What Bitcoin Did - The Bull Market & Bitcoin vs Real Estate | CJ Konstantinos

Episode Date: July 11, 2025

CJ Konstantinos is the Founder of People’s Reserve. In this episode, we discuss Bitcoin’s rise as digital gold, its role in revolutionising real estate and finance, and why it’s poised to become the ultimate pristine collateral. We get into the maturation of the Bitcoin bull market and the potential for Bitcoin bonds to recapitalise economies. CJ also discusses the importance of free market money, the risks of financialisation, and how Bitcoiners can vote with their money to drive a peaceful financial revolution. We also cover the implications of using Bitcoin as collateral for mortgages, the dangers of liquidation risk, and why MicroStrategy could become a central bank of the digital economy. THANKS TO OUR SPONSORS: IREN: https://www.iren.com/ RIVER: https://river.com/wbd ANCHORWATCH: https://www.anchorwatch.com/ BLOCKWARE: https://mining.blockwaresolutions.com/wbd LEDN: https://www.ledn.io/ Follow: Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny CJ Konstantinos: https://x.com/CJKonstantinos

Right now, Bitcoin is at the very beginning to be on parity with gold. You're going to have to have over $20 trillion market cap, which is a solid 10x from here, which is a million dollar Bitcoin. And this ongoing transfer of wealth from this paper printing infinity world of fiat experiment units of currency being transferred, that wealth being transferred into the absolute digitally scarce digital economy with Bitcoin being the reserve asset. That's what we're watching. now. I think 150 is next. And after we get through that, I think well above 200 is next. You marry the too big to fail narrative with the ability to print, and that is the root of our problem. This is a matter of national economic emergency. They've married their business model to the traditional yield curve because they forgot that this isn't just a monetary revolution.

It's a financial revolution. C.J. Good to see you, man. I'm excited for this podcast. I think we couldn't be doing it at a better time. We've got Bitcoin at a basic all-time highs. It did hit an all-time high a few hours ago. Things are good, man. Thank you for coming on the show. Oh, thank you so much for having me. It's a pleasure to be here. It's an honor to be here. Well, it's an honor to have you. So I want to get into all sorts with you today. I know you're kind of like the Bitcoin collateral guy, so we're going to cover all of that. But before we do, can we talk a little bit about the market? Oh, yeah, absolutely. So what, this has been a funny

ball market to me. I think I maybe came into this with being a little bit too excited, thinking this was going to be like 2017, especially like in the early part of the cycle when it looked very similar to 2017. And I've said it before to a couple of people. It's felt slightly underwhelming. I don't know if this time it's just moving slower. Like what's your general take on what's happening in Bitcoin? Yeah, this is a great question. I honestly believe that the marketplace is maturing. So we've been used to, you know, the having cycle, they call it, with little bumps in between. So you get 210,000 blocks you get your having, but every 2016 blocks, you get your difficulty adjustment. And based on that issuance and

based on cost of production, we've seen cycles go up and down. But with the advent of Bitcoin Treasury companies, the strategic Bitcoin reserves, literally nation state mining and accumulation of Bitcoin, the marketplace is maturing. And the liquidity pool, the global liquidity pool is expanding as such that the downsides are becoming more dampened, and then the upsides are also becoming a little bit more muted. It takes more liquidity to push that price up. But I think what's actually happening is we're moving out of a commodity cycle where the cost of production plays a key role in the price discovery of the underlying asset. And we're actually moving into a money cycle or credit cycle where the amount of leverage within the system actually plays a bigger

a role than the cost of production because the premiums now have been pushed so high relative to cost. And it's and it is the, it is the maturation of the asset class that that transforms us. And to me, you know, when I first started, you know, Bitcoin was magic internet money. It was, it was, it was just a pet peeve type thing, like little side joke. Um, but it's really evolved and matured and and become known as digital goal. And right now, Wall Street is monetizing the asset class as digital gold. That's the narrative. So as usual, Wall Street is probably a full cycle behind what's really going on.

And after the monetization of the asset class comes the financialization of the asset class. And I like to look back at like in 71 when they remove gold from the dollar, Michael Saylor calls this land banking. Real estate became monetized. And that drove a premium into the asset class. But then it became financialized with mortgages, second mortgages, home equity, lines of credit, and all the different financial products built up around the asset class, which drove the premium even higher. So right now, Bitcoin is at the very beginning of the premium being driven into the asset class in the form of its monetization as digital gold.

Now, the good news is to be on parity with gold, you're going to have to have over a $20 trillion market cap, which is a solid $10x from here, which is a million dollar Bitcoin until you're actually digital. gold and the world recognizes you and prices you as digital gold. And that's the real opportunity right now in the marketplace. Some people are like, oh, I wish I bought 74. Oh, I wish I bought earlier. I wish I bought sooner. We are so early on. We're like in year 16. Go look and see how long it took to do go from seashells just to metals or from metals to banking with metals. The amount of time that's passed for Bitcoin and where we are is breathtaking. It is truly, it's excellent. faster than the internet did. And this ongoing transfer of wealth from this paper printing infinity world of

fiat experiment units of currency being transferred, that wealth being transferred into the absolute digitally scarce digital economy with Bitcoin being the reserve asset, that's what we're watching right now. So although it might be a little bit more boring because we're going up, we're getting like these, I like to say it like this, like we're getting a repricing and then we're we're getting a distribution. So for anybody out there who's familiar with those terms, the way big, long-term allocators and accumulators accumulate an asset, because they still don't look at Bitcoin as like the engineered money, as the savings technology, they're still using the dollar as their

unit of account. They'll buy it at 60,000. It goes to 100,000, and they'll distribute. And then after they're done distributing, they'll re-accumulate. Then it gets priced from 100,000 to 120 or 150,000. They'll distribute and then they'll reaccumulate and then it'll get repriced and we get more of like this stair step of accumulation repricing distribution accumulation repricing and it creates a stairstep ladder versus that vertical like parabolic thing that we saw in 2017 and in previous having cycle so i chalk it up to the maturation of the marketplace bigger players coming in longer term allocators coming in playing that game that they typically play in all types of asset classes, which is to accumulate, distribute, re-accumulate, reprice. But the good news is that the downside, I think,

is going to be muted. What was the biggest pullback so far, I think was around 30 percent. You know, Bitcoiners are used to 50, 60 percent downturns and 80 percent bear markets. So I think this is the new normal. We get that 20 to 40 percent drawdown through distribution and re-accumulation. and we get a massive repricing. And with each repricing, I do believe it's going to become more volatile. I think some people are thinking 120s next, I think 150's next. And after we get through that, I think well above 200 is next. And we might not get that full on bare market that everybody is expecting.

You know, everybody is, everybody might sell 210 or 220 thinking, oh, it's going to come back to 70. But maybe it only comes back to 170. And then we continue to the next stair step. So I think there's going to be a lot of people caught off sides as the dynamics and the market structure mature as bigger and bigger players get into the marketplace. And it's exciting to see. It's very exciting. I mean, you said loads in there that I kind of want to ask you questions on.

But at the very start of that, you said that Bitcoin started as this magic internet money. And when I came into Bitcoin, that's what it was. It was this like, it was weirdos on the internet talking about freedom money. And that was really important to me. And it's still really important to me. Do you think in this kind of financialization of Bitcoin, we can retain the freedom money aspects of it? That is a fantastic question that Bitcoiners are not asking enough. And I think we got to be careful, especially through the financialization of the asset class. I think every Bitcoiner understands that the root of the problem is fractional reserve practices.

Like fractional reserve practices that allow for the creation of currency, it's out of thin air is like the definition of the problem. So you have to be really careful through financialization because Bitcoiners have to go back and they have to read what Hal Finney said. Now, Hal Finney has a lot of popular posts. You should read every single one of his posts. In one of his more popular posts, he calculated the potential of Bitcoin's value back when there was no price, back when there was only a few cents of computing.

cost to mine big blocks of coin-based Bitcoin. And he's saying, hey, for a few cents, we're earning these blocks. If you calculate 20 million and you divide the world's wealth, well, hold on one second. Why did he use 20 million coins instead of 21 million coins? Interesting, right? Very interesting. How did he know those million coins were going to not be back in circulation? I think Hal probably was Satoshi, in my opinion.

But Hal had another interesting topic, which was not just to calculate market cap with 20 million coins, but also what he thought about Bitcoin banks. He thought that where this led to, if Bitcoin wins and Bitcoin succeeds, we move back into a free banking error. Because ultimately, Bitcoin is a free market money. But I think what a lot of new Bitcoiners don't understand, either because they are just now starting their journey, or they're so tied up in life they haven't had time. to go to the deeper levels of the rabbit hole, but you can't have free market money

when a small group of men can state the price of the money. So when a small group of men can state the price, and the price of money is interest rates, right? So when a small group of men can say what the interest rate is with their mouth, and they can state that rate, and they can use different policies to anchor that rate, and they can control the price of money, well, since money is 50% or 50% of every single child,

transaction, controlling the price of money is controlling every single transaction. So by definition, you cannot have free market money when a small group of men can tell you what the price of money is. Can you imagine if Bitcoin wins the battle and then as a Bitcoiner, you want to post-Pers collateral and then a small group of men tells you what the price is to borrow against your Bitcoin, that's not free market money. And we're, we are now kind of heading down that path where Bitcoiners are like, that's it, we won, we're integrating into the system. No, you cannot have free market money without free market interest rates. This is not just a monetary revolution.

This is a financial revolution. That means you need a true free market yield curve. And that's why I love Bitcoin. That's why I'm so passionate about Bitcoin. I see the digital economy, the only economy in the world that has no debt. The only economy in the world that has, no one power player or controller that can come in and say how the game is supposed to be played or what the rules are supposed to be. It's a consensus mechanism through proof of work. It's the

perfect mechanism for consensus. And we run a node to broadcast our feelings and to cast our vote. But in that digital economy, we have all of these defy applications, which right now are just built on test nets. Like, let's be honest, it's all just test nets. Everything will converge Bitcoin. Everything will be built on Bitcoin. And it probably won't be called defy. It'll be called BitFi. And rightfully so, because Bitcoin is the only form of pristine collateral in the world. Nothing else can compete with it. And if anything tries to compete with it, it's a scam. So having that understanding and then seeing that we have now, this digital economy, we have this domain within our financial world where interest rates are not stated and are not anchored

and are determined by the supply of money, the demand for loans, and counter party risk. This is for the first time in thousands of years that humans have had a domain where the price of money is determined by the free market rather than a centralized entity, rather than a small group of men stating

and anchoring the interest rate. So Bitcoiners need to, I think, embrace that narrative, take hold of that narrative. And remember, it's not just about getting your local government to buy Bitcoin. No, it's a, about how Finney's vision, the vision that he had before Bitcoin even had a price, that there will be Bitcoin backed banks. Those banks will distribute their own currencies. Those currencies will be a

liability of that Bitcoin backed by the Bitcoin. Interest rates will fluctuate between counterparties and this free market banking ecosystem will be a healthier, although that has the potential to create inflation with Bitcoin keeping those players in check on the balance. sheet will be a much stronger and healthier domain, not only because of Bitcoin's integration, but also because nothing is too big to fail. If you're in a Bitcoin world where Bitcoin is the reserve asset and you can't print Bitcoin and you made a bad decision, you're going to fail no matter how big you are. And that's so important. We don't get that in today's economy. We don't get that in today's financial system. That is that you marry the too big to fail narrative with the

ability to print and that is the root of our problem. So we want to eliminate the ability to print or at least transfer the ability to print from from entities or banks that are backed by nothing to entities like I believe micro strategy and Michael say I believe Michael Saylor in the long run will turn micro strategy into a central bank of the digital economy. And then they will tokenize oil and other commodities. They'll tokenize securities. They'll tokenize any type of currency that they want. They'll issue their own currency, and that currency will be backed by the Bitcoin on their balance sheet.

And the interest rate at which micro strategy as a central bank of the internet economy borrows from, say, people's reserve as another central bank of the internet economy, that interbank lending rate, that creates the front end of what today is the federal funds rate, the overnight banking rate, is a stated rate, an anchor rate. In the future, in the true free market economy, where Bitcoin is the reserve asset, that federal funds rate, it will be replaced by an interbanking rate of Bitcoin banks. And the rate at which micro strategy and people's reserve borrow from each other will determine the overnight rate and formulate the front end of the free market yield curve.

And Bitcoin powered financial products will formulate the rest of the yield curve. And that price will be discovered in true free market fashion, not with stated and anchored interest rates. So sorry to hammer that one home and go on a little bit there, but more people need to be asking that question. No, stay on the rant, CJ. You're getting me fired up right now. Do you know Ben Prentice? This is a little bit of a tangent, but he's one of the guys who is behind what the fuck happened in 1971, that website. He's been a producer on this show for a long time. Something you said at the start of that made me think we should do another show at some point with the two of you, because he actually thinks that fractional reserve Bitcoin is going to be good

for Bitcoin. He's a really smart guy, like well-read in Austrian economics, so maybe we'll do that at some point. But I want to get back to the point. When you state how the Fed and how central banks work in the sense of them just dictating what the interest rate is, it's unbelievable that people just believe this lie, that this is how money actually works. I think like the paradigm shift of people understanding Bitcoin is going to be monumental. I don't think. I don't think, I think a lot of people are going to be ready for this. I do want to go back to something you said earlier as well. You were talking about the monetization of Bitcoin

and how Wall Street's monetizing the asset. Can you explain what that actually means? Yeah, absolutely. So the monetization of the asset is just recognizing that it is actually a money, number one. So it's not just a medium of exchange. And I think that's how a lot of Wall Street was looking at it, which is why they were so confused.

so confused. Like at first, they're like, oh, Bitcoin is competing with the dollar. Well, no, the dollar is a currency and Bitcoin is money. So here we are again, going back to education. If you ask people on the street, hey, do you know what the difference between money and currency is? Nine out of ten people are going to be like, what do you mean? You mean a dollar? Like a dollar is a dollar? They don't understand that money is a store of value and that currency is just a medium of exchange. Do they not understand that because the dollar isn't a store of value. Yeah, I mean, I think, I think they don't understand it because number one, our education curriculums are an embarrassment. Just look at our, just look at our rankings. I mean, this is what

happens when you pay your teachers, like they're babysitters. And that's something we're passionate about at people's reserve, creating our Bitcoin bond product. We want Bitcoin bond products to power teacher compensation and pension plans. Not only teachers, but fire, EMT, police. you can't pay these people like they're not important or otherwise the society is going to turn into what it has you're going to get teachers who act like babysitters when they get paid like babysitters it's just it's just pure stupidity and common sense economics and that's what we need to return to so i i hope people don't think i'm a conspiracy theorist but i believe most people in bitcoin now understand that most conspiracies are are true and and there's only a few

conspiracies that are not true. Well, one of the conspiracies that I think the data shows is true is that our education system has been weaponized. And those curriculums that have put into, been just devolved, their devolution over the years, have dumbed us all down to the point where we can't, we don't even know the difference between most people think they can save dollars. Most people think, here's another one. Most people think debt is bad. If you tell people, oh, yeah, I have debt. They're like, oh, you better pay that off. Yeah, some debt is bad. Let me, yeah, let me make that more clear.

Variable rate debt like on a credit card, very bad, very dangerous. Fixed rate debt on like, say like a mortgage, like if you got a 2%, 2.5%, 3% mortgage over 30 years, that's really good. Yeah. I mean, because the interest rate that you're paying is lower than the inflation rate. So what you've been able to do is you've been able to pull forward your purchasing power. and you've been able to capture profit because the rate of the interest is compounding at a rate that is lower than the rate at which prices are increasing. So you were able to get more for your money right then and there versus spreading it out over time. So in real terms, in terms of purchasing power, fixed rate debt over a long period of time is actually an asset.

But you're right. Short term debt with high interest rates with interest rates like credit cards that are 20 and 30 percent, very bad. don't want to take on that debt at all. But when you use the more sophisticated tools and you get a fixed rate, most people still think like, oh, man, I can't wait to pay off my house. You know, like, oh, I just got a bonus at work. Should I pay off my mortgage? I'm like, oh, my God, when I get that question, I feel so bad for that person because they don't understand that, look, there's a reason the bank doesn't keep the mortgage on your book, right? The bank writes the mortgage, packages them together and sells them off to Freddie and Fannie, who have over $7 trillion of it on their book,

because the bank doesn't want the risk on their book. They got to package them all together because they're too risky individually. Then when they package them together, it slightly mitigates the risk, but because the interest rate is so low, the real rate of return is negative. So they sell them off as a cash flowing vehicle to the marketplace, fixed income marketplace, who Michael Saylor's demonstrating is starved for a real rate of returns and thus eager to see what continues to come out the financial engineering Pandora Box that he has gone over there in order to guarantee returns that outpaced price increases. But it all ties together.

It all goes back to education. It all goes back to monetization. What is monetization? It's the realization that Bitcoin is not just a store value, but a medium of exchange when it needs to be. Now, it's a low velocity medium of exchange, right? You're not going to spend it on your coffee. You're not going to, it's not going to be good.

going back and forth. It's a lot like, isn't it interesting? Gold needed a L2, right? And the perfect thing for gold was paper. So gold was the collateral asset backing the circulating paper liability units and you would be able to turn those paper. But the paper wasn't the money. It was just a currency. It was just for the medium of exchange because you can't shave the gold. You can't break the gold down, but these paper units broke it down. Right. And Bitcoin is in a similar case where I think lightning actually does a really good job to help increase velocity, right? Lightning breaks it down and makes it easily sendable like in seconds. So that's a really good way to break it down. But what you were mentioning earlier with fractional reserve Bitcoin, that makes sense too. Because you have to,

you have to, there has to be some type of mechanism, whether it's a privately issued currency. And that's what Hal Finney believe that Bitcoin banks would issue their own currency units. And those currency units would be backed by the Bitcoin held on their balance sheet and priced in Bitcoin. And that's what we believe here are people's reserve. Everything is going to be priced in Sats and everything is going to be settled on Bitcoin. But that doesn't mean every single type of value transfer is going to be facilitated by Bitcoin network itself. It's the settlement layer. It's the ultimately it's the unit of account. And monetization is what accelerates us beyond just store value, beyond medium of exchange, but to unit of account. Realizing that it is a money

and I'm going to account for my wealth with this money. And that's what Wall Street is realizing, and that's what's going to bring Bitcoin to a million dollars. This episode is brought to you by Blockware. Would you rather have one Bitcoin today or two in a few years from now? Silly question. Well, Bitcoin mining is a tried and true method to accumulate more Bitcoin, and over a few years, it can even outperform a normal DCA.

Blockware's mining as a service enables you to start mining Bitcoin without lifting a finger. Blockware handles everything from securing the miners to sourcing local power and configuring the pool, they do it all. With multiple data centers across the US, blockware is the most reliable mining partner in the industry, and mining is one of the most efficient ways to acquire Bitcoin. So click the link in the description to get started today, and if you tell them what Bitcoin did send you, you'll get one week of free hosting and free electricity for every hosted miner purchased. So click the link in the description or head over to blockware solutions.com. This episode is brought to you by River. This episode is brought to you by

River. In every ball market, there's always a bunch of new investors and with it, a flood of new companies and products and promises. But if you've been around long enough, you've seen how this story ends for a lot of them. Some cut corners, take risk with your money or just disappear. That's why when it comes to exchanges, I only recommend River. They deeply care about doing things right for their clients and they're built to last with security and transparency at their core. River is also the only Bitcoin-only exchange in the US with proof of reserves. So to open an account, go to river.com forward slash WBD and earn up to $100 in Bitcoin when you buy. That's river.com forward slash WBD.

You know when you talk about the conspiracy of like the education system being flawed? I mean, it clearly is flawed. Do you think that is, I love a conspiracy theory by the way. I just did a show with Matthew Pines on UFO, so you're in the right place. But do you think that is an intentional weaponization of the education system to keep everyone as sort of good little worker bee? or do you think it's just a degradation of another institution? I think it's a combination of both. I think you have good players and bad players within the system,

but the system is so compartmentalized. Just look at what's happening now. Just the other day, a reporter asked Donald Trump, who, without Donald Trump, nobody would say fake news. Nobody said fake news except conspiracy theorist until Donald Trump came on the scene. And he started waking people up and it's fake news. fake news.

But the same news went to him and said, what's going on with Jeffrey Epstein? What's going? And then Trump says, why are you asking about Jeffrey Epstein? Well, what do you mean? Why are we asking about Jeffrey Epstein? Because there's some things that have gone on. There is material evidence and there needs to be transparency. This is like the perfect example of what I mean.

Good actors, bad actors. Some of it gets lost in translation. No, you know, how could Trump say such a thing? when he's the same person that brought all the attention to the fake news. And now they want to use fake news to cover it. The thing that came out with them releasing the video and the being a minute missing is just the most insane thing I've ever seen. Like, just don't put a video out. Did you see the AI video?

Someone made an AI video. They're like, here's the one minute of missing tape from Epstein's cell. And it's just Hillary Clinton, like, walking out the door. Amazing. I mean, I could do the conspiracy thing all day. Let's stick with the plot. So you think micro strategy becomes essentially like a free market central bank in the future. I could totally see him trying to turn that into a Bitcoin bank.

Is this a return to the free banking era? I think that is what we're seeing. And I think if Bitcoiners embrace fiat fractional reserves and then take their Bitcoin to those very same people that they're pointing their finger at and saying that those people are the problem, those people are enslaving us with debt slavery, those people are committing usury, those people are printing the currency units in partnership with the government and with other entities, those people are empowering the cantillionaires, but I'm going to bring my Bitcoin to them and post it as collateral with them so that they can earn interest off of me from my savings.

What? That sounds very hypocritical. That sounds like you haven't taken that much of a deep dive into what this movement is about. Like we said earlier, this is not just a monetary revolution. This is a financial revolution. There's a reason that they say, be your own bank. And that's so that you don't have to be dependent upon the existing infrastructure and systems. That's why smart contracts were created. That's why we see the test nets the way they are now.

They'll eventually converge on Bitcoin and we'll have BitFi with Bitcoin as a pristine collateral and smart contracts through virtual machines built on top of Bitcoin, settling in Bitcoin, with Bitcoin proof of work security and transaction finality. That's what this movement is all about. And you have to get behind entities like micro strategy, like meta planet, like people's reserve, who understand what we're doing here and understand what the mission is. And you have to vote with your money. The only vote that you have that counts, in my personal opinion, is the vote you make

with your money. No other vote that you take in this world actually literally counts. or is counted accurately. Maybe the vote that you can make with your feet in terms of just leaving a jurisdiction. Yeah. The vote with your feet, with your actions, and the vote with your money.

They're the only two ways you can truly express yourself in this world. I firmly believe that. And for some Bitcoiners to claim victory or to bring us off the path of where we came from and start to partner, like at People's Reserve, we have set up an infrastructure where we have a private fund and we go and we source

liquidity providers to participate in our fund so as investors in our fund they provide zero cost capital and then since we have zero cost capital we're then able to turn around and loan that money to bitcoiners at whatever rate we deem is necessary to generate the proper return on the funds but that's a really important concept because when you look at the rest of the marketplace, what are they doing? They've gone crawling back to the cantillionaires on their knees, begging for a credit line. Oh, can you please give me a credit line at 7% so I can flip it to my customers at 10 and 12 and 15% and 16%. Yeah, the guy who walks into a bank and makes a promise to pay for 30 years and it's backed by nothing but proof of promise will give him 6.5%.

But you posting Bitcoin collateral and you being over collateralized, no promise required, 16%, 14%, 12%. That's bat shit crazy. That doesn't make any common sense whatsoever. Why are they doing that? Because they've married their business model to the traditional yield curve. Because they forgot that this isn't just a monetary revolution. It's a financial revolution.

This isn't just about free market money because if you want free market money, you need free market interest rates. You can't allow your business partner to tell you what the price of the money is or else you're not going to be able to redefine the risk-free borrower as the Bitcoiner. You're not going to be able to restate or at least offer free market interest rates based on the drastic risk mitigation of Bitcoin being a pristine collateral. I mean, that's the good news, though. I think LPs are waking up. And, you know, when I go talk to these guys, some of them I go in there and I'm like, hi, how are you? They know, they know I'm there to talk about Bitcoin. They're like,

son, I've been in markets longer than you've been alive. Let's make this a quick one. Right? And they think I'm going to talk to them about investing in Bitcoin instead of actually investing in a fund that lends to Bitcoiners. And then after, you know, some of the light bulbs go off, I tell them, look, you loan money to the government. They give you a cash equivalent. You're holding this cash equivalent over that period of the loan. In the meantime, they are printing more of those cash equivalents. And they are printing them faster than they've ever printed than before. So the collateral that you're holding is going through massive supply expansion. and thus at the end of the loan, when you get paid back your principal plus interest,

what you can buy with that cash equivalent is drastically lower than what you could have when you just lent the original money. Forget the principal plus interest. You could just spent the principal and got more goods and services or more assets than you can at the end of the loan with principal plus interest because the interest isn't paying at a rate that's higher than the inflation rate or higher than the rate at which prices are increasing. And I tell them, look, Why don't you lend that? You talk about diversification, diversification. Well, I don't want, I'm not here to talk about diversification in your investment portfolio.

Do whatever you want when it comes to investing. You invest to add risk, analyze risk as you'd like. But in your lending portfolio, you lend to mitigate risk. So in your lending portfolio, how are you diversified? Oh, well, I'm lending to the government because I want risk-free cash flow. And I'm lending to some municipalities because I want some tax-free cash flow. Okay. But you know what? You need to further diversify. You need to add Bitcoiners. You need to lend to

Bitcoiners. Why? Because the collateral that they give you, it gains value over time. It cannot be diluted. There's only 21 million Bitcoin. They'll never be any more Bitcoin. And then as they continue to dilute those cash equivalents, the purchasing power of your collateral increases over time. So when you lend to a Bitcoiner, the loan becomes less and less risky over time. When you lend to the government, the loan becomes more and more risky over time, especially if we go into a random liquidity event, like a COVID or a bank term funding program, or big beautiful bill, or deficit budgets increasing as they have. So I think the LPs are waking up and they're starting to realize, yeah, you know what? There is a lot of, we do need to analyze what risk means. And looking at Bitcoin

as a de-risking asset is not even part about monetization. That's the part of the financialization. That's the next step, right? Like the financialization of the asset class is everybody waking up and realizing, whoa, Bitcoin is not just like the perfect form of money. It's also the most pristine form of collateral. And if I want to lend to somebody who I would consider risk-free, I'm not considering the person with the printer risk-free

because they're diluting the collateral they're handing me. The Bitcoiner can't dilute the collateral. The Bitcoiners' collateral gains value over time. And then even further, when you cross-collateralize that collateral, with real estate, now you're at the true risk-free point. And that's, again, education. We need to redefine risk-free borrower and redefine risk-free interest rate. And we're not going to be able to redefine that rate or borrower if we marry our business to the traditional yield curve.

And Bitcoiners need to embrace this narrative, understand this narrative. And just as strongly as we teach that you should huddle Bitcoin and never sell Bitcoin, especially right now in the middle of the ongoing transfer of wealth. You should teach that you don't trust people who practice re-hypification. You don't trust companies that practice fractional reserves. You don't trust these types of setups and you align with your feet.

You move from one platform to another and then you vote with your money and you use the products and services of the platforms who are moving forward what Bitcoin really is and what this revolution is about, which is not just about becoming rich by holding an asset.

It's about freedom. It's about having a better future for our kids and our grandkids and our great grandkids where a small group of men cannot dictate whether or not the value of their time and labor should increase or decrease. The free market itself dictates that value based on the contraction or expansion of the global economy. That's what this movement is about. And you must vote with your money and your feet to support those people who understand what's going on. I'm so bullish, CJ. This is great. So you mentioned how kind of real estate fits into this there, just briefly. But can you expand on that a little bit? Because one of the most surprising to me, at least, pieces of news that came out recently is Bill Pulte, who's director of the Federal Housing Association, something like that. He came out and a couple of weeks ago, he was like, we're looking into the idea of using Bitcoin for mortgages. And then a day later, he was like, okay, let's do it, let's go. So how big news do you think that is? I think that's huge news. It's a great first step. Now, I think there was a

little bit of confusion in the marketplace because what the order was is that if you're a Bitcoiner and you have been a responsible saver of the apex asset on the planet, then that should be considered when you go to get a loan. If you went to go get a loan before Pulte so ordered Fannie and Freddie to take in, they called it cryptocurrency wealth, but really it's Bitcoin wealth. And you went to the bank and said, hey, look, I don't work. I don't work. I don't know how else to say it. Like I, you know, I have no taxable income. However, uh, I bought Bitcoin when it was $150. And I have nine digits of wealth. They wouldn't care. They would say we, we don't care. It doesn't matter that you have $100 plus million of Bitcoin because we don't account for that.

We don't take it into account. It means nothing. Your credit score is more important than that wealth. It might as well just erase it off your balance sheet like it doesn't exist. So that's just a crazy concept right off to start to begin with. So I think that's what this news was about. This news was about getting rating agencies to understand that, yeah, beyond a credit score, you can look at a person's balance sheet.

And whatever's on that balance sheet can strengthen their credit score. It's not just the proof of promise and whether not this person was able to maintain those credit promises over their financial history, but also the wealth that they accumulated. And it doesn't make any sense

that somebody could, you know, Michael Saylor calls it land banking. How could you own a $20 million estate in Martha's Vineyard, go to a bank and say, hey, I'd like to borrow, you know, $5 million against my $20 million property. Well, with that low of LTV, any financier would say, absolutely, no problem. Come on in.

We'll give you a great rate. And they automatically account for that wealth, regardless of the credit score. Because it's, it's $20 million of real estate backing a $5 million loan. It's a low risk, no brain financing opportunity. But the same thing is for Bitcoin. And that's what Bill was able to do. Get Bitcoin into a position where at least people who are underwriting mortgages are saying, well, hey, you're a less risky borrower because you have been a responsible saver of Bitcoin.

And that's a huge first step. Now, there is a big difference. This is not integrating Bitcoin as collateral into a mortgage. This is not opening up any doors that allow for innovation with the securitization of Bitcoin-backed mortgages. everything that connects Bitcoin to a mortgage, there's still a lot of red tape there. And we're nowhere near getting standardized qualified mortgages integrating Bitcoin.

It's been hard enough just to get Bitcoin associated with non-standardized, non-qualified mortgages. But it is a great first step. So I think it is really big news. I think it's on the same level, actually, as like strategic Bitcoin reserves. Strategic Bitcoin reserves and this announcement, are on par because what it does is the strategic Bitcoin Reserve is the monetization confirmation and recognizing Bitcoin as a form of credit worthiness that allows you to get traditional financing

is a financialization realization. So they both complement each other and are really a signs of the time of how fast the market is moving. Do you think we'll get to a point where Bitcoin is use as collateral for these mortgages. Because I imagine for the people listening to the show, I would assume that most of them have a disproportionate amount of their wealth in Bitcoin. And so people may not be able to afford a house in terms of their Fiat savings and their fiat income, but they might be sat on a huge stack of Bitcoin. Do you think we'll get to a point where you can collateralize that Bitcoin buy a house and the rest of that is just not even part of the equation? Yeah, I mean, absolutely. I mean, that is one of the things we're doing

at People's Reserve. So I know. it's coming and it's coming fast, we're probably going to be up by Labor Day. So this is, this is coming in the next 50 or something days for sure. But on a wider scale, I think it's going to become popularized as well. And I think, you know, going into the financialization of the asset class poses a new risk for Bitcoiners. And the biggest risk moving forward is actually liquidation risk. So at people's reserve, we like to say, choose your counterparty wisely because the contract at which you use is going to dictate the amount of risk that you take if you borrow against your Bitcoin. And at people's reserve, we think it's not a good value proposition to be in a position where your Bitcoin

could be liquidated. So you want to operate within contracts that mitigate liquidation risk. And at People's Reserve, the way that we've done that is we are actually going to be a first market mover to introduce variable interest rates. And I love to use the COVID example for this. Like if you went to a traditional lender and you posted Bitcoin as collateral right before COVID and prices at 10,000, price starts going down towards 5,000, you're getting margin calls. If you put a, if you post a little extra margin to protect an extra 10, 20% or whatever and you say, no, I'm going to sleep on this to make sure I, you know, I don't know what I want to do. Well, overnight, it went from 5,000 to below 3,500. And you were a little bit of, you

liquidated because these lenders, they don't view Bitcoin as engineered money. They don't view Bitcoin as savings technology. They view it as a risk on tech stock that you bar against on margin. And that's unacceptable because you now, because of an unbeknownst liquidity event, you now lost the most important asset on your balance sheet. When you say lenders there, let me just clarify that. Sorry, are you talking about the people that are posting the dollars on the other side of the trade? Yes, yes. The LPs, the liquidity providers are who are putting up the dollars, they do not look at Bitcoin as a pristine collateral,

as an engineered money that strategically was designed to leverage the natural laws of economics to properly store value through space and time. You say that to them, they look at you sideways. They're like, what? You know, like, no, it's magic internet money. It's a risk on tech stock. So you can borrow against it on margin

and you can start out a 50% LTV. And if it gets to 82% LTV, we're going to start liquidating you. You're going to start getting margin calls. And if you don't post margin, you're going to, you get to 85, you're getting liquidated. So you don't even get to, it doesn't even get to the point where you're like 100% LTV, you get liquidated or DFI where it's like 97, 98% you get like. It's like at 80% these people are starting the liquidation process because they,

they consider Bitcoin a high risk asset class. And that goes back to what we were talking about earlier where it's like, no, this is a financial revolution. you cannot take your business, whether you believe in Bitcoin or not, you cannot take your business and go shake hands with these people and go use their ability to create circulating credit units to print money out of thin air to them bring back into the Bitcoin ecosystem. And at the same time, practice rehypification or whatever other crap fiat practices they have

going on in the background. So Bitcoiners really need to choose their counterparty wisely and understand where is the liquidity coming from? Who's providing that liquidity? Is it in the vision of how Finney's Bitcoin bank vision? Or is this a fractional reserve practice that is actually empowering the very system that we know is the root cause of the problem?

And I think what I was saying about earlier before with the liquidation risk, these people are happy to liquidate you because they just get the money back from the principle and they'll collect the interest and penalties. And liquidation is our biggest risk going into a financialized future of the Bitcoin asset class. And that's why, you know, at people's reserve, if you were borrowing through that same scenario and the price is at 10,000, it starts going down towards 5,000.

What we're so excited about is that you don't get a margin call. You just get a call that lets you know that your interest rate increased a little bit. And then it went down from 5,000 to 3,500, your interest rate increased. So for the next couple months, you pay a higher monthly payment based on a higher interest rate. but at no point in time were you at risk of being completely liquidated. And then as Bitcoin goes back to $10,000 just a couple months later, because everything's too big to fail, your interest rate is right back to where you started from.

And when it goes to new all-time highs, your interest rate actually gets lower and lower over time, reducing the burden of the debt and reducing the amount of interest over the life of the loan. This, I think, is a new model that we couldn't be more excited to introduce to the marketplace. because no bitcoiner who's been a responsible saver of the most pristine form of collateral in the world

should put their Bitcoin up for collateral to buy a home and then not be able to sleep at night in that home or to put their Bitcoin up for a collateral for their business and worry that the next day that all of their business revenues over the last three or four years could be lost because of some market event that they have no control over. To me, it's just, it's not a good value proposition.

and we need to, and that's what this financial revolution is about. It's not about using all the same old tools to have existed for hundreds of years. It's about innovating. It's about creating new tools that are powered by Bitcoin. That's why we call it Bitcoin powered finance. You have traditional finance that doesn't incorporate Bitcoin. That creates debt slavery, right? The promise of your time and energy is what backs the debt.

And it's so bad that they have to actually let you claim bankruptcy. You can get to a mathematical point where debt is inescapable. And that is debt slavery. And the law actually realizes that, recognize the mathematics, and says, yeah, you can get to a point where we'll let you claim bankruptcy and start over because otherwise you'll never escape it. Well, Bitcoin powered finance says, forget about it. that. We don't want your promise. We want your proof of work. You delivered value to the economy. In return for that value, you received Bitcoin. And now we're going to take that proof of work and we're going to use it to back the credit that we're going to extend you. And even if it is a fractional

reserve Bitcoin, like you had mentioned earlier, like that value is still backed by Bitcoin. So when the House of Cards collapses or the promises fail, you fall back into equity. You fall back into Bitcoin. You don't fall back into an empty promise. You fall back into 24-7-365 liquid equity that can be settled in 10 minutes with transaction finality. And that is just common sense where it's like, what's more safe, what's more secure? What do we want to build our economy on? Do we want to build on a house of cards, on a house of promises with derivative on top of derivative, on top of derivative and 1000x leverage? Or do we want to build it on top of foundation of equity on a foundation of liquid proof of work that can be tapped into 24-7365? It's a common sense answer.

Unfortunately, some bitcoins are choosing the uncommon sense answer because it's just too different. Or they don't understand that, you know, Hal's vision of a Bitcoin back bank, like micro strategy and hopefully one day people's reserve being the echelon and the corner and the foundation. of the marketplace to help understand the price of money, to let the free market dictate the price of money. So I love your questions because they all come back to what Bitcoin did, right? What Bitcoin did? Like, what did it do?

It brought us back to the basics. It got us out of this crazy Fiat monetary experiment that has, just like the education system, sometimes by good actors, sometimes by bad actors, has just been led down the wrong path. And at this point in time, we need to stop. We need to exit the path and we need to revert and move back to the path of common sense. And one reason I love Bitcoin so much is because it's not just that it's a financial revolution. It's a peaceful revolution. No violence required, no pain and suffering required. You can just simply vote with your money to choose Bitcoin and opt out of the madness, opt out of the non-commoncensical

trad-fi setup that they have and literally be your own bank. And if we can do that, we can win without a shot ever being fired, which to me is really important too. I mean, I have my fourth kick coming. So I don't want my kids growing up. Thank you so much. I don't want my kids growing up having to fight for their freedom. Our founding fathers fought for that.

Let's choose the peaceful revolution. Vote with our feet, like you said, by choosing the right platform and vote with our money by spending our money on goods and services with people who support the Orange Peace Revolution. And if we do that, things are gonna accelerate even faster than they are right now. Because as the light bulb goes off, I see even these LPs, right?

Even the guys who are providing the liquidity, they've been, you know, maybe it's like a family office and they are just sitting on piles and like mountains of cash, like unfathable amounts of cash. Like people think, Apple is sitting on a lot of cash. There are other entities in the world that are sitting on more cash than these publicly traded companies. There are private institutions and private wealth funds that sit on mountains of cash and they have nothing to do with it. But you know what they can do with

it? Lend it to Bitcoiners. Create the Bitcoin centralized bank economy backed by Bitcoin, secured by proof of work, ignoring proof of promise, and putting in a commodity credit, an equity-backed credit. And if we can do that, I think the economy will explode like we've never seen before.

I think the quality of goods and services will increase like we've never seen before because it's literally the opposite of fiat. Fiat is about maximizing supply, maximizing prices. Who gives a crap about quality? Right? You think about building a car

I like to compare it to like a Ford versus like a Ferrari, right? The Ford is like we're mass producing these things. And if something goes wrong with it, just do a recall and give them back some money. Who cares? There's no care about quality. A few people might die, but. Yeah, a few people might die, but collateral damage. That is the, that, that disrespect for life and quality is a fiat disease.

Bitcoin eliminates that disease and brings it back to Ferrari where they say, look, we're going to build so many of these per year because it needs to be of the best quality. It needs to be handcrafted. And every single person who buys this car is going to get the best supercar in the world. Now, I don't know who the heck needs a supercar. There's no need for that. But the focused on quality, right, the focus on, forget about the pricing. We're not pricing these to mass produce.

We're pricing these based on the time and energy that went into it. And when all of that happens because of Bitcoin, everybody's quality of life and standard of living is going to go up. Everybody. I know here in the States, and I'm sure you can testify this as well, the quality of even services industry, like waiters and waitresses and bartenders and cashiers, it's falling off the cliff. You used to walk into stores and the cashier would be like, hi, how are you? You know, you go to a cashier now and the cashier is just like scanning the stuff, looking at you. judging you. Maybe not even looking at you.

Yeah, it says nothing. And then she's like, all right, next, next. Like, people are not happy at their job. And can you blame them? They're working longer. They're working harder. And they're making less money. Well, actually, they're making more currency,

but they can buy less with the currency. So they are making that currency, when it gets translated into money, they are making less money because wages are crashing against Bitcoin. Everything is crashing against Bitcoin. But when Bitcoin is your unit of account, your purchasing power is going through the roof.

Your quality of life is increasing. Your standard of living is increasing. The stress is rolling off your shoulders, not by anything that you've done, but by the engineered design of the money itself. So we can leverage this engineering. We can leverage this eighth wonder of the world to make life better for each and every single human.

But it all starts with number one, education, and then number two, Bitcoiners having, like what you do with this show, having these conversations so that people can start to learn and understand, oh, you know what? The way I thought about that was wrong. The way I was taught about that was wrong.

I need to change my mind so I can switch my feet and vote differently with my money. And fortunately, we are seeing that happen. We are seeing this accelerate. And that's what's most exciting to me. This episode is brought to you by Anchor Watch. Now, one of the things that keeps us Bitcoiners up at night

is an idea of a critical error in your Bitcoin call. storage and this is where Anchor Watch comes in. With Anchor Watch you're protected by two things. You have their time locked multi-sig vault and you have your own A plus rated Lloyds of London backed insurance policy. So you get to hold your keys and Anchor Watch holds the risk. So whether you're worried about inheritance planning, wrench attacks, natural disasters or just your own silly mistakes, you're fully protected by Anchorage. Rates for fully insured custody start as low as 0.55 and are available for individuals and commercial customers located in the US.

Speak to Anchorage for a quote and for more details about your security options and coverage over anchorwatch.com. That's anchorwatch.com. This episode is brought to you by Ledden, the global leader in Bitcoin-backed loans. Since 2018, Leiden have issued over $9 billion in loans and were the first lending platform to do proof of reserves. With Leiden, you get full custody loans with no credit checks, no monthly repayments, just easy access to dollars without selling a single sat. And as of July 1st, Lenin is now Bitcoin only, which means to, they exclusively offer Bitcoin back loans or collaterals held by Lennon directly or with their funding partners and your Bitcoin is never lent out to generate interest. I recently took out a loan

with Leden. The whole process was super easy. It took me less than 15 minutes to apply and I had the dollars in my account in just a couple of hours. It's super smooth. So if you need cash but you don't want to sell your Bitcoin, head over to leddon.io, which is L-E-D-N-I-O. This episode is also brought to you by Iron, the largest NASDAQ listed Bitcoin Miner using 100,000. 100% renewable energy. Iron are not just powering the Bitcoin network. They also provide cutting-edge computing resources for AI, all backed by renewable energy. We've been working with the founders Dan and Will for a long time now and have been really impressed with their values, especially when it comes to their commitment to local communities and sustainable computing power.

So whether you're interested in mining Bitcoin or harnessing AI compute power, Iron is setting the standard. Visit iron.com to learn more, which is ira-e-n-com. I mean, I love what you said there. I was a second Hoddle said on the show once that like Bitcoin is both innovative but very restorative. And I think that's exactly what you're saying. And the one thing that I know Bitcoiners love is quality. They'll argue about their pans that they cut their stake on on X. Like quality runs through this deeply. But I do want to kind of talk about how Bitcoiners should be looking at using Bitcoin as collateral for loans. Because there isn't, it's not zero risk. I recently talk out a loan with lead and just full disclosure they are a sponsor now. It's the first

loan I've taken against my Bitcoin. I've done it in what I consider a very responsible way in the sense that it's not a massive amount of my stack. If I need to top that up, I can. Like the liquidation list is limited. But how do you think just your normal Bitcoin should be looking at these products? Yeah. So when someone asked me the question, should I lend against my Bitcoin or should I borrow against my Bitcoin? When the question comes, should you lend your Bitcoin? The answer is always no. Never introduce counterparty risk for any reason whatsoever.

You should never be depositing Bitcoin and earning interest. That is a hard stop. Something's wrong. Something's not right. 100%. If you're ever going to, you yourself are the only source of counterparty risk. And that is when you're borrowing against your Bitcoin, not lending it. So lending it, hard stop.

It's not going to work. It's never going to work. You should not give up 60% compounding annual growth rate over the last five years, over 80% Cagger over the last 10 years for 4 to 5% on your stack makes no sense. Stupidity. But when you want to borrow against your Bitcoin, you are the counterparty risk, right? Because you are the one who has to make the payments on the Bitcoin. You are the one that can determine the LTV that you're using.

So when someone asks, should I borrow against my Bitcoin, the answer is yes and no. It's yes because you can. can unlock the purchasing power of your savings without giving up ownership. And right now at the bottom of the S curve, on the precipice of a massive acceleration of the transfer of wealth from the fiat world to the digital economy, you'd honestly, you'd be a fool to sell your Bitcoin at this point. But if you've been a responsible saver of Bitcoin for the past five years and you've experienced the 60% cagger, which that's, that's, That's a 10x, like 60% Kagura of five years is 10x.

So if you were saving $100,000 and it's now worth a million dollars, you have outpaced your peers by pretty much 10x. It's been an unbelievable experience for those responsible savers. But now that you have a million dollars worth of Bitcoin, how does it make your life better? Like at some point in time, like, I remember for me, I'm like, I'm looking at my phone. I'm like, this is great. This is cool, but nothing's changed. I still have to take the trash out. I still, you know, my relationship with my wife and my children still,

nothing changes just because of the number on the screen. And if you're like cash flow positive, you live with any means, that's fine. Like, that's totally acceptable. But I think that's one of the key points of this is if you are going to borrow against your Bitcoin, it's what are you borrowing for? I think that's one of the big questions. Like if it's to improve your life in some way to buy a house, if you have just expenses that you need to pay,

or even buy more Bitcoin. And I think all of those are okay options, but don't just go and blow it because you have it. Yes, definitely, definitely not want to do not want to do that. And you need to have the cash flow, right? So at people's reserve, some people are like, so how do you pay back the loan? And it's like, well, what do you mean? You want to take out a loan and not have to make a payment at all? Then the tradeoffs of that, I mean, because those options do exist, not at people's reserve,

but at other providers, you can get a loan, make no payments, but then you share the upside of the Bitcoin. So you'd probably be better making the payments because the upside of Bitcoin is tremendous, again, because we're on the precipice of this transfer of wealth accelerating. So, yeah, you should borrow against your Bitcoin responsibly and you should continue to work to generate cash flows so that you could service the debt. And if you don't have those cash flows, you're going to be in trouble in trouble because you have to service the debt. But the other thing is, no, you should not borrow against your Bitcoin because I believe that even though liquidation, like if you set up an LTV of like 33%, right, you post $1.5 million of Bitcoin collateral so that you can borrow $500,000 to go buy

your single family home, your LTV is 33%. So your liquidation risk is extremely mitigated. It's it would take a big drop in Bitcoin to get to the point where you need to add margin. However, that can happen. We've seen it with COVID. You can have some type of event take place that drops price from 10,000 to below 3,500, or from 100,000 to below 35,000. And then just a couple months later, you're right back up at 100,000. We cannot control what happens in the Middle East.

We cannot control the consequences of the Fiat disease that we have let rot away our economy and society. So for that reason, these black swans that are going to pop up as the house of card falls, it's very risky if you're using a contract that has liquidation. And again, this is why we're so excited. We want to remove that liquidation risk. And with variable interest rates, we've been able to do that. If the value of Bitcoin goes down, your interest rate will go up higher. It's that simple. And then when the Bitcoin goes back up, your interest rate goes back down. Because it's not just about the supply of money and the demand for loans, it's counterparty risk. So if the value of the collateral goes down, the risk goes up. So to compensate for that for additional risk, you get a higher rate. But when you look at Bitcoin as engineered money, the only time your rate's going to go higher is when you're one of those downturns. And historically and statistically speaking, the downturns are few and far between. It's Bitcoin's compounding annual growth rate over longer terms that empowers you, right? Like 10x in five years with a 60% cagger.

If you post $500,000 of Bitcoin and you buy a $500,000 home, five years later, the collateral is now worth $5 million. And the debt is less than $500,000. So the burden of that fixed fiat denominated debt against your pristine collateral shrinks massively over time because of the collateral being an engineered money that was strategically designed to gain value. It auto de-leverages you. I've never seen anything like it. And that's, it's negative risk. Bitcoin is the advent of negative risk. And when you try to put negative risk into a Tradfai credit model, you just get a whole bunch

of blank lines, like a whole bunch of red error signs because it cannot calculate. It doesn't work. It's like if you're using an Excel spreadsheet and you type the formula in wrong, there's just a bunch of question marks and hashtags, it's like, oh, er, er, can't calculate. That's what Tradify is. They cannot calculate for their models are all based on circulating credit backed by proof of promise based on your credit score and based on some of the assets that you might have on your balance sheet that aren't perfectly liquid like real estate a lot of people have been trying to

liquidate real estate for the past couple of years they still haven't sold their properties because real estate is not perfectly liquid and when interest rates are held high by a small group of men who get to state the rate and hold it up there you unless you're willing to take a massive price cut you're not going to be able to liquidate that property so they don't understand negative risk because in a circulating credit market, there is no such thing except risk. It's risk on top of risk with re-hypothicated risk and then derivative risk on top of the re-hypothicated risk. In a commodity credit market backed by Bitcoin, there is literally negative risk because to initiate the loan, you're at least posting one-to-one. That's at people's

reserve. I think the standard within the lending marketplace is you're posting two to one to get the 50% LTV, right? Yeah. So it's over collateralized. There is more equity. There is no promise required. If you barred the money and walk away and never come back, we don't care. We will just liquidate the portion of your Bitcoin to close the loan and you come

back and get the rest of your Bitcoin and take it back into self-custody. It's negative risk. So that's what's so hard for these Tradfai LPs to understand. They can't plug it into their models. Their models don't compute. But that's what's so exciting about monetization. The monetization is going to accelerate this understanding, and then the financialization is going to bring about these new revolutionary Bitcoin-powered financial products that will make Bitcoiners, the risk-free borrower, and they will give Bitcoiners access to the cheapest cost of capital in the world because you are now the risk-free borrower. You hold the pristine collateral that is the foundation of the system.

I love it. Can we also, so this is all kind of the maturation of the asset. Like we said at the start, this is all Bitcoin kind of growing into the kind of financial product that we know it may end up being. How do BitBonds fit into this? Oh, yes. So this is another great question. You got some good ones, Danny. So I think this is one of my favorite products at People's Reserve. So let me start off by saying this. Huge fan of Michael Sam. He has opened the Pandora's box of financial engineering, and anybody building a Bitcoin-powered financial product is building on top of the shoulders of Michael Saylor. He will go down in the history books as the person who opened Pandora's box. I'm a huge fan. I hold micro-strategy shares. They're in trust. They'll go to the great-grandkids.

And if the great-grandkids try to sell them, they're getting out of the trust. Because you don't want to sell shares of a future central bank of the digital economy. And I'm just, even here at People's Reserve, you know, I think Michael's focus has been on financial engineering for corporations and institutions. Yeah. And for, you know, sophisticated investors as well. But a lot of what you see with BTC torque and all the different offerings that he has, it's for that $300 trillion pool of fixed income capital. Yeah. And each tool that he's created has serviced or solved a problem for a specific pool of liquidity.

within that larger ocean of $300 trillion of corporate and institutional balance sheet wealth. But at People's Reserve, we build on top of his shoulders with financial engineering for the everyday person. And that's why our Bitcoin-powered finance products focused flagship on the Bitcoin-powered mortgage because the real estate industry is also a $300 trillion industry. And a lot of that industry is being taken over by institutions. So we need to empower the small guy with the financial tools that they need to leverage their responsible savering of Bitcoin. But then going back to what we're talking about, the teachers and the cops and the firemen and the EMTs, like, how do we fix this? Even social security.

I don't believe in social security. I think we should recapitalize social security and then end it. So all the promises that are made can be kept, but then it should end. and people should be saving for retirement on their own terms. Well, how do we do that? How do we recapitalize Social Security? You can't just keep issuing U.S. Treasury bills, notes, and bonds, and then using these bills, notes, and bonds that pay an interest rate that is lower

than the rate at which prices increase, because now the next generation who receive that pension payment of the teachers, the, what retirement do they have to look forward to? The only retirement they have to look forward to is that they go in to do a drug bus and there's some gold sitting on the table and they all look at each other and they split it. They can't turn it into evidence because this is the only chance

they have to get ahead. This is the type of corruption that a broken money system creates and it doesn't create it because those actors are bad. It created it because those actors are not properly remunerated for the services that they provide to society. So with our Bitcoin Power bond,

here's how we've structured it. And there's so many different ways. to do this, right? We see micro strategy doing it with all of their issuances from preferred, I mean, all of the BTC torque vehicles. And then you see it with this principal protected note. And I think this principal protected note is a very powerful value proposition. And I'll just give an example. Let's say a teacher invest $1 million or a teacher pension plan or fund invest $1 million into people's reserves principal protected note, which we call a Bitcoin bond. right now how we would allocate that million dollars is it be based on the interest rate of the U.S. Treasury note.

So the U.S. Treasury note is a five-year U.S. Treasury note. It pays four and a half percent. At four and a half percent, the allocation model is split 80 percent U.S. Treasury note, 20 percent Bitcoin. Why? Because what happens is the $800,000 in the Treasury note with four and a half percent interest applied over that five-year period, matures with a value of $1 million. And that's why we call it principal protection. Because the original principal investment of a million dollars is protected by the cash equivalent. You're going to get your million dollars back.

Even if Bitcoin went to zero, which you and me and everybody watching the show does not believe. But even these trap-fi guys, the pension plan runners, they do believe that's a possibility. So even if Bitcoin goes to zero, you still get back your principal. What you're going to be able to buy with that principle? Well, that's the same problem you face by just lending it to the government with no Bitcoin element within the, you know, nobody knows what you're going to be able to buy. That's the problem. We can't get an interest rate that's outpacing prices. So whatever we're buying, we're buying less of. Now, what's left over, though, and this Bitcoin bond is the 20% of Bitcoin. So 800,000 went into the Treasury. It matures at a million. Over that five years, the 200,000 in Bitcoin maintains it's 60% caggar. That's a 10x. That's $2 million. The Bitcoin bond matured, with a $3 million value. In simple interest terms, that's 40% APY.

Even if we go with Michael Saylor's 30% CAGR thesis, that's 20% APY. Inflation is around 10%. It's really hard to narrow down because inflation is based on your lifestyle. It's based on your business. It's based on what your business buys or how you live your life, but roughly around 10%. So you need to get a return above 10% to actually make sense

to use that as a savings vehicle. vehicle, otherwise you're losing in terms of purchasing power. But you take this Bitcoin bond, or you take a micro strategy Bitcoin bond, or you take a metaplanet Bitcoin bond, and you put this Bitcoin bond into a pension plan, into a Social Security fund. You are now recapitalizing the fund. You are now taking something that is creating liability and you're eliminating the liability. That is the problem here in the United States. We have $38 trillion of debt. We have another $220-something trillion dollars of unfunded liabilities. You always hear people talk about, oh, we're at 38 trillion. We had to raise the debt ceiling. Well, what about the $220 trillion worth of promises we have to pay

over the next generation or two? What about that 220 trillion? That has to be printed. And if it's not printed, then promises are going to be broken. And if promises are broken, social security is not just, look, the quality of life and standard of living that can be supplied for by Social Security is It's crashing. It's absolutely crashing. The first people who received social security payments were able to live like they were working still. The people who get social security today, it's just paying a bill or two and they still have to go out and work an odd job. You see 65 plus year olds working at Home Depot and Lowe's and Walmart because they have to earn an income to supplement on top of the social security because there's been so much dilution of the cash

equivalent, so much dilution of the fiat currency. How do you eliminate that problem? You incorporate Bitcoin. And that's what Bitcoin bonds do. No matter who's structuring it, when you plug Bitcoin into a traditional finance product, like a bill, note, or bond, and you create a structured product with Bitcoin integrated, Bitcoin's engineered design will create a positive rate of return. So Bitcoin bonds are going to be the only vehicles that people have to be. access to that creates a real positive rate of return. In other words, a rate of return that is greater than the rate at which prices are increasing. So that at the end of the maturation of that note, you're able to buy more goods and services. You're able to increase your quality of life

and standard of living. And we should be plugging it in to the teachers, to the firefighters, to the policemen, to social security. And I even had an idea what Trump is the tariff king. okay let countries pay tariffs and let them get a discount if they pay in bitcoin take this bitcoin package it into a bitcoin bond you don't even need to sell it to the public sell it to the pension plans sell it to the social security fund recapitalize the republic this is a matter of national economic emergency if we don't do something we will no longer be the global financial leaders we will not have the type of of say that we have in the world right now if we just sit back and pretend that the dollar is going to be the king forever. We must integrate Bitcoin into our

fiscal, monetary, and economic policies, and we must do it immediately because other countries are already making their moves. Russia is talking about it. Thank God Bricks chose gold. I don't know why the heck they chose gold, but thank God they did. It gave us a chance. Imagine if they were already integrating Bitcoin, we would have already lost. The transfer of wealth would have turned into a transfer of power. We need to get in front of this. And Bitcoin Bonds is just an example of one of those Bitcoin powered financial products that will change the world and make the world a better place because it's able to produce

a positive rate of return because Bitcoin can't be diluted. In a world where everything can be created and supply can be expanded at infinum, Bitcoin cannot. And we need to leverage that economic reality to empower ourselves. We the people must empower ourselves. The government's not going to do it for you. The big cantillionaires, the companies with the monopolies on the marketplace, they're not going to do it for you. They're happy where they have you right now.

We the people must empower, we the people, by embracing Bitcoin banks like micro strategy and hopefully people's reserve so that we can have a free, open, and fair market, a true equitable market that provides equity to those who provide value. to the economy. You don't get nothing for free. You provide value to the economy. You get rewarded for that value. And then as you allocate your wealth and you incorporate Bitcoin into those wealth vehicles, you are able to grow your wealth and preserve your wealth through time. And that beautiful website you mentioned earlier, what WTF happened in 1971, we can get a whole new set of charts. WTF happened in 2025 when we financialized Bitcoin and we plugged it in. We got rid of these

traditional financial products, we created Bitcoin powered finance. What happened since then? The quality of life goes up. The standard of living goes up. The quality of goods and services goes up. Everything gets better because you're now built on a strong foundation of rock where when something goes wrong, you fall into equity, you fall into value, you fall into proof of work. You don't fall into the nothingness that requires even more printing to pretend that nothing went wrong. I love it. So when you go out and you're talking, you'll talk, talking to these pension funds or whoever it is and telling them about these Bitcoin bond ideas, what's the general reception been?

Do they get it? I would say, I would say, you know, no, most don't get it because they still don't look at Bitcoin as an engineered money that is going to continue to produce the way it's been producing. They either they don't understand absolute digital scarcity or they have the Peter Siff syndrome where it's like, well, there's a million Bitcoin. You know, look at all the, look at all the cryptos out there. You know, every, every single new crypto is an alt-coin, right? It's an alternative to Bitcoin. They don't understand the network dynamics. They don't understand the computer code or the computational power that supports the network.

They, I would say probably three out of 10 are like, sign me up, send me over that PPM and I will, I can't wait to get in. You know, I'm excited to get this on my balance sheet. I'm excited to utilize this. That's not a terrible hit, right? It's a really good hit rate. Because when I first started People's Reserve, like in 2022, it was like one out of like 30 that would get it. Now it's like three out of 10.

So the light bulbs are going off and people are able to realize. You know what? I think it has a lot of what's doing on the world. There's a line being drawn in the sand between truth and lies. And that line being drawn in the sand forcing people to say, hey, does it make sense? Is it true that I can just put this chemical in my body and be safe? Does it make sense that if I just wear this mask over my face that I'm not going to breathe in like these really small germs? Is that possible? Like what about the, what if I just take it for a second?

You know, why is that person like in the government, they cut like a hole out in their mask and they can play their flute and they're still safe? Like you you have to determine what is truth and what is lie. And that is the difference from when I started. In the beginning, nobody was really discerning. They were kind of just going on and living life. Now people are saying, no, I want to take a deep look at this. And I want to understand what's truth and what's a lie. And that has led to a massive amount.

I mean, three out of 10, 30% is insane. That's an insane conversion rate. But three out of 10 are excited. And the other 7 out of 10 are just like that one guy I said. They're like, son, I've been in these markets longer than you've been alive. Take a hike. you know we'll come we'll come back and we'll thank you for your time they'll get bitcoin in the price they deserve they will and but the other 10 are like this is going to change my business

this is going to change the future of my family this is going to change how i allocate my business revenues this is you know they're they're starting to see it for what it is which is a tool and and i think the dollar's been king for so long these cash equivalents have just been considered the pristine collateral for so long that nobody really questioned it, right? It was like, I don't know how I actually don't even know how to explain it. It's just nobody questioned it. But after 2020, when they started printing a massive amount of these things to the tomb where inflation, I mean, the government headline inflation is way off, right?

Like even today, they tell you like they target 2%, but we're at 10% right, on average. So if you buy more luxury goods or your business. business is in a more luxury type domain, inflation is probably closer to 15 to 20 percent. But, you know, if you're if you're in some of these Chinese markets and mass production markets, you're probably like in the in the five to 10 percent range. So just depends on what your business does and how you live your life. But 10 percent is a pretty safe number to say, hey, if you're not getting a 10 percent raise, then you're actually making less money. If you're invested into a cash flow vehicle or a store of value derivative, then it better produce more than 10% or you're losing purchasing power.

And people are now finally coming up with that number, whereas years ago, that number didn't exist. It was like you lend to the government and you don't think about it. You lend to the municipality. You get tax-free cash flow. There's nothing to think about there. But now people are really starting to think about it and really making sure, you know, and that's what happens. I talked to one business owner, just I'll close it out with this example. They, in 2017, they had a 10-year plan where in 2027, they were supposed to be able to build three factories.

They were supposed to build three more factories. After 2020 and then after everything that happened since then, they need financing to build one factory. They were, the cash, yeah, the cash flow that was created through the interest paid in 2017 would have. have been significant enough to build one, to build two factories and then use leverage on those to build a third. Instead, they need to get financing to build one factory. That's how much dilution there. That's what's forcing business people to sit. Wait a second. Who am I supposed to fire? Who messed up? Who ran the numbers on this and told me I was going to be able to do this? And now the time has come and I can't do this. Who's getting fired? The Fed is who you got a fire.

Exactly. They say, sir, I mean, we could not anticipate that the supply was going to be expanding. so drastically that there would be so much dilution that that would force prices up. And now all the land, labor, and material prices are so high, sir, we need to get financing just to build the one factor. And then that changes it. Now when that guy goes to dinner and he's at an awards dinner, he tells the story to a friend.

And the friend has a similar story who then tells it to another friend. And it's just like fire. And those stories spread and spread and more and more stories pop up until finally, people say, what's the solution? And now those three out of ten people who heard that story are now looking for the solution. And they find micro strategy. They find the preferred offerings. They find people's reserve principle protected note. They're seeing Bitcoin being integrated into Bitcoin powered finance products. And they're saying, wow, not only do I need Bitcoin, not only do I need

exposure to companies that are building around Bitcoin, but I need Bitcoin powered finance products. I need my business to be powered by Bitcoin. I need my balance sheet to be powered by Bitcoin. And if I don't do this, I'm falling behind. And then once they do it and they see and experience the results, now they go back to that same awards dinner the next year and they say, how to turn out. Well, hey, in 2029, I'm going to have my three factories because I rebalanced. I reallocated. I got into Bitcoin. I'm using this. I'm using MSTY. I'm using STRKD. I'm using micro strategy. I'm using Bitcoin. I'm using a Bitcoin powered bond.

All of these products that incorporate Bitcoin, reduce volatility risk, reduce just straight spot exposure to Bitcoin and produce a cash flow for me and a return for me that allow me to build my business and strengthen my balance sheet. You should check it out. And that is catching fire. And if they'd have just bought Bitcoin in 2017, they'd be building 30 factories with no financing.

Exactly. Exactly. So just to sort of close out, when we go through this monetization and financialization phase of Bitcoin, what does that mean for Bitcoin price? How quickly do you think those transitions happen? And where is Bitcoin at the end of it? Yeah. So Michael Saylor has this famous saying, he goes, all your models will be broken. So as the creator of the Bitcoin fair value algorithm, I took that to heart. I was like, man, is my model going to be broken? But yes, yes, it is. It absolutely will be. be broken because what happens is the demand for Bitcoin will so far outpace the supply.

And all of those older coins, like we just recently saw 80,000 coins move. I'm sure that had something to do with some type of OTC deal. Maybe it had something to do with those older wallet addresses having a little bit of a security concern and just getting into a newer type of address. But I still think some of the older players, You know, $100,000 is a very psychological level. There is no technical resistance at this level, none whatsoever. It's all psychological.

And that's what we've been doing. We've been flipping the 100,000 psychological resistance into psychological support. And if we do have another bear market, we probably come back down to 100. So I anticipate what we see from here going forward is going to be that stair stepping, you know, distribution, reacumulation, repress. pricing. And I think the next stop is probably single family home. I think when Bitcoin gets above the price of, say, $440,000, the average price of a single family home here in the United States, a lot of people are going to say, well, wait a second, I work my entire life. I made a 30-year promise to work my entire life to buy my home. Now it's harder to buy a Bitcoin than it is

to buy my home. What? What? What? I have to work 30 years? and I can't even buy one Bitcoin? What are you talking about? What the hell is this thing? And that's where I believe once we get all these Bitcoin treasury companies and all the sovereigns piling into Bitcoin kind of like they are now,

where does the next big wave of liquidity come from? I think it comes from homeowners. I'm not a fan of Janet Yellen, but she had at least one good quote during her career, which was the most important source of wealth for the vast majority of Americans is in their home equity. And I think, you know, that's another important Bitcoin-powered finance product, our home equity, Bitcoin line of credit.

You need to transform your home equity into Bitcoin equity. Home equity, depending on your zip code, grows at 2 to 8 percent CAGER. Bitcoin over a five-year period, 60 percent plus CAGER. 10-year period, 80 percent plus CAGER. You cannot outpace and grow your wealth if you're keeping your home equity in your home. You must transform home equity into Bitcoin equity. And the real estate market in the United States alone is like $40 trillion. And upwards of 50% of that is owned outright.

So we're talking about a $20 trillion liquidity pool, a $20 trillion pool of purchasing power that is going to exit home equity and enter Bitcoin equity. That's probably the next big way. But that's not going to happen until people realize their home is worth less than Bitcoin. And that Bitcoin is more important than their home. So I think that's where we go next. We go to single family home. And then after that, I think we go to gold parity.

We go to the digital gold level where Bitcoin gets to a million dollars. And that's where I see it going over the next couple of cycles. But beyond that, when you talk about the financialization of Bitcoin, you know, my mom always said, write your plans in pencil unless you want to make God laugh. So I don't like to project too far out because nobody truly knows. But I do think, you know, the price of a single family home, parody with gold, and then beyond that, through the mainstream financialization of the asset class, it's literally global wealth divided by 21 million. It's infinity divided by 21 million. Why is it infinity? Because we're created in the image of God.

We have the ability to create. We have the ability to create something in this world that has never existed before. we can deliver value through creation, through ideas. So the upside of humanity is infinite through our ability to create. Therefore, the global economy, the value of that global economy is infinite. And we need to take that value, which is infinity, and we need to divide it by 21 million. Or actually, if you think like Hale and myself, you should be dividing that by 20 million instead of 21 million. And that's where we're going in the long term.

All global wealth will be priced. in Sats and settled on the Bitcoin network. And that is when we will have achieved our goal and increased quality of life and standard of living to the maximum. That is when we will have leveraged the power of the digital economy and the natural laws of economics to make life as good as it can be for those who choose to deliver value to the economy and value their fellow human citizens by participating in the economy and delivering value and finding ways to help each other and Bitcoin at the core of that can actually deliver on that promise. There's never been a way to deliver on that promise ever before in the history of humanity.

But with the, I don't even want to say creation almost, with the discovery, with the 40 plus years of computer science that went into discovering how to create the perfect proof of work consensus protocol, we now have the ability to deliver on that promise and to move that promise forward and I hope we all do. Let's go, CJ. I have really enjoyed this interview. Thank you so much for the time. Where do you want to send anyone before we close out? Well, thank you so much for having me. It was an absolute pleasure and I hope we do get to come back and do that additional Bitcoin banking talk. I think that'd be fantastic. For right now, everybody can just go to people's reserve.com check out everything going on. Of course, follow me on X at C.J. Constantinos and People's Reserve at People's

reserve. Perfect. Thank you so much for time, man. Really enjoyed that. Appreciate you. Thank you. You too.