What Bitcoin Did - THE MONEY PRINTER IS COMING w/ James Lavish

Episode Date: February 24, 2025

James Lavish is a macro investor, former hedge fund manager, and managing partner at the Bitcoin Opportunity Fund. In this episode, we discuss global liquidity cycles, the role of the Federal Reserve in managing market liquidity, and the implications of U.S. deficit spending. We also get into Bitcoin’s correlation with liquidity cycles, the potential for Bitcoin-backed bonds, whether Bitcoin will eventually break free from its perception as a risk asset and what incoming QE could mean for Bitcoin’s price. MASSIVE THANKS TO OUR SPONSORS: IREN: https://www.iren.com/ RIVER: https://river.com/wbd CASA: https://casa.io/ LEDGER: https://www.ledger.com/

If there's no dollars and everybody's running out and paying insane overnight rates for these things because they need them, well, what happens when we have a treasury auction? Who's going to buy those bonds? What we saw in 2019 what the answer was, the Fed, the Fed will buy the bonds. So they've got to turn on QE and they've got to go out there, they've got to print money, and they've got to go buy them themselves. And that's what will happen. Yeah, it was the three fights in that first minute.

Yeah, the first nine seconds and two of the, uh, two of the players, two Kachuk brothers. I played with their dad. Oh, cool. Keith, Keith Kichuk. He was out at Boston University, and I played a lot of hockey in Boston because being a Boston Bruins draft, I would go out there in the summers, and we would all train together.

So we all trained at Boston University together. And Keith, you know, that first year of college, he had broken his foot and he had gained some weight, and he was kind of, you know, kind of, getting it back on the horse. And I was like, how are you, you're like, the draft is in a couple weeks. And he ends up getting drafted first round for

Winnipeg and becomes an absolute superstar in the NHL. He's powerhouse, awesome. And now his kids, it's just weird, watch his kids, they're becoming powerhouses too. That's so cool. So when I was, I know nothing about hockey. I really enjoy it whenever I watch it, but I know nothing about it. But I thought that there was like enforcers on a team.

So there'd be someone that was like the guy who's going to someone if it kicks on. Oh, yeah. But then there was like three fights in a minute. So how many enforcers are there? Well, this is a different situation. So what you're talking about is there are enforcers, you know, they used to call them goons. But they would, with their purpose, they're typically very large defense or just wings that they put on the fourth line.

And their purpose was go out and intimidate the other team to protect the best players. So like, you know, Marty McSorley was out there. Marty McSorley was out there to protect Wayne Gretzky, you know, like you can't, you can't take a shot at these guys. And so you've got to have somebody that will, you know, if you're going to go and try to take out our best player, we're going to send out our enforcer to take you out. So you better be prepared. So that's, it's kind of old-time hockey.

But this situation was the U.S. comes out there. The game's up in Montreal. It's a super liberal city. And, you know, the crowd starts booing the national anthem. And that's, you know, okay, I get it. I, you know, there are people who don't agree with Trump and all that, whatever, the politics put aside. You don't boo somebody's natural.

It's just such poor form. And so the Kachuk brothers just probably looked at each other on the bench. We're like, no. Let's have it. They're like literally dropped their gloves, the moment the puck dropped, and they were ready to fight. It was crazy. Love it.

And it's the rule that if you stay on your feet, you can just keep fighting. Well, it's not really a rule. It's the refs don't want to get in the middle of it. So it's dangerous, right? So they're not going to go and try to break it up when you've got these enforcers or these big guys, you know, trying to punch each other in the head. You're a ref. You don't have any padding on. So they wait for them to drop and then it kind of, it gives them the opportunity to get in there and break it up.

And then are you sent off for the game or do you just get like Sinbin? How does it work? I'm not sure what the rules are and the international play but yeah you just get a major penalty and you're back on the ice a little while later it was a fun starts

to that game though so this is the final now tonight this is it USA Canada who won that last game I only saw the fight I didn't see the result you know what I was actually I was I was traveling and so I only saw parts of it but I did see the fight but I've got a I've got a bet

on tonight and with this with this NHL player the former NHL player who's um he's an he's actually in the hockey Hall of Fame's guy Chris Pronger he plays uh he used to play for st. Louis and he was a big um you know rival with when i was living down in Dallas for a long time people hated them so it's funny because now we're friends on Twitter but you know it's uh yeah where I'm trying to turn them into a bitcorner so I said let's bet 100,000 sats and then make it public and give the sats away

So, oh, that's good. I do a lot of boxing and the thing that I find most impressive is that they can stay on their feet on ice skates and still fight. It's, I mean, well, here's the thing though, Danny is, I mean, I've been skating since I was just under four years old. I mean, and so it's actually easier for me to sprint on the ice and it is in the grass, you know? Oh, really? It's much smoother.

Yeah, it's a smoother motion. And so it's, when you, when you play that many years, years, it's hard to bring you down. You know, like my wife, the first time I took her ice skating, she's like, oh, I'm going to drag you down. It's going to, you know, it's dangerous. I'm like, no, you're not. Hang on you.

Like, it doesn't, you're, your center of gravity is lower. You just, you're used to it. Yeah. I'm like Bambia on ice. I'm no good at it. But we'll make sure this is wrapped up so you can watch the game then. But Mr. James Lavish, you recently dropped a piece on liquidity, which is something I thought was really interesting.

Like, the piece was amazing. And it's something that I spoke to Jeff Ross a bit about recently. So I wanted to kind of get into more detail on it. But can we set this up with, can you explain what you actually mean when we talk about global liquidity? Yeah, I mean, and this piece came after. I had this conversation. Substack had this investor, it was a financial newsletter day.

So all the writers of financial newsletters got together and they kind of paired up and talked to each other. And so Michael Howell and I got together. and we talked about liquidity. And Michael Howell is from cross-border capital. He's, he's, I would, I mean, to me, he is the leading analyst on the globally, leading analyst on global liquidity. The guy knows what he's talking about.

And he follows this stuff very closely. He's got proprietary models that are powerful. And so we talked for a little over an hour, And so a lot of what my piece is of that, that newsletter that you're talking about is kind of going just a little bit deeper than our conversation. We kept a pretty high level for everybody to understand it. So, so what we talk about, what we mean when we talk about global liquidity is just you hear about like M2, you know, the money supply and how, you know, how that's driving the stock prices and sometimes the, and of course, real estate. and so asset prices, basically. And so, but where does that come from?

You know, where's that, is it the Fed printing money? Is it banks lending money? Like, how is this, like, how is there more liquidity? You know, is it hedge funds, you know, using derivatives? Is it cross-border transactions and lending? Like, how does this actually? And the answer is it's all of it. And so you have to look at all of it to try to get a sense

of how that money supply is either increasing or decreasing. So going back to first principles, Danny, you know this, but for the benefit for, I know you know a lot of what I'm talking about, but for your audience, you will, you know, for people who don't know this stuff, and we talk about the money supply and the expansion and contraction of it, like first principles, first of all, our central banks have manipulated the money and they've created an absolute disaster with the amount of manipulation

that they're doing with the money supply. They're either adding it to the market or they're taking it away. And when they do that, you have these booms and bus of economic cycles, which are not really as natural as they should be. So we talk about the money supply. Most people think, oh, is the Fed printing money

or are they taking it out? So are they doing QE quantitative easing where they're printing money and out there, they're buying, they're out there buying bonds and US treasuries and mortgage-backed securities in the open market?

Or are they doing QT, quantitative tightening, where they're selling their own securities from the Fed, they're from the Fed balance sheet, they're selling them into the open market.

And that will take money out of the system. So when you're buying it, you're injecting the system with capital that wasn't there before. They just print it from the Treasury. It's not really printing. What they do is they press a button and it shows up on the Fed's balance sheet. The Fed gives it to a bank. The bank goes out there and buys it.

It ends up on the balance sheet of the Fed. And that's kind of how they do it. Recently, what they've been doing is quantitative tightening because we had lowered all the interest rates down to zero. And we had printed all that money and bought all those bonds. then when when inflation spiked up over 9%, the Fed raised rates, then they stopped doing QE and they turned around and started doing QT, which means that they were taking money out of the money supply by selling bonds, the bonds that were on the Fed's balance sheet,

into the market and taking that capital back out. Okay. So that's what people think about. But there's a whole lot more that goes into it. And Michael has done a tremendous job of analyzing and explaining, explaining this, you know, and some of its essential bank reserve, some of its bank credit, you know, the loans and credit lines to consumers and commercial lines, you know, to companies and businesses, you know, and so that's important. There's shadow banking, which is non-bank,

non-bank financial companies. Is that like the or dollar system? It's like, that's actually like hedge funds, you know, so private lending kind of thing. And, and then cross-port flows is what you're talking about, is capital moving between countries, right? That's the one that I'd probably understand the least. Like, how do cross-border flows impact liquidity? Yeah, I mean, it's just whether capital is coming into your country or coming out of your country and it moves that exchange rate up and down, right? And, and of course, it influences, like we talked about in the newslet of some financial stability, right? So if you think about a foreign investment comes into your market, like into bonds and equities, that's adding to liquidity

and outflows will drain it. So global liquidity is not changing, but the liquidity in your region is. I see. So, and then, of course, currency exchange rates will impact it too. But other things that people don't think about that Michael's done a good job analyzing, and this is all his proprietary models, but he also adds in their bond volatility. So these are all the things that go into global liquidity. So bond volatility is important because people will use their treasures. They'll use their bonds as collateral, right? So they'll put their bonds to somebody, you know, lend them to somebody, and they'll borrow

cash for those. And how much cash they get for that, the loan to, um, it, the underlying value, right? Depends on the volatility of that instrument. So if the bond is really volatile, well, they'll lend less money because it's more risky. But if it's not as volatile, they'll lend more money, right? So the loan to value will be much higher if it's less volatile.

So the volatility really does matter. And that's just another aspect of that calculation. I don't have the calculation, but he's got some incredible charts about it. and how these liquidity cycles move. And what he's found is that they kind of move in five to six years cycles. And in this latest cycle, it looks like we bottomed out in October of 2022. And now the liquidity is coming back. Like all the central banks were drawing capital out of the system,

and that peaked at October 2022 with not just that, but bond volatility, you know, a lending practice that were down. It's all that. All that goes into it. And so now it's kind of turned back up. You get more confidence in the economy. The central banks stop tightening rates. So they start lowering rates a little bit.

You know, the lending picks up and all of that. And then you get, it kind of turns back up and it looks like we're in the upswing. And if you do that, if you do that five to six year period, it looks like we're going to peak in liquidity somewhere around. the end of this year to beginning the next year. So that's, and that influences all the markets. What Bitcoin did is brought to you by our lead sponsor and massive legends, Iron, the largest NASDAQ listed Bitcoin miner using 100% renewable energy. Iron are not just paring the Bitcoin network.

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Is it like risk assets benefit from this in the biggest way? Yeah, risk assets definitely benefit the most from liquidity. And so you're looking at primarily the biggest beneficiaries are the high-flying tech stocks, the S&P, you know. And then, of course, Bitcoin has been an increasingly, incredible gauge for global liquidity if you look back in time. The only thing is Bitcoin, it trails liquidity. So if liquidity is up, that it takes Bitcoin somewhere between two and three months to catch up. So if you overlay those charts, though, the Bitcoin chart and the global liquidity chart,

man, they look, they look really close. And so that's what you're, that's what you're kind of watching, but it's a three-month lag. So it's, it's not a great indicator, but it absolutely is directly correlated today. This may not be forever. I don't think it will be forever, but today, it is absolutely directly correlated to the money supply and liquidity. So do you think as Bitcoiners, instead of paying attention to the four-year cycle in such a great deal, because that obviously has diminishing effects, do you think liquidity is really the big driver of Bitcoin? That's a loaded question, but it is absolutely, it absolutely matters. You have to have liquidity for an asset like Bitcoin over the last few cycles to expand and for that price to rise.

Will that break eventually that being so tied to the liquidity cycle? I believe it will. We're not there yet. We're in the middle of it still. But it won't break until there's a reason for people to own Bitcoin other than speculative. And at this point, most people just believe, they believe it's speculative. You and I know that that's not the case. You and I have a much longer view on this.

And we understand that Bitcoin is an important allocation to have in your portfolio for multiple reasons. One of them is not just to keep up with the money supply because money supply drives inflation and Bitcoin goes up with the money supply and saves you from inflation. Now, it will matter, but will it be the leading indicator or will it be the most important thing with Bitcoin?

I don't think so. And eventually, it's not there yet, though. When it happens, it's when Bitcoin is now taking market share from the, rest of the global asset pool right so right now it's been taking market share arguably from gold and and some from equities not a lot i mean there's 115 trillion dollars of equities in the world 100 almost 120 and so there's 120 trillion dollars of of cash there's 330 billion dollars of of three hundred and thirty billion dollars of of uh real estate and 300 billion dollars of

of bonds. I might have those reversed, but the point is, there's 900 trillion. I said billion. Did I say billion? I meant trillion. There's 900 trillion dollars of total assets if you add those all up. 18 trillion of that is gold.

So when Bitcoin is taking from gold, but it'll eventually start taking from bonds, is my belief. And that's a little bit down the road. And we can talk about that a little bit later. So, I mean, every, I totally agree with what you say, though. I don't see Bitcoin. I'm all in Bitcoin, and I definitely don't see it as a risk asset for me.

But I think the broader market still sees it as a risk asset. Do you think that's something that will change in the kind of near term? I think it's going to change when the volatility dampens a bit. And that's going to take time because people see the volatility and think risk. They don't realize that volatility in a rising asset is actually a good thing. Why is that a good thing? because it allows you to accumulate at opportunistically. And so, and it's rising, though, over the long term.

So it allows you to take advantage of drawdowns, especially. And the reality is, I mean, look at what Michael Saylor's done with micro-strategy, now called strategy. He's able to, expand his balance sheet and buy 479,000 Bitcoin borrowing capital from the markets to do it, he's sound a way to optimize his ability to borrow. How does he do that? He does it because of volatility. The volatility ends up being a good thing. So what he's done for your listeners is he's been issuing convertible bonds at zero percent interest.

Zero. He's not paying any interest on these bonds. And people are like, wait, people are lending him money for free to go buy Bitcoin. Are they nuts? Good question. The answer is no. These are professionals who know that the volatility is beneficial to them because they're buying something called a convertible bond.

And that bond can convert into stock at a, at a price above where that bond is issued. And so if they buy this bond, they know they've got upside optionality from the stock. Well, the stock is tied to Bitcoin. Bitcoin's volatile. The stock is volatile.

So why does that matter? Well, now they've got this convertible bond that you've got the ability to convert into stock. So if you're a convertible bond owner in a hedge fund, you're buying these bonds and then you're selling short, micro strategy to delta hedge against it. What is that? That's the optimal hedge to have against that

bond of stock, because this is going to convert into this. This can convert into this, right? And so there's an arbitrage. This is the same thing as this in a ratio. And so they can find that optimal point, which is the delta hedge, that they can trade around and make money as the stock goes up and down, they can short more and then buy it when it comes back in and then short more as it goes back up and make money along the way as that stock is rising with Bitcoin and it ends up going into the money and they make all this money off of that optionality on the upside from owning the stock, owning that bond and then eventually the stock. So volatility ends up being a wonderful thing for them, not just for Michael, but for the bond buyer. Even if it's downward volatility.

Well, no, the downward volatility is, I mean, we've seen downward volatility in companies that are dying, and that's not a good thing. But this is a company that has revenues that can easily keep up with the payments of the early bonds, and that leverage them to be able to do what they're doing now and borrow money for free. So, yeah, volatility in a decreasing asset is not a good thing. I mean, it can be a good thing if you're, if you're you know, a hedge fund that is able to short it on the way down, you know, but for the typical investor, it's not, it's not good. Okay, let's get back. I want to pull this chart that you did.

Yeah, this is Michael's chart. I want to be clear, cross-border capitals down there. Okay, can you talk us through this, though? Yeah, so this is, this is, the black line is a, that's the global liquidity measure, according to Michael, and that 65-month wave is just that, it's that, it's that wave line that, that is a, you know, it's a derivative of that time period, and it goes in that, it's like a sign wave. And you can see that the, sorry, the global equity cycle just follows it, not to a T, but you can see that peaks and valleys kind of hit in those, in that, in those same periods.

Yeah, right? So when you go back to like 2000, like, you know, you can see that global equity was coming out in 2000, 2001. There was rising after that. And go to 2008, you can see how global equity, it peaked right at that, right at that global financial, the great financial crisis. And then, you know, it just collapsed. But you see how it stops there in 2010, 2011, 2012, that black line kind of stops.

Well, that's central bank manipulation. So they kept it, they kept it from contracting too much too rapidly. And then the upside, they, you know, in 2014 to 2018, they were keeping it from expanding too much. But then you get back into 2019, you see how all the capals come. coming out? Well, that's where we had, right in 2019, we had a crisis here in the United States. I've talked about this a few times before, but there was a repo spike. What is that? Well, this is a great chart to see what happened here. You can see right there, 2019, you've got the liquidity kind of bottoms out. Well, what happened was the Treasury in the

September to October of 2019, the Treasury was they issued their QRA, their quarterly funding announcement, talking about how many bonds they're going to issue, how much money they're going to borrow. And it surprised people. At the same time that you had companies making their tax payments for the fall, at the same time the dollar was strong and it was difficult for foreign corporations to buy treasuries, and foreign, you know, entities to buy treasuries.

This all came to a head in the fall. And what does that mean? Well, there weren't enough dollars, basically for people to take their treasuries and put in the repo market. There's a private repo market back then that you could put your treasuries to another company. Like hedge funds do this all the time. They'll, they've got, you know, they've got $100 million of,

of T-bills or actually treasuries that they want to borrow against, they'll lend them overnight to another institution to a J.P. Morgan or something, J.P. Morgan will give them, basically, they'll give them dollars for that, and they'll pay an annualized rate on that overnight for that, for that repo, repossession.

They swap treasuries for cash when they just, they need some liquidity. Exactly. And so there's an interest rate for that. Well, during this crisis, the interest rate went through the risk roof overnight. It was like something is wrong. Something's broken. Somebody's blowing up. They need cash. This is a bad. This is really bad. And the Treasury and the Fed panicked, basically,

for good reason, and said, oh, we've got to, you know, stop QT and turn around and put more liquidity in the market. And so back in 2019, you can, you can pull up a chart on Fred and see the Fed balance sheet. And you can see that the money supply started expanding. So the central bank, the feds, balance sheet started expanding back in the fall of 2019 before we ever even had COVID. So, and people forget this because COVID was so, it was so jarring that they forget that this happened all the way back then. And so, you know, but that's what that's showing. And then the money supply just expanded straight through 2021 into 2022. And then the Fed turned off the spigot, and it came back in. And it bottomed out in October or so of 2022, and we're back, we're back rising again. And I remember doing

a show on the previous what Bitcoin did with Caitlin Long and Travis Kling back in 2019, when that repo market was blowing out. And they, at the time, they were saying that, like, this signifies something is really, really wrong. And then, like, two or three months later, COVID happened, and we know what happened then. Is that kind of like the efficient market hypothesis playing out? Kind of, you know? I mean, like, there's only, the problem, though, Danny, is what it is, it's not even the

efficient market. It's the manipulated market playing out. Like, how much they have to manipulate to keep it in order? than what you have people like, you know, when you have people like Larry Lepard, he believes that we're getting really close to these, there it is right there. You see that right there?

That little bump right before 2020. So the Fed had been doing QT from 2018 down into 2019, and then there's a little bump there. Like, they stopped, like abruptly stopped QT and started QE. And that was because the repo crisis. And then you get into 2020 and you get into the COVID lockdowns and the absolute disaster there. And look at what they did. They doubled the balance sheet.

They put $5 trillion on it. Insane. So, and this is why all these problems. So not efficient market. Inefficient market. It's more like manipulated market theory. Are you quite surprised with how far they've been able to draw down their balance sheet since sort of coming out of COVID here? You mean being able to sell off all this now?

Yeah. I mean, they've barely been trickling it out now. Now they're not even doing QT, really. They're just letting the bonds that they have on their books expire without replacing them, like mature. So they let them mature, they don't replace them, and they're calling a QT. $25 billion a month. It's nothing. It'll be, you know, it's kind of, it'll be significant when they stop because when they stop QT because it just signals that, uh-oh, we're going to have to start the spigot again. And then you heard the Fed's boss said today. He, and I think I retweeted, he said,

the possibility of slowing quantitative tightening is not just about the debt ceiling, but also because the Fed does not want to overshoot. I mean, they blinked. They literally just blinked. And they're like, we've got to make sure that we don't take, we've set ourselves up to be able to get to QE before it gets too late, which goes back to the charts that you just had up, that red chart you had up. And those are all the factors they're looking at.

And so what happens is the Fed's looking at all this and, And Powell, the last meeting, he flat out lied, you know. I mean. Why? What did he say? He said that there's plenty of liquidity in the bank, right? And he basically said that, what was the word he used? He said that there was abundant.

Yeah. Yeah. So abundant. So here's the thing. He's been asked this before. He hasn't been asked it in a while. I don't know why these reporters are giving us up softballs, but, you know, like, ask him the real questions.

Like, these are the things that really matter. He was asked about, when does he start getting nervous about bank reserves? Because the reverse repo was being sold off. So now we've got to unpack that, right? So what's the reverse repo? We just talked about the repo, where if you need capital, then you can take your treasury, lend it, get some cash for it overnight.

I think you described it as a pawn shop to me. A pawn shop, yeah, it's pretty much it. Exactly. But you know, you get it back. And they're not going to sell it on you, though. So, or the reverse of that is a reverse repo, which is you've got too much cash and you don't want to tie it up for too long because you may need it in a few days, but you'll lend it to somebody for their treasuries.

Okay. So what happened? Well, you had that chart of the Fed balance sheet expanded over $5 trillion. So what happens? Well, that money finds its way into banks' hands, into consumers' hands, into investors' hands, because they're buying securities in the upper market. Well, then what do these investors do with all that money? Well, they put it in money markets.

So if you got your swab or your Fidelity account and you have cash and it goes into a money market, it gets swept into a money market. You sell a bond, you sell a stock, it gets swept into the money market overnight. And then you're sitting in a money market. But where's that money market go? Well, what do they deal with that? Well, they typically buy T bills with them, right? But now we have something called the overnight window where the Fed has this window always open

because the repo crisis. So now they've got this window always open. They get the reverse and the repo and the reverse repo window always open, the two windows, and you could use them every night if you want to. You can look at New York Fed at what the balances are on the website. And so it's available for investors to just take that cash and put it in the Fed and get paid for it, really handsomely. So what these money markets are doing is they take in the cash.

cash, they put it in there overnight. Instead of buying T bills, they've got ready capital right there, and it's a great return. It was four and a half, five percent over that return. It was five and, you know, almost five and a half percent at one point. And at one point, all that capital that they had put into the market, there's liquidity. So these are things you were talking. Liquidity goes into market. Where does it go? It goes into stocks. It didn't go into bonds a little bit, but not much. It goes into real estate, you know, different things that people are, the investors are buying. But it also went into reverse repo. The reverse repo got up to over $2.5 trillion.

So think $5 trillion got printed. $2.5 trillion went into the reverse repo. It not didn't come directly from there, but, you know, the excess liquidity went into that market. Yeah, you can see, that's the reverse repo. Okay. So you can see up there that it got there at it when it spiked it spiked all the way up to like $2.5 trillion. Yeah.

Now this is not a daily. This is, I think I did this on a weekly or something. So you can't see the the interim weekly spike, but it got up there. Now it's all the way down and it's even lower this like $50 billion now. So what has been happening? Okay. So you could see that at some point in there, at the, somewhere in 2023 in the summer of,

well, why is this start coming down so much? What's happening? What's the function there? The function is that Janet Yellen figured out that, oh my God, we have such large deficits. And she had, you know, there are a lot of of policy errors here, but the main one being the Fed and the Treasury teaming up to print so much freaking money and just flooding the market with it. But another policy error is she did not

issue longer-term treasuries and get all of her tables off the, you know, out of the system when there was zero interest rate policy. So at the time where you could borrow at such low rates, She didn't do it. And so all these bonds were maturing during this time and were running $2 trillion plus deficits at the same time. She's got to go borrow that money. So where is she borrowing it? Well, she started borrowing it on the short end

because now interest rates are up. And so now she's got to just kick this can down the road and play chicken with the market. This episode is brought to you Kasa, the leading Bitcoin self-custody solution. I've been using Kasa for a few years at this point and I can't recommend them enough. Kasa have options for all Bitcoiners from a two of three multi-sig to a three of five and a private client option for absolute best-in-class security. Kasa also have an inheritance product which I've recently set up and it couldn't be easier.

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If you want to find out more, visit ledger.com and secure your Bitcoin today. That's L-E-D-G-E-R.com. Is that her fault, though, or is that because there was no market there for the long-liduration bonds? There's always a market there for them. If you pay enough interest rate, if you just have to pay a little bit more, but you're not paying 5.5%. You're not paying 6%. Maybe you're paying a few percent. So maybe you're paying one or two.

But so now what happens? Well, now she enters the market and she has to deal with all this, all this, the deficit spending, and she's got to deal with these bonds maturing. And so what does she do? She goes and starts issuing T bills. So they've been issuing massive amounts of T bills over the last number of years. So this is just like one-year bonds? They could be like a week bond or just a few days, a week and a month.

And so, and they're T-bills super short. They're not even called bonds. They're called bills. And so she's doing that. And so she's drawing money out of the reverse repo. How? Well, because the money, because the money markets, right, they want to own the best yielding product they can, as long as long.

as it stays within their liquidity parameters. Well, all these T bills are great for that. So she teases all that money out. And so she's been teasing, teasing, teasing and teasing and teasing this money out of this reverse repo for years now. And now it's down at the tail end. So now she can't take money out of there anymore. Well, Bessent can't because now he's in charge.

He's taken over this pile. And so now he's looking at this, and he's been criticizing her all along, that she should have gone out further on the courage. She should have gone further. I agree with him. She didn't. So now what happens, Danny?

Well, we've got over $7 trillion of bonds that are maturing. That's that next chart you've got right there. This is the next year. This is what we have to deal with. Yeah, in total, with interest, yeah, you've got over $10 trillion coming due here. And they've got to deal with it. What are they going to do?

Well, Bessette has been critical of, of yelling this whole time. And now he stands there and he says, well, huh, what am I going to do with this? You know, so can I go out on the curve? If I start going out on the curve now, interest rates are, you know, the 10 year is now sitting at, I think it's over four and a half percent

the last time I've looked today. Let's see, let's see where it is here, Danny. It's at 4.51%. So that's the yield in the 10 year. Okay, what if you go to the 30 year? That's 4.75%. That's not going to work. I can't issue a 4.75% treasuries on $10 trillion.

They'll blow us up. So I've got to kick the can down the road more, keep blinking, you know, or keep playing chicken, not blinking. So explain that to me. Does that mean they're just going to roll over this debt into more and more short duration or short, Ergeration bonds. Correct.

But where's it going to come? Who's going to buy this? Who's going to buy these bonds? Like the simple buyer was the reverse repo market, which is the money markets. That was a simple one. Well, as these mature, let's make it clear here. Let's be clear. As these mature, a lot of that money, most that money, the vast majority of that money,

likely just gets reinvested into it because people aren't going, oh, my T-Bill matured, and I'm going to go do something else with it. No, they're just like they're keeping it there. in the money market, it's likely going to remain there. And look, if people sell bonds, you heard what happens. I mean, people sell stocks in the market, you heard what happens. They open their Schwab account, they sell their stock, the stock gets sold, the capital comes into their account, it gets swept where?

Into the money market. And the money market does what? It buys either the reverse repo or the T-bill. Whatever is a better rate for them that fits their liquidity parameters. So that's what's going to happen. And it's not like this sudden thing. So a lot of this money will get reinvested into the money market, get right back into the money market, right back into T-bills.

However, there is one small issue that is on the horizon that we're going to have to deal with. We do not have a debt ceiling right now. So this is something that I spoke to Lynn Alden a little bit about, because when Trump came in, I think the debt ceiling, it was basically like an issue straight away. I think on his first day he had to do something about it. it. Right. So what's the state of that now? I've not really followed it at all. Yeah. So what the state is, we don't have one. And so what happened was back in summer of 2020, three, we got to a point where we were in real deep trouble. There was no money left in the Treasury General account, which is the

checking account of the Treasury that they have to pay bills with. And they had come all the way down the line to like literally the last minute they're going to trip some sort of payment that would be a default on something. So what they can do is when you don't have, when you say

you cannot issue any more bonds. That's it. You're at your limit. Your credit card is tapped out. You can't issue anymore. That's where we are right now. It's where we're back then. So what they're doing is the Treasury is playing games internally.

and not paying things that they don't have to pay right now. And so what they're doing is they're basically saying, it's like saying, well, I've got a 30, 60 or 90 day grace on this. I don't have to pay this yet. I'm gonna wait and not pay it yet. And they've got enough of those things that they can go. What Yellen had said was she believes they go into the summer with this.

We haven't heard percent on it yet. And they can play those games into the summer. They've got over $700 billion in the, in the Treasury General account, it moves around from day to day, but that's what the last time I looked at, it was right about there. And so, you know, they're playing with that,

and they're just going to play chicken on this. So, all right, so this is where we're at now. You've got all these bonds turning over, and you've got a deficit. Okay, now you've got to talk about Doge. Yes, Doge has, they've saved $100 billion of spending. spending so far. How much more they can do, who knows. I'm covering a lot of nonsense and fraud

and whatever. But I assume you think the two trillion that this target was originally is out of reach. I mean, let's talk through it structurally, right? First of all, let's set the stage. The U.S. government works on October 1 fiscal, right? So the year begins October 1. Our first quarter just ended. for 2025. So we got all the, we got the data back. How did we do? Not so great. We ran a $711 billion deficit in the first quarter.

And so the problem with that is it was 35 to 40 percent higher than last year. So anybody says, oh, yeah, but there were no tax payments yet. They come in April and it always runs a high deficit in the first quarter. Yeah, great. But it was way more than last year and last year. we ran a $2.1 trillion deficit. Danny, you don't have to be a genius, do this math. 700 times four is $2.8 trillion.

There's a massive upswing in deficit spending. Okay, so yeah, they saved $100 billion. That's great. That's awesome. We need to keep doing this. We're still running deficits because structurally, we're at a point where we spend so much money, Danny. we can't, we can't keep up with it, right?

So just thinking about it, we're going to give big round numbers that will be close to what's going on. Our tax revenues are about $5 trillion. And our spending is about $7 trillion. So you think, okay, if you just take $2 trillion out, you're great. Okay, let's talk through, where is that going to come from?

Well, your mandatory expenses, and I've talked about this ad nauseum, but I'll do it really quickly for your listeners. your mandatory expenses, these are signed into legislation, you can't, you know, you're not going to cut these unless you find fraud in them,

which this is a new wrinkle, right? So that spending, though, that signed into legislation is $4.1 trillion annually. You've got defense spending, which is about $900 billion. So now you're a $5 trillion right there.

But here's the thing. You haven't even talked about your interest on your debt. You cannot default on that. That is absolutely mandatory, What is the interest at the moment? Which is about a trillion dollars annually. Okay. Net interest because there's intergovernment payments and debt and loans and all that stuff.

But the total mandatory expenses, $6 trillion. And then your discretionary spending, it's stuff that's not signed into legislation, which is the really easy fluff to get out of there, is $1 trillion. So it's $7 trillion of total spending. So where are they going to find? that extra trillion dollars, even if they cut every single discretionary program, they're not sending any money to anywhere else.

Which they're not going to do. Which are not going to do? But even then, where are they going to find? Are they going to find $500 billion of fraud in the Social Security, Medicare and Medicaid lines and line items? Maybe are they going to cut half the defense? No way. You're going to default on interest?

No way. So it's got to come out of that top line. I'm skeptical. Or you have to raise your tax revenues. Oh, here we go. Raise your tax revenues. Well, how can you do that, Danny? Well, you can either expand the economy in real terms

or you can expand it in nominal terms. And that goes all way back to the global liquidity and the money supply. It's really easy to, induce and create inflation by flooding the capital with money, expanding the money supply, creating inflation, creating asset inflation, which creates consumer inflation, which creates inflation GDP. We're so financialized.

They're super, they're closely connected, that you end up having a higher GDP that your tax base, that your tax base is off of. Trump's not going to raise taxes. But taxes could go up in nominal terms because of inflation. That is definitely possible. So these are all the things that are going to play into how this debt maturing cycle plays out. Where did tariffs fit into all of this? That's a good question.

Nobody really knows. We know one thing. We know that Trump has a massive. massive ego, and he loves wielding a big sword and getting these other countries in line. He is right. We have been trampled over for decades from these countries that are just using our balance sheet, basically.

Now, he uses that sword, and he threatens with tariffs all over the place. You saw the market reacted to his threats on tariffs on Mexico and Canada and China in that one day. And then suddenly they're like, oh, you know, we figured it out. We got a 30-day stay on this. You know, we're good. Well, you know, he basically, he wants to get people in line to do certain things that he wants them to do, whether it's to close the freaking border from Mexico, close the

freaking border from Canada. Yes. Like, it's absurd that they refuse to help us with that. Okay. Well, we're going to, you know, we're going to hit you with tariffs then. It's too painful for them. They know they can't deal with that. So they are going to come into line on that.

And you saw the reversal, instantly, like almost instantly, instant reversal. They can't talk about, you know, oh, we just don't want these people. They got to talk about the criminals. They got to talk about the fentanyl and all that. It's all just talking points. But they basically want to stop the flow of unvetted immigrants. Like, we got to, like, immigration's great. our country was created on immigration.

I'm not against immigration. I think it's very important. We've got all these colleges that are supposedly bringing the most brilliant minds from around the world to study at, at Stanford, and the Ivy Leagues and Caltech and whatever. It just can't be unlimited immigration.

Can't just be unlimited. Like, we've got to be able to, we've got to have a process. Okay, so we got offline there. But the point is that he's using the tariffs for, for that. It's just a bargaining chip for now. Yeah.

And for, you know, it's a bargain chip with the dollar and all that, you know, to let other country know, the other countries know that, hey, we're not going to just take it. We're going to kind of be in control here financially. We're going to take back control financially. So it's unclear what tariffs will be and how impactful they will be on inflation. Like, if you just take the straight line on it, sure, and tariffs, on other country's goods coming into here are inflationary if we need those goods if they're necessary if they're chips or if they're if they're um auto parts that we need that yeah we're it's

going to be inflationary if it's if it's goods that can be replaced no if it's goods that we already have here that we're that you know that they're tariffing ours and we're not tariffing theirs well then that makes strategic sense to me bring that bring that money back home and let it go to are producers, our manufacturers. That would make sense, but that's painful in the short term, likely, and it takes some time. So that's like the scale of the problem, and it seems like a very big problem that the US has right now. I'm sure it's not just the US. But what, if you were Jerome Powell or Scott Besant, what are the things that they can do to kind of get through this?

Well, I mean, Bessent's doing it. He's going to kick this can down the road and keep his. issuing T bills until they can't. So this comes all the way back to the Fed and the problem and when they get nervous. So we talked about the last press conference that Powell did for the holding the rates steady on the Fed funds decision, monetary, their monetary decision. And this is what he's doing. He's watching the bank reserves, and he said this a couple of years ago, that he starts to get nervous when the reserves are somewhere around the 10% to 12% area of GDP.

Powell said this. Yeah. So once it gets down below that area, then you're like, uh-oh, the reserves are, you know, they're getting down to a point that they're not going to be able to keep up with this. with the debt we're issuing. And so that's where the repo crisis was, and it got down below it. And then you could see that's back in 2019. This is where we are now.

That's where we are issuing all those T-bills. Well, the question is, this is the big question. Once we get out of T-bill issuance policy and we start going out on the curve, and we start issuing bonds, what happens to the reserves? Because right now, the reserves are sitting at about $3.2 trillion. GDP, somewhere about $29 trillion.

So if it starts dipping, if they go out on the curve, they're drawing money out of those bank reserves in order to buy those bonds. So the bank reserves are coming out, they're buying bonds, and then that number will drop. And that's what they start getting worried about, is that it drops the point that it did back in 29. and we have another repo issue where everybody needs dollars and they can't get them. There's no liquidity. They can't get them from the bank.

The bank doesn't have enough to cover their risk ratios and their needs to lend it out. And it tightens up enough that you have a repo crisis and a run on dollars, not the dollar, but a run on available dollars.

And that means that the interest rate goes up to borrow them. I mean spikes up, and that's a problem. it's a problem because it locks up the financial system for the treasury. So it means if there's no dollars and everybody's running out and paying insane overnight rates for these things because they need them. Well, what happens when we have a treasury auction? Who's going to buy those bonds?

Well, we saw in 2019 what the answer was, the Fed. The Fed will buy the bonds. So they've got to turn on QE and they've got to go out there, they got to print money, and they've got to go buy them themselves. And that's what will happen. So that was going to be my next question is, if they do start issuing long duration bonds, who is the buyer? Because, like, again, I'm no expert in the bond market, but it seems clear that over the last couple of years, there's not really been a deep liquid buyer for long duration bonds. Yeah, there has not.

That's why you haven't seen a lot of them being issued. But hedge funds are out there. There's those international buyers. you see them. They're called international because they're out in the Caymans or, you know, but they're out there. Some sovereigns are out there. But we've seen a decrease, a significant decrease in sovereign demand for long-term debt. There's a lot of reasons for that. And one of the reasons is that we made a catastrophic error in the last administration seizing bonds from another country that was catastrophic. It doesn't matter if they're your enemy. It was absolutely idiocy.

They did that. I still can't believe it. When I heard they were doing it, I was like, I couldn't believe it. Yeah. Like this is the gold reserve asset. You need the world to buy your bonds because you're so irresponsible with your spending. You need them. What are you doing? But they did it. And so that signal to the world that, hey, look, if you're not a really close ally of the United States, you're out of luck, pal. We might just seize your treasuries. So what does that signal them to do. We'll own anything but treasuries. Yeah, buy gold. Why? Because gold can be turned into dollars. They need dollars. They'll get them. We'll get them with gold, you know, or Bitcoin eventually. So, yeah, and that's that, that's, that's, that's the question. Who's going to

buy these things long, long, long term? The Bricks, the Bricks nations have backed off from buying them. You know, they don't, they don't buy them like they did before. The Bricks nation, Brazil, Russia, India, China, South Africa, yeah. So you think then the likely outcome of this is QE happens in, like, relative short order quite soon? I mean, you heard what Bostic just said. They just basically said, we're going to stop QT soon. That's a signal that we need to get ready because we may need to be in the market again

at some point here in the near future. And what kind of form do you think that will take? Will it be QE like we've seen before? Because like in 2023, when the regional banks started failing, they did the BTFP program, which I know wasn't technically QE, but it kind of wants. Not QE, yeah. Yeah. Do you think it would be something similar, or do you think they'll just outright do QE? Well, it depends on what happens in the market.

Is it a market shock? Is it something completely unexpected that causes turmoil in the bond market? If it's that, they're going to come out and just print money and buy. They're not going to care. They're going to stabilize the market. It's going to, they will rationalize that we need to stabilize the market. And so that's what we're doing. And so, but if it's a contained crisis, like they were able to create an acronym for,

well, of course, they would rather do that and call it. I'd rather hide it. I mean, they're doing it right now. It's not technically QE, but they have something called a regular Treasury buyback program. So they're out there buying treasuries in the open market from buyers who hold these illiquid treasuries. You know, they're older treasures. They call them off the run.

And these are back in the day, the big bond traders, the banks, they would come into their desk, and there would be a big stack of, it was like a long, you ever see dot matrix printers, Danny, you're too young. Yeah, no, I know what they are. They put the holes on the side and they just, yeah. Well, they had these huge runs of these, of these printouts of bonds,

and they had all the bonds, and they were all the treasuries, all the mortgage-backed securities, and they would, if somebody called and said, hey, what's the price of this bond? There was no Bloomberg back then, you know? So there was no pricing, like, there was no dynamic pricing for them.

It was all on the phone, and there was no ticker for bonds, right? So at least you had stock tickers since way back when, since the buttonwood tree, right? So, but there was nothing to look at. So they had to look at these papers, and they were, so they'd look at the, run and say, oh, this, I'll pay you, you know, 97.5 for this one. Okay. But if they asked for a bond, it was like, well, it's not on the run. I have no idea. It's not liquid enough to even be in this

massive stack. Then it's called off the run. It means to be really illiquid. Well, now the treasury's out there buying those bonds that are off the run. They're just not liquid. And so why are they doing that? Well, they're creating liquidity in the market, making it easy for people to move their paper and they're just replacing it by buying those and then issuing new ones. And so it's basically what's happening. Is that QE? Not technically. Does it add liquidity to the market?

Absolutely. If you ask Michael Howell, he'd be like, of course it does. It's absolutely what they're doing. Is it a ton? No. But on the margin, it's adding liquidity, just like BTFP did. So if this year is going to be like a big year for liquidity, I think Bitcoin, whether it's because of liquidity or not, everyone's expecting a big year for Bitcoin, what do you think will

happen this year? Do you think we'll see 200K plus Bitcoin? Well, I've been saying, I've been saying for a long time that my vision was, I was thinking there would be about $180,000 this fall. Now, a lot of things have happened since then. Yeah, see, here's the global liquidity. This is again, Michael's chart, and this is, uh, staggered so Bitcoin is actually I think six to eight weeks backwards here so it has to catch up but I think that what happens here Danny is that we have a lot of tailwinds that may push that forward the 180,000 I still think that we can see it this year we could easily double especially with all the tailwinds well what are the

tailwinds. The tailwinds are, there's a whole host of things that have been happening. You've got the gap accounting change where Bitcoin doesn't have to be held as an impaired asset on companies' books anymore. They can hold it at mark-to-market, which prevented a lot of companies from buying it. They just didn't want on their books. The ETFs came out. The strongest launch of ETFs in the history. Ibit, BlackRock's ETF, gathered $50 billion of assets in less than a year and it blows everything away. Made it very simple now for anybody, both any institution and meaning endowments, pension funds, even hedge funds who didn't want to deal with having their keys, there's easy for them to

just step out there and buy them and people who have their IRAs and individuals who want to own Bitcoin but have no idea what to deal with the keys and all that. Super simple. It's been a huge boon for Bitcoin. Then you had options on top of that, which helps drive even more liquidity in there because then you've got sophisticated investors who are using options to hedge their strategy so they can even own more Bitcoin. That's another one. Then you've got, you know, SAB 121 was just finally fully repealed. That bulletin from the SEC that was onerous for banks to own Bitcoin and to deal in Bitcoin. and made it very difficult for them.

And it basically threatened them that they, if they held Bitcoin on their balance sheet, that the SEC would audit them or come down with them because they weren't abiding by these really tight, this really tight recommendation. And so, but it was finally repealed fully. That's off the, so that, I think, allows companies to start moving into this space. I mean, they're going to make it easy for you to buy Bitcoin right through your Chase or Wells Fargo or, you know, a Citibank account, and then they're going to offer products around it. They're going to lend around it. They're going to, you know, their collateral products.

They're going to be all kinds of stuff. So that's that's that. And then, of course, we've got this new administration who's clearly crypto-friendly. I mean, the guy launched his own Trump coin and Melania coin. He talks about Bitcoin a lot, as has his family and his cabinet. you've got people around them who, like David Sachs and Besant, these guys own Bitcoin. Lutnik.

So those are all, that's all a big deal. And you've got Senator Lomas who's been pushing, driving this bill, the Bitcoin Act. And that's the- And has to purse in the SEC? What's that? And has to purse in the SEC? And, and, oh yeah, it's right. That's right. Pers of the SEC, exactly.

But the, but another tailwind is the, the, the Bitcoin Act, the possibility. I don't think it's probability in the next few months. It's got a long way to go. I mean, Senator Lemis from Wyoming, she authored the bill. She needs a co-sponsor. She needs to get it through committees and comments and then revisions and negotiations. It's a gauntlet that they've got to run with that thing. It's going to take a long time. Nothing happens quickly in Congress. Nothing. It's got to get through both branches of Congress and then to the president's desk on something that he's willing to sign. He's likely willing to sign anything they get to him,

but we'll see. And I don't see an executive order coming because if you, you know, if you think about him signing an executive order that would make the U.S. government buy Bitcoin through the exchange stabilization fund, like through the Gold Reserve Act, then where he could buy probably,

$50 billion, maybe even as much as $100 billion out of that $200 billion fund of it. But it's a bad signal to the world that we're needing to stabilize our currency. That's just not, I just don't think they're going to want to do that. As much as a lot of Bitcoiners are hoping that that will happen, I just, I don't see them acting that way. Remember, again, Trump wants to, he's got a huge ego. He wants the stock market up at all-time highs. He wants financial stability.

wants to the economy warring and the way to do that is to you know is to is to keep kicking this can down the road creating liquidity making money easy and keep going and so you know um that's uh that's so those are all kind of tailwinds for bitcoin on top of this expansion of them of liquidity and liquidity getting easy so um or continuing it's already been then ticking back up. It's just now it's just going to continue. Probably into the end of this year, into next year. So they'll probably get the Bitcoin Act solved just in time to buy the top.

Exactly. What do you think of the Bitcoin bond idea? I was speaking to Preston yesterday and he was the first time I ever heard about that was with Preston on the show, like these long duration bonds with a Bitcoin kicker. I mean, it's very, it's interesting. I'm just not sure where the market is for it yet. yet. To me, that signifies massive dollar weakness, though.

That even more so than like a strategic reserve. Yeah, exactly. And that's the issue. It's interesting, but again, I just don't see that. I don't see that happening in the near term. I don't know. I actually haven't talked to press. I used to talk to them almost every day, but I haven't talked to them in a few weeks.

I've been so busy with the fund. But yeah, I mean, I have to dig into that deeper to get a strong opinion on it, but I'm face of it now. How's the fun going? It's great. You know, our first fund won. We closed early last year and we've done well. We're up 82% net, net, net of all fees and everything in the five quarters we've been

open and we're up 65% net net last year. And, you know, for your listeners, the Bitcoin Opportunity Fund is a public-private investment fund. We invest anywhere in the Bitcoin space, public and private. The one thing that's different from us and the typical VCs in this space is that we're, we're focused on later stage companies. I mean, we'll do some VC stuff, early stage stuff, our real focus is on later stage companies that, you know, we look at them and they have real revenues and real profits and real returns. And so that's kind of what we're looking at.

And we've done well. So we raised that, though, Danny, in the depth of the bear market. I mean, it was awful. Yeah. How big was that first fund? It was tiny. It was just over $12 million.

And you did a lot of like distressed mining companies and that kind of thing. Is that right? We did some distress mining. We got early in on micro strategy and that thing. We did some interesting investments in things like we were lending Bitcoin to, like a company called Cormant out in West Texas. He had access to excess solar and wind power out there that was just stranded.

Is that James McAvey? That's James, yeah. Yeah, yeah, he's great. He's awesome. And he, and so that was a great deal. That's been a fantastic investment for us. Micro Strategy, we got in very early on, made our biggest position. That's been a great one for us.

So, but now we flash forward and we've more than doubled the fund. And so on the asset terms, and so, but that fund's closed. We've got people who are like, you know, we're starting to get interest now that Bitcoin has gone from the $17 to $20,000 area that we were raising during that everybody wanted to just run for the exits. Now we've got people interested because Bitcoin's up at $100,000. Yeah, it should be a bit easier this time. It's, yeah, so we're actually having people calling us and we're encouraged because we have,

we have family offices, small family offices that are saying, hey, we want some capacity in your fund, but it's closed. So we're now in the middle of we just started taking capital for fund two. And it's the same exact strategy as fund one. They'll invest, you know, pro rata, Perry Pesue on everything according to their asset base. and so but we've got some really exciting deals. This one, though, we're going to keep open. Nice.

Which means that you can invest at any point or top up your investment at any point. What's important about this, though, is that because we're doing private deals and some of the deals like that Cormit deal, we've got a few deals that were in Mitz negotiation right now. Once they get in the portfolio, they're kind of, they're side-pocketed. So if you're a new investor, you can't get access to that just to make it clear. clear to people when we talk about these things, that's the one thing about this,

the strategy is that you gotta be in before the privates are struck. But we're super excited, we're seeing a lot of really exciting things. We're actually in negotiations with a guy that we will just call it a, you know, we'll call it a Bitcoin LBL, like the first Bitcoin LBL. And it's a non-cyclical bricks and mortar, you know, industrial service business and we're, you know, it'll be on a Bitcoin, you'll use a Bitcoin Treasury and has fantastic cash flow. And it's kind of like a roll-up strategy. And it's something that David and I have done in our old world in the straight hedge fund space and private equity space.

Is David someone you worked with before? Yeah, David Foley is, I've never worked with them before this, But Dave Foley and I are the co-managing partners of Bitcoin Opportunity Fund. And so, but he's done a lot of corporate finance. He was a banker at Goldman and, you know, he's Harvard Business Guy. Harvard Business School guy. We won't hold that against him, but he's smart.

He's a great guy. And so, yeah, but that's like a deal. We're super excited about that. That's just not typically what you would get in exposure in this space. So that's, we're focused on things that we bring, like our experience and our knowledge, we bring that to the table that we feel that's something that other people aren't doing and

is super exciting. And we think that the most boring business like this can be the most exciting investment for us and our investors. That's kind of what we're focused on. The big question I think is always for like any VC in the space is like how do you beat the Bitcoin hurdle rate? How do you think about that? Yeah.

Well, I don't say we're going to beat the Bitcoin hurdle rate. depends on what you think the hurdle rate is going to be, first of all. Yeah. So our aim is to beat Bitcoin on a risk-adjusted basis for investors. So tamped down volatility, still get exposure to the space and get exposure to things in the space. It's hard to tell exactly where we're at because we mark our privates at cost. So unless there is an absolutely compelling reason for us to mark it up, we're not doing a series A, series B, series C, and then marking it up each way.

you know, each, that's what VCs do. We're not doing that. We're marked to market on our public investments. Liquidate the portfolio. You get exactly what you see back on your investment statement. You know, the privates are just marked a cost right now. There's been nothing compelling to marketing them up. So, yeah, so that's kind of the hurdle rate, though, is, look, we're trying to return.

we're trying to create a fantastic return for our investors in the Bitcoin space. And that is a risk-adjuster return that is super attractive. If we can beat Bitcoin, that would be awesome. I'd love that. I'm not going to promise that to my investors. That's insane to promise. But we are heavily exposed to Bitcoin and Bitcoin companies. And so we should do well.

If Bitcoin does well, we, very well should do well. I can't say we will because the SEC would come down on me on that. But I have full expectations we would do very well in that case. So yeah. Amazing. Well, thank you so much for this, James. Hopefully I'll see you in Bedford. But if not, I'll definitely see you in Vegas. We'll do something there. But is there any way you want to send anywhere before we close out? Yeah. I mean, talking about the fund, if that, if anybody out there is interested in getting more information about it, because we are, we are raising fund too right now,

then just go to Bitcoinopportunity.fund, www.w. Bitcoinopportunity. Fund. And just sending your request and we'll get with you and send you some information or get on the phone. So there's that. And then, of course,

I'm on Twitter. At James Lab, as you can see it right here. I'm on Twitter. And I talk about all this stuff. Ad nauseum. You've heard it all. Perfect. Well, thank you, James. I will April 11th, Bedford. Cheat code, we're going again. I'll see you there. I am excited about it. Can't wait to see you there and thank you for having me on. It's always good talking to you, Danny. Yeah, that was great. Thank you, James.