What Bitcoin Did - The Dollar Changed. Bitcoin Is the Endgame | Matt Dines

Episode Date: June 26, 2026

“The game has changed, it’s very clear.” Matt Dines is a fixed-income portfolio manager and host of Mind Print Hash. In this episode, we get into why he believes the dollar system has already changed and why Bitcoin may be the endgame. For decades, global markets have been built around the offshore dollar system: LIBOR, Fed backstops, QE, ZIRP and the assumption that every crisis ends with more liquidity. But Matt argues that world is being replaced by something very different: a Treasury-led dollar system built around T-bills, SOFR, regulated stablecoins and a new set of geopolitical incentives. We discuss why 2022 was such an important inflection point, how the move from LIBOR to SOFR changed the structure of dollar markets, why the GENIUS Act matters for stablecoin rails, and what Treasury dominance means for the Fed, global credit and Bitcoin. We also get into MicroStrategy and STRC, the risks facing Bitcoin treasury companies, why dollar liquidity still drives Bitcoin markets, how geopolitics is reshaping the financial system, the path to a Strategic Bitcoin Reserve, and why holding real Bitcoin still matters. Bitcoin is not just another risk asset in this transition. It may become the base layer for a new monetary system, but getting there will be volatile, political and tied to the future of the dollar. In this episode: Strategy, STRC and Bitcoin treasury company risk From Fed dominance to Treasury dominance The end of the petrodollar Why capital markets are war by another means The path to a Strategic Bitcoin Reserve Why Bitcoin is the endgame THANKS TO OUR SPONSORS: ANCHORWATCH BLOCKWARE LEDN BITKEY SWAN CAPE FOLLOW: Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny Matt Dines: https://x.com/LeveredUSTs

We're moving from an era of Fed dominance and treasury subservience to an era of United States treasury dominance. What we're doing away with is this forward guidance mumbo-jumbo. What it really is is backstop, it's ammunition for the Fed to do all of the things we talked about, QE, ZERP. The game has changed, and it's very clear. All of the players who, you know, were cooperating around this old business deal, you know, that lasted for, 75, 80 years. They're now, like, maybe it's too far to say they're at war with each other, but they're not seeing eye to eye, and they're definitely not cooperating anymore.

Capital markets are war by another means. So when we say nothing stops this train, right? It's like, well, there's another train, and it's like, you know, that's what Scott Vescent represents all of that. So we'll see how this plays out. Matt Dynes. see you, man. It's early in the morning here in Australia, and I woke up to a bit of a bloodbath in Bitcoin and stretches down another nearly 8% today. What on earth has happened overnight?

It's not too bad in Bitcoin yet, but we're fighting the downtrend of a bare market and the Bitcoin dollar, you know, FX rate. Stretch and the perpetual preferreds. Yeah, this is a long story. I think it touches on the bigger point. picture that we'll talk about as this conversation goes on. But there's massive change going on in the dollar at the structural level. If you think about America, we're about to be 250 years old, we've gone through several iterations of the dollar, right? And when we say the U.S. dollar, it's meant different things structurally, like at least four or five key, key different ones over the course of this great nation's short history. I'm Americans. I'll show that

bias, right? Just to wear it on my sleeve. But in my framework, we just went through a big one. 2022 was a key acceleration. And I think a lot of us are still operating under, you know, let's say the offshore dollar or euro dollar or some of us in, you know, the Bitcoin space, the influencers. They call it the petro dollar standard, right? I'll stick to the term offshore dollar, but big inflection going on. And there's a major transition, and this is one of the most important ones, I think, we've seen in American history. All right. So we'll start there.

All right, stretch. If you think about all credit in the world, we'll talk about this offshore dollar credit bubble. The whole strategy is built on. We access dollar credit capital in the U.S. U.S. brokerage, like, you know, the stock market liquidity pool. So we tap dollars in these perpetual preferred instruments at, let's say, 11, 12, 13%. That's a liability. That's how we source dollars. I'm saying we, it's not me. I'm not doing this, but just whatever, royal we. And then we go long

on the asset side, Bitcoin, right? And so if you think about the strategy as a dollar strategy, just turn it on its head, living the upside down of the Netflix show. stranger things, right? It's not a Bitcoin strategy. Think about it as a dollar strategy. You're tapping onshore dollar liquidity at, you know, 11 to 13 percent with these perpetual preferreds. And then you go long dollar liquidity in Bitcoin, which is, it's a global market, right? Bitcoin trades, you know, the spot market. Every nation state has their exchange. But largely, like if you look, go to one of these websites, coin market cap, whatever, I think something stands out here. Obviously, the is the biggest liquidity pair

in the Bitcoin to dollar FX rate. But very few exchanges of like actually support a bank deposit dollar like an onshore federal reserve regulated or similar United States regulated financials. Exactly.

USDT. Yeah. So the main liquidity pair is actually Bitcoin to offshore, you know, tether dollar liquidity. Right. All right.

So just think about it that way. it's it's it's it's really built around that infrastructure you're sourcing liquidity onshore and then your uh long uh bitcoin dollar liquidity in this offshore pool now we had a massive um act of congress in the u.s last year the genius act uh besides this one big beautiful bill it's the most consequential piece of legislation that's come out of this uh 200 and i think it's the 225th congress i can't remember just off by one at 226, 225, whatever. Around that. Yeah, or thereabouts.

It's like computer science, right, that you started zero for indexing that off by one error. You get it, right? It's been the most consequential piece of legislation. And what I'm talking about here is Genius Act with the dollar stable coin regulation, which what it technically did, and we'll talk about structure because the structural definition is key. It pulled in these stable coins. which have been proliferating for over a decade. And it's a growing market, right?

Over, I want to say 186 roughly billion dollars of tether. Circle has a lower market cap. It's not quite a trillion dollars yet. Let's just call it half a trillion, that type of ballpark for money supply of this new stablecoin dollar. That is a merchant. We, with Genius Act, passed last year, and this is a big change in the future of the U.S. dollar itself, the direction we were going to take because Biden and that administration was taking us one route, which was going down to CBDC road. And with the Trump election and Scott Besant

as kind of the architect here, we're going down a separate road with the Genius Act stablecoins and a private issued stable coin dollar. That ultimately anchors back and is reserved one to one with U.S. Treasury debt, so Treasury bills, short-term maturity IOUs, from this legacy credit-based dollar system where your dollar is a liability. What this has effectively done is pulled the dollar into like an asset-based definition at a roundabout way. And this change has basically steered, you know, power, control, the operating nexus of the dollar, away from the, the old offshore standard, which was centered out of London. We can get into that whole architecture of global capital markets, foreign exchange, all of that,

and this dollar standard as the global reserve currency that I think Bitcoiners really understand pretty well. But you've moved the nexus and the operating kind of center of gravity for the dollar away from London and all these money center banks in this global patchwork, and it's moving to Washington, D.C., and New York. And if you kind of view everything through that framework, there's this major transition going on from this offshore dollar to this new stablecoin dollar, a lot more will make sense,

I think about the geopolitics, credit markets, the tech play, the AI bubble, all of that. And then at the very frontier of that, When I say a frontier credit, what do I mean there? Like, you, in credit, like, start with, like, the highest quality IOU and an IOU-based dollar system where everything's a liability. Everybody in the world wants to get closer to that center of gravity, like the, like Federal Reserve deposits, right, for regulated bank.

Or if you can't get access to the Fed, like if you're not a domestic commercial bank, in the U.S. The next best option is treasuries, right? The U.S. Treasury bill. And so in a roundabout way we've re-anchored, when I say we, now I'm talking about U.S. Treasury, Washington, D.C., power brokers, high net worth families who are the ones who are, you know, moving and shaking and making these decisions. They're pulling in the dollar one way and moving, you know, in one direction.

And then everybody else on the rest of the world on this old offshore dollar, you know, standard, they're left to scramble. They're being left out to dry. And where you see this in policy, right, we've gotten used to this in Bitcoin, where the policy path from Washington, D.C. And like the Federal Reserve and New York, the center of financial gravity, it was really built over the last like four or five decades or, you know, it really started post-World War II, Bretton Woods, all that. We don't have to go back that far down into the weeds. But Big Corners, you know, in 2020, we locked on to something very clear, like the whole what happened in 1971 narrative where we broke the gold redeemability for international capital transfers where banks could redeem their dollars to the United States Treasury or the Fed and runoff with the gold. same thing happened domestically

1967 with the dollar in the domestic U.S. economy. It was actually pegged to a redeemable weight in silver and the dollars in your pockets were actually silver certificates from the United States Treasury. You had the Federal Reserve notes inter-circulation at the same time.

It's a similar analogy to where we were where we had two competing dollars and they trade at par with each other one to one and everybody treats them as the same thing. Stable coins. Stablecoin. and Federal Reserve note dollars, we still treat those as one-to-one,

but they're two dollars competing, and one of them's coming and one of them's going, right? And in that period where they're competing, can they hold different values, even though they're tradable one-to-one? Great question, yeah. So from an arbitrator's standpoint, the answer is, yes, they do have different values,

and the difference is pocketed by the financial place. who have scale and the ability to do so. I'll go through a few examples who did that with these silver certificates. But for every day, you know, run-of-the-mill, you know, economic transactions, say you're going out to eat or let's say, I don't know if you've ever used a stablecoin dollar to pay for anything. I don't think I have, you know. I've used it on like Bitcoin back loans. I've been paid out in stablecoins, but I think that's the only time I've ever used them. Yeah.

I know for World Cup tickets, FIFA made us pay for early advanced tickets. stable coin dollars. That was the one example. And granted it's FIFA, of course they're going to be involved in milking everything they can out of it, right? Of course, the most corrupt organization. The thing that keeps me up at night with Bitcoin cold storage isn't Bitcoin failing, it's my setup failing. And this is where Anchor Watch comes in. With Anchorage, your Bitcoin's insured with your own A plus rated Lloyds of London insurance policy, and all Bitcoin's held in their time-locked multi-sig vaults. So you have the peace of mind known your Bitcoin's insured while not giving up custody. So whether you're worried about inheritance planning, wrench attacks, natural disasters,

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them maybe you'd do the job for a buck back then like just the inflation who knows but if you gave him the federal reserve note which is like everybody recognizes those today like they're the greenish tinted ones they got the green seal or if you gave him the treasury silver certificate which was like a much more whiter background. It had a crisp blue seal. He might not have like paid any difference. He wouldn't charge you like a 10% premium for one versus the other. He'll take your dollar one way or the other for mowing your lawn.

But the people who recognized what was going on and they recognize that the redeemability window for silver on those silver certificate dollars was closing, you had really clever guys like Henry Jurecki is a story if you want to look this guy up. He advertised in all the newspapers around the U.S. Like, hey, bring me your silver certificate dollars. I'll collect them here, every major city, and just brought him in. He'd even pay people a little bit of a premium. And this is in the 1960s and 1970s.

If you've looked at a long-term silver chart, right, it's going like it looks like Bitcoin, the last 10 years. Yeah. And famously peaked at like that $50 level back in 1982, right? So this, like there were a few figures who pulled these silver certificates out of the economy. And then they went to the treasury, redeemed them for the, you know, silver billion. And sold that into, you know, a market, captured that risk-free profit. it, I've done some calculations on what it amounts to, but basically, like, that transfer of, or that

transition from $1 to the next, I think it nets out to, like, the arbitrageeers probably captured 10% of the total silver certificates outstanding. So it was basically a tax. The government was forced to devalue, right? You get these things from time to time, right? That famous story of George Soros and Scott Bessent was there famously, you know, now. in the, you know, 30 years later type of history playing itself out, breaking the British pound. I remember that story back in the early 90s, right? So, yeah, the big hedge funds or the people with capital or access to dollars, yeah, they'll profit off of the transition. And yeah, those same things will go on this time around, right? All right. But back to like these perpetual

preferreds. I've, you know, just been warning about this environment, what's going on with interest rates and, you know, potential for credit spreads to, you know, widen and go into that backdrop on like a 2025, 2026 story, all that. But when we get into like a late innings of a credit cycle, right, you get into a dynamic where the money supply, these boards, these figures, you know, these men in suits and dark rooms, right? They can confuse. track money supply. They'll, raise it, they'll lower it. On the cycles

that work for them. And in the late innings, or the late stages of the credit cycle or the economic cycle as well, where you don't want to be when the musical chairs start getting taken away, you know, from the party, you don't

want to be further and further out on the risk spectrum, right? So if you think about it, like the riskiest, most frontier credits, like if you move from credit quality, right, the ratings agencies are like AAA, that's your safest thing. Keep going down notches. Like everything down to triple B minus. That's technically investment grade. Some of those, like there's a lot of private credit stuff up out there that I would still consider frontier as a fixed income portfolio manager. You know, everybody follows these stories, the blackstones, all of that, private equity,

private credit, insurance cos, all of this stuff going on. That's definitely. That's definitely, Definitely frontier, but then there's whole other levels of frontier. You can get into like high yield rated issuers who are doing things like subprime auto lending. Those stories are out there. And when the musical chairs go away, that's where it's harder and harder to, you know, get, like climb that elevation to get to safety, like when, when, you know, tides washing out, that type of thing. So edge of the frontier in credit right now, for better or worse, is these new perpetual preferreds that have been issued. This trade we talked about, don't think about it as a Bitcoin strategy. Flip your mindset, go live in the upside down, and think about it in terms of a dollar strategy. It's basically a frontier outpost in the credit world right now.

That's where you see, all right, standard impores. they gave strategy an issuer level rating. You know, widely publicized it's a B minus. It's the rating that they can get based on the hard rubric. These teams, they have very well established defined criteria. Can I just ask you a question on that quickly? Because obviously, I don't live in this world. So you have junk bonds, you have investment grade bonds.

This is somewhere in the middle. So what kind of, sorry, you want to jump in? No, go finish. Sorry. It's not even junk. Sorry, go ahead. Oh, this isn't even junk bond? It's, it wouldn't even, yeah, you can't call it a junk bond. It's not rated as junk.

Okay. So, I guess the question was, like, who is this aimed up? Because one of the things that, like, Sailor and, I guess, like, Fong's, the strategy guys have been saying is that they want to, like, attract institutional type capital to this market. But I know they've also said that 8% of the people that are buying this is still retail. So is this kind of a mismatch? Is this why the sort of big money isn't necessarily going into this in droves at the moment? I think there's a lot of reasons. It's a, we could go down a deep rabbit hole on this topic.

It depends who you're talking to, right? Could you get a pension, you know, to buy this? So if you're looking at a pension, it sits on a giant pile of assets. It has different buckets. Like it has a fixed income bucket, a fatalecate into it has an equity bucket. It has a, they call it alternatives buckets, which would be like a non-exchange traded, non-public investments. So, yeah, maybe a pension. You can find a risk bucket for anything.

They have a, you know, a multi-asset framework. You can find something in the allocation model to, you know, plug it into. For different investments, say it's an endowment, something like that, where they have much stricter criteria. they have to hit certain total return targets and not miss them by a very wide degree. They might say, hey, we have a 5% total return target. We need to hit 5% like hit the dartboard right on the bull's eye every time. Don't miss the dartboard. Well, if you take a 20% loss on, say, a perpetual, like, equity and you allocate it

and do it in size, you're like, well, we shot for 13. We're minus 20 right now. Like, we're all over that dartboard, but we really needed those shots right on the target. So there's some investors, like, it just may not fit into their target objectives, you know, just individual criteria, stuff like that. But if you go look at like fixed income allocations, it's going to be very specific what type of credits are within the mandate, right? So there's all kinds of fixed income boutique managers out there. There's a lot of different accounts. But like the most popular is going to be you have to have an investment grade.

Like that's going to be the bulk of all fixed income assets. Like just guessing shares, I would say probably at least half. It'd be the majority of all fixed income or just dollar IOUs in that old offshore dollar framework that we're coming out of. They have to get an IG rating if you're managing a big pool of IOU money type of of assets. All right. So I'm just getting into the weeds a little bit. So strategy has an S&P rating at the corporate issuer level, but that's just the outlook on the corporation and its ability to service its existing debt. Now, it's very specific here. The only debt outstanding

are these convertible bonds. That is a, you know, if you look at the prospectus, like it fits the definition of a debt security, right, or a debt offering, right? It's got a specified maturity date, a contractual rate of interest, all kinds of these things that collectively you look at the thing. It's like, does it walk like a bond? Does it talk like a bond? Okay, that's a bond. So the SMP 500, or the S& Standard and PORC, corporate issuer that B minus, that's just talking about, that, that's an assessment of strategy as an issue itself. Now, the rest of these Bitcoin Treasury Coes, they don't have that. it's actually a pretty high cost to,

you have to pay, um, standard impores or one of the ratings agency, like an annual, it's like a subscription fee. And, uh, they just charge you like for their team,

within your given sector, um, to maintain coverage against you, right? Then when you go make a debt offering, like one specific bond, you can have the ratings agency, rate that thing individually.

And then if you're trying to like, get your, like, uh, bond placed, like to raise, capital from, let's say it's a fixed income fund, like an ETF, or it could be an insurance company, or it could be a firefighter's pension, whatever.

Like, each one of those may have a mandate where they need to see certain things to include that security in their portfolio, right? So these, all right, the convertibles, as far as I know, or as far as I'm aware, that those were not rated, that it just be a non-rated security. Like if you look it up in Bloomberg or whatever, they'll just say NR, not rated. But if they wanted to get these rated at the individual level, like, yeah, you can, you can pay a ratings agency. The team will tell you what it is. It's a very strict rubric of like a credit box that you had to fall into as an issuer. In terms of the, terms of the deal, like, what type of like cash flows are backing this, all of that. And so when S&P did that B minus rating, what they're really looking at, like Bitcoin is like, it's not. It's not. even in the world. Like, it's not even in their framework. They're looking at the debt, uh, outstanding, and that's just the convertible bonds at this point. And then the existing

analytics, the software business, what those cash flows look like. And then they're looking at the, you know, the cash flows, the projections, all of that. And they say, all right, how, how, uh, you know, credit worthy or how, you know, sturdy is this thing. So they're not even looking at the Bitcoin, No. Okay, interesting. So would it be fair to say then that rating is probably low, considering they have all those assets on the balance sheet? What do you mean? Is it low? Like, is it sandbag? Is that what you're saying? Is it like, is it rated worse than it is in reality? Um, well, with, okay, so if you're thinking about Bitcoin, you're trying to put it into dollar terms. Like, we're trying to plug a square peg into a round hole here. Um, with these two things.

So you've got two things here, your dollar liabilities. Like think about strategy, but most of these Bitcoin Treasury companies are doing very similar things. Your liabilities where you have a, like say the perpetual preferreds, right? You have a conditional promise, but it's not an obligation, right, to pay these monthly distributions. or now they're trimming it down. Now it's semi-monthly or daily. Or, you know, maybe they'll get us down to the minute next. You know, who knows.

But it's not a contractual interest payment obligation. And the lender has, or the security owner, because I don't even know if you're holding these perpetual preferred if you'd be considered a lender and say a courtroom, if the situation ever got there. if you could even take it there. But those daily cash flows or semi-monthly cash flows at this point, those are at the discretion of the board, right?

So my point there, you've got short-term cash-low obligations. You can turn them on or off, right? If you turn them off, right? Well, that's going to have implications from the capital markets because it's the same thing as a rug pull, right? If I tell my kids, I'm going to get them ice cream this evening and I don't get a ice cream. Like, number one, my kids are going to hate me. But, but I'm also, like, setting them up to not trust me at all. Like, it's just not a recipe as a parent, right? You want to get into. All right. Different analogy, bringing in my own knife there. Always, if you tell your kids, you're going to get them ice cream,

go get ice cream. You got to do it. Yeah, you have to do it. Yeah. So if you want, it's, yeah, it's a behavioral response, right if you want the behavior hey keep buying my securities right i have to buy them i have to give them the ice cream all right so they've got a daily um liquidity obligation or semi-monthly right they don't have any maturity date though like there's no there's no tenure you know there's no 80 year and you see like banks frequently issue perpetual preferred or not perpetual but they'll put like a 2088 like i can go into bloomberg right now and find you a ton of morgan stanley goldman sacks like all kinds of similar issues. They'll give the, like to make it the hybrid security look a little bit more

debt-like, they'll put a maturity date on it. But, you know, by look and feel, it's a very similar thing to what these Bitcoin Treasury codes are doing. All right. So my point there, you've got short-term liquidity obligations. Now with Bitcoin, you do have a cash flow, right? but it's as the owner of the Bitcoin, you can create a cash flow by selling your Bitcoin. But it's of unknown nominal amount. And also, you can control the time you sell in the most part, unless you're forced liquidated, like a secured borrowing. That's not the case here.

But they could, you know, they do have that ability to create a cash flow, a dollar cash flow with their Bitcoin. But right now, like the credit agencies, I don't. think that's part of their framework. We went through this, I went through this process for a private credit fund that focuses on Bitcoin back lending. We got, we got a preliminary rating, all of that. Let's just say, like, you can qualify for IG. They can, they can definitely qualify Bitcoin back lending for IG at this point. Or you could. I don't know if you could anymore. So it is possible. But yeah, so the timing here, there's, there's,

you've got some problems because a lot of these companies like to keep paying this you know these distributions right and I'm very specific I don't use the word dividends dividends on inequity are you know think of them as like a it's not a return of capital to shareholders you're you're paying you know generally financing that out of the retained earnings of the of the business like for the most part if you're not doing that then you're dividend end is by definition not sustainable. These Treasury codes, the management has made very clear. They're not that. They're return of capital distributions. So very specific there. But I don't know, just to bring this back home what we were talking about, like we're talking about like a frontier credit here.

Like this is like tip of the spear. It is the, it is like within dollar credit itself. You're talking about a strategy that is novel, unique, not historically. You've seen perpetual prefers. We've got, you know, a lot of iterations in history where they've been important instruments in capital markets with the British consuls being the most famous one. But this strategy, doing it, you know, selling it, selling perpetual preferreds, flowing that into, you know, Bitcoin, promising.

an interest rate on, you know, that ability, which at the end of the day, all boils down to your ability as a company to access liquidity in capital markets. That's what's new and novel here, in my opinion, right? So I think, you know, if you just take the Zoom out view and we can start talking about this big dollar transition that's underway, like, you know, in these big transitions of history from one dollar to the other, or just monetary transitions in general, those like inflection points are where it's very hard to see

when you're leaving an old world behind and moving into something new, and that's where you can get wrong-footed, right? So if you build up a strategy, and this doesn't mean, you know, the Bitcoin treasury companies and those strategies are alone here, if you're building like a credit strategy or a carry trade strategy for an,

old world, this offshore dollar world that's being left behind, you can have problems if you're not along with the Scott Besson framework, in my opinion. So just kind of note or just seeing this all play out and realize what was happening, this big, like, this is fourth turning stuff, right? This is like what it looks like in capital markets. You don't want to be caught off sides. Like, I'm going to make an American football analogy. Offsides and soccer. right, same thing. You don't be off sides when the ball is in the air. In American football, it's like, you don't want to be a cross on the wrong side of the line of the scrimmage when the ball is snapped. It's that sort of thing. Don't be over, don't be too far ahead of your skis

when, when that liquidity pullback starts to happen, the tightening in the system. And a lot of it's like just manufactured out of the developments we're seeing, Venezuela, Iran. Those are, those are dollar liquidity events, the tariffs of Liberation Day, April 2025. Those were dollar liquidity events. And it's all coming from the policy of this White House and then the broader capital markets, power factions,

who were ultimately the straws stirring the drink, in my opinion, pushing this transition ahead. It's really that. I've been trying to call attention to people doing this, like saying things like, hey, borrow on margin on your Robin Hood account,

then buy this, you know, perpetual preferred at 11, 12%, I was like, guys, that's actually, risk on risk, probably more dangerous than you think. And it was very hard to see what was going on to the, like, the dollar. Hopefully, I will explain it here as I drone on a little bit. It's a much more interesting topic, I think, than I've, that I'll lead, then I'll lead you to believe here. But that's what I was worried about. And I think we're in that world.

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on stretch and strategy. I like the business model that strategy started with when it was basically turning cash flow from the business into Bitcoin and put it on the balance sheet. Like that is awesome. And it's essentially what Block have done. It's what Tesla and SpaceX. That makes a load of sense to me. I've kind of stopped trying to rationalize.

The whole sort of strategy behind it has got so sort of complex and convoluted that I've stopped trying to rationalize it and I've kind of just put into the bucket of like my gut just says I don't like it. And my question really is like, is this an existential threat to that business or is it something that they'll get through and be okay? Like how bad is it? Because it's very easy to say like it's an existential threat when stretches at $81 or whatever it is right now. But do you think it actually could be? I'm not going to go out and say, you know, hey, this is going to be the end of it. I just don't know. We'll see.

They're in a street fight, though, or an alley fight. This isn't where I would want to be right now if I'm a manager. So they're going to have to figure out a way to punch their way out of this. But, yeah, you raise a good point there. So you think about strategy as a business before August 2020. And, you know, I come at this from kind of a, I've been, I've been aware of Michael Strategy as business. And we were actually a customer.

So Rob Hamilton at Anchor Watch, CEO there, we actually worked at the same business for a little stretch. I think Rob actually overlapped a little bit after me. But we ran an ad exchange or worked out of a small startup, but basically what that amounts to, I don't want to go too deep into it. basically think you know how commodities you know oil exchange right uh you buy oil on exchange it gets delivered etc um these businesses like when your ad advertisements load like when we were doing it it was just desktop and mobile was big and now it's smart tv it's pretty much everything is running through these exchanges

but you get your supply your you know your media site the spn you know whatever when you load the page they send their supply over to the exchange they say hey, we have a, we have a unit of inventory. We have some eyeballs here, put an ad up. The cookies come through, all that stuff. You get your audience segments. And then the demand side comes in, Toyota. All right, show this guy at car.

We were in that business model. You had massive amounts of data, just tons of activity. And we actually used micro strategy, like their analytics business. So, yeah, we were customers of that product. Rob and I, this goes back over a decade now. But prior to Bitcoin Standard Era, like, I find it very interesting, like this company. Like, you see how AI played out, right? Like, 2023 was really when the LLMs, all of those products, the chat GPT, it really hit

public release, right? And the industry in the background was building up and preparing for that. And like, the insiders knew, right? But that's when the world woke up to it for sure. Yeah. But strategy, if you go back and look at their earnings calls, right, or their annual reports, they're talking about like baking in artificial intelligence, like exactly what we're talking about today,

into their business intelligence, like data analytics stacks. Like the product terms, they had this all trademark. There was a product offering back then as hyperintelligence, all one word. And they called that the future of the company, and this was going to be the hyperintelligence decade. And what it was, like, it was the,

like they were taking the company into AI, right? And they still, like, they still have AI product offerings, if you go search for them. But they're just not pushing them hard. And they're like, if they were getting the traction in that market, like it'd be a different story. We'd be talking about a different company today than the one we, than the one we have. But I think, yeah, as you were going into it, that initial, you know, the micro strategy version of the Bitcoin company, right?

It was an analytics company. We are the treasury. I keep using the word we today when it's not me. But yeah. the management, the board, all of that. The Bitcoin strategy then was, hey, we take our treasury reserve, which we talked, or a cash reserve, which was a melting ice cube, like direct quote, when we move it into Bitcoin, problem solved, right?

And the idea was, if you go back and read the press releases, hey, we're still bullish, we're excited about growing this analytics business, hyperintelligence, blah, blah, blah. All right. Whatever happened over, like a Bitcoin bear market happened. in 2022. The AI trend happened in 2023, and there was still some effort there on, you know, the AI, you know, product drought. But somewhere, was it like,

2024 was kind of their year of convertibles. And then before the November elections in the U.S., you got the 21, 21 plan or, you know, whatever, we're going to raise 21 billion of common equity and 21 billion of, you know, credit strategies. And that's where, you know, they did the equity first, cranked it up, massive issuance. And, like, it started on late October, 24, saw the top on the strategy share price

and the euphoria after the Trump election win and what we thought that meant for Bitcoin, right? Maybe we, you know, in hindsight, we might have got ahead of our skis a little bit. But then we got the perpetual preferreds, all that. But I think it's not just one company, right?

Like you transitioned from this B.I. analytics and then it was like we're also doing B.I. Plus AI. And then it's those two things plus Bitcoin. And then it's like, hey, what happened to the AI story? And now it's just all perpetual preferreds. Yeah. Like, if you're thinking narratives here, it's like, have you seen the movie, the prestige, the Christopher Nolan film with that? Great film. Yeah, I love it. It's crazy. Like when I was like, Mom, you got to watch this movie. I watch this my mom. She's like, I hated it. I was like, these people, like they live their whole life to take each other out. It's a

insane. But yeah, I was thinking about that. It's like our narrative framework, right? It was you start with the pledge, right? You present this thing. Then you get the turn. It was like, oh, you make that transition, right? Something happens or you kill it, you make it go away. Well, I think that's kind of where we're at right now. It's the something's going away. And then it's like, all right, well, you're waiting here. The prestige is coming

next. Something's going to happen. The bird will, you know, come back in front of the audience, we'll present it. But, you know, the little girl in the movie, right, what is, you know, she sees like, no, no, no, no, that's not the same bird, right? It's kind of the same way with this dollar transition going on, right? It's like, here's here's a dollar, here's the bird. It's like, no, it's a different, it's a different thing. That's how I see something coming out of this, right? This is going to be, there's going to be something important happen here. You don't have, you know, almost 850,000 Bitcoin out of 21 million. And, you know, if you look at the actual recoverable supply, it's, it's a much bigger share, like, on a lower than $21 million number, right?

So there's no way in, and, you know, snowball's chance in hell that this thing isn't not important as this world plays out in the next few years. I just, like, I don't know what it's going to look like. It could, like, the range of outcomes are very broad. But the point, like, the risk I raised here when these things were priced at par, like, par is perfection, right? You can't, if, if the market starts pricing these things at, you know, 101, 101, 102, 103, what are they going to do on this variable rate, especially like Stretch, right? They're going to cut your interest rate, right? So your upside is capped if you're buying Stretch at par or much of these other offerings. The downside was, all right, the ability to maintain these distributions, right, for a lot of these Treasury Coes, the ability to service debt is, it's coming from.

If you look at the financial reporting, the cash flow from operations doesn't cover, say, the operating expensive to just keep the core business. I mean, the core business is selling securities at this point, and that's kind of your tell. But to keep that thing up and running, you don't have enough to make these distributions on your preferred equities or your digital credit, right? plus your operating expense for a lot of the situation these companies in, without that ability to raise capital, to sell securities in to the capital markets and return for those dollars. And that's cash flow from financing, CFF. If capital markets pull back for whatever reason, and I was arguing it's probably going to be a dollar story, right? So much, we're still swim on, like we talk about Bitcoinization and all of this. And I do believe that's happening over the long term.

Long term here is probably a decades, multiple decades type of time. I expect this to take the rest of my life, right? It's kind of how I am prepared for this to play out. But the waters we're swimming in, it's a dollar liquidity world, right? So if your strategy requires that dollar liquidity, your upside is limited as an investor. you have no margin of safety if you're coming in at, say, par, there was only downside. So the only thing that could happen is that adverse outcome we're in now. Now, could these things recover back to par?

Yes, that's in the range of outcomes. But now you've got to dig yourself out of a hole as, say, like, say your timing, right? If you wanted to pull your principal out of your holding, that you're parking this in in the brokerage account, you're dependent on secondary market liquidity. So when that's not there, you may not be able to get the price you want or you thought you wanted for your credit. So yeah, we'll see how this plays out. It's not an alley fight. Like the best way to stay out of an alley fight or a bar fight is like, don't get in one.

But we're past that now. I say, I'm not in this alley fight. But everybody involved in this. I guess I kind of am, long Bitcoin, just, you know, cold store. It's definitely going to affect the whole. Yeah, but, I mean, you know, don't store next month's rent bunny and Bitcoin, right? It's generally good advice without giving any financial advice here.

But yeah, we are. Like if you're attached to Bitcoin in any way, like you're going to be caught up in the blast radius of what's going on here. It's certainly going to be interesting to see how this plays out. Let's get more into your sort of dollar thesis here. Because one of the things you said earlier is like 2022 was a pivotal moment. the world kind of started shifting away from this petro dollar offshore dollar system. And I'm curious to know exactly what you mean and what was the catalyst there.

Okay. So this, you know, World War II, I'm just going to start history of World War II right now. What we do? We come out with like the allied powers. They form an economic block. And it's the largest trade block in the world. Like we talk about global trade, right? You see it in the headlines almost every day. That is the most important business in the world, that trade franchise. There's no public equity that foots to it. But if you think back in history, right, like the Dutch VOC or British East Indies companies, like these are the largest market cap firms and like those transitions that happen, like which nation state owns it or who is the scene. Do they own?

Yeah. Or yeah, exactly. Exactly. Like India. Yeah. The entire nature. Like exactly. Or nation states.

But yeah, that, so that trade block is the, I mean, it's bigger than SpaceX, bigger than Google, all of that. And then the flip side of that, right? When you move a shipping container from, let's say it starts in Hong Kong, loads up the goods, delivers in, I don't know, Rotterdam, right? If you're in Europe or you're in Australia. I don't know where you're made. port is. I'm not guess Sydney. Something like that. Yeah.

Your counterpart of that is like flip it. Transaction is, or sorry, money is one half of every transaction, right? So when those goods move from A to B on the ocean, your financial centers, like your network, this offshore dollar network, dollar just became coin of the realm, right?

It replaced the British pound, which, you know, replaced the, you know, Spanish silver dollar, which replaced blah, blah, blah. but that global dollar network, that offshore dollar, was actually tied to this post-war, like post-World War II architecture that got set up, right? And it's still holding together today, like NATO, your BIS member banks, right? All of these federal or central banks like the nation states who opt into this system and settle, let's say, between themselves at the Bank of International Settlement. all of that. That's part of this business franchise, right? All right. So what you've slowly seen since 2008, right, in this system is over time, you've started to see the, let's say there's

cap table partners on this franchise. And before World War II, let's say that, you know, London firms were the, you know, the senior partners and the New York firms were the junior partners or the American capital was junior. It's become very clear at some point that role is flipped over the 20th century. And in the last, let's say 10 to 15 years, ever since we've gotten through the GFC, the GFC was like the starting gun. Oh, this offshore dollar bubble thing. This is not long for the world anymore. We need to move on to some other thing, some other framework. And it's been in process, like moving gradually than suddenly.

But in the last, I'd say, you could say SOFER, the launch, like the go live of SOFER in roughly 2017-2018 was your, was a key seminal event. But it went even further than that. Obviously, we can talk about COVID and its role in this. But 2022, like when the bond market was selling off, what the Fed did, like we saw the inflation coming, we raised interest rates, we sacrificed the U.S. dollar bond market, right? We let the price depreciation hit to account for, you know, the purchasing power loss from inflation and all of that. At the same time, what we did is we moved the venue for the marginal dollar in this

credit-based dollar system from London, which was set by the London Interbank Offering Rating. or LIBOR, where all these capital market banks, like mostly firms based in the UK, but it included American banks as well. Like they have a presence in London, just like HSBC, standard chart, etc. JPMorgan's in the game there. But you move from this venue where all the banks, you know, with LIBOR, would get together at the end of every trading day and set the overnight cost of, you know, short-term dollar funding in a mechanism that was not.

not, there was no market-based transaction to it. All you did was reply to an email or, you know, something like that. Report your number of what you would lend to your best customer on an unsecured basis for a short-term, you know, dollar loan. You just report that into a spreadsheet. There's a statistical process. You cut off the top. I can't mean. It's like the top four and the bottom four and you take the middle, I don't know, take average of those or whatever. And, oh, that's LIBOR. And that's the reference rate for. all of the dollar credit outstanding, like your adjustable rate mortgages, your auto loans, like credit cards, like anchored the LIBOR in this process. And very easy in that statistical

process, you have no economics getting in the game, right? There's nothing. You're not going to lose. It's, it's pretty easy to manufacture or like massage the number that comes out of that process. If you're, you know, one of, let's say, the 15 or 16 money center banks, who is a contributor or has a vote in that process. So you can see in that framework how that's more important than the Federal Reserve, right? And people talk all the time about the Federal Reserve being like 12 people in the room that get to pick the rate. And this is essentially the same. Yep. Well, more so, right? Because the Fed has had to respond to them. All right. So this is where I say, I wrote a piece on substack, maybe put in the show notes. But I explain it in terms of in this

era. So think about it's a, it's an offshore dominated era. The whole point. point of this system is you've got, all right, you've got this block coming out of the, the, the western side of the Allied powers, you know, west of the Iron Curtain,

post-World War II. They've got a financial system. And the economic model was, hey, we're going to build up credit, dollar credit. We're at the beginning of this framework, you start at Bretton Woods, you started with all of the

local currencies, like in FX markets, were all pegged to the dollar. and then the dollar would be pegged to gold, and that's for cross-border capital transactions, and then domestically your dollar was pegged to silver for households, businesses in the U.S. Over, you know, 20 years after World War II,

you know, we broke that metallic peg, you know, famous Nixon 1971 window. And then after 1971, we allowed, like, think about Nixon, what he did is defending the U.S. gold vaults. We'll start there. I'll just not go any deeper than that. But once we got off of that metallic, like redeemability or anchor to the dollar, now you're on the credit standard.

And in the kind of the economic framework for this trade block, the idea was, okay, well, if you just expand credit, like money is credit, right? They're the same thing. You print dollars into thin air. It's debt, but you're printing the dollars. what you were doing is you're generating incremental economic activity like you're moving a shipping container of HDTVs from you know China to Rotterdam right you raise the the amount of dollar credit outstanding and that just it's a one-way trade up for for you know

money supply and this is this is how you get a you know offshore dollar credit bubble plus onshore dollar credit. Like, it's hundreds of trillions of dollars, right? And in that framework, right, where credit has to, like, it has to increase. You can't let that thing contract. Otherwise, the whole thing just de-leverages upon itself. The U.S. has to be subservient to the rest of the world. And then you have to have a U.S., inside the U.S., you have a, like, a dominant, a framework where the central bank is dominant. So I call this era, like once we get into 1981, you know, Volcker raises rates to 20%, squeezes out the inflation of the CPI inflation, right, of the 1970s. You get a policy framework in the U.S. where the Fed dominates, right? And what it's doing is every time that the global economy wants to, like, it goes into recession, the U.S., like the onshore institutions had to bail out that offshore bubble, right?

And it's increasingly every time, right? So let's say in 1987 we get into the flash crash, right? What do we do? Oh, we cut interest rates, right? Then once we get to the next version in the late 90s, you got the Southeast Asian financial crisis taking place, Russia's defaulting, all that stuff. LTCM is collapsing with all of its Nobel laureates, the hedge fund operating out of New York. What do we do? Oh, we start to do the typical lower.

interest rates, but then you're adding, you're starting to add in QE, right, which like made a main facility, central banks coming in as the, not even lender of last resort, they're like reliquifying the system. They're sopping up all of the excess credit that exists. And then it, like, monetizing it, issuing it out. And that's what QE is in like, uh, each cycle. Like 2008 gets worse. COVID gets, you know, more so. That's why, you know, we all recognize it, right? And Bitcoin, we, we, we all nailed it and everybody came around the table, listened to the podcast 2020, 2021, and we got that. And then we just extrapolated that story and said,

this thing's going to go on to infinity. All right. So you had a role where, all right, it's Fed dominance. And then you also had Congress as well, right? You had the Keynesian approach where what do we need? We need more fiscal stimulus, right? You just fiscal spending acts that don't make any sense. Like, they're just boondoggles.

There's diminishing marginal returns on these same projects. Like, I make the analogy. So fiscal spending in the 1950s, what did we get for it? You got the Eisenhower interstate system in the United States, which is awesome, right? I've been to a lot of countries in the world, and, like, our highway system is pretty great. I haven't seen the German Audubon, though, so maybe that's, you know, I'm not, I haven't seen the best of the best. But by and large, the Eisenhower interstate system, like, it did wonders for the U.S. economy. It was great, right?

clearly a good use of credit and federal government spending. But by the time we get into 2008 with the American Recovery Act, you get into things like, I can't remember exactly the size of it, like just ballpark it, trillion dollars. What we got out of it was like my city where I came from growing up in Missouri. Like we got one more interchange on our highway. It's like whoopty do, right? Didn't make a bit of economic difference to anybody. Like just there's just one more stoplight on my way home.

And I think most cities in America, there are probably thousands like that. And then by COVID, it's like CARES Act. We're going in, we're taking on these trillions of dollars of debt, placing it on the public tab, right? And we were literally just paying people not to go to work. So like you just, it's like the, we just make less sense over time. Yeah, it's into absurdity and decadence and, you know, all of the above. All right. So that's the fiscal route. And we just had a Congress that would go along with it. And I don't know how much time or we can beat this dead horse. But I view Congress as just a total deadbeat organization in the United States. And we don't have any way out of this. Like we can't, you know, unlike a European democracy or constitutional structure, like most of them have the ability like the king or the prime minister or something, they can disband Congress, send them home, hold snap elections, all that. U.S. we can't do that. So we have a Congress that's compromised, but. and paid for all of that.

And they'll pass any fiscal spending bill up until, I mean, maybe modern day, but we still do it, right? I haven't seen a Congress yet who has turned down,

um, um, like a fiscal stimulus bill. Um, so I called that era, like the era of Fed dominance, like from a U.S. uh,

framework. And what that was, like you had Fed chairs like Alan Greenspan who just passed away this week, age 100. Ben Bernanke, Janet Yellen, and I'd include Jay Powell in this bucket, where they're willing to just keep cutting,

like doing what needed to be done to bail out this offshore dollar credit bubble. And he kind of had to, right? The guns to your head. You can't just change the system, you know, on a whim. They put people in these roles who would do what the system needed them to do. So what do you do?

You cut interest rates every cycle, lower lows, lower highs, till we got to ZERP, Europe, Japan, they tried to do NERP, negative interest rate policy, QE, rents repeat. But 2022 was that moment where, all right, there was a tug of war. And at the end of the day, all of this offshore dollar bubble is parked on the economic potential. And you could just say the existing economy itself as well of the domestic United States. the system requires the United States Treasury to go into ever-increasing amounts of debt.

Like I said, if you're offshore, you don't have access to the Fed. So your next best IOU is that U.S. Treasury security, right? It's the Treasury's IOU. That's the highest quality dollar you can get with minimum credit risk. That's as close as the money printer as you can get in this framework. So this system requires not just a Fed that'll dominate domestic policy, but it requires a United States Treasury that is subservient to the central bank and then also subservient to the rest of the world, the other G7 countries or whatever. And if you think about it in that mindset, that's how you get the America first kind of seeds springing up in the 2010s and it starts to make a little bit more sense. But your Treasury secretaries in this Fed dominance era, or I'll call it equivalently, the other side of the coin is treasury subservience, you get Treasury secretaries who will just do whatever that system needs.

They're guys like Larry Summers, Timothy Geithner, Hank Paulson, Jacob Blu. Like we just named Janet Yellen. and they'll do whatever that offshore system needs them to do, which includes running up a debt to $40 trillion, like every stop of the way. All right. So the seeds of this transition from this offshore dollar to the stablecoin dollar, which we've seen materialized that I've talked about,

it didn't happen overnight. It was in the works. I worked at Citigroup back in the early 2010s. I came in post-GFC and I had to, no idea what I was getting into. Yeah, let's just say that. It's shocking. Like, balance sheet, like, we were looking at, like, a couple trillion dollars in subprime, like, asset exposure on the balance sheet.

And that was a time when, like, I didn't even know what a trillion dollars was. Just seemed like an insane amount of money back in 2011, you know, 2012 era. And our team was publishing, like, basically the rate card of Citigroup's mortgage rates for, like, all. of its branches in the United States. It was like, well, a lot's right. A lot of, a lot is riding on the line of us getting these numbers right, you know, people's mortgage payments for the next, you know, 10, 20, 30 years potentially. All right. So even in those meetings, and I was just like an analyst starting out, we were still talking about replacing LIBOR and moving to something else. We knew LIBOR had to go away. And SOFER was already on the table. I'll explain SOFER a little bit. As early as

those days. And most of us, like, at the non-executive level, like, we didn't even understand what the heck was going on. Like, coming through university, I did a master's in finance, very quantitatively focused. We didn't go through any of this, like how the dollar structure worked. Like, it's just not there, right? You're learning quantitative formulas, number crunching, all of that, like pricing exotic derivatives. How the system actually works isn't taught to you. Or isn't a focus. Maybe that's changing. who knows. Actually, it's the podcast circuit. Like, now that it's talked about, people can find this.

And that's made all the difference, in my opinion. All right. But this was going on at least since the early 2010s. And that transition to SOFER, we spun up that system in, I think it went live, like, for scale in 2018. And those dynamics, let's just say COVID showed up at a very opportune time for this transfer away from, London-based pricing with the LIBOR model to New York-based pricing, the SOFER model. And the key thing about SOFER, right?

We talked about the banks, like you literally just make up the number. You don't need that much evidence to support your submission at the end of every business day. With SOFER, it functions differently. Like, it's actually published by the Federal Reserve Bank of New York. they're operating as a middleman, a custodian, call it a tri-party lending relationship. Three players involved here. Think about like the Federal Reserve Bank in New York is like the house.

And then you've got a borrower and lender showing up. borrower needs dollars on a short-term basis. Lender has dollars that they can, you know, deploy into that loan. But the borrower and sulfur has to post collateral, right? And for the most part, like most popular collateral, it's going to be treasure. So now the skin in the game. Exactly. You can lose your highest quality credit, the risk-free rate in this system's framework, right?

So, or your risk-free asset, right? So if you mess up, you over-lever yourself, you've actually, yeah, there's consequences now. Which is obviously how it should be. Like, that makes total sense. 100%, right? And in a perfect world, that hope, I mean, there's no such thing. But as we move along, like notice here, your skin in the, the game is just another IOU on this treasury debt that keeps ballooning. But moving from

nothing to something, like it actually is a massive step. And then, you know, eventually, hopefully it'll be like a real, uh, economic asset, uh, like, let's say gold or Bitcoin, right, uh, where you lose something of consequence and the private sector, households, businesses, they have a say as well. If you zoom out in the Bitcoin story right, now it's starting to make sense. Like Genesis block, Chancellor's on brink of second bail out of banks, right? What was that saying?

Like, when Bank of England or the Fed or, you know, whatever central bank, when they come in in QE, what they're actually doing, like, think about it like, think about it like a poker game, right? You've got your players who are playing this game, shrewdly, wisely. They're building up a chip stack. And then your counterparties, your other players at the table who don't calculate, their risks correctly or take too much risk, they get off sides, you know, take too much risk at the wrong time in the cycle, you get, you get rinsed as, you know, maybe is going on right now

in Frontier Credit, you know, topic we mentioned earlier. But the whole point, like, Chancellor on Brink of second bailouts of banks being in the Genesis block was when you change the reserve money or you can just, you know, willy-nilly inject more chips if you're the house at that poker tail table so that the short stacks get reliquified every time the the big the big stack is about to take someone out. Only sent his break. Exactly. So that's what Bitcoin does.

It's a reserve money. Unlike gold, it's a ledger money. And it's an even playing field for everybody who chooses to play at that. Poker table is not the right analogy here. Never bring the casino games into a financial analysis. is what I've been taught to do in speaking with clients. But it makes sense to me, though.

Yeah. So in terms of this transition then, I guess this isn't something that's just happened in the last couple of years. It's been a long thing which maybe started or, you know, started in 2007, 2008. You then have the sort of 2017 libel switch to sofa. Then the sort of 2020 to 20.

It wasn't switched yet in 2017, 2018. Yeah, we'll get into that. That transition starts, I guess. And then 2020, 2020, is you have COVID and it's also like the end of the 40 year bond bull market, which I imagine is a part of this. Oh, absolutely. Yeah, the end of the 20 or end of the 40 year bond bull market was your.

Yeah, it was like one of the three worst returns for U.S. dollar denominated credit in the nation's history. I think like 19, 29, 30, like he had won by the Great Depression, maybe one by the Civil War, you know, something like that. But that, you know, we talk about the fourth. framework, right, as a way to understand this. You know, like 80 year type of transitions. It's like, oh, that was that was that. We just saw it.

We're in it. Yeah, exactly. So, yeah, exactly. So SOFers spends up. It's your competitor. Like now you're like, whatever you were running, your little scheme, you know, on Lombard Street in London, your end-a-day process. Like, well, that's cute.

But over here, this is where you actually, to go for dollars and we're going to set our interest rates with tri-party collateralized repo and uh that's where the puck is headed at the end of the day we're it's the u.s dollar we're talking about here right we own this or it should be our you know real estate to own and um we spent like four years like with that processing contest but But 2022, the hiking was kind of the last straw. But right when the hike started, March of 2022, Putin invaded Ukraine, created the commodity spike, similar to what we saw in Iran with Epic Fury here in the first quarter of

26. That created, you know, the final, the alley fight, right? Someone had to tap out. And we stopped pricing the marginal dollar in LIBOR, and we started pricing it in SOFER. And at some point in the last, like, year or two, we just stopped even printing LIBOR as like any reference to it. Because there's all kinds of old credit outstanding that was like benchmark to this thing. Like someone's car loan or home loan from like 2001, those loans are still out there. someone's paying based on LIBOR.

We figured out what's the number? How many basis points do we add to convert this over from LIBOR to SOFER? It's a business negotiation. Same way that these ceasefires or these deals between Iran and the United States are like, I view them at the end of the day as a business negotiation. It was that process. So 2022 was that moment where that kind of power struggle, the tugged war, what was formerly like a cooperative cooperative partnership, like the cross-atlantic

framework, right? NATO being the military front, but then you have like WTO for the trade, you know, that framework. And then you add this offshore dollar cartel. You know, think about BIS, IMF, all the central banks opt in. You've got the Basel three, you know, framework, which are still an open negotiation and implementation. Um, 2020 was that moment where like if it was an arm wrestling match, like, yeah, US just like, other side's fist hit the table. So that's kind of like the last remnants of the old world power giving the baton over to the US. That's how I view it.

Exactly. Yeah. And then, okay, and then on a separate front domestically, this is where you get into. All right, the Fed was responding to its, its interest here. Like the Fed, it's shareholder. it's public-private institution, right? It's got some public oversight, has to report to Congress, all of that. The president gets to elect or nominate a board of governors members, all that process.

So you do have some public input into the management of the organization, but the shareholders are the domestic U.S. Fedwire banks. And so Fed chair, you know, pushing this thing along, ultimately you have to have the back of the domestic U.S. capital, for lack of a better word, behind you to push this ahead. So that's what I think when Jerome Powell was doing this. Like, you can view, like, Jerome Powell will go down as a very interesting transitionary figure because he was doing all these things that a Fed dominance era, Fed Chair would do. He queueyed the crap out of the market. He zirped the market and didn't say anything wrong.

with the fiscal state. Like he wasn't opposed or didn't raise his hand to CARES Act, American Recovery, all this stuff. But then he also did these things for, you know, moving from LIBOR to SOFER. So I view him and you know the decision recently, like after his term ends, we were in the Worse Fed now. He chose to stay on.

I kind of view him as like, he's your transitionary figure. He's kind of like in history, I think of him as like a man for the last war, but you have him in place as a, general to like just maintain institutional integrity. It's like, all right, very interesting figure, complicated, complex figure is how I think he goes down.

All right. But in the meantime now, you've got a political process. We still have to get through like the White House's say and Congresses say on what direction this domestic dollar is going to take. And that's where the difference between the Biden White House and its Treasury Secretary and National Economic Advisor, Lael Brainerd, and the direction they wanted to go down

are the polar opposite of what we got coming out of the November 2024 elections. So in the big picture of United States monetary history, that like the November 2024 election, in my opinion,

will be about the fork in the road that the U.S. voters chose. And what they were actually voting on was the future of the U.S. dollar. So I'll explain this. Same time that the Fed started hiking in 2022, and we were going through this transition from LIBOR over to Sofer, you know, strangulating it to death in the bathtub, right? All that. Through some analogy, but capital wars, right?

That's kind of what happened. In the Biden White House and those players involved, Yellen and Braynard, there was an executive order that was like the standing memo to all of these governmental agencies. that basically said it was paving the way for the CBDC. They instructed the Fed, OCC, all the agencies, all these technocrats, these bureaucrats, all of that. They were tasked with figuring out this, you know, this path to get the future of this dollar system from the United States framework onto a CBDC. What do I mean by CBDC?

It's a good Bank of International Settlements paper today. on this exact topic. I'll just, TLDR, B-I-S and this legacy framework, call it offshore dollar framework, which is dying. They don't have that anymore. You'd call it Davos Man,

that type of globalists. They don't like Bitcoin, and they don't like the Genius Act stablecoins. They want something else. And that something else they want is, they want the base money, or the money that banks use to transact and settle between themselves to be central bank money that sits outside of the private sector. So you as a household, you as a business, you can't

interact with the Fed, right? You need a bank charter to do that. You need a piece of paper. That's how it works in the United States, current standard, and most central banks in the rest of the world as well. So they want to gatekeep, they want to retain control? Yeah, the term for that would be outside money versus Bitcoin. If Bitcoin emerges as a base money, that would be an inside money, which means the private sector has the ability to own, hold, transact, and basically market make. We talked about this up front at the conversation, right? In the old days of the Federal Reserve dollar versus the silver certificate dollar and the contest that worked between it, with the dollar that's redeemable into silver, what that does is, an act, it acts as an arbitrage mechanism where the central bank or the state can't direct the central bank to go out and, uh, issue too many credit claims. Like if they, if they were doing that, what you would do as a household or business would be, I'm going to put my dollar to you. I'm going to redeem it for the silver. That's right. So if we had an inside money so we could redeem for

gold or redeem our dollar for Bitcoin, that would be, um, like a check on the, the monetary power of you could say the state but also the private banking interests. This is the definition of sound money that everybody talks about. What they're actually asking for is that ability as a private sector entity to hold your banks, which are that intermediate layer between the public sector, which is the state and the private sector, right? And then also hold your state accountable from committing monetary tyranny. Right. So what the Biden administration was instructing with this executive order for all of these agencies to go out and do was figure out, you know, legally how do we do this? Technically, how do we do? How do we, how do we, how do we, how do we, how do we, how do we, how do we, how do we, we're going to need some blockchains, go hire the ETHBros, the Salana devs, all of that. They'll build this thing for us.

And, and, and that was the, that was the standing like management policy directive. under the Biden administration. We were marching down that path. We still have the EU marching down this path. That's what the digital euro is. They just made an announcement today. This digital euro is going to have a pilot test at the end of 2026. And they're shooting for a 2028, 2009 launch,

because they're going to need it, right? At the end of the day to do what they want to do, like prosecuting a broader war with Russia, let's just say, or industrializing or monetizing, private sector savings to prosecute said war. They will need this CBDC, this digital euro, as the base money to go and do what they intend to do. All right. So Biden administration was on those grounds.

What happens? November election happens. Day one, we get an executive order. It's like Thursday, right? If the inauguration was like a Monday or Tuesday. that first flurry of executive orders, what did it do? The first one on like the monetary roadmap for this new administration, the Trump administration, it repealed that standing executive order that said, hey, let's go down, let's figure out what's the project management, you know, roadmap, the Gantchart, all of that to get the United States onto a CBDC.

First executive order pulls that, rescinds it. like that that's dead in its tracks no CBDC from from from a white house directive standpoint next you get um this is where I say we're moving from an era of Fed dominance and Treasury subservience to an era of United States Treasury dominance and then Fed is going to be reformed it's going to play a totally different role it's not going to be used as in this era of the United States Treasury dominance. and then Fed is going to be reformed. It's going to play a totally different role. It's not going to be used as in this era we're heading into. It's no longer going to be used as this behemoth to keep bailing out the offshore dollar or everybody else's monetary systems that are squatting on the U.S. economy, in my opinion, or have been for the better part of a century, at least. We're moving to an era of treasury dominance. So the next executive order that after repealing what Biden was doing with the CBDC, the next one, and this is how I view it is key, you had a lot of Bitcoin in custody that had been like, let's say, criminal asset seizures or civil asset forfeiture, all that. Say it's sitting in different branches of this, you know, government bureaucracy that is Washington, D.C. It's in some, you know, U.S. Marshals, you know, file cabinet, some Bitcoin's over there. Some is in the FBI file cabinet over, you know, in Virginia. Virginia. It's just scattered all around. The next executive order gave a directive. All of that Bitcoin that is technically within like the ownership of a U.S. or an agency that reports into the federal government chain of command, all of that now needs to move to the Treasury. Right. So now the treasury is the United States Treasury is the custodian and holder of the Bitcoin that the federal

government has, you know, claim to, title ownership, all that stuff. All right. That's huge. Like we, we were looking for the, as Bitcoiners, we were looking for the strategic Bitcoin reserve. Like, when are we going to get it? When are we going to get it? It's a sequence of events. Like there's a process to get there. And if you look at these little steps along the way, you're like, oh, now the Treasury is asserting dominance. It's not just, you know, going to, you know, be the bottom in this relationship and do what the rest of the world needs and keep racking up this, you know, $40 trillion of public debt. Like, the number's still going to go up. But we're asserting dominance and saying, no, no, no, those Bitcoin are over here.

And then gradually, you're going to start seeing all of these, you know, steps implemented to ultimately, like if you look at Scott Busson's statements, what he's telling you is this Bitcoin reserve is coming. It's just going to take more time, like, to do it the right way. You've got to follow parliamentary procedures, figure out custody, all of these things that need to be taken into consideration to do it the right way. Make sure someone's not just going to walk your Bitcoin out the door, like an intelligence community hack or nation state attack, all that stuff, like do it the right way. That'll take time. But series of events, I'm trying to think of other executive orders. but I guess just quickly on that.

The question I would have is, obviously saw the Strategic Reserve Executive Order go through. And like a lot of Bitcoin is probably expected to happen quicker than it has. Do you still think it's likely to happen? And then as a part of that question, what do the Treasury want to do with it? Like, why do they want it held in the Treasury? Okay.

All right, let's answer the timelines here. It's not a, there's no probabilistic guarantee that we're going to get, a strategic Bitcoin Reserve. There's still a lot of milestones that we need to hit to get to that endgame. So think about it. A couple weeks ago, we had Representative Beggage from Alaska, the United States introduced the American Reserve Monetization Act, which is, it's an updated version of the Bitcoin Act that Senator Loemis introduced about a year ago. And my answer to that is, I don't think we have a Congress to get it done at this point. So, same thing in November 2024, what we were actually voting on, was which fork in the road we were going to go down.

CBDC route with Biden or a Bitcoin route with Genius Act stablecoins. I didn't get into specifics why the backing one-to-one of stable coins with T-bills is important. We'll get into that. And second part of my answer to this question. But I don't think right now we have a Congress that would pass the ARMA, even though it had like 22 sponsors. Like can we get the, majority like 215 votes, I think it would take to pass Congress. I think Speaker Johnson would introduce this if he knew he had the votes to get it done. I think what we don't know is do we have the votes to get it done with this Congress. So that's an important thing. I think we're voting on this November. I get it. Bitcoiners were confused about what's going on geopolitically with Iran. Maybe I put that into context how I think about it. But there's going to be a lot at stake in November, like what we're voting on. And if we want that strategic Bitcoin reserve, we're going to have to send a Congress

to Washington, D.C. that gives it to us. So full stop there. So not guaranteed it's going to happen. I do think in the Bessent framework, he was in congressional testimony, I want to say two weeks ago. He got asked a question by Tim Scott, Senator from South Carolina, I believe, who asked about progress or are we still working on this? And Scott Besson's answer was like, we're working on it with all deliberate speed, right? And that just goes to the order of operation. This isn't something

you can just spin up overnight. Like there's no precedent for this. It's a big, it's a big change to have a Bitcoin Reserve, have a Treasury stockpile, all that stuff. It's not something you just ask ChatGPT. How do I do this and press a button? And it's like, does this work? Like, no, a lot goes into this. So what's the end game here? All right, let's think, think about this, and this is where I'll get into maybe a little bit of speculation, because I don't know how this is going to play out. What I'm thinking about, though, is prior iterations in these dollar transitions, where we move from one definition of the dollar, say it's an asset back dollar, like silver certificates, for example, we moved to a credit dollar, and then we move back towards that asset back dollar. The one I like to

think of is during the American Civil War, right, the greenbacks. Very similar time, like thinking about the fourth turning kind of framework. It's like all the institutions are going through a big transition. We have to find a new like steady state equilibrium for all the social order, financial order, all of that to reestablish stability, right? Civil war was kind of that, right? like America. There were there were also like military conflicts all around the globe at that time too.

Like all of them playing into each other. But you had a dollar that was on a like silver standard or like silver standard gold standard, biometallic standard coming out of a financial panic with the like panic of 1857, kind of an analog of the financial crisis of 2008. If you think about what we're going through currently. But that just like wiped out. credit. And the president at the time, Buchanan, didn't bail out the banks. And so that you got replaced. We got Lincoln as president. We had the war. Now, the United States Treasury was in a

position where we didn't have the financial resources. Like, we didn't have the gold to fund the soldiers, purchase the armaments, all of that for the union to get what it needed to win the war. And what we did is we, by roundabout way, created a dollar, the greenback that was a treasury issued IOU, no interest rate, no maturity. This was the precursor to the Federal Reserve note, you know, legal tender dollars, redeemable for nothing, only payable, like, legal tender for credit, you know, arrangements, all of that. once the U.S., like once it was clear that the union was ultimately going to persevere in this struggle, like probably 1864, the discussion around like Washington, D.C. and within capital markets in New York started to switch to, instead of this massive proliferation of like literally that was like money printer, right? We just printed greenbacks

like off the press. The discussion in capital markets and policy circles started a shift to, oh, actually, we're going to win this thing and we can start to rein in money supply. And within the span of civil wars, you know, coming to its conclusion in 1865, and then by 1875, that discussion of, oh, we're going to re-monetize, we're going to re-peg to some base money. And this won't just be, you know, funny money paper script anymore. The dollar won't be, you know, paper script anymore. You had the gold remonetization act of 1875, and we were back on. the gold standard, like pegging to the base money that the world was choosing at the time, gold,

in the second half of the 19th century. So this can go quickly, if you think about it. Like, we're going through the same thing, like an American reindustrialization right now. We're in the very early phases of that. It's built out on this AI trade, right? All of the capital flowing into that is part of this. Massive energy investments, like all the above. But you can see a world, like it's fuzzily coming into existence where, all right, think about this. We're already in a world where that liability-based IOU dollar, that's gone with the wind, right? It's a prior era. We're moving on.

Like, trains left the station. We're moving to these stable coin dollars. They're backed by a treasury bill one to one. Like, that's Genius Act, 45 days or less maturity. interestingly right like what's the collateral for sulfur to get a marginal dollar in this credit-based system it's also it's also a more and more just a treasury bill right as the most common uh favored collateral and repo markets lowest haircuts all of that um and you see this world now that we're moving from that liability based offshore dollar to this asset based stablecoin dollar give this thing enough years

let these trends keep right, like just keep extrapolate them. I can see a world where we're just calling, you know, someday these stable coin dollars. Like, we're just going to call them dollars the same way, you know, after the silver certificates were pulled from circulation and all we had was the Federal Reserve notes. We just, man, they're dollars from the private sector. We'll just call them dollars. They're technically backed by treasury bills, right? So they're backed by an IOU in the old system. What we're seeing as this offshore dollar bubble, as we're raining it in what's happening, the capacity for lending further and further out.

So if you look at, let's say, for example, the 30-year treasury bond, right? It's like $15 billion is the auction size, and they hold it once a month. If you look at the treasury bills, these things might be for the four-week bill. It's like $80 billion and they do a new issue every week. And they have not just one 30-year once a month or one-20-year month at once a month or a 10-year-one. a month, which are like, you know, 10 to 20 billion, that type of size or scale. These treasury bills are like $80 billion each auction. They hold a new one every week, and there's a four week, an eight week, a 13 week, a 26 week, a 52. So the maturity of the debt profile

has this bubble, this offshore dollar credit bubble, the old post-World War II framework, that's kind of transitioning to its next state. It'll be a major upheaval, right? we can all sense it. The maturity profile of the debt in that system is just coming smaller and smaller. And so I can see a world where, let's say, five to ten years of letting these trends play out, more and more of the liability-based dollar and those IOUs, like the credit stack, it's naturally shifting more and more so T-bill heavy, right? And you can see it in the Treasury's debt outstanding, right?

it's becoming more and more treasury bill heavy. And is that intentional? Because I remember when Scott Bessent, before he came in, he was criticizing Yellen for doing everything on the short end, but has then continued to kind of do the same thing. So that's an intentional move rather than it's just a force of the market. No, it's a force of the market, as you put it. Yeah, it's if there were a better, like people are like, oh, you idiot, why didn't you, why didn't you lend all of you,

why didn't you extend all your debt out at 30 years back when it was a 1.25 coupon in March 2020. It's like, because you couldn't. The capacity wasn't actually there. The treasury bills is the direction, like the system is, is telling you what it needs to do.

And as the operator here at the helm, you just take what you, what you get at the end of the day. You can play the poker hand very well, right? You can be a good player or a bad player. But at the end of the day, like the dealer's just going to deal you the cards you get. So that's how I view it.

So naturally that debt profile is just shrinking, shrinking, shrinking, credit maturity. So you can think about this, like in the U.S., right, we recognize this as a problem, that longer term or like longer maturity financing. It's going away when we can feel it. So earlier this year, remember that, feeler tweet. I think Trump sent it out.

It's like, what do you guys think about a 50 year mortgage, guys? Yes, I do remember that. That's part of that. We're trying to figure out how to extend,

you know, maturities longer or get more people into housing or underwrite mortgage loans that, you know, borrowers can qualify for. We're trying to extend it out, but there's just no capacity there.

So you're working, like you're squeezing all the blood you can out of the rock. And there's, after 70 years of doing this, there's just not, not that much, there's nothing left really is what's happening. So as that maturity profile shrinks, right, we become more and more treasury bill concentrated in that treasury debt stack. As this stable

coin, like genius act proliferation really kicks in and that old offshore dollar, like if you're looking at all the dollars outstanding and the stable coins start to grow their market share, eventually there's a tipping point. But more and more of, like we talked about the arbitrage incentives. Where can you generate the most bang for your buck on one dollar of capital? That same way that Henry Jurecki, all those fellows, cleverly arbitraised away, walked away with 10% of the purchasing power on another dollar transition, the way I see this, more and more of those treasury bills are going to find their way into stable coin issuers like Genius Act regulated. They'll become stablecoin dollar rails. And then what's happening here, Venezuela, Iran,

all of the like Cuba coming soon to a theater near you greenland like what's happening is we are re-architecting like the dollar payment rails and all of that kind of orbit and we're bringing in the commodity suppliers and the trade of those um the base layer goods in the economy right your energy resources that everybody needs those will increasingly settle in stable coin dollars and And if you think about this from the like Venezuelan perspective or Iran's perspective, you no longer, like if you participate in this version of the dollar, which is more New York, less London, this time around, you no longer have to pay the one extra hop through the whole foreign exchange, you know, swaps, all of this offshore dollar credit kind of big transaction cost. that is just paying this financialist cartel, right, at the end of the day. They're sucking off, you know, whatever the share is, what is it 10%, 20%, you know, who knows,

of the actual real growth on all those ships, you know, moving through the Suez Canal, moving through the Panama Canal, moving through the Strait of Malacca, crossing the Pacific Ocean, all the above. Now to get the dollar you need, which is like the coin of the realm to buy your energy resources or minerals, critical minerals, right? Headline keeps showing up. in the papers, right? You no longer have to cross through all these middlemen, you know, foreign exchange,

you know, counterparties. And you go straight to what you need, which is that treasury bill counterparty risk, that dollar settlement rail. And you, like, get, at the end of the day, you get wholesale pricing, or sorry, you get retail pricing for your commodities and you aren't, like, selling your goods at wholesale pricing anymore, or deep discounts, say, on the black market to, let's say, Iran oil, Iranian oil going to China, for example, at deep discounts, or Russian oil being sold into India at deep discounts. So what's happening, like, this system is all, you know, we're transitioning

from an old offshore dollar system onto this U.S. like centered stablecoin dollar system. there's economic incentives for the resource producing countries to do it and go along with it. That's where if you look at the MOU that was just signed with Iran, the most important thing is like, oh, you're going to reenter the SWIF system first. But really what you're coming into is the stablecoin system. Same thing with Venezuela selling its oil, right? They settle through, I think it's like cutter. But you're now going to be on these stable coin rails.

There's going to be lower transaction costs, all the above. of you're going to get better, you know, more transparent market-based pricing for your commodity exports that your economy relies on. And over time, what this is doing is we're replacing that old post-war, you know, the last vestiges of the Bretton Wood system with this new, I don't know what's called a Genius Act system. All right. So next, what happens? What happens once this stablecoin dollar becomes like they're all the dollars, right? Well, at some point, if your stablecoin, you know, money supply is bigger than the $100,000. trillion dollars or, you know, multiples of that that's in this offshore dollar system and you're

backstopping with treasuries. Eventually, you need something else to re-peg your stable coins to. And that's where the Bitcoin reserve. This was going to be my question. Because like I see the transition that you're talking about from the petrodoll to this unsure dollar system that's stable coins backed by treasuries. What I wasn't sure is where Bitcoin plays a part, but this is where Bitcoin plays the part. Well, so think about this. So what happens? when stable coin supply increase. And this is why go into coin market cap or whatever. Like the majority of liquidity is in right now it's old tether, USDT. Tether's in process of transition. Another, another key highlight. We talked about the executive orders of 2024 elections,

the fork in the road in monetary history. I want to say was it December 20203 where Tether made the announcement that they were cooperating with, I want to say it was the FBI. for enforcement of the United States Treasury's OFAC sanctions. That was a huge tell. Now, Tether is on board with what was happening when we talked about, you know, the United States, the American capital base moving in one direction and over the 2010s. That event, and I don't know, Tether guys, I've never met them. I don't have any inside information.

But looking in hindsight, that announcement from Tether, which preceded, I want to say, the election result, that was a huge directional tell that they were going to cooperate with this new version of the dollar that was being pushed through. So if you think about that quote, right, we all, 2020 taught us like nothing stops this train. Like, we're all stuck in this mindset that this whole system is still running on the architecture, the blueprints, the players involved, the incentives. It's just what we saw in the past, like, You know, we had 2001, then 2008, then 20, 20, we're just going to get more QE, more ZERC, more stupid fiscal spending from Congress. I think the game has changed, and it's very clear.

All of the players who, you know, were cooperating around this old business deal, you know, that lasted for 75, 80 years, they're now, like, maybe it's too far. say they're at war with each other, but they're not seeing eye to eye, and they're definitely not cooperating anymore, and the U.S. is definitely now asserting itself on the international stage, and not just geopolitically what we've seen during 2026, but it's now an extended story, like, that they're asserting themselves in the international capital markets arena, which is just one plane, right? Capital markets are. war by another means. So when we say nothing stops this train, right? It's like, well, there's, there's another train and it's like, you know, that's what Scott Besson represents all of that.

So we'll see how this plays out. What does it mean for monetary policy? Because like either domestically or globally, whenever there's a problem, it's either stimulus, money printing, swap lines, whatever it might be. How do they do that in this new system? Well, did you know, like how much of a fit that the legacy, you know, institutional media, politicians like Elizabeth Warren, you know, that camp. Christine Lagarde at the ECB, everybody is like with from the establishment from this prior business order who was like an elite who benefited from being at the top of the system. Did you notice how much of a fuss they raised about Kevin Warsh and his nomination? Not really, no. Maybe I wasn't following it close enough though.

Oh, Central Bank Independence. Like, Danny, this is terrible. We need Central Bank independent. I did see that. Yeah, yeah, yeah. This guy is going to be Donald Trump's sock puppet. Like the framing of what Kevin Warsh and like his chairmanship. Like, you haven't seen anything like from a, like a Fed Board of Governors nomination.

Until going back to like the Judy Shelton nomination, I want to say that was 2019 thereabouts in Trump's first term, they raised a huge fuss about that, right, for Judy Shelton's, I would just say more Austrian leanings and monetary policy. It's like, no, no, no, we can't do that. We've got to stick to the Keynesian. Konsez says we can't take any you know non-orthodox views here at this around this boardroom right we do group think but yeah so Kevin Warsh what he represents so notably right

Kevin Worse was nominated to the board of governors back in the 2000s by George W. Bush and he was very anti-money printing then wasn't he exactly he resigned I want to say 2011 or 2012 once he saw the GFC response like he's like I I'm out.

So this whole, I talked about this era of Fed dominance, right? Like, Federal Reserve was going to dominate monetary policy, public policy as it relates to money itself within the domestic United States. And it was going to cooperate in a subservient world to everybody, this global offshore dollar standard, right, that have proliferated. Kevin Warsh was the opposite of that. that. Like, he's not a Keynesian. He's a monetarist. And you saw that at his first press conference. It was almost two weeks ago now. But he came out and he said, we're getting rid of all these things.

The dot plots, forward guidance. What is this whole, like, we're getting into like jargon here. But forward guidance is this monetary, it's a central banking policy framework. It's a 2000s era development. Like, this wasn't handed to us like on the stone. tablets at Mount Sinai, right? This is new. We literally made this stuff up in very recent history. But the idea is if you, if the central bank communicates to capital markets, what it intends to do with short-term interest rates, the rest of the livings out there, the private sector,

banks, et cetera, but also households, businesses who, you know, make credit. borrowing decisions with their real economic activity. If the Fed can just be up front and telegraph with these dots, what the interest rates are going to be for the next three years and then longer term, it'll be a self-whatever reinforcing reality, and we'll just spend this into like, the castle will just build itself up in the sky is kind of the framework. It's truly just Wizard of Oz BS.

But it really is like part of your central bank dominance framework. Like you really believe that if you as a central banker, if your economic models and your, you know, DSGE, econometrics, all of this stuff, what you say GDP is going to be, what's unemployment going to be, all this stuff. They're all wrong, by the way. They never play out.

Their track record is terrible for the, you know, know, 10, 10 or so years that we've been doing this. These were Bernanke inventions, the dot plots I'm talking specifically. But it's all like, it's like Tinkerbell clapping for fairies. If we all believe in her, this will work out. Kevin Worse comes in on day one. Like, so think of him as like the new manager coming into an existing operation or like a new coach coming in to coach a sports team.

This is the way I framed it on my podcast after, you know, we saw that first. press conference. What you come in to do, if you want to instill change in like an organization that maybe used to be great or was a winning or functional organization and it's gradually slipping and losing its like, like, you know, is it good to great framework? Well, you're not even great anymore. You're slowly just figuring out ways to explain away your lack of success or, you know, losing. If you're coming in as like a new manager into that environment, if you just try to change processes, whole hog, cold turkey, all of that,

almost guaranteed you're going to run into resistance, right? The people staffed around the building are from that old organization. So if you come in and try to change things and tell them what not to do, they're going to reject you, right? So what he does is he comes in and he says, number one, we're not doing forward guidance anymore. we still did the dots everybody submitted a vote but I made it clear I didn't submit a vote or I didn't submit a dot which is a leader what you're doing you're modeling behavior and you're telling people say there's 11 other people who are voters at this meeting you're literally showing them as time goes on it's like well if you don't want to do it I'm the manager around here like I'm the one who would hold you accountable so if you don't do it what I'm telling you is like you're not going to be punished for not doing this.

And then over time, same way like sports rosters or like they'll, they'll transition over time. Same way. Like you're going to see new people come in who are more aligned with the view of like where the dollar is going that we talked about and this reform that's happening down to the structural level at every level of the dollar. And you'll get new staff at place. So the player is playing with like Victor Wimbenyama this year, like go through an office seat. You're going to bring in new players that play with him and do what the coach wants to do. And so it's a slow process. But what we're doing away with is this forward guidance mumbo-jumbo, which is really what it really is backstop.

It's ammunition for the Fed to do all of the things we talked about, QE, ZERP, and then accommodative fiscal stimulus. to support this offshore dollar framework. That's all being thrown on the wayside. And then slowly you're going to see a less Fed-centric monetary system within the United States. And it'll get back to being a lender of last resort specifically for money markets or short-term, you know, commercial paper markets or so far, or enforcing these policy interest rate corridors with, within, yeah, those overnight capital markets that we talked about that were so important with LIBOR to SOFER, all of that. That's interesting. So your take is they've kind of brought Walsh in,

they're going to build the team around Walsh, and it's not that he's going to necessarily, like, end the Fed, it's they're going to drastically reform the Fed and its sort of powers. Yeah, exactly, exactly. So it'll be a totally different, like the Fed has changed. Like, we talked about the dollar going through all these different metamorphoses over the history of the United States. The Federal Reserve Act of 1913, like the Fed we had in those areas, it's not the Fed we know today, right? All you had was the regional banks with the Federal Reserve Act.

You got this, you know, the Washington, D.C., like the mothership Fed in the 1930s under FDR, and then it just became the centralized behemoth that it is today. But that was a process to get there. So we're going through one of those. processes. So as we change this, as we just re-architect, restructure this dollar financial system, the Fed's role will change. So the way I think about it, there's $3 right now. There's, all right, the easy one for Bitcoiners to understand is the stablecoin dollar. But then there's also two flavors of the stablecoin dollar, right? There's Genius Act compliant,

which are going to be backed by T-Bills, and there's going to be non-Genius Act compliant, which is like old tether that's going away. Yeah. But stable coin dollars with Genius Act, they're anchored into this onshore system through the Treasury bill. All right. So that's key. And then you've got the onshore dollar. That's our U.S. commercial banking system, right?

It's your Fed wire members. You could also, you could also say like credit unions in the United States. There's some other entities involved, but like the Fed is the king of the hill. And then the offshore dollar is this hodgepodge of, just purely liability-based dollars where your dollar is only as good as the creditworthiness of your counterparty. So like, let's say your HSBC, Hong Kong or something like that or whoever. And you've got all these money center jurisdictions like the big ones, Tokyo, London, Frankfurt, I mean, New York would be the Western Hemisphere sponsor.

And you got all these secrecy jurisdictions like the Cayman Islands, Panama, Gibraltar, Dubai, which are like part of that network. But that offshore dollar, so what you're actually doing here, if you read the history, all of this, you're actually, like the name of the game is to be able to enforce par. Like enforce your hundred cents on dollar your claim. Same way that stretch is trying to defend par, measured in $100, right, on its perpetual preferred. all of these dollars are going to be tasked with maintaining their hundred cents on the dollar. So if you think about the Stablecoin, Genius Act, you're defending par by anchoring to the Treasury bill, right, which is a short duration, you know, treasury bill.

And they limit, you've got to be backed one for one. Stablecoin's outstanding with Treasury bills in custody onshore. So there's a good mechanism for defending par versus like algorithmic stable coins would be an example. Let's say you want to try to make a dollar, you want to try to make a U.S. dollar, but you're not going to interact with the American banking system. Well, good luck. We've already seen what algorithmic stable coins do. You can't defend them. It's very hard.

You got to over collateralize all this stuff. But at the end of the day, it's a very tough game. You're fighting a losing battle. Okay, so the onshore dollar, you got the Fedwire banks. They have a very robust mechanism. This is why your JP Morgan dollar, your Wells Farrow dollar, your 100th smallest bank in the United States, if they're a Fed member, because you have the Federal Reserve system, they've got a defensible mechanism for defending par, they're 100 cents on the dollar. Now, if you're offshore, you don't have access to the Fed. This is where you need your treasuries, right?

you need that dollar flow, which is draining out. Like, the U.S. is exporting treasuries to the rest of the world, but what it's actually doing is it's leaking economic value, like from its own real economy to the rest of the world to prop up the offshore dollar. So if you're, let's say, some Cayman Islands bank, you've got to reserve a whole bunch of treasuries to backstop all those IOUs, those liabilities you've underwritten on your own balance sheet, right, to keep your money good.

And it's a, it's a, it's a vicious market, right? If, if, um, if these arbitrageeurs can spot weakness, like, if you've got a, you know, $100 billion, you know, prize just sitting there, like a, like a sport animal, like these people hunt this and they'll go and they'll attack you and they'll, they'll, they'll extract your hundred billion dollars of of weakness and and they'll put it on their wall like i'm not kidding this is this is how these this is how the game works it's a poker game you lose the hand there go your chips right so the offshore dollar they now have to defend par right and that's where it gets hard and that's why you like follow the tick reports all this stuff you see like all right who's buying treasuries

and yeah that so that's going to be the name of the game these next few years especially as what this administration is doing. And we say that the Trump administration, it's also the military, right? Like, if you think about this thing as like a giant game of risk, I don't think Trump is like the only one playing like, what is the amount, like 4D, 5D chess or whatever. And he's just the only one playing this game. It's like, no, the generals, the war planners. They're, they're the ones actually like organizing strategy. And like the president has to get it and understand it. And ultimately as commander-in-chief. And, you know, ultimately, as commander-in-chief, like make the go-no-go calls.

But there's generals in the room. He's being fed to playbook. Yeah, there's a war college, all of that. And then the same thing for the capital market side. Like there's definitely like the astute players. They know how this money game works. They've designed this strategy. They've been doing it since before Trump even, you know,

came down that escalator in 2014. So there's, yeah, there's a lot backing this. I guess we'll just say that. So there's a totally different train. And that's where I think the framing is like, I don't, can you stop this train? Like if you're the offshore dollar, you've got to defend against this train. And I mean, if you have to, you know, place chips on the table, like you've got the onshore dollar. They've got robust mechanisms to defend.

And also like a military, a capable military. They've got they've got the stable coin architecture set up ready to go. you don't just pass a major piece of, you know, legislation that, that changes the dollar framework. And you're just going to say, like, as history plays out, like, is this thing going to be important or not? It's like, no, that's generally how, that's generally not how this works, like another famous act. Like, when I flip to that, the history of the dollar, pieces of eight by Edwin v.R. Jr. for anybody listening, that's, that's like your seminal book on the legal architecture and structural framework of the dollar changes of the United States history.

but in general, like, if you see something of that important or like that scale coming out of Congress like Genius Act was in 2025 and all these other developments we've been following along since the 2010s, but really kicking up with the November 2024 elections, it's like the line when you're looking at screenwriters, right? If you introduce a gun as a prop in Act 1, it has to show up in Act 3. So if I'm placing bets here, it's like, all right, this is the way the dollar wants to move. So you want to organize your behavior, your portfolio allocations. I'm a fixed income manager. You want to build along that because that's the tides, that's the oceans. And like it's the big picture. Those are the forces you can't change. Same thing with, let's say, Bitcoin Treasury Company.

So we haven't really heard this like enter the zeitgeist or the communications, but it's like, guys, your dollar strategy here has to foot to the big picture of what's going on. And, you know, maybe I think we're getting that. Yeah. The really interesting thing to me here is, like, I've had a lot of people on who talk about how, like, the dollar Ponzi can't continue. Like, there's going to be a big print. And it's really like, can it survive? How many more big prints can it survive?

All this kind of stuff. And it sounds like you're saying it doesn't matter. The dollar's already changed. Yeah, exactly. So same way, the greenbacker, like, well, yeah, can the union just keep printing greenbacks? Well, it's like, well, that's not the right question to ask. It's can they print and procure the resources they need to win this competition, right, versus, you know, the Confederacy or, you know, the same thing in other conflicts, World War II. can the U.S. and the U.K.

procure through the financial system. Can they raise the capital they need to defeat the Nazis? And also defeat the Japanese imperialist in the Pacific theater. That's the question. And I think, like, yeah, if you're like, Matt, this isn't World War II or the Civil War, it's like the Secretary of Defense just gave you a huge signal. They changed their name to the Department of Defense. the Department of War. I think that's your tell. That's your, that's your PR. Like, they view

themselves as at war. Oh, man, it's so interesting. How are you for time? Because we've been going for doing these two hours, but I do have more questions. I'm good. I'm good. Cool. Because like, I kind of sidetracked it before a little bit when I was asking you the role that Bitcoin plays. And I want to get that a little bit more concrete in my head, like how Bitcoin plays its part in this new system. Okay. All right, the way I view it. all right, Bitcoin is, like, it just wore it on its sleeve in the Genesis block, right? The Chancellor is on brink of second bail out of banks, published in the Times of London, right? Like printing presses are literally down the street from, you know, Lombard Street,

uh, and where this problem originated from LIBOR, all of that subprime mortgage, uh, originations in the United States anchored to like variable rate. LIBOR was the reference rate. what we realize there is, oh gosh, we can't just squeeze all this, you know, blood from the rock. That is the United States economy. It's like there are limits to this system. We're going to need a new framework. All right.

So what was Bitcoin, like in my mind? Like we've heard it describe it. It's a solution to the Byzantine General's problem. It's like, okay, dive deeper for me because that's just jargon. In my mind, like it's what it simplifies down to is, It is a level playing field as a money where any participant who comes in cannot change the rules of the monetary protocol. So what it does enable is a fair playing field for two unaffiliated or disinterested parties to come together for an economic transaction and settle together in that base money. And so who are these two participants, right?

Well, think about it. It's like, oh, the oil is leaving Iran and it's headed to China. What are you going to pay in? Well, you got to settle in a money. So at the end of the day, you got the businesses, you know, an oil refiner in China importing from the producer in Hong Kong. Within the financial, you know, endpoints of that transaction, you got to bank at both ends. Prior to this, they were dealing, you know, the world was on this global dollar standard, which was running through centralized intermediaries.

And what we realized is those centralized intermediaries over the course of 100 years or, you know, longer, they become corrupted. They fail to like political influence or capital influence or whatever it is. The plainfield could definitely be tilted from one counterparty away from the other. All right. And so that's what, like my mind, that's what Bitcoin's showing up in 2008 arrives right at the Lehman collapse. It's like problem, solution, right?

But what it is is it's that level playing field money that allows for economic trade to take place without or by bypassing these centralized intermediaries that have become corrupted over time. So if you think about what's going on, this adoption of Bitcoin as a reserve asset doesn't happen overnight. It starts off, as we know, like early days, it's hobbyists. It's anarcho-libertarians, and then it moves into, I don't know, crypto bros, whatever. And then at some point we get into like U.S. public equity markets, the non-operating companies. Like you talked about this before, like Block is actually running a business and accumulating Bitcoin. SpaceX is running a real economic business, accumulating Bitcoin. Strategy does have a real economic business and is accumulating Bitcoin, but the tilt has gone very clearly.

clearly with management's focus, like in my opinion on the matter or reading this as a third party observer, it's definitely skewed more towards just pure play financialization type of player versus running a real operating business. But I think that, like what these Bitcoin treasury companies, you know, represented for capital markets integration in, you know, the 2020 to 2025 era, that was part of the process of moving towards more mainline. adoption. So what's a signal like in Bitcoin you'd be looking for if this is getting deeper ingrained into the financial system? Well, it's like, well, first, BlackRock launches the ETFs. And like it's like the Ibit Bitcoin, like it's, it's single largest product revenue

line or like an individual revenue line at this point. So they see it. They're like, oh, well, we got to get a Bitcoin income statement revenue line for the future of our company. Same thing. Morgan Stanley then is like, oh, we're doing an ETF. This is in like the 2026 era. And like things like this week, you see Schwab, like a legacy brokerage, which itself at one point was a disruptor of the stock market brokerage industry. The way equity trading used to work, it was basically limited to your high net worth, ultra high net worth families and huge commissions for shares to trade. So it was like, it was a, it was a, it was the wealthy man's game.

Like you, you wouldn't see your Uber driver today, you know, giving you stock picks, uh, back in 1960 or whatever. Like Charles Schwab, when they came in, they were the disruptor. Uh, what, what he did is he said, oh, we're going to use, uh, mainframe technology when get rid of or eliminate, you know, back office, you know, pen and paper ledgers, all of that stuff, processes for execution and settlement of trades for our client. So instead of $100 per trade, we're going to charge seven. The industry was like, you idiot, you're killing, you're going to kill the golden goose. What are you thinking? No, they hated him. And he did it. And what

he actually shows is by brand costs down, you actually get more trade and you expand your market as, you know, instead of just wealthy business owners in your town or maybe a few people in every city having access to, you know, buying stocks on the New York Stock Exchange. You now have Robin Hood. Well, that's where we go as the logical endpoint. There's a whole different geopolitical bag of worms to unpack there. I do have a take on that, but let's not go there. Cut it down to seven, but you get this massive market and boom, like, it's just, wow,

the pie is way bigger. And it's like, yeah, I brought you 10 golden goose is where you had one before. But Charles Schwab in the last like few weeks, they opened up, um, trading of not Bitcoin ETFs like for their client base. Now they're letting their customer base buy UTXOs directly. I haven't,

I haven't piloted their product, but I don't, you know, if you can withdraw to like a self-custodied wallet, but that's a huge step, right? So you're cutting, you're cutting middlemen,

like exposures in that hot between the actual beneficial owner. Now there's no, um, there's no, BlackRock. There's no ETF wrapper that you have to buy, like if you're a Charles Schwab client to get access to your Bitcoin. And that's a huge tell on where the U.S. securities market is going for the years ahead. So this went kind of under the radar and financial media, but it's a big deal in the

back end, like the back office side of the financial industry. So the way corporate bonds used to like settle prior to 2022. They settled T plus two. So if I bought a bond today on Wednesday, June 24th, we would actually not settle the transaction until Friday morning open a business, right? So, and this is the way it had been forever. It's like this podcast. This is podcast T plus two.

T plus two. Yeah. He'll be out on Friday. Yeah. Awesome. But in 2022, we shrunk the time for back office settlement of corporate bonds and basically all non-U.S. Treasury bonds used to trade T-plus two. We shrunk that to T-plus one. This April and May, you saw all the leading exchanges in the U.S. securities

markets. So NYSC, NASDAQ, CME. They said they're going 24-7 trading with real-time settlement. So you can see where the puck is going here. So the whole tokenization trend, right? this idea so if you look up like the real world assets tracking like what a what is what does davos man want to do he wants to tokenize everything like that timberland and you know the canadian whatever Alberta British Columbia all that tokenize that that becomes the collateral for this offshore system which won't be an offshore dollar system anymore so instead of treasuries we need something else that's being taken away we need your timber we need your commodities or it could be we need your equity.

So if you go to the trackers, right, well, the number one tokenized security is actually stretch by total assets. And behind that, it's actually your AI plays, like tokenize micron. But what's going on is it's that same way, in my framework, that anchoring of, like the offshore capital market system

want to anchor to the U.S. dollar and then kind of squat on that real value, created by the domestic economy. Same thing. So let's say we want to tokenize Tesla shares, tokenize MSTR, tokenize SpaceX, whatever. Like if you look at the graphs on just total capital outstanding in that it's the offshore bucket shop of crypto tokenization, it's the replacement plan for this offshore dollar in my understanding of what's going on.

what the U.S. capital players are saying is like, no, no, no, no, no, no, no. You're not going to disrupt us here. Nasdaq, NYSE, CME. They're going to match you feature for feature on liquidity. So they're going, we'll allow 24-7 trading. We'll allow, you know, near real-time settlement. So your brokerage coming on on Bitcoin, what do you get with Bitcoin? Like, Bitcoin is your, it's not, it's not yet your base money. We have to work up to that.

It'll take at least, I mean, like, think, I think, decades to get there. But if you're thinking about 24-7 trading and liquidity pairs, you need that, that, like, you need Satoshi's solution to settle frictionlessly on that level playing field in real time to accommodate that, I mean, tokenization, but what it really means is like 24-7 near real-time settlement of securities and trading liquidity, all of that. And then the other thing you see is this adoption of prediction markets, right? So CalC, Polymarket, all that stuff. There's also huge developments there with the CFTC.

And you can see this like a few weeks ago. The CFTC, the U.S. regulator for commodities, gave CalC the approval to launch their own Bitcoin perpetual futures product. and that actually like hit the stock prices of the legacy players in the U.S. So CME Intercontinental Exchange, they were down like 8, 10 percent on that news. My read on what happened there is the kind of the legacy incumbents, their shareholders realize like, oh, we don't have a moat anymore. The disruptors now are going to encroach upon this territory, so we're going to have to respond. And they have equity exposures.

Like, they're investors in Polymark calcium. They see where the puck is headed. But you can kind of see slowly this thing coming together, and it's going to go extremely fast because, like, the 24-7 trading for commodities, like in July, Comex is going to start settling gold futures, 24-7 for the microcontract. And then oil starts, like, the next month. So those are your two biggest commodity pools for, for. liquidity, most important

commodities and hard commodities in the real world. CME is already there. And what you see with these like, what do you call it, like prediction markets, whatever, which are just starting to really, like, the growth is huge. Like if you just look at the chart, the

assets involved in all this complex, it's just like, like you can see, it's like, oh, this is like the internet in the 1990s. And this is where capital is going. If you look under the seen at how polymarket works, right? They're binary contracts. It's

100 cents each. The person with the long they own yes. The other counterparty owns no. They add up to 100 cents on the dollar. That's all there is. And the way polymarket works, I found this very interesting. They're funding

in stable coins. Not the US. The US app is just a sports betting app. It's very early on. But what they do for the global market for polymarket, you fund in USDA and then each counterparty and a given contract is fully collateralizing their position. Let's say it's, what is it, 100 cents for yes, no, I don't know, big event. England wins its next World Cup match, right?

Yes, maybe they put in 60 cents, no puts in 40 cents. That's 60 cents of stable coin adds up to 100. The exchange here just takes a fee. They're not. Like as opposed to CME, which is fractional reserve, right? You put down, could be like 10 cents of margin, right? And this is where you get the basis trade, all these carry trades. You post your treasury as collateral.

You buy 10x that. You lever up and you ride the carry. Money, magic money tree, right? With the polymarket world and where prediction markets are going, stable coins, all of that. Think about this. The long and the short, the contract is fully collateralized. They're funding in a Genius Act stable coin, which is reserved one to one with treasury bills.

So if you think about like the hoops that these positions, like where does the counterparty go? Start off, long and the short, you got 100 cents on the dollar. That's sitting in circle USC. Behind that is a treasury bill. And there's some yield generate on that, like I don't know, 3.6% today.

And that yield is, is being passed to all of the participants up this value chain. So if you go look at Polly Market, what they're actually doing to incentivize the buildout of volume, they have these special contracts or events like 2028 elections or Bitcoin Price is one of them, where they'll pass through the interest on those T-bills to grow liquidity and build.

up the market share. So it's part of this stablecoin adoption story. And this doesn't like, just want the audience to know, like, hear me out. It's like, am I a stablecoin maxi? No. Like, these are all like it's IOUs all the way down. But what I'm talking about here is a system, like a framework that gets us to that end stage. I think that everybody on the what Bitcoin did audience wants to see, which is a like a financial, system, if it's not hyper-bitcoinized and we're not all settling in sats, well, at the next best thing would be a financial system where your counterparties at the end of the day have to reserve and a sound money, they have real skin on the game. And for like, for a base money behind their

swaps, their collateral, all of that, if they get it wrong or they try to bend the rules and steal purchasing power from the rest of the market that they're not entitled to, that there's no bail outcoming and they'll have to post a hard collateral and risk losing something of of dear important, which is your UTXOs. So Bitcoin ends up just being sort of the base, the base layer of everything, the base layer of the financial system. Yeah. And then the answer is like what timeline are we thinking on, right?

Because if you're thinking about a dollar order and you're trying to, you can't cold Turkey, this post-World War II system and this framework and just move straight to, hey, we're fully on Bitcoin and all of that value tied up and stored in the hundreds of trillions of dollars is just evaporated overnight. That's really like read when money dies about what happens to a society when that happens. You probably have it on the bookshelf. I actually recently bought it. I've not read it yet. Okay. It's not a good tale. So you don't want to like live through that. You want to work through this. I mean, it's like the. It's like the. Indiana Jones scene where he's swapping out the, you know, the idol he's after with the bag of sand.

It's like you want to do that to the best degree possible because there's a lot of people counting, like they've saved their purchasing power in this system. And if they get rug pulled, like go look at Weimar Germany. I did a big deep dive on Bismarck, right? Because I was like looking into Social Security, right? Otto von Bismarck in Germany created the first nation-state level public pension scheme or mandatory retirement savings scheme. I asked, okay, well, it's probably not in survival anymore. Like, how did it fail? Because everybody who is looking for Social Security is like, all right, how does it fail, right?

And you look at what Bismarck did. It was actually the loss in World War I and then the Weimar hyperinflation that it didn't actually. actually like totally kill the pension system. But for that generation, they rinse their claims. Like they wiped out their purchasing power. And what you ended up with was like your grandmothers all lived their end of end of life period and complete destitution. It's just not good for societies to go through that social breakdown. Like once you get in that state, if you look at the Russian revolution, like the October revolution, it almost happened in Berlin. coming out of World War I as well.

That's where the Bolsheviks come in, the disorderlies. Like, if you think this Mamdani situation is bad in New York right now, just, oh, wait, wait and see what happens if you have a complete monetary breakdown. It is very difficult to defend City Hall, all of the governance institutions, away from what are ultimately, I think most of society would agree that people we don't want holding the key. to the car. All right. So if you can if you can like do this and preserve broad system stability over the course of let's say like decades or conduct this handoff over a generation or two,

you can get through like your society, your civilization, we can get through this process without face planting. And the problem like the entire global economy like talked about this starting as like the Western allies coming out of World War II running this coalition. The other the other side of that was the Russia, the USSR, that's collapsed. Right. We've incorporated China, Japan. The whole world is in this basket. Right.

So if this old system just baseplants here and we're like, oh, a dollar's going to hyperinflate tomorrow, it's like, okay, but you do realize that is going to be extremely costly, disruptive, chaotic, random, good luck defeating the Marxists, the Bolshevists, all of that, versus if you can do it and maintain stability, we can actually get to that world we want and we actually don't have to go through a century of humiliation, like a wasted century, something like that. So the way I'm seeing this play out, this dollar transition, like, it's happening. Like, I'm not a fanboy, like, cheering for this. It's like, no, I can, my take reading.

reading the players like Genius Act, Stable Coins, um, we're going that way, that transition away from the offshore dollar towards the stablecoin dollar, and then the reformat of U.S. onshore regulation. All of that is happening. And at the same time from these same figures like Scott Vassent,

I mean, not just in his testimony to Congress. Like he was at the Pub Key, Washington, D.C. opening night. Like someone spotted him in a photo. I was like, oh, there's signal there. Kevin Warsh also, I mean, he does some crypto investments, all that stuff.

I understand it. He's favorable to Bitcoin as well with his other shitcoin or bags as I understand it that he has capitalized and made investments into. But yeah, the way I see it, and congressmen, we have a ton of congressmen who are supportive of Bitcoin. And, you know, 10 years ago, that number was probably exactly zero. And, you know, we don't have 215 votes at this point, I don't think. But we have more than 22 sponsors on that bill, I think, was the last I saw. So this is that process playing

out. It's not a guarantee that we get Bitcoin in this process. We may end up, I don't know, stable coin, shit coins, all of that. And we short-circuit ourselves. Like, we have to actually go out and make it happen. So this is a global audience we're talking to, but like this November

election, and we're two hours and 17 minutes in, and this is a payload. Like, I know, it's hard right now to see what's going on geopolitically. We thought we were getting out of forever wars. What are we doing in Iran? What are we doing in Venezuela? It's part of this fourth turning. But the biggest thing we have riding on this is like we need to, if you want that, that strategic Bitcoin reserve and you want the dollar system to go this way and lean into Bitcoin, we have to elect the Congress to make it happen.

And that is the straw that stirs the drink at the end of the day. Like it's a United States, like we're living in a multipolar world, but the United States is, maybe it's going above the law. I don't want to offend anybody and say like it's the biggest, most important player, but it is. It is. Yeah. Yeah.

So if we do that, then it will be a, it'll put us on that trajectory towards that Bitcoinization in game that I think most people listening here to WBD would agree they want to see it in the world. Matt, this has been unbelievable.

This is the best explainer of the transition to this potential new future that I've ever heard. It makes me so bullish on Bitcoin the fact that we're sat at $60,000 right now. We're still so early. There's so much winning to do. I agree. At the very start of the show,

you were talking about like how you really don't want to position yourself during this transition. You don't want to be like way out on the risk curve. Bitcoin by the market is still perceived as being very risky. I think if you like understand what Bitcoin truly is, you don't necessarily see it as risky as that. But how do you think it will sort of perform through this transition? What do you think happens to Bitcoin? So the name of the game here, you got to realize like back in the 2010s, right, I was young, had no capital. I was selling Bitcoin for, let's just say, like, pay off student loans, thing like that.

Like things I wish I didn't have to do and could have held those early stage bitcoins that I no longer have those cost bases. So what I would say, so early on in those days, I realized capital was dear, but I didn't have the ability to hang on to those UTXOs. Those decisions, if you're young right now, like you realize if you're parting with your Bitcoin or if you're buying a credit claim on Bitcoin or someone else's IOUs and they'll pay you some percentage of the Bitcoin and they'll reduce the volatility for you. I think over this whole process, what we're learning, we're all fighting over those 21 million

UTXOs and I mean, fighting literally in some sense, right? Iran, if you look into it, like their cost of energy, right? I don't know if this is accurate or not, but once when their oil was sanctioned, their access to the dollar system shut off. Oil was trading at the equivalent of like 12 cents a gallon in Iran. So they just like dirt cheap energy. At that price, like plug in your Bitcoin miners. Doesn't matter if it's 60,000 or, you know, down 50% on a drawdown.

It's still the most, like the highest and best thing you can do with your stranded energy resources at that point. At any price of Bitcoin is plug them in. mind the Bitcoin, get a whole of those UTXOs. So I think like, yeah, we talked about what do you do as an individual here? Name of the game, it's still, I know it feels hard in this cycle. And I think whatever happens to these treasury companies, a lot of people got caught up in that. If it gets worse from here, this is June 24th, when we're recording this. it was a bad day on the equity or the common equity,

the preferred shares across the complex. So I don't want to kick any of these management teams while they're down. They've got a knife fight in the alley they need to get out of. But whatever happens here, people should like realize those Bitcoin you own, you hold custody of. And like even if you can't manage your keys yourself, like if you don't want to manage a hard.

hardware wallet. There are other collaborative custodians out there who can give you access to keys and make sure what you own is not paper Bitcoin at the end of the day. So as this process goes on, it's going to take years. We're going through one of those other, one of those bear

market values. For a lot of people, this beating we're taking is going to be extremely hard to hold on to your UTXOs through and that's the definition of bare markets. Like, If it were easy to hold for the long term, we'd all be in yachts and all that stuff. So I think, yeah, just that mindset, I know some of our friends say at Matt O'Dell, stay humble, stack sats. It's going to be an extremely volatile geopolitical process as well.

I know we have that MOU sign between the U.S. and Iran. What it really is, it's 60 days. we have to get to the next stage of this and it's over like the nuclear question like that has to be settled I don't see that getting done by 60 days so all of this volatility all of this chaos

I hope it's resolved but I'm preparing like my base cases like we're not through it yet so yeah batting down the hatches everybody plan for the long term and at the end of the day yeah you see in the like the bare market the drawdowns, go on X, like all of the non-bitcoinsers, they're dunking on us right now.

But I think one of my friends, Parker Lewis, put it well. Like back when FTX collapsed, like day of, we were at a conference, Pacific Bitcoin down in Southern California, a conference that no longer exists, right? Just tells you how fast these things move, like how much happens at a short amount of time. But I was down there, we were working on a business deal, and FTX collapses. I go, this is terrible. This is so bad. This sets Bitcoin back for years. And Parker's like, no, no, no, no. I see a totally different way. This is fractional reserve Bitcoin. We're getting liquidated at all points in times the way he thinks about it. Someone has to own those 21 million units. And we're all just, you know, trying to get our claim, maintain our claim, own as many of those as we can over time and be able to hold on to them too because defending is also part of the game. So, yeah, that's what I would say as the in-state to this.

And then also there's agency. I know you had Simon Dixon on and recently, and he went deep into this. And yeah, he has some coverage, you know, intelligence community, all of that stuff. I don't get down in the weeds, like, to the full degree. But I think where I would say I disagree with him is in his framework, he just kind of puts it aside that there's no, you can say the Sovereignty Movement for each one of these nation states, but even more important is the American Sovereignty Movement, which I think is going on. And any given leader, like you can say if Trump is your figurehead, he may be compromised,

he may not. So don't ever put all your chips in one man. We have yet to have a George Washington arrive on the scene or an Abraham Lincoln arrive on the scene. And, and, and, and, and, in my reading of, you know, what's going on. But this idea that we as the, like the electorate, the people, we have no control over or no agency in this process. I think we're actually a lot more powerful than you think. And what we've seen take place in the, the pole of the center of gravity of this, of the U.S. dollar,

away from that offshore dollar, from London towards the domestic United States, and it sits in New York now as the center of power. But within the United States itself, that power center is also decentralizing. You have like Dallas spinning up the Texas Stock Exchange. You have Miami spinning up as a major capital market center. A lot of the finance industry is moving down there. Citadel. Like everybody's setting up their offices down in Miami. So like even within the U.S., the capital markets, the center of gravity is distributing as well. So my point there for people, I do think Americans, you have agency. You've got the most important government structure in the world

where the people are the sovereign. Like no other constitution has that framework at the base level. And I think, yeah, this is the time to not just lose, lose. conviction in Bitcoin, but don't lose your conviction in, you know, America itself. You know, we're celebrating the 250th anniversary. I know, I know you're not an America day, but like, we have work to do. So let's, let's get out there and go do it. So, yeah, it's a bare market rally. Amazing. I love it, man. This has been awesome. Before we close out, though, just tell everyone where they can check you out on substack, podcast, everything that you're doing. All right, on X, my handle is levered USTs.

It's just a play. Just took the handle. It was free real estate. Can't believe it. But yeah, the offshore dollar system, it's just levered USTs all the way down. That's where you can find me day to day.

And then my business partner, Cameron Otsuka and I do a weekly podcast where we just take the biggest news stories of the week. We crunch them into one update, try to get it done in 30, 45 minutes, and give you the real time update on all these things and try to get an audience the core of what's going on and the big picture developments.

And that podcast is Mindprint hash or YouTube channel subsdeck. You should be able to find us just about anywhere on that one. Awesome. I'll make sure all the links from the notes. One of my favorite episodes has done in such a long time. Thank you so much, man. We'll have to do it again at some point. Maybe I'll come over and we'll do it in person next time.

That sounds awesome. Thanks, Danny.