What Bitcoin Did - THE STRATEGIC BITCOIN RESERVE IS HERE w/ American HODL & Matthew Pines

Episode Date: March 8, 2025

Matthew Pines is a national security consultant and a Fellow at the Bitcoin Policy Institute. American HODL is an OG Bitcoiner. In this episode, we discuss the Strategic Bitcoin Reserve, the geopolitical game theory behind nation-states accumulating Bitcoin and the details of the executive order. We also get into the implications for monetary policy, how this shifts incentives for developers, and whether this signals the beginning of a global Bitcoin arms race. MASSIVE THANKS TO OUR SPONSORS: IREN: https://www.iren.com/ RIVER: https://river.com/wbd ANCHORWATCH: https://www.anchorwatch.com/ CASA: https://casa.io/ LEDGER: https://www.ledger.com/ FOLLOW: Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny American HODL: https://x.com/americanhodl8 or https://primal.net/hodl Matthew Pines: https://x.com/matthew_pines

You know, in Fiat land, it's all learned helplessness, right? Like, you just sit there and be like, please, government, give me more money. Like send more Fiat in my way, right? In Bitcoin, it's like, no, this is fucking manifest destiny, man. We're going out here, and we are storming the frontier, and we are building new structures. We are making our own way in the world. And, yeah, you can just get off the couch and you can just do shit. None of this would have happened if David Bailey didn't raise his hand and say,

hey, I'm fucking retarded, and I'm going to plow straight through ahead until this gets done. the thing that nobody says can be done, I'm going to get it done. And people gave him, you know, so much shit for that. He fucking did it. Ross is free. We have an SBR. If you're not bullish, like, yeah, the price is 86K. Who gives a fuck?

If you're not medium and long term bullish as fuck on all of the things that have happened recently, you just don't understand the game theory here yet. You don't understand where we're going and you don't yet understand your role that you're going to play in it. You're going to play a significant role too. you're not just a dude with one Bitcoin. You're a fucking king with one Bitcoin, all right? Let's go out and get it.

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 power in the Bitcoin network. They also provide cutting edge computing resources for AI, all backed by renewable energy. So whether you're interested in mining Bitcoin or harnessing AI compute power, iron is setting the standard. Visit iran.com to learn more, which is iriareen.com.

Matthew Pines, American Hoddle. Strategic Bitcoin Reserve is here, it's real. Pines, you did it. BPI did it. David Bailey did it. We've actually got this thing. I wouldn't say I've done it, but the collective wheat, the collective we, you know, it turns out that you can just do things.

It turns out human agency is a material force in the world. And, you know, individuals that are bearish on human agency and the power of means. to reify into reality are just not going to make it. Yeah, I think there's been a lot of bad takes on this, I think. I think people are missing the forest for the trees when it comes to this executive order. So I want to get really into the details with you. But the first question I have for you, is this basically the executive order draft that you did with Bitcoin Policy Institute that's been implemented?

I mean, the details are different, right? Obviously, we had a very specific mechanism that we wrote into that draft, which is about the Exchange Civilization Fund as established by the Gold Reserve Act. But for all intents and purposes, this is about establishing a Bitcoin Reserve at the federal level that is two things. One, it doesn't sell existing holdings.

And two, it instructs the Treasury Secretary and the Commerce Secretary to explore budget-neutral ways of acquiring more Bitcoin. And so our mechanism, which is in the Exchange Civilization Fund, was budget neutral. It was using surplus funds that are already in essentially the couch cushions of the federal governments for an exchange account to acquire a starter position in Bitcoin. So an executive order can only ever go so far as available funds or where you sell existing assets and then use the proceeds to make new purchases. So that, yeah, I think was

more than I think anyone was expecting. And I think given the constraints and given the the sort of the realistic options on the table, that was about as ideal of an executive order as I think you could ask for. Yeah, it's pretty wild to see the change in policy from like over, just over a year ago, we weren't even allowed to have Bitcoin ETFs and now the US government is going to be holding and potentially buying Bitcoin. It's pretty wild. Hold on what's your kind of take from the whole thing been? Well, I'm kind of of the opinion of same as Matthew here, which is that I think that via executive order, this was potentially the best possible outcome for Bitcoin Maximilist.

I'm not thrilled about the shit coin stockpile, but hey, I would like to suggest that one way we can do a balanced budget here is to sell all the shitcoins for Bitcoin. That's pretty budget neutral to me. You know what I'm saying? What are shitcoins for other than to put more Bitcoin in your pocket? I don't know if they serve another use case. So yeah, I mean, I think it's the best possible outcome via executive order, I think it paves the way for the Lummus bill. I think it really, you know, adds momentum, serious momentum behind the Lummus bill.

And hopefully we'll see more about that soon. Maybe Matt knows some things he could share and illuminate us about. But yeah, I mean, I'm super bullish on it. I think there's a lot to unpack here, though, with the way it was written because actually it was written in a pretty masterful way, I think, where kind of everybody got what they wanted.

So pretty deft political maneuvering from Sax and co and whoever else was responsible behind the scenes. That said, though, you know, reading comprehension is not Twitter strong suits. There were a lot of bad takes being generated about the specific wording in the document. So maybe we can go through some of it and talk about how it's actually going to work in practice. Yeah, I think, Matthew, probably worth you breaking down exactly what this executive order means. And then also one of the most bullish things I think that came out of this is the fact that Even if we got us to shitcoin stockpile, that seemed like it was likely anyway, but at least it's been segregated from the Bitcoin side of things. Mm-hmm.

Yes. So the 10,000 foot level view is if you, you know, sent this back in time to Bitcoiners six months ago, let alone six years ago, I think the reaction would bend you are from a different timeline. This is your sci-fi fantasy novel. This is not real. and so I think people have this, you know, embedded expectation and sort of a reflexivity where just the price is all that they care about. And I just say like this is as sort of as bullish of an outcome as you could have like plausibly put on the drawing board six months ago when when President Trump came to Nashville, right?

And I think in the long arc, this will be seen as an inflection point. a pretty dramatic historical pivot point of America's relationship to Bitcoin. So I think you can dive into the minutia. We can certainly unpack that. But I think it's worth just sort of pause and reflect that President of the United States, signed executive order,

clearly articulating Bitcoin as a strategic asset and demonstrating how its fixed properties as digital gold make an important asset to acquire before others, right, that they put that in the language of the bill. Essentially, why this needs to happen is because they view Bitcoin, not just as an emerging digital technology that they want to support, but as a as a strategic asset that is a subject of essentially geopolitical competition.

And so that, to me, is like the bumper sticker headline signal that is now being sent to other national leaders and that, you know, these things move slowly and then all that. Right. And I think that message hasn't been fully digested. We can sort of certainly dig into the details, but I didn't want to get into the details, but that's a good point that you raise. And Hoddle, you've been, I think, around in Bitcoin longer than me and Matt.

So coming from, was it 2013 when you got in, how wild is it to see the United States government basically saying Bitcoin is here, it's real? These were things that we believed 10 and 15 years ago, for those of us that were here. I was only here 10 years ago, not 15, but like these are things that have been believed about Bitcoin for a long time. And if you understand sort of the game theoretics behind Bitcoin, you know, it leads you to nation state stacking and then eventually stacking by central banks. So like we knew it was going to happen.

But yeah, it's still a very surreal feeling to watch it unfold because I still kind of feel like a random idiot who stumbled out of my dorm and bought fake internet coins, right? And I agree with Matt's take here about this being something akin to the four minute mile or like a starting gun on or like a Sputnik moment for, you know, this sort of global geopolitical sat race that's going to happen where people are going to try and get as much Bitcoin on balance you as they possibly can because whether you're one of America's allies or one of America's adversaries, when the 800-pound gorilla makes a move, you have to react, right? And so, like, Matt had a tweet I really liked, which was that basically, you know,

this language from the executive order stating that there's only 21 million Bitcoin, right, is now on the desk of every finance minister, central bank head, president, et cetera, the world and they now have to figure out how they're going to react to it. Like America's doing this. What is your next move? And the second and third, fourth, fifth, sixth order complications from that are, I don't know, you know, it's very stimulating to think about all the potentials, the potential ways this could go over the next decade or two. Yeah, it's crazy. Like, even, even though people have been talking about this for a long time, it does feel like one of the gradually then suddenly moments, because it's happened so quickly since Trump first started talking

about this. Totally. All right. Let's get into the details. Matthew, do you want to break down exactly what is in this executive order. Certainly. And it's actually not that complicated, right? So folks should read it. But it essentially makes a clean delineation between Bitcoin strategic reserve and a digital asset stockpile. So those are separate kind of formal, you know, programs that are going to be established, one to hold the nation's Bitcoin, one to hold all the other digital assets that we hold.

The main distinction is that we are not going to sell, you know, either of them, but we are only going to add to the Bitcoin one, right? That's kind of the bumper sticker here. And there's a few other more very important maybe under the radar things, which is it orders an accounting of all the federal government's digital asset holdings within 30 days. And then anything that is, you know, not subject to other restrictions or law enforcement purposes has to be essentially disposed into the district of Bitcoin Reserve. And so it's my understanding that it actually could be quite a significant amount of digital assets in different corners of the federal government that now have to be, you know, identified and transferred into a single custodian account.

So I think, you know, we might find that there's actually more Bitcoin than we thought, you know, inside different couch cushions in the federal government's, you know, different branches here. So that's the most important thing. And then the, you know, I'd say that the part that's the most, like the crux of the bill, of the EO is this idea of budget neutral acquisition methods that Commerce Secretary and the Treasury Secretary are instructed to develop. I think this is one of the areas that people have misunderstood the most. Yeah. So they are, it said basically they shall develop, you know, essentially plans to acquire. more Bitcoin. It doesn't say how, right, but I have to do it in a in a budget neutral fashion

that doesn't really lead to any incremental cost for taxpayers. And so that is where the market, I think, is is underpricing in terms of just how much Bitcoin can be acquired through budget neutral means. And it's my understanding that the summit today, you know, the sort of the, I think it was four hours folks were there. A lot of that was dedicated to brainstorming ideas for how the federal government could basically use budget neutral methods to acquire more Bitcoin. So unclear timeline, unclear scale, but the conversations today have been extremely bullish, I would say, from the perspective of the government's intentions to build their Bitcoin holdings

over time. Yeah. I think that's a key thing. I'm obviously not a lawyer here. I don't pretend to be one. But the word shall, extremely important. And to me, that reads as a specific edict to Treasury that they are to go out and figure out their strategy for how they are going to acquire more Bitcoin.

And, you know, from reading Matt and Zach Shapiro's work from BPI, you know, there are, it seems like three or maybe more modalities that are on the table. imminently and then potentially we could find more as we go. Is that right, Matt? Yes, there are, there's a lot of, I mean, if you think about it in the abstract, the government has a lot of assets, right, whether it's illiquid assets or or liquid assets, right, actual US dollars in its accounts, foreign exchange, its accounts, or gold, gold certificates, or physical assets, or intangible assets that it could monetize, right? So even the executive order that established the sovereign wealth fund identified $5.7 trillion.

of the nation's assets that Secretary of percent, you know, indicated he would look to monetize some portion of that in order to capitalize a sovereign wealth fund. Now, the sovereign wealth fund idea was developed and sort of promulgated in the EO separate from this concept of a strategic Bitcoin Reserve, but this basic idea that is clearly in the minds of these cabinet officials and, and, and, um, and SACs is that we have a certain, certain pool of assets over here. And how can we leverage them, how can we monetize them in order to acquire other assets that we want? And the government has said, we want to acquire assets that are important to us strategically. We might want to acquire Greenland, right?

We might want to acquire more chip fabrication domestically. And it seems like they also want to require Bitcoin. So I think the folks that are running these agencies, Lutnik and Bessent, these guys come from Wall Street. They're essentially, you know, they're experts in financial engineering, right? And what America does better than almost anything else is we are experts on financial engineering. And so now the experts of financial engineering are running these agencies. And they're looking around at the federal government's balance sheet. And they're thinking like Wall Street guys,

thinking like guys about how do I, how do I monetize the assets I have to acquire other valuable assets, right? And so I think that's the lens you have to think about. They're looking at, for example, I think the government sponsored enterprises, right? The sort of Fannie Mae Freddie Mac, there's, I think, a trajectory that's underway to privatize those. And you can imagine selling that off and generating a lot of of new reserves, essentially, right? The government is selling off an assets and essentially privatizing these things. It's now freeing up parts of its balance sheet. It's acquiring liquid reserves.

It could deploy those into Sarm wealth fund. It could deploy those to acquire Bitcoin. So I think there's a lot of options on the table in terms of what is budget neutral, right? Because in a sense, you're not, you need congressional appropriations, right? You're just taking existing assets, intangible or liquid. and you're finding clever ways to essentially monetize them and then use some portion of those proceeds or those existing liquid assets to just acquire Bitcoin.

And from the balance sheet of the government, that's budget neutral. We're basically going, the analogy here is like portfolio reallocation. We're going through a rebalancing, but we're just using America's assets to do so, right? Yeah, exactly. It's like we have a certain portfolio that's inherited, right? Some of its government building,

some of it's our gold or gold certificates, some of its, you know, Florida exchange. Federal lands, for instance. You know, oil rights. There's a whole bucket. I'm sure they probably had a big spreadsheet that they put together to add up to that

$5.7 trillion that they put in the executive order for the sovereign world fund. And that's in the minds of the same people that are at the Crypto Summit right now, right? And Lutnik in particular, I think, has ideas in mind. I think he is, if you go back in time after the election, remember there was a moment where Secretary Bessent kind of had a lock on the Treasury Secretary job,

and then all of a sudden it kind of was thrown up into a little bit of a race between him and Lutnik, as Lutnik threw his hat in the ring, and there was a lot of bargaining, and I think Lutnik got the Commerce Secretary job kind of as a deal, right? But I think Lutnik, you know, ultimately he wanted the Treasury Secretary job. And so I think he's trying to find all sorts of ways, And I think he's also very much a Bitcoiner, right? And he, uh, Kentor Fitzgerald, his, his, his, his, his former firm holds all of Tethers reserves, for example. Um, so he's like a major Bitcoin bull.

And he's very, you know, clever in thinking about structuring, uh, you know, financial transactions. I think he is applying that into his, a role as Commerce Secretary. And I think he's looking to, you know, push this in a certain direction. I mean, I was surprised actually see how explicit the executive order tasked, not just Secretary Bessent, but Secretary Lutnik with this, right? And just reading the tea leaves of the various public remarks that they both have given,

I get the sense, and this is more of a sense, I get the sense that Besson is not as, I guess, intellectually or personally, you know, interested in Bitcoin. Like, he knows the talking points sort of to sort of speak about. He kind of has the lines that he says, but you can kind of tell that he's be much rather, you know, thinking about his geoeconomic play and Ukraine.

you know, rare earth and sort of Japan, you know, sort of monetary, you know, agreements and international kind of high finance stuff. Whereas Lutnik is like, he lives for the, he lives for this. I think he wants to get his hands dirty. So I could imagine a sense in which they've de facto, you know, Lutnik kind of is in the driver's seat a little bit more on some of these Bitcoin-related ideas. And of course, you know, a lot of this will fall into the operational execution of the Treasury

Department. So I think they have to work together on this. But I think it's important to understand the different personalities and different dispositions at play here. And yeah, and then we'll see in the next 30 days or shortly, right? Well, what gets leaked or announced about these ideas for budget neutral acquisition of Bitcoin. I think Bessent was trying to sort of slow roll this. He was like, first, we want to agree not to sell what we have, and then we'll discuss it. We'll take feedback from the industry.

We'll talk about it. We'll study it. And then we'll decide what the way forward is. That's like his measured, you know, kind of deliberate approach. I think Lutnik's idea is like, we got to go. Like, we got to get after it. Big ideas. Let's move.

So it would be fascinating to see the personal dynamic between those two, given that they're both given this responsibility, you know, like, which sort of temperament and which inclination, you know, measures out here. But I think the upshot is,

the US government is committed to acquiring more Bitcoin, right? The question is scale and pace. And I think that is not, fully digested by the market because it's not really the absolute magnitude of the purchases that they could acquire. Like, you know, if you were, I think a plausible estimate would be in like the low single to maybe multiple single digit billions. Like if I had to like, you know, using maybe the combination of the exchange stabilization fund, et cetera, if they really went hard, you know, in the paint and they decided we're going to take all the proceeds from these

different privatizations and maybe we'll get really clever with some other financial engineering tricks. We try to like jack that up. It's possible. But I think they would, you know, maybe start slower. At least that's my read, right? Things can change. But biggest change is going to be on the geopolitical stage. Because that lands in the inbox of, you know, president of China, of the central bank head of Japan, of these Gulf monarchies. And they just go, oh, okay, this is a new world. This is it. Like, this is now a different regime. And then they start instructing their people to do the same sorts of things that Lutnik and, and Bessner are doing.

Like, why wouldn't you be like, well, if the president just instructed his, you know, senior leadership to start studying ways they can acquire Bitcoin. Like, I think we should probably do the same guys. And I think that reflexivity and that sort of cascade is happening, but is happening behind the scenes. and the massive pools of liquidity that then get triggered, it's on a delayed fuse. This episode is brought to you by River, the best place for Bitcoiners and businesses to buy Bitcoin. With River, you can set up zero fee recurring buys,

making stacking sats effortless. And while you're waiting for the perfect buying opportunity, River lets you earn daily interest on your cash balance paid in Bitcoin, which outperforms most high-yield savings accounts. What really sets River apart is their unmatched dedication to security. You have peace of mind knowing the River has monthly proof of reserves and holds all Bitcoin in multi-sig cold storage. And with US-based phone support, you'll always have someone ready to help. To open an account, go to river.com forward slash WBD and earn up to $100 in Bitcoin when you buy.

That's r-I-V-E-R.com slash WBD. This episode is brought to you by Anchor Watch. The thing that keeps me up at night is the idea of a critical error with my Bitcoin cold storage. This is where Anchor Watch comes in. With Anchor Watch, you're protected by their time-locked multisigvolve and with your own A-plus rated Lloyds of London-backed insurance policy. You get to hold your keys, Anchor Watch holds the risk. Whether you're worried about inheritance planning, wrench attacks, natural disasters or your own mistakes, you're protected by Anchor Watch. Rates for fully insured custody start as low as 0.55% and are available for individual and commercial customers located in the US.

Speak to Anchor Watch for a quote and for more details about your security options and coverage. Visit anchorwatch.com today, which is anchorwatch.com. I also want to give a quick shout out to the Human Rights Foundation's Financial Freedom Report. This is their weekly newsletter that drops every Thursday, and it covers how authoritarian regimes use money as a tool for control and how people are pushing back against that using privacy tools and, of course, Bitcoin. It's an amazing newsletter, it's Pure Signal, and you can subscribe for free at Financial Freedom Report.org.

So can we go through the different pools of capital, that they could kind of dip into. And is the exchange stabilization fund the most likely kind of, is that the easiest lift for them for now? So legally, it's the most straightforward that I know in terms of existing law. That's why we dropped the executive order in the sense that it seems like a very straight shot for the president or for the Treasury to use existing authorities under the Gold Reserve Act. They would have to just structure the transaction as an overnight note because the Gold Reserve

Act, which establishes the Excellaneous Civilization Fund, empowers the Treasury Secretary to deal in gold, foreign exchange, or other instruments of credit and securities. So technically you can't directly buy Bitcoin, right, using the ESF. He would have to essentially enter into a debt obligation or a securities instrument with, say, a counterparty like Say, Coinbase, where you can imagine like an overnight note that gets drafted up that is denominated in dollars, but is redeemed in Bitcoin into an account at say Coinbase or another third-party custodian in the name of the federal government. And so, like mechanically, right, you would then be in the letter of the law as an instrument of credit or securities. But the end,

the end result of the transaction is the US government has, has, has, has, has ownership and or custody of Bitcoin. There's about $39 billion in the ESF as like a net positive position as of the end of January, which is the last report that I think is public. I heard that they try to keep about $20 billion as like a buffer in that account of just sort of T bills of like an emergency reserve. So maybe they wouldn't want to eat into all of that. But that still leaves 19 billion just kind of hanging out there, kind of really serving no function. So 19 billion seems like a pretty straightforward, you know, initial, uh, initial, uh, you know, acquisition, which would be a material amount of Bitcoin that may be double the amount that we, that we have, right? Um,

so, uh, yeah, beyond. Beyond the ESF, I had heard, and I don't fully understand this one, so maybe you can eliminate it for us, is that there is up to 160 billion in SDRs that could potentially be rebalanced into Bitcoin. SDRs being special drawing rights. Special drawing rights, yeah. Is that something that's feasible, or is that sort of pie in the sky?

That's less feasible. I mean, there's a lot of, I mean, this is where, like, you have the lawyers and the existing law. like the ESF basically says like Instructed Treasury was like consistent with its obligations to the National Monetary Fund on an orderly, you know, system of monetary arrangements.

The Treasury Secretary is empowered to deal and da-da-da-da. And then it also has a line on like the structure of the special drawing rights and their obligations. So I believe that's part of the legal commitment between the U.S. and the National Monetary Fund in terms of the nature of the sales, So to see what those SDRs. Like an SDR essentially is a ledger entry on the IMF's books.

So if we sell it, right, we'd have to, we'd have to collect dollars essentially for that. And then someone would have to give us dollars and take those SDRs. But the allocation of SDRs is sort of set by like a treaty quota. So it's not like a free market. It's like a geopolitical arrangement. Like you're not just dumping SDRs to like Botswana, right? Like someone would have to buy the $160 billion with SDRs. I don't know.

I'm not expert enough about the nature of that market. to know how you could dispose of those assets, which essentially are marked as assets on the balance of the U.S. government, and get dollars in return. So that's like, you know, they sit there. They're in the account, but I'm not sure how easy it is to spend them

just, you know, on a whim. And I think, you know, parts of the Treasury Department would probably balk at that, you know. There's probably other ways, right, other than using the SDRs that, like, for example, the gold certificates. Now, this is the part where it stretches more into the legislation, like legislative track, where the Lummis Bill, the Bitcoin Act, is also budget neutral in a sense that it doesn't

require new debt issuance and it doesn't take any existing, you know, appropriated funds. It essentially instructs the Fed to remark the value of our gold certificates that are held at the Fed, but they're owned by the Treasury Department to market. And so they were marked right now at $42 and $22 an ounce. Can you explain why it's marked at $42? Is that like a hangover from Bretton Woods? It's a hangover from the 70s. When it was the last time, I think they made that adjustment, you know,

post-the-Nixon-Shack kind of recalibration. And it is, yeah, in a sense, it's an accounting, you know, item. The government just hasn't, basically, if you, after the Nixon shock, the government basically didn't want gold to be important anymore, right? Because the whole point was it kind of got us in trouble, right? The fact that we weren't able to make good, you know, essentially the de facto sort of, you know, sort of dollar gold standard that broke down, right? And then Nixon basically said, no, sorry, we're going to a sort of free-floating standard.

So they kind of aggressively wanted to kind of downplay the role of gold in the national system. So the U.S. government was basically like pretend that gold isn't worth money, right? And so they just pretended that that value was still $42 an ounce because it doesn't matter anymore, right? There's no redeemability. You know, gold is just a barbarous relic. You know, gold is not a monetary metal. You know, not a monetary metal anymore. We're going to a petrodollary, you know, currency standards.

So they, it was a sort of a matter of psychological operation and sort of politics that we just want to deemphasize gold as a monetary metal. But it's always been there, right? Obviously, in our vaults as assets of. How's it? Is it? Is it? Because we haven't done an audit on it in over. 50 years and there's a lot of rumors floating around about shipments of gold back and forth

between Europe and America at the moment. That is a good question. Why is all the gold going from London to New York? Well, yeah, so those are two different questions. One is whether it's in Fort Knox and the other is what might be in sort of Manhattan vaults of J.P. Morgan. And I know on that part, right, there's been a lot of gold moving from London to New York. I think that was engineered by essentially Trump people, by when they were threatening

tariffs on Europe and the UK in particular, which is. the major London gold market, you know, those tariffs, you know, could apply. So get the gold out of there so it's not a bargaining. You know, I might butcher the technicals of the market. But essentially, you know, if you wanted to be able to settle physical gold, right, you now have to price in a new potential premium if there's going to be a tariff in the future. And so futures, right, then basically become more expensive for physical settlement of gold out of London and cheaper relative, you know, to do the same sort of.

of trade in New York. And so your sort of your, your, you know, the risk is to move it, right? And now becomes cost effective to move that gold physically to New York, to sort of, you know, do that arbitrage and also to evade that potential sort of tariff, sort of risk premium. So that basically was like a sucking sound, just pulling physical gold out of London into New York. And there's also just like, okay, like was the tariff threat, you know, to sort of engineer that financial arbitrage that would then trigger that physical flow of gold as a means of just getting the gold into the U.S., you know, again, this is all part of like the, you know,

whispers of a much broader global economic reordering or kind of these major shifts that are afoot on the global stage and realignments genetically that Bitcoin may play a role in at the same time. And so, yeah, it's important not to see this. It's important to see this Bitcoin executive order, like, in that larger context, right? like Bessent is doing all this other stuff, right? He is trying to, you know, engineer a global reordering, you know, Plaza Accord, Maelago Cord, whatever you want to call it. But I will say, right, the overlap.

And Zoltan has written about this. I won't go into the details and, you know, violate his copyright. But in one of his recent sort of private letters to his subscribers, it was all about basically the SBR and the Lummis Bill in particular. Because he noted in the history of sort of the. 20th century, you know, America has occasionally rug pulled, right, the monetary system and just decided to revalue gold, right? And so in the 30s and then again, and Bretton Woods and then again, 70s. And each time we did that, it was an act of Congress that gave the Treasury Secretary

the legal authority to revalue those gold certificates, right? And, you know, he was looking around and it was like, well, if we wanted to play this game again, right, to pull this move again with a gold revaluation, you need law, you need the legislative authorization. And at this, at this current moment, the only bill that would give the Treasury Secretary that authorization is the Lummiss Act. Sorry, is the Bitcoin Act by Senator Lummis. And so, you know, reading the tea leaves, it's kind of like, hmm, maybe there's like a deal here, right? Which is the Bitcoin stuff is almost like a, it's like a figly for it's like a smokescreen, right? To the international market, right? Because like, If you passed a bill that was like gave the Treasury Secretary explicit authorization to

revalue gold, everyone would sniff that out, right? It would be like, why are they, why they just pass that bill that says they can value gold? They'd be like, uh-oh, like, we're about to get rugged again. We need to like, whereas if you put it into this Bitcoin package, it's, oh, it's just the crypto thing. It's just kind of like financial engineered kind of like, it's not a, it's just a it was a promise to his base.

Yeah, it's not a real thing. It's just kind of, you know. Those stupid crypto, it's Beanie Babies. How dumb. Rachel Maddow was calling it's Beanie Babies too. Exactly. So that's maybe a bit to like 20 dimensional chess, but it's not implausible to think that there is other other reasons, right, for the government to think about Bitcoin as a strategic

asset and why something like a Lummus bill is an important thing to support. But again, this is a complicated game here. Isn't the game theoretic basically like just at a broad level? And I first heard this from you, right? that like basically we demonetize gold, which is held by our adversaries, while monetizing Bitcoin. And if we can successfully swap those things,

then, you know, we own the future and our enemies own the past. I mean, like my like, if I was like, you know, evil, evil mastermind here trying to like cook up the play, it would be you do the gold play first. Well, so you establish the executive order SBR starter position. It's kind of this, it's this vessel, right? And maybe you fill it up a little bit,

but it's small potatoes. But you're sort of setting the context for what you want to do next. Then you do the gold move. So you've got all those gold certificates. Maybe you've got some gold. Who knows. But if you just have the gold certificates, it doesn't really matter if you've got the gold. These are just like ledger entries.

And it's an accounting trick to essentially credit the Treasury General account with, you know, maybe $800 billion, maybe a trillion dollars of fresh reserves. Essentially, it's like a gold QE or gold certificate QE. the Fed is now essentially crediting the value of those gold certificates at the market value and then just moving those account, you know, credits into the Treasury General account, which is now spendable by the Treasury Secretary, right? That's not, that's not, you know, authorized funds within the borrow any money. It's just, it's now a slush fund, essentially, of a trillion dollars, that the secretary can do whatever he wants with it, basically.

And then you can, you know, put that in a sign wealth fund, do domestic reinvestment, you know, do all the sort of industrial stuff they want to do and maybe even buy some Bitcoin with it. And then you could be like, all right, now we've revalued the goals of it. We kind of got what we want out of that. Now, maybe we'll actually take the physical gold

and maybe we'll sell that. You know, slowly. Maybe we'll do some deals. And you should be trying to squeeze as much, right, liquidity out of those, maybe that legacy hard asset that you want. And then you do the phase two into Bitcoin, right? When everyone is now

thinks you're going to be doing this sort of gilded, Brighton Woods 2.0 kind of thing with maybe gold kind of being re-centered as a monetary reserve asset in the global system. And then Bitcoin is kind of the like sneaky end play right, where, you know,

China, Russia, the sort of Eurasian autocrats, they've been building these gold reserves for many years. And if we do this sort of gold reset, they probably would win, right? as well, you know, assuming we have the goal that we think we have, if not when we would definitely probably not want to do that play. And then if we run the Bitcoin play, though, like before them,

then we would win. So there's probably a lot more complexity to that, right, than that sort of simple scheme. But it's kind of a remarkable point where we now have, like, certain things happening that, you know, pushing that, that are like, you know, early, our, like, data point. that you're plotting on that line, right? If you just sketched out that hypothetical line

and you're like, all right, well, let's see if reality like matches up. Well, in executive order, that basically is very specific about creating a strategic Bitcoin reserve, essentially instructing the Secretary of Treasury and Commerce to find ways of acquiring Bitcoin. And then you see a pivot to supporting the Lummis bill, right, which is that the next big move.

We'll see, you know, how much that gets momentum. Those would be data points that you would start connecting. Oh, as an early Bitcoiner, it's obvious. Like, to me, we're in the end game now, you know. This episode is also brought to you by Ledger. If you're serious about protecting your Bitcoin, Ledger has the solution you need.

Their hardware wallets give you complete control over your private keys, ensuring that your Bitcoin stays safe from hacks, fishing, and malware. With Ledger's easy-to-use devices and the Ledger Live app, managing your Bitcoin has never been more convenient. Whether you're a long-time holder or new to the world of Bitcoin, Ledger makes it simple to keep your assets protected. If you want to find out more, visit ledger.com and secure your Bitcoin today. That's L-E-D-G-R.com.

This episode is brought to you by CASA, the leading Bitcoin self-custody solution. I've been using CASA since 2019 and I can't recommend them enough. CASA have options for all Bitcoiners from a 2-3 multi-sig to a 3 of 5 and a private client option for absolute best in class security. CASA also do inheritance which I very recently set up and it really couldn't be easier. My inheritance plan has gone from a vague treasure map for my wife to a rock solid security plan that I have total confidence in. To find out more about CASA, go to casa.io, which is c-a-sa.io.

I also want to tell you about cheat code. On April the 11th to the 13th, we're going to be back in Bedford and we have an amazing lineup of speakers including X-PM Liz Truss, Preston Pish, Alex Gladstein, Nat Brunel, James lavish and so many more. We then have a football day where we'll hopefully see Rail Bedford win the league again. Last year was amazing. This year is going to be better,

but tickets will sell out for this. So if you want to come, head over to cheatcode.cote.uky and grab a ticket. Just before, we kind of glossed over the Fort Knox thing, and I want to get back to it. Hoddle, I want the fun answer before we get the analyst's answer. Do you think the goal is in Fort Knox? No.

I don't. Listen, not, I mean, some of the gold is in Fort Knox, right? But is all of the gold in Fort Knox? I don't know. I mean, is there a reason that, okay, you don't want to revalue the gold, but like, is there a reason we haven't done an audit on, no one's been to Fort Knox, really, you know, and done a comprehensive audit in over 50 years, right? So it's like, I don't know.

Did Lex Luther irradiate all of it, like in Superman 2 or whatever? Like, you know, there's no reason not to do an audit at Fort Knox. So, like, the fact that they haven't done one makes me think nefarious thoughts about, you know, where that gold might have gone, what it might have funded, what it might have been useful for, et cetera. So, you know, I don't know. I would say that probably we have most of what we're supposed to have in Fort Knox, but probably not all of it. It was hilarious to me that people believed that they were going to do a live stream of the audit of Fort Knox. So they're just going to open the doors and nothing's there. Well, it's funny. The head of the Polish Central Bank,

I forget the exact time he did it, but sometime recently, he did like a full, like guided tour. of their gold reserves. And they've been very public about how they've been acquiring gold. I think it was like 100 tons to build up to be like 20% of their reserves. And it was, it was very sort of showy as he sort of walked the camera around. He's like, look at the gold. We've got all those gold. It's here.

Right. It was very much like a kind of a demonstration, you know, to international investors or sovereign debt investors that like they're good for it, right? Which is kind of unusual for central bankers to do. Like, I'm not aware of anyone else that's done that. But it seems like that's sort of what, you know, the Elon and Trump move was about, right? It's, okay, well, I wouldn't, I'd be very surprised if they're committed to doing a tour where, you know, they don't know what's going on there, right? So there's some other, you know, I think that going back to my early point about the last 40, 50 years, we're all about the United States, kind of negging gold and kind of downplaying it as a monetary medal and just kind of, you know, making gold, you know, gold bugs, you know, kind of.

of a conspiracy term and then they apply the same thing to Bitcoiners. Like, there's a lot to kind of suppress, you know, attention and interest in gold as a monetary metal. The fact that you have the United States, you know, I'm going to be like, you know, I'm really interested in whether we have the gold we think is drawing a lot of attention to gold as a monetary metal that wasn't there before, right? And that's a, that is a complete 180 from the, you know, from the whole rhetorical stance of the U.S. government for the past 50 years. I think that's more important in my mind. and then, you know, ultimately what's in the, what's in the vaults. I mean, maybe that's important too.

But it's like, why? Why would they do that, right? Like, what else is, who gave them that idea? Why would they want to, you know, keep pushing this as like a meme? Like, what is it about this idea of the gold being an important thing that they want to, you know, raise in the minds of the average American, right? Turn it into kind of this kind of spectacle almost because gold might become more importance soon. And then the same thing with Bitcoin, right? Why are they, you know, passing executive

orders and having an AI cryptos are like having a big summit, right? These are things are done for attention, right? The executive order is the brass tax instructions to yada, yada, yada, yada, right? You can do that, you know, and it's done, right? Why do you convene a big meeting with all these, you know, senior executives put on a show, right? You're trying to send a message a signal. And I think it's more than just like a rhetorical, you know, pat on the head to your, to your political supporters. I think there's, there's a different layer to it as well. Yeah, just going back a little bit. I was becoming more and more skeptical whether we were actually going to get a strategic Bitcoin reserve. And if we were going to get it, I definitely thought it was going to come

piled in with load of shit coins. And I know it has, but at least they're separated. Hoddle, were you surprised to see the way that this has actually been passed? I think that the only thing that made it surprised I believe that this was going to happen pretty much the whole time but then Trump sent out a couple of crazy true social post where he was like and we're doing Cardano and Solanos

and you know XRP and then I was like wait what's what the fuck is happening now and then I don't know that that just kind of all fell by the wayside and then they did what they were originally intended to do and I do have to give David Sachs and team credit I think they cut the baby

down the middle and this was the best possible outcome for almost all parties involved. Because, I mean, hey, if you're a shik-coiner, at least you have, like, a stockpile, you know, which is, it's a pretty small thing, but it's, you know, symbolically, I guess, meaningful or whatever. And then if you're a bit-coiner, we have what we want, which is we have delineation, bifurcation from the shitcoins. And then we also have incremental new buying and the potential for, you know, these larger

monetary, you know, game theory plays that that was outlining. So, yeah, man, I mean, I guess I did lose a little. faith in the middle, but largely it was how I expected it to go like when I first started hearing about it in Nashville 2024. Yeah, it's, I mean, it's quite nice to see Brad Garlinghouse getting a bit rugged for want. But when you saw those posts on like true social, Matthew, do you think that shows that maybe Trump doesn't have his like, it isn't fully invest in this and there's other people doing it behind the scenes really and it's not a Trump-led thing? I mean, I think that's the case in most White House is, right? Like, the president is only, you know, only has so much bandwidth to,

to execute decisions. And usually they execute the decisions when they're, like, basically done, right? Like, the mechanism of any White House is the president signs the thing, right? And maybe they're given sort of two options or three options. And they say, sir, which option do you like? And they usually structure the options that it's like, A is bad, C is bad, B is right in the middle. And everyone goes, B is good. And he goes, oh, yeah, B is good too. And they, and they, do be. So like the way all White House's work is sort of engineering the decision environment, such that the president, you know, is put in a position to say yes, right, most of the time. And so I think that's probably what you would expect here as well. That's sort of the function

of the policy process and the coordination mechanisms across, you know, the working group in this case to ensure that all the different stakeholders were bought in. And then you go to the president, you say, yep, Besson's on board, Lutnik's on board, the industry's on board, you know, and then just, okay, this seems like a good idea, right? And so that's my expectation, right? But, of course, you know, Trump is also his own man, and sometimes he has his own ideas,

and people can talk to him after lunches and whatnot. And, you know, I think maybe that's what happens to tweet, is it kind of, maybe it was kind of a bit of a, like a short-circuited, maybe some of that process, right? Like a tweet is not executive order, right? So I think that's part of maybe what we should expect. And sometimes, you know, you don't have like unitary control, especially early administration where, you know,

sometimes those mechanisms are still a bit, you know, are still getting to be tightened up. You know, someone could just, you know, jet down to Maralago and have a lunch and, you know, convince, you know, the president to tweet something. So I think that's probably what happened. And but, like, the hallmarks of a good policy process is you kind of steer it back. You're able to kind of, you know, shape things.

And in a matter of a few days, I think Bell Hines and Sacks, we're able to kind of, you know, corral things and get this EEO. I think the distance from that Sunday tweet to this EO is quite significant, right? I think the market maybe hasn't quite caught on to like just how different those two things are. And it's kind of a whiplash, right? But, you know, this is just part for the course. And so we know the US has about 190,000 Bitcoin. Like you say, they're going to do an audit and see what else they got hidden around.

But a massive portion of those funds are the BitFenex funds, right? And so what happens to them? I mean, those probably won't go into the SBR. They probably get returned to Bifenex holders, right? So what do you think the SBR will start with then? Because how many coins does Bitfinex? It's 160,000. It's like 120, I think.

120,000. Yeah, I think we might end up with, I think there's a 112,000 coins total. So maybe we'll get 88K, I think. And those are mainly from Silk Road, right? Leftover from Silk Road. Yeah, there might be a few other small seizures in there. There's also a rumor that the FBI has been mining Bitcoin for some number of years now. I wonder if, you know, that's going to be turned over or if they're, you know, air quotes,

using it for law enforcement operations, I'm not sure. But, uh, well, I'll just say, like, I have it on good authority that, um, the intelligence community, for example, has a sizable amount of digital assets. Um, makes sense that they've, you know, this is, this is separate from the, of course, you know, the NSA was Satoshi, right? Like, of course, of course they had the one million. A million coins. I, I mean more the, you know, sort of the operational trade craft use of digital assets, right? Just paying assets in the field.

Yeah, paying people or, you know, you can imagine like back in the day, 2013, 2014, you know, a few thousand Bitcoin would have been just like a normal operational kind of thing. And that just got stuck somewhere. Now it's a significant of Bitcoin, right? When I saw a progosion march on Moscow, I was kind of like, I wonder if somebody gave this guy a billion dollars in Bitcoin, you know? And here's another interesting idea, right? So there's a lot of folks that the U.S. government doesn't like, right? Like, say, cartels or the fentanyl gangs. And some of them are using crypto, right?

tether or digital assets and more generally to, to, you know, facilitate their activities. I don't think the U.S. government has systematically gone after those individuals, you know, crypto holdings, right? We've sanctioned them. We've sanctioned their facilitators. We've sanctioned their banks, et cetera. And I think maybe like on the margin, you know, where targets are opportunity or where

arrests, you know, come with, you know, a hard wallet somewhere, right, that we've seized those funds. But I don't know if we've been like super proactive, right? And maybe that's, you know, we're going after the cartels. We think we designated them as terrorists now. So that could be another source of, you know, crypto for the Bitcoin Reserve. So, yeah, I think there's, but I mean, going back to like the accounting, right, there was a story. I think Coin Desk did really good reporting on this.

It was Coin Telegraph. I think it was CoinDesk, where they really dug into the U.S. Marshal Services, kind of shoddy management and accounting of the apparently. reserves. And like even SAC said like we think we have roughly 200,000 and we think this is the amount that we'll have to kind of reserve for for future disposition to victims. But we don't really know. And so the first order of business is just like do the accounting. And so I'm really curious to find like what the actual number is, right? Did they lose any? Right. Was any sold, you know, before this executive order was signed, right, by some mid-level bureaucrat that just wanted to, you know, do it.

How much was stolen? Probably we're going to find some theft in there, you know. I mean, if the story for the Quintelioraph was it was not very well managed, right? They had spreadsheets, you know. Well, this is another thing talking about the management of, you know, this, now we have a Bitcoin Reserve, right? Like, are we going to get a Fort Trump? And is Fort Trump some sort of a, just a nom de plume for a multi-sync quorum across,

you know, eight different military bases, right? Or like, how does it actually look? Do we have a key on a nuclear submarine that just floats around under Antarctica? You know, we can do all sorts of cool shit. I think for now they're probably going to just keep to a third-party custody provider. I don't know. I think the existing one might be Anchorage, but I don't know that for sure. But I think, you know, at least for the time being, it probably makes more sense for them

to just use an existing, you know, trusted, audited third-party, you know, institutional custody provider, but I think it's an important step the U.S. government should take a takes very seriously about designing their own custody arrangements, right? They should just like they self-custody their own goal. They should self-custody their own Bitcoin. But I think they should, you know, not just like, you know, do that too quickly, right? Right. You'd want to like have them set up the road. Just like you don't want your mom to take her coins off Coinbase too soon. Yeah, right? Yeah, the lesson of the irresponsible service is not, is not encouraging on that front, Right. So you want to task relevant agencies. You want there to be proper oversight and governance and you can use proof of reserves to, to, you know, show some measure of transparency, which you can't do with the real Fort Knox. I think there's some interesting ideas there. And there's another, you know, idea that they're floating around, which is the city of like bit bonds, right? Which I had been curious about, but I wasn't really taking as seriously as the SBR idea, but now I'm like taking it much more seriously as a

idea. Because in a sense, like, it's actually almost easier than going out and making like market purchases of Bitcoin wholesale, right? You can find this assets. But like, there's already strong demand for Treasury securities and there's already strong demand for Bitcoin in the market. And so if you confuse the demand for those two things, you can actually find enormous demand, like hundreds of billions of dollars worth of demand for essentially treasury bonds with a Bitcoin kicker. And I can imagine. Do you want to explain how they work? I did do a show with Preston Nico on this, but for anyone listening that doesn't know what a Bitbond is, do you want to just quickly explain it? Yeah, it's kind of simple, essentially where, you know, it's a normal treasury

bond, but where there is an additional kind of kicker that gets paid out as part of the interest, right? You could structure it in various ways, but where, and that could be shared between, you know, the U.S. government itself and, and the buyer of the bond. And to kind of give, you know, depending on what your risk profile is, a certain amount of exposure to Bitcoin alongside the normal treasury sort of security sort of, you know, duration risk, right? And so that's, you know, there's lots of ways you can sort of engineer the proportions, the payoff, etc. But I think the upshot is that the government would probably be able to get a much lower sort of market rate on its, on its debt borrowings with a Bitcoin kicker. Because there's a lot of people in the

market that want to, you know, engage in different sides of that transaction. I think there's a lot of people that want to borrow Bitcoin. And also a lot of people that want to hold a treasury bond with a fixed sort of, you know, it's sort of like the, it's sort of like the micro strategy play, right? The sort of different pools of investors out there that, you know, want to have a calibrated exposure to the volatility profile of Bitcoin. So you can kind of create these financial instruments that are, you know, that meets those different sort of risk tolerances. And yeah, I think that would be an interesting way of, one, like, you know, getting, getting buyers of our debt, right, and getting a lower interest rate, right? And then using that to also potentially, how you, how you share,

you know, you sell the bond and you could go buy a portion, you know, the process. You should use a portion of the proceeds to buy the Bitcoin, right? And then maybe half of the acquired Bitcoin goes into the trade of Bitcoin reserve. The other half gets paid out, right, according to the maturity profile of the bond. And so it's a way essentially the government gets a lower interest rate and gets to acquire Bitcoin. So, yeah. There's obviously like massive benefits there in terms of incentivizing people to buy long duration bonds, which people aren't really buying very much at the moment. So one of the criticisms for the strategic reserve is that it signals weakness in the dollar.

The bit bond to me, again, complete layman's perspective, but seems to signal that even stronger. Do you agree with that? I mean, this is where it's a matter of scale, right? And it's like you could start small as like a pilot program and just be like, hey, this is an experiment. We think we're going to test the market. We can get a good deal on this. But like the risk is almost to the upside in the sense of you get too good of a deal, right? And the government goes, oh, we should just only issue these types of bonds now, right?

So good, right? And then the rest of the market starts to be like, well, I don't want the normal, you know, the normal vanilla bond. I want the Bitcoin plus plus bond. And, you know, I guess there's something you would need to study that in terms of the reflexivity involved. What the total market size of the sort of the Bitcoin infused bond, it really is. could be large, maybe a few hundred billion, but the total treasury market, you know, refinancing is seven to eight trillion dollars a year.

So, you know, most pensions and institutions and cyber wealth funds, you know, their appetite for normal vanilla treasury securities, I don't think it's just going to disappear overnight because we've done like this pilot program of a Bitcoin bond. But I don't think it's, you know,

I don't think you just ignore that scenario, right, over the medium to long term. And the Treasury Barrow Advisory Committee, I'm sure would commission, you know, studies of all the different, you know, the way these bonds trade on the, on the secondary market and is it leading to a substitution of demand or is it leading to an addition of demand? I think those would be open questions, right? Like, you know, in principle, it could just be in addition to existing demand. There could be, you know, new sources of capital that wouldn't otherwise buy a treasury bond that now will because there's

a Bitcoin element to it, right? And in that case, there'd be almost zero risk. In fact, there'd be, you know, the opposite. There'd be a much. stronger now demand for our debt. And so there's no sort of downside scenario. But, you know, empirically, you could, maybe you find that there's a substitution effect where some, you know, previous buyers of your normal treasury bonds are now going for the Bitcoin bonds. And then you might, oh, worry that you're in a different dynamic now where, you know, if that continues, you know, are we now committed to doing more of this and less of that? And what are the long term effects of that? So I think it needs to be studied. I'm for, you know, but I think it's at this point, you, you know,

the promise of trying it out, right, is certainly the upside there is well worth it, right? And this sort of hypothetical future risk is important, but I don't think, you know, is a reason to sort of not not do a, not do at least a pilot program on it. Yeah, that makes sense. So I want to just talk about one of the criticisms of the SBRs. Like, this is really split Bitcoiners. And I totally get it from the other side as well in terms that like Bitcoin is about separating money in state and now Bitcoin is a cheerleading the state on this.

But I think the best most valid criticism comes from, there's a few people, Lola Leets was one of the first people I saw tweet about it, when it comes to how this like changes the incentives for Bitcoin developers, because any upgrade to Bitcoin is now like a national security risk. I want both of your perspective on this, but Hoddle, do you want to start? Well, there's another one here that people are concerned about, which is, you know, there's a narrative that the SBR is going to be made up entirely of seizures and so that there's an incentive there for them to seize Bitcoin from American citizens.

My perspective on that one, before I get into the other one, is that I would much rather have the government have a strong Bitcoin position if I'm an American Bitcoiner so that they don't need to turn me into a criminal in order to extract my Bitcoin from me because they already have their own Bitcoin position. So I think there's better alignment there. And I think actually there are less seizures that said, you know, like Truman, Capote said, if you step outside the bounds of the law, you lose the protection of the law. So if you are doing things in a criminal context using Bitcoin, I would expect your Bitcoin to be confiscated.

And, you know, you now are low-hanging fruit for the intelligence agencies to, you know, stuff more Bitcoin into the SBR. So you got to, you know, be smart. Don't be a retard. And then the other thing is, sorry, refresh my memory one more time. What was the other one? upgrades to Bitcoin potentially being like a national security risk and how that changes incentives for devs. James O'Baron has been on this beat for a while.

And I think that we've always been worried about state craft inside of Bitcoin development. And I think that worry gets heightened probably 100x with something like this. So I think that is a very real concern. And, you know, we already have a, the great thing about this is that the Bitcoin development process is already pure chaos. So how are you going to hijack something? You know what can't be defined? You're going to hijack a flock of birds?

Like, what are you going to do, man? Good luck. I hope you can figure it out because none of us can. We don't know what's going on. Yes. Yeah, I would say on the civil asset seizure side, it's an important point. But I would say the critical distinction is like, you know, local police, you know, that sees people's cash and then use it to buy their own Ferraris or throw themselves

parties, you do have a massive perverse incentive because the seizure is literally going into the operating funds of the people doing the seizure. I think, hopefully, I think the current way it's structured and the way to keep it structured is to put it into a long-term reserve for the whole government that doesn't support an individual agency's budget, right? Like, if the Treasury Department was able to spend the Bitcoin in the SBR for their operating budget and then that defused their need to go to Congress to ask for funds, I think you'd set up like perverse incentives and I would, I would be worried about that risk. I think put it in essentially a lockbox and say you can't sell it, right? Well, then there's not much of a, you know, there's no value. There's no like, you know,

operational use of that Bitcoin that incentivizes the seizure, right, in the normal way that I think people think about it. Then you get to like the 6102 style kind of seizures, which are really not done for like the, you know, the like, okay, how do I, you know, fund my budget next year like with some extra sort of slush fund. It's more of a like a, okay, we have to reset the same. system and we don't want people holding Bitcoin, right? And in that case, like the existence of an SBR, I think, actually mitigates that risk because now it aligns the incentives of the government with the individual, you know, Bitcoiners. Whereas if you got into a scenario where the government didn't hold any Bitcoin and Bitcoin became really important, right? They'd be like, oh, okay, how do we

get Bitcoin really quickly? All right? Well, we're going to have to take your Bitcoin, right? And so if the government already has a little good amount of Bitcoin and Bitcoin is going up in value, they're like, this is great. We all win, right? So it's about aligning incentives. And so I think it's like, you know, people, when we think about it, you realize actually the structure of SBR could be done in a way that would be problematic. I think the way it is currently structured doesn't present those risks. Then the ossification question, I think is a critical question. I think SBR just adds a different dimension to it now. And I agree. I don't have like a solid forecast of how this is going to evolve. And I actually am looking forward to maybe having some more discussions with developers about

how they think about this affects the dynamic, because I'm trying to model, like, the community of rough consensus, right? And how does the existence of, you know, a new type of Bitcoin holder, how does it affect how they think about protocol changes and soft forks and signaling and that sort of thing, you know, things like like Ops, TV, for example.

And, you know, there's a theoretical argument, and then there's, like, just in practice of, like, how does this actually play out, right? I think there's just like a, I think we just have to kind of just foster more explicit discussions among developers about what that means. I don't, I don't know if it's a settled issue.

I think some developers are just checked out and they're just like, it's done. Like, what's the point? It's already effectively ossified because, you know, maybe because it's already reached a certain institutional point, right? Where once BlackRock starts their ETF, like, that was more of an ossification threshold than the SBR. But, yeah.

Yeah, it's an open question for me. I don't have a... By the way, I think it might be... It might be too easy to point to outside forces and say that these are the problems with Bitcoin development, and actually the problem is with us internally. So, you know, we started to ossify because of distrust that was fostered in the community post-2017, really.

And then, you know, we got Taproot, and it enabled some things that some people didn't like, and there wasn't enough careful consideration beforehand. And Bitcoin's adversarial by nature. It takes its roots from civil engineering culture. And so, you know, we can make upgrades to it. Yeah, but like if the upgrade is catastrophic, like, it's better to not make it. So I don't know that the government is as in charge of this shit as we are.

And also, you know, if you listen to Trump at the press conference today, he kind of introduced it like, eh, Bitcoin, they say it's good. I don't know. Oh, no. Who fucking knows, right? So, like, they're not taking this as seriously as we are. We take this serious as a heart attack. And so, you know, I don't know.

I mean, the future's in your hands, man, not to be corny or whatever. Well, I would say, like, the reason why the SBR happened was because Bitcoiners made it happen in and out of the government. And so I think we're sort of seeing in real time this, this distinction dissolved to a certain extent, right? Like, for example, at the Bitcoin for America Forum, which with BPI is hosting next Friday, we're having a congressman from Alaska announced something very important. You know, and I think he's a legacy bitcorner. He's been Bitcoiner probably longer than most people on this call. And just was there, right?

Doing his congressman thing until the sort of the political context and salience around Bitcoin changed. And he's like, oh, this is actually something I know a lot about and I'm passionate about. like I will go where I want to go with it. I think you're seeing that activation happen now. And then there's a lot of people that will just sort of, you know, bandwagon, right? Now that it's like the thing that the president supports and then they'll get educated, right? Like the first little thing is just because your buddy buys Bitcoin and, you know, it's an exciting thing and you're interested in it and you're kind of confused by it.

But like, you know, you find it hooks you somehow and then you get further into it. And then, you know, that's how every bitconer becomes Bitcoin, right? It's not like there's like some genome that picks people out, maybe, you know, disposition to autism. But, and, but I think, yeah, the possibility space for Bitcoin and Bitcoiners in this era is quite large. And this opposition between Bitcoin and the state. It's like, this is my very first one, like, you can just do things like institutions are social fictions of huge. human, you know, like mutual belief. And like the power to just like gather individuals that have a lot of motivation,

intelligence, and capital. And they could just build new institutions and do new things at scale that become quite historical is like undervalued as a thing that can occur in the world. And I think you can just apply that at each level. And I think you can imagine like entirely new institutions get built, right? Like I think about, and David Zell came up with this number, like in, If Bitcoin reaches some, you know, rough level parity with gold, there'll be an equal number of Bitcoin billionaires as the total number of Fiat billionaires in the world. And that is just like a mind-boggling thing to think about in the sense that those Bitcoin billionaires all became billionaires kind of through the same basic process.

They all kind of believed roughly the same sort of thing. They all kind of had the same sort of heterodox beliefs. They're sort of orthogonal to the existing institutional structure. They don't have the same allegiances. they're not just going to donate to the library at their college, right? They're going to want to build fundamentally new institutions that are designed for the new era that we're entering into. Well, I think it's really interesting.

Like if we did get to the point where there's as many Bitcoin billionaires as Fiat billionaires, like you say, there's no like genome that makes someone a Bitcoiner. But Bitcoin is a different. What do you think that would do to the world huddle? Well, I've been talking about this, the same thing Matthew's been talking about for a while. I think in any meaningful revolution, you know, there's this table of power. And I think you get about in the best revolutions, you get about half the seats at the table of power. And if half the world's billionaires were Bitcoiners, that's about half the seats, right?

And so suddenly, Bitcoiners have inclusion into this, you know, this table that sets the rule, the rules of the global order. And what are the rules they are, you know, basically what is money? Elite, elite conferences with each other are all about rulemaking, right? And so like I think the thing that we bring to the table as Bitcoiners, and this is an orthogonal belief set, is that the rule, we should have a fair rules based order enforced by code and take human decision making and judgment out of the mix. That's a big radical idea to the table and the fiat billionaires are going to be like, what the fuck of these guys talking about? But we're going to have half the seats of power. And so you're going to have to listen to our ideas. And we're going to want things enforced by code.

Really. That's like one of the only things that really aligns us across the board is that we believe humans are fallible and we want to take humans out of the system as much as possible. It's hard for us to really imagine a world system that has that, you know, new force that just erupts into it, right? And it could happen quicker than people think, right? Like, you know, maybe what happens this cycle or next cycle? But like in the next five or ten years, you know, it's sort of my base case that Bitcoiners are becoming are going to be a geopolitical force. We're already a political force. Like, we've already seen that.

We went from, you know, Nashville to now a Bitcoin strategic reserve, right? In like seven, eight months, right? It's like, that is a snap of the finger. And so where are we going to be after, you know, a full presidential term where this is now, there's now, you know, open-filled running, right? Everyone is obviously, like, it's kind of ironic that, you know, everyone is in Bitcoin is so impatient, right, when the whole point is like low time preference and think about, like, the generational value of this asset and everyone wants to happen now, now, now, now.

And we've just seen this unbelievable acceleration of America's pro-Bitcoin orientation. It's kind of, okay, like, if this doesn't stop, right, where are we going to be in three years? Like, it's kind of, and then what's that second order effects of that on Bitcoiners and their geopolitical influence, right? Because, you know, David Bailey has talked about this. It's like he's going around the world. He's meeting with folks, everyone from Asia to the Middle East. And every one of these national leaders has like a David Bailey type person, right? kind of like that millennial, you know,

oh, you're the crypto tech guy, right? Explain to me what the deal is with this. And then those people were seen as a trusted advisor because they knew the tech or they had a little, you know, they had some capital in it. But then all of a sudden Bitcoin becomes a geopolitical asset. Now those are the go-to guys to explain what we should do. And so those folks kind of have the ear now of national leaders, right?

And as a zero to one moment and that's happening at the same time. And of course, it's happening in the context of much of these, larger sort of geopolitical shifts that we're seeing underway, you know, as the great power has kind of returned to a more competitive dynamic where, you know, the world system is, you know, potentially getting fragmented. But, but Bitcoiners, like, it's like Bitcoiners span these different borders, right? And so, and they have a different orientation to how to, how to, how to, how to do politics, right? And I don't know where that's going to evolve. I think what we do need, though, is we need new institutions to help, you know, frame those thoughts, right? I don't think it's like,

these are more like orientations or dispositions than like specific views, you could say, right? And I think you're going to see like new, when you have billions of dollars, like, what do you do with it, right? Was you bought your yacht or your house, whatever? And most bitcoins, right? Like a lot of bitcoins that have billions of dollars in Bitcoin, they live out of a backpack, right? It's like, so these guys don't typically have the same sort of trappings, right? Some do. But, but then you're like, okay, what do you do with what what what's your point in life right like what do you what are you here for right you want to you want to make your mark you want to build something that last beyond you

and you know all humans got are institutions right like you could build a monument to yourself and you know some billionaires are doing that um or you could build like a human project right like a new sort of social sense making a new uh civil society project that's based on a different predicate right that recognizes you know a different possibility space for human beings uh in the 21st century So I think that's an exciting new frontier that could be unlocked or opened up with Bitcoin reaching this potential next stage is on the near term horizon. Yeah, this is kind of like what Eric Weinstein was saying to Pete when he was on what Bitcoin did. It was like, great, you're rich, but what are you going to do with it? And that'll be fascinating to watch happen.

In terms of this Trump admin now, what do you think is next? Because one of the other big things that he said in Nashville was that he wants to mine all the Bitcoin. Do you think he has other plans in the pipeline or is he like promises fulfilled Washman that now will let this run? I haven't heard anything on that front. I think a lot of those talking points were thrown in there. I'm not sure how much, you know,

master planning there was in the speech riding for that. It sounded like a good line, so I'm sure they, you know, said it. But I know, I don't think we're going to be setting up like a national cyber hash force. And I think that's a bad idea. But, you know, I think there is something to be, you know, looked at in terms of the distribution of mining, right? And how that now plays out right at the national level, right? Between and that's a much larger conversation and you could have Bitcoin mining experts come here to give you all the ins and outs about how the mining market is changing

is that the public market, the private market, home miners, open source mining, you know, A6 supply chain, integration behind the meter, high performance data centers, you know, co-location, renewable. It's like it's such a complicated market. It's changing like every few months that, you know, it's hard to make predictions about what the state might do to, like, you know, potentially tip the scales there. I do think an important, you know, thing to look at is just regardless is, is, is, is block template, you know, construction trying to decentralize as much as possible, you know, take, take the sort of the current nature of the mining pools and use clever software to push that down and even create markets, right? Where you maybe can use,

essentially zero knowledge proofs to almost tokenize hash, right? So almost any individual miner can essentially get like a lottery ticket through their contribution. I saw a clever, clever proposal for that. So I think we're going to need like Bitcoiners and developers to come up with like clever ideas to just like, you know, that is still, I think an attack factor that exists. It's a risk. And I think we should try to push that down. Cool.

Matthew, I know you've got a hard stuff very soon. But just we should talk very quickly about the White House summit today. Have you heard anything come out of that? I mean, it's happened while we've been talking here. So I'm at a disadvantage. We'll check Twitter right now and see. I would say my, you know, we'll see how good my predictions are. I don't expect the actual summit to, you know, produce any new announcements other than the executive war that was just signed.

My understanding is that, you know, there's a lot of people that were sent there. They were, you know, discussing behind closed doors for several hours. now that the EO has been signed, like, what's next? And I believe that the, you know, the two main protagonists here, Lutnik and Besson, we're soliciting ideas, right? That's now in their remit to produce, you know, budget-neutral options to acquire new Bitcoin.

And so I think there's a lot of smart people in that room. A lot of folks represent the industry, a lot of clever government types as well. And so, you know, I think maybe they've come with some interesting ideas. I wouldn't expect them to announce those ideas. today, but I think they're cooking. And so I am optimistic that we will come up

with some interesting ideas to add to the nation's stack. Holder, what's Twitter saying? I checked Twitter and, you know, not much. We live in an image and meme-dominate economy. And most people don't read, right? Most people don't try to pay attention to the bureaucratic morass inside D.C. and unfortunately, like, that's what you have to do.

You have to read and you have to pay attention to boring things, like who's going to be in charge of XYZ department inside the Treasury Secretary as office. Yeah. And, you know, that's like, you got to like click through and read that, like, block of text. And most people don't do that. So maybe that's like BPI's competitive advantage is like,

we're like word cells. You can read. No, we just read your tweets, Matt. That's what we do. You read the primary docs. We read your tweets, yeah. It's a compression mechanism, right? I'll take it all.

I'm like, oh shit, Matt's bullish on this guy. Yeah, fuck yeah. He's been a good treasury secretary. Yeah. I mean, there's a lot of smart people now. And it's like, it's, we develop really good relationships. I mean, I'm just, so I think we might not have said this, but like, I'm now executive director at BPI, right?

So I have done the full hard cut into into Bitcoin full time. And I did that like a month or two ago, just because I saw all this coming. I was like, this is the moment, like, to just go all in. Like, this is a now or now. everything, you know, really proud of what David Zell and Grant McCarty have built in the last five years. I've sort of been on the sidelines helping them, advising them as a fellow. But honestly, like, people owe Grant and David, you know, an enormous, you know, debt of gratitude. And these guys have been in the wilderness cranking on this, this concept of a think tank for

Bitcoin for years. And now it's like paid off more than I think any other think tank has ever paid off. Like, it's just, you know, billions of dollars gets spent every year DC on think tank, blob nonsense. And, you know, a tiny percentage of the policy proposals that come out of these armies of PhDs and senior fellows writing white papers inside the DC, you know, nominclatura system, you know, almost none of them get operationalized. And yet these BPI guys, you know, now we have a full staff team of like really hard charging awesome people. Small team, though. Like, I would say we take sole credit for it by any means, but like from the summer through now, like, we've been very clear.

Like, this is laser focus, laser eyes, get the SBR done, right? And not get distracted by Crypto Reserve, not get distracted by bearish comments on, oh, this is too soon. It's like, no, this is actually possible to do it. It's not that. It's actually, it's, there's a line of sight here. You just got to like laser and you just got to execute. And, you know, and they did it, right?

And so I am like, people should be bullish on human agency that like a small number of these guys basically and Gala. were able to push us across the finish line. And so, yeah, the event we're hosting next week is just like a testament to this. Like we put this event together, not knowing what would happen with this. We didn't even know the summit was going to exist, right?

It was just, you know, they had the executive order signed. We're like, all right, we should put together a summit, you know, focus on Bitcoin. We should just try to get as many of the key leaders across the industry there physically to demonstrate across digital assets, across the financial industry and politicians, that Bitcoin is very, real. Bitcoin is serious and like Bitcoin is important for America and here's how to like execute on that

on that digit. Yeah. So I'm really bullish for for next Tuesday and BPI's work. And just a shout out to the Pubkey guys. So really excited to have a partnership with them. Opening up essentially a Bitcoin embassy downtown. Yeah, kind of equidistant between the White House and Congress will have, you know, the Bitcoin burgers at Pubkey, the bar and restaurant, as well as our physical. office in an event space. So it'd be like, you know, just like the vibe of that, just like, just hearing that pitch, I was like, I can't, I can't not do that. That's like, that's like the most insane, awesome thing ever. So I just think, you know, everyone's caught up in the headlines and wants to, you know, number go up now. And I think, you know, real Bitcoiners have patience and

just recognize it we're in a different era. That is literally a revolutionary war tavern. That's what that is. A hundred percent. A literal one. The work that, um, David and Grant and everyone at BPI has done has been pretty incredible to see. In terms of the thing you're hosting next week, has this change anything in terms of who wants to turn up and who wants to be in the room? I mean, I think I've gotten, I don't know, 20 signal messages since we've been talking about that.

Because, yes, I mean, you know, we were planning. It's like you show up to a new high school and there's a cool kids club. And how do you convince, and you want to host a party to make yourself cool, right? So how do you do that, right? Well, you try to get, you know, one or two of the cool kids to kind of commit to it

and they got to get some of the other cool kids to show up. And then pretty soon, you know, everyone shows up to your party. Then you're a cool kid. That's like really all that it means to be a cool kid, right? There's no other distinction. There's just a social graph and whether you're in it or not, right? That's what we've been doing. It's like, except the cool kids is everyone from, you know, CEOs of these large companies,

these major, you know, traditional finance funds, you know, senior senators, senior congressmen, white house officials. I just got to be like, yeah, we're going to put on an event. You should be there, right? And then get them all to show up, right? make it seem like it's an important enough event. And then literally that becomes an important event just by virtue of those people showing up.

There's no, like, objective, you know, criteria just get those people there. And that it becomes a very, you know, strategic event. And I think that's what's shaping up to be, a very important event. You know, I think it's like a natural sort of stepping stone from today's discussion to, okay, you know, which probably was more about the show, to be honest, right?

The sort of the pictures and, you know, obviously the president providing his symbolic support. I think we're going to try to get into the weeds, right? Like the details, like, okay, now that the EO signed, how can we get the Lummus Bill passed? And then looking forward, what are these other ideas? De minimis tax exemption, bit bonds, protection for open source development, self-custody solutions. Like, you know, SBR is just kind of the asset side of Bitcoin. There's the network side of Bitcoin, which is just as, if not equally important, right?

The ability to transact, the interface with the energy system. So, I mean, Bitcoin is not just one thing. It's a thousand different things, all stuffed in. So, yeah, I'm really excited to see what comes out of Tuesday's event. And, you know, it'll be live streamed. So I think it'll be on Rumble. It'll be on our page. And, yeah, I'm extremely proud of the BPI team.

You know, small crew basically put together this massive event in like three weeks. That's now only going to get, you know, a lot more attention. So it's a lot of plate spinning. Well, I got FOMO and I booked a flight. So as long as this cyclone passes, I'll be there. I'm leaving tomorrow. Before we close out, Huddle, is there anything that you want to leave us with? On the BPI point, I heard somebody describe BPI as a couple of kids in a garage band think tank.

And I was like, fuck yeah. And they're kicking your ass. Like, all the crypto lobby can't compete with a couple of guys in a garage band think tank. And I think what Matt said at the beginning of the show, is the most important thing for Bitcoiners, is that we have extremely high agency. You can just do things. You don't have to have this.

You know, in Fiat land, it's all learned helplessness, right? Like you just sit there and be like, please government, give me more money. Like send more yacht in my way, right? In Bitcoin, it's like, no, this is fucking manifest destiny, man. We're going out here and we are storming the frontier and we are building new structures. We are making our own way in the world.

And yeah, you can just get off the couch and you can just do shit. None of this would have happened if David Bailey didn't raise his hand and say, hey, I'm fucking retarded and I'm going to plow straight through ahead until this gets done. The thing that nobody says can be done, I'm going to get it done. And people gave him, you know, so much shit for that. Every day, all day, oh, you're this, you're that. How could you blah, blah, blah. He fucking did it.

Ross is free. We have an SBR. BPI is fucking a real thing in the world. Like everything is, I mean, if you're not bullish, like, yeah, the price is $8. 86K. Who gives a fuck? If you're not medium and long term bullish as fuck on all of the things that have happened recently, you just don't understand the game theory here yet and you don't understand where we're going and you don't yet understand your role that you're going to play in it. You're going to play a significant role too. You're not just a dude with one Bitcoin.

You're a fucking king with one Bitcoin, all right? Let's go out and get it, you know? Let's fucking go. That's the quote. I mean, I mean, it can't top that. I mean, that's it. Microw. mic drop. Well, thank you both for doing this on pretty short notice. Appreciate you both. Matthew, I'll see you next week.