by legendary investor and Bitcoiner Turdemister, someone I've been talking about Bitcoin with since all the way back to 2016. Tour just dropped a new report titled How to Position Yourself for the Bitcoin Boom in 2025, and it's a must read. We dive deep into what's really happening in this current cycle, from the absence of a speculative mania to how institutions are moving in and why this might be

Starting point is 00:00:32 the true institutional bull run. We also explore critical risks like potential custodial confiscation by governments and long-term implications of AI and just the monetary reset in general. This is one you won't want to miss, so sit back, relax, and I hope you guys enjoy the show. Celebrating 10 years, you are listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. Hey, everyone. Welcome to this week's show. I have the one and only, Ter Demester, back on the podcast.

Starting point is 00:01:17 Tur, I think we've been recording shows about Bitcoin and this entire space since I don't even know, 2016, 2017. I want to say 2016, yeah. Yeah. Maybe even 2015. I don't know. But it's been a long time. So great to have you back. I've learned so much from you through the years.

Starting point is 00:01:36 and now is no different. And you have a new report that you just published how to position yourself for the Bitcoin boom in 2025. This is a free download that people will have a link in the show notes that if people want to download this and read it, it is amazing. It's about 24 pages. You go into depth.

Starting point is 00:01:56 We're going to cover a lot of that on the show. But yeah, what was the impetus for writing yet another banger of a report? Yeah, I'm glad you like it. well, it was twofold. One, it was at simple, we were just talking, you know, I work with Unchained here at Austin, and we were just talking about our general collaboration and doing some events and things like that. And they were like asking like, oh, have you considered writing a new report? And I was like, oh, actually not because I always do them in the bear market. But give me some time

Starting point is 00:02:25 and I'll think about it. And I did, I did have that feeling of kind of disagreeing with the consensus, which is usually a good time to put something out. And it seems like there was a kind of a consensus that 100,000 is nice, we should be happy with that. Let's just accept. It's a four-year cycle. So we're going to go back down and then we'll take some profits here and call it a day. And I was like, I don't think so. I haven't seen a mania. Like it just my gut was like, I think there's a lot more here. So it was a great motivation to dig in again and actually you look at the data and see what comes out. It's funny that you start off with that because I completely agree with you,

Starting point is 00:03:06 having been through a couple bull markets, this right now doesn't feel anything like a speculative mania or anything that is like the past cycles at this point in time from the having, right? If anything, it feels somewhat bearish right now as far as just like almost like nothing even happened, I think, for most people. Even though the price has quadrupled in two years and a half.

Starting point is 00:03:32 Yeah. I mean, the previous cycles always had this speculative blow off that usually lasted, what, six to nine months where it was just, the price was literally raging three to five percent what felt like every day for like six months straight. And we haven't seen anything like that. No, I think whoever's buying is probably like hate buying right now. Like they kind of feel like they have to own some and they don't like, Trump, but you know, it's like you got to diversify somehow. I just, yeah, it's not at that stage

Starting point is 00:04:05 where people feel like this is the be all and all answer to all, you know, all problems. It's not there. And we have, it's an institutional cycle. I don't know if you agree, but I think this is the real institutional cycle. I don't think retail is really in this market yet. Wow. Yeah. Your report kind of starting off there, the narrative or the talking point is whales are selling. But in your report, you kind of say, you're not saying the opposite, but your report suggests that whales are holding rather than capitulating and signaling a mid-bull sentiment. Talk to us a little bit about this and what metrics you're looking at that are suggesting that. Yeah, so the hodler net position change is a metric I like to look at. And it basically

Starting point is 00:04:47 looks at all the coins and aggregates, but weighted for their age. Are we seeing net hodling, or are we seeing net moving of coins, which usually indicates selling. And so you see these spikes in the graph. And usually in an early bull market, there's just no movement whatsoever. The whales are just stoically holding. And we have seen a few spikes down, but no moves really above 100,000 in the past six to nine months. Yeah, so you see those little spikes. And actually, in my video presentation, which was a little bit after the report, there was another spike down. And that was that 80, thousand, the one that people were talking about 80,000 Bitcoin being sold, which led to a, I think it was only a 3% move in the price.

Starting point is 00:05:33 Yeah. Incredible. And actually, I looked up the Biffinx hack back in the day. I think there was 160,000 coins. Even that, like, yeah, the market had a little sell-off, but it didn't do anything substantial. So also, I think you have to keep in mind that there may be Bitcoin whales that are moving coins, not because they're selling, but because they're seeing the sale. strategy opportunity of, hey, if I put my coins in a vehicle here, we can now use leverage

Starting point is 00:06:02 to increase our stash. And for the first time, in a kind of a, yeah, an illegal and legitimate way. So I don't want to put all my money on that. Like, oh, it's totally bad. This time is different. I still think that there is probably some profit taking among Wales as well, because they're accustomed to the four-year cycle. We're above the previous all-time high. Like, it feels like a nice time to do that. I'm curious what your take is because you're also really deep in the Bitcoin space and talking to people. Like, why do you think these older coins are moving a bit? Yeah, I don't know. It seems kind of weird that you're seeing such large blocks kind of come onto the market, the way that they're coming onto the market, because they're going, it appears

Starting point is 00:06:43 they're going into the spot markets, which for all intensive purposes means they want you to see that they're selling. They want you to see it kind of getting ready to be released. And then wanting you to position yourself for that event. And that's kind of odd, right? Because if you really wanted to mask this, you would do it as much over the counter and behind the scenes and as slowly as possible if you didn't want the market to know. So I find that quite head scratching. I don't have an answer for it.

Starting point is 00:07:12 But if you were going to pick through the incentives of why somebody would be doing that, I guess they're trying to signal to the market and maybe go into some type of derivative to catch after the move to be more levered in the long-term play, call it a one-year derivative or a two-year derivative on the underlying. So I don't know, but it's very different. It's very different than what we saw in previous bull runs. And I think so much of it is just to your point that you made earlier, the institutions are here and Wall Street is here in full steam.

Starting point is 00:07:48 And they seem to be kind of pulling out a lot of the playbooks that they've used in markets for decades, which is if you want to acquire the underlying, you do fancy stuff like this, I guess. Yeah, it's good, you make good points. Yeah, and it's true that we don't really know. I mean, I do think there's blockchain analysis that's fairly good, but still, you know, we don't really know where these whales are. So.

Starting point is 00:08:09 Yeah. I don't know, like, what if you're a Chinese whale? I mean, you've kind of had some visitors from the government. They're like, hey, you know, we want you to have a good future, but also, you know, we're looking to acquire Bitcoin, so maybe we can work. something out where you ostentively sell a whole bunch of Bitcoin, et cetera. I mean, who knows? Like this?

Starting point is 00:08:26 Yeah, there's so many possible scenarios. But I do think in the aggregate, you do got to pay attention to this. If we're going to see bigger blocks move, like two moves of like 200,000 coins, I think that's often a sign that the whales knows something is up. But I don't feel like we're there yet. Yeah. Yeah, I agree. And, you know, it's interesting.

Starting point is 00:08:45 There's so many people running around saying, well, we're here we are. We're coming up on the point in time. of the four-year cycle that you sell your coins and you go away for a year and a half and then you come back. If there's one thing I've learned in Bitcoin, it's when you make a really simple like decision like that or you think you've figured it out, it seems to always figure out a way to prove you wrong and to change and to adjust. And I have no idea what to do right here. Absolutely no idea. Yeah. I think that's why I put out the report because I have same feeling and I was wrong back in the day in I think it was 2016 late 2016 early 2017

Starting point is 00:09:28 maybe where we were like between 1500 and 3,000 so it was a new all-time high yeah and people had this like mental blah me too it was like ah you know I think this is too much and people who are ignorant are getting in and I remember even selling selling some bitcoin just thinking like oh you never know and then we went to 20,000 yeah Yeah. So, and I, I feel like there's a lot of, like, bullish predictions of, like, I guess the Samsung is probably the only one who has, like, very bullish prediction and a short-term prediction, whereas most people are like, oh, yeah, a million Bitcoin bit by 2030. And most predictions seem to be hovering around like 200,000, which is, yeah, 2x from here,

Starting point is 00:10:13 but we, I don't know, I just don't know. I mean, get the blow off. I'm very happy to have egg on my face, you know, when it happens and be a, and be a, exposed or whatever that I was way too bullish. I do feel like we could tack on another 18 months possibly to this cycle, maybe eight to 18 months or something like that and have a real blowout. Because also the capital is now concentrated in Bitcoin. Like yeah, there is an old coin. We're seeing that bubble up again, these coins in my opinion.

Starting point is 00:10:41 But I don't feel like it's people are so ignorant they were in previous cycles. They know Bitcoin is the game in town. And also if you have an appetite for risk, go at it. Right? In the Bitcoin space, any kind of risk you just is there for you. You name it, you can buy it. So you don't have to go to these pump and dumps. Yeah. Yeah. It just doesn't, there's no speculative mania that I'm seeing whatsoever compared to previous cycles that give you that big giant selloff is because people made a bunch of fast money. They don't really realize why they made it. They just followed their cousin who told them about it and then they bought in and it ripped 100 percent and then they sold. And that's the collapse of it all. I just don't. I'm not seeing that right now, but we'll see. You can see how timid for people listening. You can hear all timid we both are having been through seeing a lot of things in the space. You just can't copy, paste the previous cycle. You never can.

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Starting point is 00:15:45 All right. Back to the show. Hey, you bring up in your report this risk of custodial confiscation by governments. And this is a risk that I'm looking at the incentives of the government, more and more spending, more and more reliance on debasement of the currency. I look at the social construct of society. And there's a huge population that literally just look at the government like, oh, you're going to print some money and just mail it to me? Yeah, that's what I want you to do without the thought of the long term consequence. They don't care about the long term. They just need relief now. Yeah. And so the politicians that are representing a lot of this population that need the relief now, I don't see them looking at any of this as if they're going to rain in and perform austerity or anything like that. So with that being the setup, and then you're looking at the world potentially moving to this

Starting point is 00:16:45 new form of money, and you look at the consolidation of the coins into the hands of institutions that are cussing very large swaths of this quote unquote new money, walk us through how you think some of this could potentially unfold. Is it a high risk? What are the probabilities that you're kind of putting on some of this? Walk us through it. Yeah, I mean, I think part of why this risk was considered to be so abstract and, you know, far, far away is that most people had a bit of, I guess they would underestimate the craftiness of government in terms of, you know, coming up with a narrative that they can sell to the public because the image was, oh, yeah, confiscation means the government barges in and it just kind of yanks 80% of the coins at a coin base,

Starting point is 00:17:33 puts it on their own account, and there we go. What are you going to do? We have the guns you don't. And then people would be like, no, this is America, that would never happen. But to look at what Trump did with the tariffs, he wanted to increase taxes. He wanted some kind of VAT system like they have in Europe, but he couldn't sell that. He couldn't push it through the legislature probably. But so what he did was call it tariffs, but it's almost like the net same effect. He has a whole bunch of new tax revenues that are by and large paid by it looks like it's going to be American consumers that are going to pay for that. It doesn't really seem like, I could be wrong, but it doesn't really seem like international

Starting point is 00:18:11 producers are lowering their prices, because I think oftentimes they just have very thin margins themselves. They just can't. Yeah. So yeah, just to see how they pull that off and sold it, you know, it's just the reality now. It's been something that people would think was impossible six months ago, and now we're just living it. And then just last week, it was like, oh, yeah, and by the way, Intel got a lot of bailouts or a lot of stimulus money during COVID, so we're going to take 10% And initially, Trump seemed to say like, oh, we paid good money for it. It's a great investment. And now he's tweeting, like, isn't it amazing?

Starting point is 00:18:45 We got it for free. We just took it. And I think the market is a little delusional to pump in the Intel stock, like as if this is great news for Intel that investors are diluted and that there's a risk of even more of that happening to Intel or other companies in the near future. I think that's just a short-term kind of short-circuit in people's minds. But so, yeah, I think that's the reality. And so when you think about how Bitcoin confiscation would happen, I think it could be similar

Starting point is 00:19:15 where all of a sudden the government moves. All these companies are going to be publicly traded so they can just kind of take stock in them and say it's a sovereign wealth fund, they're building. And then what probably you want to do as a government is to try and use those assets as collateral to then borrow against it. Because ultimately a government doesn't really care so much about cash. Like they don't really, they don't want to be debt-free necessarily. They just want to be able to service their debt, which means just issue more of it.

Starting point is 00:19:43 And if you have, if you're losing credibility internationally in the way that you've always done it with the bond markets, which clearly is the case, bond markets are, in my opinion, are strong in a strong bear market corrected for inflation worldwide. So you've got to come up with other ways to do it. And I think also we have to keep in mind, local governments can also start, you know, coming up with schemes like this. There's no limit almost. The advantage of Bitcoin, of course, is that it's highly auditable and you can move things around.

Starting point is 00:20:13 So there is still time to kind of position yourself for this new reality. But I think you have to just, it's just another risk factor that you have to now really add to the list if you're a Bitcoin investor. Because I said this to Connor in a podcast just yesterday that as well, that of course, We all know. The risk in Bitcoin is not spread homogeneously, but I think it'll be the same for confiscation. There's not going to be, I don't think, a blank out ban of Bitcoin. That seems impossible with the Trump administration, given how bullish to be all these people are in the administration. But I do think certain vehicles could just have more risks than others. It's interesting that you kind of use the Intel as an example of how government could just dilute existing shareholders in a,

Starting point is 00:20:59 stealthy kind of way, then borrow against the shares through a sovereign wealth fund. And most shareholders are the public or people covering it. I mean, I would think that your typical American wouldn't even really understand like what took place to be outraged or upset about with respect to something like. The story is we're partners now. Yeah. Where's government and the American people and Intel? We're partners now.

Starting point is 00:21:28 Yeah. Whereas if somebody in Bolivia, if a Bolivian government had done that, we would be like, this is confiscation, this is nationalization of the industry. And we all know, there's examples, there are studies of like oil companies. When the government owns 50% of an oil company or a majority share, their production goes down by about 50% on average. Like that, they just become. Is this like gas prom as like an example or who you? There's several examples. You have Venezuela as well, you just kind of compare it to pure private play oil companies. And of course, because they have a board with market people, they don't have bureaucrats on the board. We saw it in Belgium too. Like the government nationalized, what was it again? The telecom company and the

Starting point is 00:22:12 postal company. And even the national, that's a funny example, actually, the central bank of Belgium had lots of gold and the government came on board as a partner. And so now even to this you can buy shares in the Belgian National Bank and have a claim to all the gold, but the shares are trading at way below NAV, way below NAV, because people don't fool themselves to think that they could actually pull that gold out. You know, this is such a salient point because this is something that I've talked about on stage at different conferences and whatnot, but I've always left it very generic as to the government's going to eventually figure out that they're broke and they're going to need

Starting point is 00:22:51 real money to pay for things. and I'm looking at this over here and this is a honeypot. And then it's pretty much end of analysis. And I don't really get into the mechanics of how they might actually try to pull it off. And what you're describing here just makes so much. Doesn't make sense. It's terrible. But from how if you're trying to predict or project what they would do next,

Starting point is 00:23:12 this seems like a very viable path because it just kind of masks and hides the reality of what's actually taking place. Yeah. Yeah. I mean, it's also new for me. Like, I was like, yeah, I did write about the risk of confiscation. I just didn't really know how it would happen. And I think in general, yeah, you always want to look at what is the government doing? And then what if we extrapolate?

Starting point is 00:23:33 And what is you, they just keep doing it? They apply it to different industries. And I wouldn't be saying this if the government had a 10% debt to GDP. But, you know, it's six and a half percent deficit. It's a trillion. What is it? Over a trillion dollars a year now that they have to pay an interest. Just interest.

Starting point is 00:23:50 Yeah. It's bonkers. It's worse than the Great Depression, literally. How about the pivot from the start of the year? So when the administration came in and Elon was going to make the government efficient with Doge and all this stuff, right? It seemed like they actually were thinking that they might be able to implement austerity measures and get the whole ship under control and save it.

Starting point is 00:24:17 And then it was, what, May timeframe that it seemed. And like, they did literally a 180 hard pivot and was like, okay, like this whole thing's going the hell in a hand basket. And then they really leaned into the genius act and like all this. And I know that they were kind of working on some of that stuff since the start of the year, but it was like they just kind of forgot about all when Elon and Bessett had their blow up. And it's just like the whole thing just spun 180.

Starting point is 00:24:44 Like what are your thoughts on some of that? Well, I mean, I agree with that analysis. Additionally, I do try to put myself in the shoes of the administration be like, okay, what is this like from their point of view? And maybe one of the things they underestimated is just how much of a, it's almost like a covert civil war that's happening. Like there's just so much strife internally in the U.S. There's, you know, on the international stage, there's the threat of war everywhere.

Starting point is 00:25:13 And I think that's like, that feels very imminent to these people who are trying to run the ship and trying to, first of all, yeah, not sync, trying to keep it on course more or less, trying to not get overthrown by the previous more like liberal elites, like for them to come back and just take it over. So I think that is maybe in that sense, a reality check. I also feel like, yeah, Scott Besant, it feels a bit like his confidence is just less than what it was, like then, well, we're going to pull this off, it's going to be great. Doge, the $5 million, what is it called golden tickets that we're going to sell people, family wealthy

Starting point is 00:25:51 people in the country. All those revenue sources, I do think the story of the tariffs is kind of going pretty well. It's going better than what people expected. Yeah, I would agree with that. But it's not enough. Yeah, so what are you going to do? And I think for Bitcoin

Starting point is 00:26:07 savers, it's important to probably keep in mind that this is kind of a story separate from the Bitcoin price. It doesn't mean if the government gets aggressive, it's not a world government. It's the U.S. government. 300 million people live in the U.S. There's so many, there's so much money outside the U.S. And you saw it with Roosevelt as well. When he confiscated gold, the literal gold price went up 50%

Starting point is 00:26:33 in the 12 months following. Yeah. So that's counterintuitive, but it can totally happen to Bitcoin too, where we have a raging bull market in which is the biggest possible endorsement. Like, what is the asset that they're after? It's the most valuable asset on the world stage. So it's a huge endorsement of Bitcoin the asset class. Yeah. Yeah. At the beginning of the year when all this was coming out, I made a video back in,

Starting point is 00:26:56 it was like probably January of 2025. And I said, this is literally impossible what they're trying to do simply because if they are like reducing the expansion of the units, they have to replace them. They have to put it. The whole thing is literally a Ponzi scheme. And if you're removing units, units out of that, you're going to get so much impairment across debt instruments that the market's not going to be able to handle it. There's just not going to be enough money or currency

Starting point is 00:27:22 in the system to service the demands and the flow of commerce. And it seems like they've figured that out. And it seems like, and you write about this in your report with the M2 and how Bitcoin tracks the M2 growth rate. And back when I was talking about this, I was just looking at the M2 and I'm like, hey, they've aggressively contracted on a global scale, the M2, and they're kind of at the limits of where everywhere we've looked in the past 20 years, where the trend line has to keep going up into the right, was where we're at right now. So like, I just don't see it happening. Talk to us about this idea of M2 growth and anything else that you want to kind of unpack with some of those ideas. And I guess my question to you and all of that is, is it really a Ponzi?

Starting point is 00:28:09 Is the Fiat system just the total Ponzi scheme and they have to keep expanding it or else things start melting down? Yeah, it is in my opinion. And, you know, I really respect you and other people who go into the nitty degree of like, you know, Lin Alden and like really understanding how it functions. But that was that realization back in 2006, 7 for me was the start of trying to find an alternative place to go and finding real scarcity really because, yeah, it does. there's just more debt than can ever be service. So the only way to keep doing it is to extend them to until you hit a wall. And that's for inflation.

Starting point is 00:28:46 And then, of course, the debt gets washed out. And you get a huge restructuring of society. Certain people, there's all these stories, of course, of people borrowing huge amounts of money in Weimar, Germany, and getting away with it. Like, just buying real acid just because they had the right connection. They made the right decision at the right time. But then at the same time, you get the mass of the populace

Starting point is 00:29:06 who just gets impoverished. And that's a new problem. It means they get angry, they have very little to lose, you can get revolutions, those kind of things. And then the government has to try and find a way to keep finding revenue sources just to try and keep the machine running, at least from a governance point of view. Maybe the Ponzi scheme is broke. But yeah, you've got to find a way to keep it going somehow. Or you just, you have a literal civil war and the country falls apart, something like that. So it's very hard to, and there's so many moving pieces, right? There's just so many moving. I'm also surprised to see how fast the international tensions are ramping up. And I think it is because once the Ponzi scheme comes to an end, all of a sudden,

Starting point is 00:29:50 you realize how weak you are. It means that even in the past, outside forces that were considered to be weak, like these gangs or whatever, all of a sudden, they can make their way in because they're profiting off of your instability. like when Russia had their hyperinflation, it was so hard for Moscow to get even some revenue. Like, you probably know this, but Yeltsin did like organize the commission to figure out, like, why are the tax revenues not arriving in Moscow?

Starting point is 00:30:18 What's going on? Like, we can't raise money. And what had happened is that, and this is way down the line, I'm not saying this is for tomorrow, but what had happened is that these provinces, technically they were paying their taxes in kind, because, you know, the ruble is worthless. But it was so hard to oversee all that, that literally, like, for example, the province of Samara in Russia was paying taxes, quote unquote.

Starting point is 00:30:43 And what it was is they had filled a container with toxic waste and just literal toxic waste, like chemical waste, and send it to Moscow and be like, this is our payment, you know, deal with it. Or like, you would have the local construction company and they would have to pay taxes. And then the city would be like, you know what? How about you guys build us a metro system? You know, just do that and that will consider that to be your tax. So it's just, it's not the end of the world, but it is like, it is a difficult environment. The money is the blood of the economy. Of course, you and I agree. There's anemia.

Starting point is 00:31:16 There's all these problems. And so once that really hits a certain critical point, the coordination becomes so hard in the economy. And now in the world economy, it's probably the first time that we're seeing a fiat crisis on a global scale. Yeah. I don't know the details about China either, but like they're probably going to run into issues with the one. Europe obviously is going to have issues with the euro. The yen is already toast pretty much. So now I'm seeing news that it looks like France is going to need an IMF bailout, the UK the same.

Starting point is 00:31:48 Like that is. It's moving out. That's an acceleration. Yeah. Yeah, it really is. Talk to us about gold. You've covered gold quite a bit through the years. Bitcoin is still not breaking out to a new all-time high against gold, which I think is an interesting

Starting point is 00:32:07 discussion point. How do you kind of see the coming five years with Bitcoin and gold and how it's kind of treated on the international stage with all this institutional adoption happening now on Bitcoin? Yeah, this is a little pet peeve of mine. And maybe looking back, it'll be some kind of bizarre coincidence. But when I look at the Bitcoin chart expressed in gold, I see these psychological points of resistance, you know, one gram of gold, one ounce of gold, 100 grams of gold, and now one kilo, 1,000 grams of gold, we hit that point in 2020.

Starting point is 00:32:43 And now five years later, we're still at a kilo of gold. And so I do think we're going to break above that just because Bitcoin is more provably scarce than gold. There's a lot more you can do with it. It's not as geographically constrained. It's more auditable, all that stuff that we all know. And so, yeah, I do think it'll be very meaningful once Bitcoin breaks up in terms of gold. I think the next obvious target is 10, 11 kilograms of gold because, you know, 10 is maybe a psychological target.

Starting point is 00:33:11 Or maybe like, how many kilos is 400 ounces? Because I think that's like a good delivery industrial bar. That's also somewhere around that. Maybe that's 12 kilos. And then people estimate that 11 kilos of gold is pretty much parity for Bitcoin. in terms of market cap. So if we get 11 kilos, then the gold market cap and Bitcoin market cap going to be the same. So that would be an excellent next point of resistance where people just, they don't think

Starting point is 00:33:36 it'll go above that. Maybe eventually, of course, I think it will, but for the coming cycle, or for the coming 24 months, even, that might be an interesting target. So yeah, I think it's very important to look at those graphs because, I mean, I don't know if you're into technical analysis, but it's just, it's become impossible to look at long-dated charts expressed in dollars. I can't see rhyme or reason in them. They're all just going parabolic because the denominator is being destroyed.

Starting point is 00:34:02 On the gold front, I mean, it's, do you, or I guess this is the question, do gold bugs look at that chart? Or is this Bitcoiners that pretty much look at that chart? I think somehow they have to, you know, because it just, it's been such a, like I said, that one ounce resistance. That was also a three-year resistance. That was not, you know, not a small potato type thing. was a big deal. I remember, yeah, in 2014, people were really talking about coin at one ounce

Starting point is 00:34:30 of gold and this is important and meaningful. And I do think gold bugs, at least the informed ones, probably the movers and the shakers, you know, why wouldn't you? Why, because they, that's been a tradition, a longstanding tradition in the gold world is to express all kinds of asset classes in terms of gold and to look at resistance and support and those kind of things. So my bet would be, yes, absolutely. Like maybe not every retail investor, but I think the long-term, very dedicated gold investors are looking at Bitcoin in terms of gold.

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Starting point is 00:38:17 at Fundrise.com slash income. This is a paid advertisement. All right, back to the show. So something that you and I have talked about for what feels like almost a decade is this difference between Bitcoin and crypto when it comes. And I guess now that we have nation states involved and the potential adoption, Eric Trump was, I guess, on stage saying that there was some nation state out there that bought tens of thousands worth of coins. How damaging, in your opinion, is the conflation of the two for Bitcoin's political acceptance moving forward? Well, I mean, the more they are conflated, Bitcoin and all these centralized crypto coins, the more you can try and sell the illusion that Bitcoin is just another fiat currency

Starting point is 00:39:05 and that it's the same thing and that anybody can just be a victim of the endless pump and dump and dilution. Because a centralized coin, it can very easily be influenced by, political actors who do have the guns and the intelligence and everything. So even if you're like, oh, but yes, we're 10 guys, but we're spread around the world. It's like, it's not that hard for an intelligence agency to track those people down and say, hey, let's partner up, kind of like how the mafia knocks on your door as a shopkeeper and be like, let us protect you, protection rackets. So I do think these cryptocoins are going to stay in existence. I think hopefully

Starting point is 00:39:42 the separation is going to continue. I think Bitcoin dominance is just so huge now. And And I feel that people are seeing Bitcoin increasingly as a conservative investment. And they're not saying that about ether or Cardana or any of the other coins. Those are not conservative investments. So I just feel like that fits in the zeitgeist where the whole world is looking for safety. Like what is safe? What is permanent? What is universal?

Starting point is 00:40:07 What is apolitical? And Bitcoin fits that to a T. Of course, now, interestingly, within Bitcoin, we're starting to have that debate of like, hey, like, are these latest upgrades? Is that actually conservative? Should we be doing that? But I think that's just a sign of the times, that that kind of speculative mania type zeitguise

Starting point is 00:40:25 versus the newer counterculture of conservatism. Yeah. One of my frustrations with the institutions and Wall Street showing up right now is I haven't seen or heard anybody from that, from those institutions, really kind of laying out Bitcoin from, especially as they're comparing it to, Ethereum or Salon or any of these other things. They don't get into any of the tech or why it's

Starting point is 00:40:51 more decentralized or why it's more secure at all. It's just kind of like a wave of the hand. Here's Bitcoin. Here's these other blockchains. We think they're clearly incentivized to just sell product. They just want to sell ETFs that are wrappers on top of all these things. And so maybe the reason we're seeing that is they're incentivized to just kind of like not really get into it because they have more to sell, but it's... Sure, but then again, they're no longer, the Wall Street is no longer the only game in town. Like, they might believe that. They might want to believe that, but, you know, look at Tether. They're making more profit than J.P. Morgan. Yeah. Yeah. The new generation is here, and they don't need to live in New York City. Mm-hmm. At all. Yeah. Yeah. And so I think it's like,

Starting point is 00:41:32 to the extent that they will, you know, that Wall Street will just continue on this road, it'll just be digging its own grave. Yeah. You know, similar to how London was supposed to, the financial heart of Europe and everything is happening from there. And maybe there is still that to an extent, but it feels increasingly like it's a kind of a pretend thing. Like it's already gone. Like people have already given up on London. So, you know, New York has that risk as well. And I think that's a little bit of the Achilles heel that maybe Trump has is that he grew up in that environment. He has that New York DNA of just like deal making and whatever is moving. Like we want to be involved in that. And of course, there's a lot to be admired about the entrepreneurship. spirit doing the 10,000 hour type study of one particular platform or technology, that's usually not really part of the New York mentality, I would say. Yeah. Yeah, my frustration, and we talk about this on the show quite a bit, is just like when you look at the Lightning Network and you look at if Bitcoin Layer 1 is optimized for

Starting point is 00:42:33 decentralization and security and not optimized for scalability, that's, and this is the Trilema that we're talking about here. The scalability is pushed off into subsequent layers that are above it. When you do go to those subsequent layers, the scalability is the thing that shines when you get into the layer two and it still comes with the security and decentralization of layer one. And so when I'm looking at all these stable coins and we had Tether back in January say that they were going to try to use, I believe the TAPRoot asset protocol from Lightning Labs to issue Tether on Bitcoin Lightning, it's going to move faster. It's going to have lower fees. It's going to have the decentralization of the node network and not for people running a quote unquote

Starting point is 00:43:22 full node. It's going to have tens of thousands of nodes that are running and having the reliability and all of that that comes with it. And so I'm looking at it, I'm saying long term, it just doesn't make sense to me that something that has better incentives would lose. I'm assuming you agree with that, but do you and are we just impatient? Do we just need to give this more time for real world assets being tokenized on top of lightning being a better use case with no native token unlike Ethereum, Falana, Tron, you name it? Well, there's probably a bit of, you know, there's a test phase that kind of needs to happen. And I think there was a little bit of overexcignment maybe early on about lightning. I think it was not realistic to think. It was not realistic to think. that everybody would just run a lightning node and do it well enough to keep doing it. Similar to maybe early on, people thought anyone is just going to run an email server, their own email server in their basement.

Starting point is 00:44:19 So yeah, you need to kind of build that infrastructure. It does seem maybe that lightning needs to be interoperable with one or more other protocols to really become like that performance juggernaut. And that also takes time to do it well. We need people that have the knowledge and the risk appetite to invest in those companies to make it happen. So I'm not surprised it's been, I think 2016 was the lightning paper maybe. So I'm not surprised it's been nine years. Also because the real trunk of Bitcoin is that store of value property. Like that is the real kind of the root, the strong

Starting point is 00:44:56 foundation of it all. And then the branches and the leaves, like that's more retail. That's more that high speed stuff. But I do think, you know, especially now that we're seeing the middle class is kind of disappearing, something that used to be very easy, like, oh, pay $20 for a wire transfer, you know, wait for four days for the money to arrive. Maybe younger people, especially, are not going to be willing to endure that anymore or just not be able to afford it anymore. So, you know, maybe those people will just kind of become Bitcoin natives increasingly, but that's then also a generational thing. So that takes some time as well. Like, boomers are not going to run their own nodes, but they still have the majority of the money in the economy for

Starting point is 00:45:39 now. I keep saying it, but their next year, boomers are going to be between age 62 and 80 years old. So it's really kind of getting to that point where they're going to be liquidating, they're going to be gifting, you know, sometimes just to stay afloat, sometimes just to kind of do family planning. That's coming in the next five to 10 years, especially if the pain in the real state keeps increasing. Yeah. Speaking of pain, what institutions or industries do you think will be most disrupted coming in the next five years, 10 years?

Starting point is 00:46:14 Within Bitcoin? Within Bitcoin. And also, I think when you combine that with AI, like, what are we in for coming here in the next five years as far as disruption goes? Well, I think from the highest possible level, I think, yes, I do think new robotics is going to be huge. Like, you're just seeing what they can do. Like, really, they can get into human environments and just take over. Like, the work that I used to do as a job student in a factory, like, you know, you can just put a machine there. But at the same time, you know,

Starting point is 00:46:45 they are maybe more vulnerable to supply chain disruption, those kind of things. Like, you have to maintain the rowos, you have to get all the parts. And then what if there's trade wars happening where, you know, there's delays? Like, if you wanted to do business in Latin America, you you were facing all those problems even in the past 50 years. So I think it's important to not be too rose, you know, put your rose color glasses on too much of like, oh, robotics is going to solve it all,

Starting point is 00:47:11 especially if, you know, look at the U.S., there's so much stuff that is not being produced here anymore. And maybe we'll lose access. So I don't think the boom in blue collar jobs is, is going to be stopped by AI or robotics anytime soon. Like,

Starting point is 00:47:26 definitely the next 10 years, I think we're just going to see. see more and more. People get into welding, get into all these kind of productive production type jobs, maybe go back to agriculture to an extent. Also, because the core of the economic machine is just going to be focused on that more. Like, people just won't be able to afford so much a cruise ship or a Netflix or those kind of things. It's tightening the belt. That's kind of the macro idea. And then, sorry, what was the question? Oh, yeah, what new things are coming up? Yeah.

Starting point is 00:47:56 I do think mining an AI is a marriage made in heaven, like these data centers, like they can just switch from one to the other if they're close to a cheap energy source. If they have political stability on a relatively around them, they can really flourish. And we can even see new towns, new cities be built around that. I think that's going to be huge. I think there will be new financial centers around the world. I'm not really sure where yet. It's a little bit kind of wait and see. I was looking into maybe this sounds a bit overly dramatic.

Starting point is 00:48:25 But when Rome fell, wealthy people elites, they had to go somewhere. And so there was a flourishing of this city called Ravenna. And like, it was kind of in the area of Venice, but it was protected by the coast on the one hand. And on the other hand, the mountains. And then also the river, I think it was the Po River. So they kind of built the city in a swamp. So very kind of unintuitive, like, oh, you know, it wasn't the obvious answer, but it just kind of gradually became the answer to these bigger centers.

Starting point is 00:48:57 And so who knows where, I think in the U.S., there's a lot of room. So who knows, maybe it's the Appalachian Mountains or maybe, I don't know, like, you know, and it doesn't mean that everyone's going to live on a farm or something. Like, we could actually have cities that start to flourish in unexpected places. I'm just kind of open for that. That's why I've been trying to follow Argentina as well. Like, that might be an area where a lot of capital could find its way eventually, if they can maintain their stability in some way.

Starting point is 00:49:25 I mean, people have been betting on a Salvador to an extent. I don't know how sustainable that is. But yeah, so because there's so much inertia with these big centers that are built around a different philosophy that I don't think it'll be very easy to just say, we're going to revive New York. You know, we're just going to pivot New York and it's going to be, I don't know, there's just so much inertia there. It seems like the simpler, the more opportunity there is.

Starting point is 00:49:50 Right, because if you want to be in from, if you're a Bitcoin or like, let's punt some money there and we'll see, you know, let the younger people build it out and then we'll kind of join them. And yeah, and then specifically industry wise, I mean, I've long been bullish on the insurance sector. Like I think it also fits in that people want stability. There is that more conservative mindset nowadays. So how do you protect your family? It's going to be life insurance, deposit insurance, those kind of things. Very boring sounding, but an insurance sector that's built around paying out claims. in dollars might not be sustainable if we're going to get 30, 40% annual dollar inflation.

Starting point is 00:50:26 So I think that's really going to need reinvention. And it's already happening. You know, we're starting at the beginning of that. But yeah, I'm curious what areas are you looking at? No, I just, your point on if there's natural resources, particularly on the energy domain, that's huge just because of the data centers and the Bitcoin mining and just kind of what energy means at its core, right? But you also have to have the policy and the government domain that's on the wrapper on top of that that is wide open saying, yes, come here.

Starting point is 00:50:57 Like it's whatever you can build, whatever you can capture and kill, it's yours kind of thing. And when you look at cities that are very established, you mentioned New York, right? I look at the policy and procedures of some of these cities. And I'm saying they are going to have a very hard time competing, I think, in the coming decade or two, just because they're just not going to be agile to how fast all of this is changing. And like what incentives they need to be putting in place to attract the future businesses and what they're looking to do. And so I think the simplicity, if it's got a lot of energy and it's got a government with policies that are like, yeah, come on in here and do what you will, I think they're going to crush. I think they're going to be really like far out in front. And I think Singapore has been a great example.

Starting point is 00:51:48 Something that's already been shown and proven. When entrepreneurs would come to Singapore, they would be so surprised that like all a sudden you get a visit from the government and it's not like, you know, how can we extract all the possible value out of you? What can we do for you? How can we help you? What do you need? We want you here.

Starting point is 00:52:06 They would even, the Singapore government, they would travel abroad and like have these diplomatic missions. I remember early on visiting Katz and Matthew Wood in her little New York office, this is like before they blew up. And she had to cut short my meeting because she was meeting the Singapore sovereign wealth fund who was like, wow, coming to visit. Yeah. Yeah. Is there out there doing outreach, right? Yeah. Because it's a young, that's a it. It's a young place. You know, like the founders are still alive. Yeah. Yeah. Yeah. Yeah. I think that's going to be huge. Hey, so at the end of your report, you compare Bitcoin to the power of the piece. And you have this artwork. channeling technology towards order and harmony. And Bitcoiners are known for saying Bitcoin solves everything. But in this case, do you genuinely believe Bitcoin can reduce global conflict? Or is this just inspirational hope?

Starting point is 00:52:57 No, I do think so. Yeah, I really do think so. I can reduce global conflict. It's an incredibly powerful tool. And also, it's going to be the stage for this enormous wealth redistribution that we're seeing. So we're basically going to have new kings that are going to be made. And then of course it's up to those kings to make it happen.

Starting point is 00:53:18 Like you can't just assume they're going to be great guys. Like we're going to have to kind of try and be vigilant. And because to an extent, it won't just be the kings who decide. Like, I'm the king now. Like it'll be because there is a critical mass of people who believe in them and their project. And so that's why when I look back at that edge from Wiedix from back in the, I think it's like the late 1500s, they don't just show, technology and being like, oh, swords and the plowshares, and then we had this big furnace in the middle.

Starting point is 00:53:47 The main characters are the virtues. So you see like fortitude and justice and they're personifying the moral virtues that are needed to make all that happen. Yeah, you see in the sky, you see peace and justice. And so yeah, it has to be a collaborative effort. We're going to have to, you know, to the extent that we're critical of previous generations of like they messed up, it wasn't just because they had the wrong technology, it was also because there was a laxness, there was an indifference towards universal moral values. And so I think that that's why, you know, trying to go back to the core or the origins of Bitcoin, the cypherpunks, that was a really moral project. And so I think that's the rabbit hole to keep going into and or the source to keep tapping

Starting point is 00:54:30 into it. And I think then libertarianism probably is not enough. Like just this, I think property rights is very important, but it probably won't be enough to really kind of have to have have a real renaissance, like a kind of a revitalization of society. But it's a fantastic start. Yeah. I love when you put some of this artwork out there. You are a master at finding awesome stuff from the past to kind of show the correlation and being hopeful for the few.

Starting point is 00:54:57 What are the rest of a master than the actual artist? But yeah. All right. Well, Ter, we're going to have links to the report. Anything else that you want to highlight? And we'll have a link to your Twitter account where you're active or your ex account. I'm still calling on Twitter. I mean, I have a couple episodes still coming out on my podcast, but I'll publish that. No, I mean, I think it's just, it's still exciting to be in the

Starting point is 00:55:20 Bitcoin ecosystem. And I think in a way, we were often annoyed at these cycles, like people are so ignorant and then they get over excited. But still, it's been a great gym to just kind of use personally, to not get overly invested in the price too much and try to keep a long-term perspective. So I do feel grateful for all that. And then, you know, it's interesting how with the Bitcoin development, just to see, again, that moral debate is like, what is Bitcoin actually about? Is it about these financial transactions and storing them as best as possible in a very lean ledger? Or is it an agnostic ledger where we should be able to put anything?

Starting point is 00:55:58 Like, the tools that people use to debate are, yeah, I mean, superficially, it's all technological arguments. But ultimately, it's about that moral argument of like, okay, what does it? this really about? What is the higher goal of this entire project? So that's just very fascinating still and important. Yeah. Yeah. We'll have links to the things that we mentioned there in the show notes. TUR, thank you so much for making time. And I obviously look forward to the next time we can chat. Always a pleasure, Preston. Always a pleasure. Thank you for listening to TIP. Make sure to follow Bitcoin Fundamentals on your favorite podcast app and never miss out on episodes. To access our show notes, transcripts or courses, go to theinvestorspodcast.com.

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