Why Bitcoin Could Hit $500K in 2029 | James Lavish
00:02We're already at $40 trillion of debt, and we're on pace to get past $80 trillion by 2035.God knows what happens with this trade of her moves.Oil rips up to $200 and prices are screaming, and you're back to 1980.Can you imagine if the Fed raise rates to 15 percent?Not to 20, but say they raise the 15 percent because inflation got up.out of control. Inflation gets up to 7, 8, 9, 10%. Can you imagine $15 trillion? If you raise ratesby another 5%, that's $750 billion, so you're adding to the deficit. I can't do it.You have inflation. You better own assets. I do believe that the bottom is in and that we are
00:52back in that expansion cycle for Bitcoin. Yeah, I would say that we're going to top out somewherearound 29 early to mid-29. It's my guess. And I think it would be, you know, my base case would besomewhere around 400,000 then. To be honest, though, I mean, let's face it, Danny. Bitcoin has beensleepy here now, I mean, quite honestly, for years, you know? I mean, when I started getting into it in 21,late 20, early 21, somewhere around there.And then I started buying it late 21.You know, we're just a little bit above that level now.I can't believe it.
01:42Now, for people like you and me, we've been involved in all this time.We've clearly been buying it at prices far below here.And that's been good.And I started a hedge fund and all that.But man, there's a truth to the Bitcoin fatigue, you know.Oh, for sure.And I think that it's gotten to that point now where you've got so many of the originalpeople who were in it sold enough that they're just not even active anymore.
02:14And they're just like, they're gone.They're doing what they're doing.And so, and then you've got the draw of not just the AI, which was a massive draw,but then you've got this draw of other things.So it used to be, it used to be had the young kids who held Bitcoin,and then they'd go and buy some of the alt coinsand ride those and play them and go back into Bitcoin,and then go right the, and then go back into Bitcoin.
02:42But now it's like, yeah, they may play some of that stuff,but then they go and move the money out to Kalshior Polymarket and they're, really, they're betting,their sports betting.And the attention, the hotball of money is one thing,that big hot ball of money moved around,Bitcoin, AI, gold, AI, you know, it looks like some of it's rolling back into Bitcoin here.But then you've got the new money, the younger money that was so attracted to this in, you know,
03:112015, 2018, and just, and then went into all coins after that.And now it's just all on, all on the betting sites.Like, it's gone.It's not here.And I'm talking to the kids in college because we have one in college and I've got myThe interns in college are both out in Florida.And they're like, oh, nobody talks about this stuff anymore.They're all betting.
03:36Everybody's on their phone betting 24-7, you know.And they're-It's crazy.Yeah.And they're getting into trouble, you know?Of course.And it's kind of like, it's essentially the same thing as the sort of broader crypto world,isn't it?
03:51It's like the nihilism.So you look at your future.You can't see how you're going to get ahead.Therefore, what's the point in saving for tomorrow?Instead, you may as well bet and just, like, swing for the fences, hope you hit something.Yeah, because it'd be better to take, it'd be better to take 500 bucks and swing for the fencesthan to put $500 in a savings account and make 4% on it.You know, like, that's not going to get them anywhere.
04:14So they're thinking, oh, well, hey, if I buy this bet at $10, man, I can make, you know, a 10x off that.I can make $90 off of that.So if I buy $100 worth, I may walk away with a thousand.Yeah, I'm going to do that.And so, yeah, that's a tough draw.They walk away with nothing invariably, you know, most of them that make that bet.But on the other side, the guy who's making the $900 bet to make $100, well, he's going to make a quick $100.Now, that's a whole lot better than putting $900 bucks in and waiting two years to get that same return.
04:52You could wait two hours and get that return.As long as that, you know, the game went your way.So, of course, way higher risk, you know, but a much higher annualized return.So it's the, it's just become this, we have that problem here now with the K-shaped economyand especially that younger demographic, they're being pulled away.And so I don't blame them.I don't.I don't know what I would be like for me in college, you know, looking down.
05:24If I were looking down the stairway of options, man, it feels like everywhere you go,you're going to be in a trap.Yeah.I do think from a very like Bitcoin specific lens as well, what we've not done very wellrecently is the sort of replacement rate of Bitcoiners.So I got in in 2016 and the people that were sort of big in the space then and very vocaland prominent, like some of them are still here, but a lot of them have kind of drifted offand they're doing their own thing, whatever.
05:54But then there was always people coming in to fill that void.So like you say 2021, you came in.And that's when a lot of the macro people came in.It's when Lynn Alden started getting much more vocal.I know she'd been in longer, but that's when she became much more vocal.And in the last few years, like, it's really the same group of people that were around in 2021who are still the most prominent voices.And we've not had that many new people come in.
06:15True.And I was speaking to Justin Moon about this.And he ran the bit devs in Austin.And he was like, there was just no one.They ended up closing that bit devs.down and there was just no one to hand it off to who was like still had was new. I had the enthusiasm.It was fresher. And I don't know what that is. I think price is just going to solve everythingin that sense. As soon as Bitcoin starts ripping, it starts being interesting again. But we are in
06:37a bit of a doldrums right now, I think. We had more interest, you know, in our hedge fund when Bitcoinwas above 100,000 by far than we did when it was at 15, or when it was at 16, 17, 18,000,you know and part of that is just because of the the FTX stuff and it seemed like everythingbeen solved and okay now we're off the races it's going to a million so but um i agree and i thinkthat once we get back over a hundred you're going to like the the interest is going to tick back upagain it's like well this thing's never going to die it really is going to a million and thenyou get the herd come back in you know so and we needed like a proper bull market again like the lastbull market wasn't enough for those nihilistic people who just want to gamble. Like, it needs to be
07:22more than that. And I think it will be, to be fair. The thing that I don't really get is, like, you look at themacro situation right now, 40 trillion in a debt, two trillion dollar deficits, inflation's at nearly4%. Still at war with Iran, oil prices through the roof. And it's like, Bitcoin's at $80,000.Like, why is this not taking off more quickly? Well, because so much money rolled into AI.and, you know, that very concentrated bets there in the S&P.And just a handful of names that are up on the year there.And, you know, that's one thing.You know, as people are getting more return on their money,
08:02just sitting in cash or being rewarded for it,that's another thing.You have seen some money roll into longer bonds here,playing that, thinking that those rates will come downand they'll make money off a, you know, a quicker trade therewhile they're still getting a 5% yield on it.You know, not a terrible bet.You know me, long-term bonds, awful bet.
08:25Short-term, yeah, if you want to play around in it,yeah, I could see that.And so there's some, there are other things going on here, though,with Bitcoin.You see the leverage in the paper all over itthat just keeps it in this, it keeps it range-bound, I think,at higher amounts of liquidity, which, okay, because, you know, way back when,2013, 2014, this thing could move thousands of dollars with a fraction of the money
08:53that is moving it, you know, can't move at $10 now, you know?So, but then you've got, and you've got all those, you still have original, you know,investors, OGs that are out there and there, you can still see that there's,they're selling calls and when you do that and you it it has the effect of selling stock you knowselling bitcoin um and the the way that happens for the listeners the way that happens if they sell thecalls who are they selling them to not to you and me typically they're selling to a market makerand so he's a proprietary market maker which means it goes on his book that means if he's long a callhe's got to be short some stock against it he's got to be short some bitcoin against it he's got to be short some
09:40Bitcoin against it. And so I keep saying stocks. I'm thinking in terms of calls in yourtypical, you know, hedge fund. But he has to be, he has to sell some of the underlying againstit to be what's called delta neutral. You know this. We've talked about it before. And that works outto be somewhere about 30 to 40 percent of what they are, what they're now long. So if there'slong a million dollars of underlying through those calls, they've got to,sell three or four hundred thousand dollars with a bitcoin to hedge themselves and they're doing thatand so that's another that's just another factor um so but once this clears you know once this clearsout and confidence gets back in remember it's difficult to get institutions to buy into something
10:34when you're getting yield elsewhere you're seeing the same issue with gold so even if you do stillhave an expansion of liquidity as we're seeing through Michael Howell's awesome analysis.And I really, I really do like how Michael looks at the world.It's not just M2.It's liquidity.And even though, is liquidity going up again now?It's been going up at a slower pace.And he thinks he's rolling over here.
11:02But I have to look at his latest newsletter.But, you know, the way that what he looks, the way he looks at it is that it's notjust money supply. It's not just central bank liquidity. On top of that, it's also, it's also debt,and it's also volatility. And that feeds into the underlying collateral. If you have a loweramount of volatility, then that means that the lender is requiring lower amounts of collateralto secure whatever margin that you're taking on that, to create more.more liquidity. And so higher volatility requires more margin. So you saw the volatility oftreasuries, you know, a month and two months ago. And that would, the move index has been
11:56moving up. And so that requires more collateral. And so that lowers the amount of liquidity.So it's it's kind of, you know, evening out. But anyways, because of that,And because gold had such a run and Bitcoin had such a run,it wasn't as much as you and I would have, that I expected.But still, now you're in a situation that you have investors who are like,well, what are my other options?You know, I can get yield over here.Why would I be putting my money into something that's not at the front end of a rapid expansion
12:37of liquidity?We're just not there yet.And when you have the Fed that's talking about raising rates,and now you're talking about, you know,even if they're not taking money out of the system,even if they're not doing QT,they're not doing QE,they're buying just smidge like a little bit.
12:57Tiny amount.Tiny amounts.But then when you don't have that and you've got the Fed that,they're tightening conditions for lending.That's what they're doing.And so today we had wars come out and we could talk about that.But leading up to today, that's what's been going on.And people are trying to figure out, investors are trying to figure out, okay, where are we
13:21in the economic cycle, the, you know, the ISM manufacturing cycle, where are we in GDP, andwhere are we in inflation, and where does it all come out with the Fed easing or tightening conditionsand then the expansion or tightening of liquiditydue to the expansion or tightening of the overall economy.And that's what we've been kind of in a holding pattern here.Both in the stocks, as you've seen, in AI,there's been a rotation in the S&P and in the NASDAQand in gold and Bitcoin.
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16:12Their founder and CEO, Mikkel, has been an expat for over 25 years. He's built his own lifethis way and brings that personal experience to helping others do the same. If you've ever thoughtabout building your own plan B, download their free report at expatmoney.com forward slashWBD. That's expatmoney.com slash WBD for your free report.So I do want to get on to Walsh and the Fed, but just quickly before we do, I did a show withGeordie Visser in New York a few weeks ago. And he was saying that he doesn't see Bitcoinas a debasement trade. And his reasoning for that was that in sort of high, if the bank starts,if the central bank starts printing again, basically everything does well. It's not just
16:52Bitcoin that does well. Like stocks do well, the lot. So if you define it as just a debasement trade,he thinks that's too narrow and he doesn't think that's what Bitcoin actually is.I don't think I agree with that, but what's your take on that idea?Well, it's a pure debasement trade, meaning that it's more pure than real estate than stocks, okay?Because real estate, stocks, for instance, you have stock specific risks that you have to deal with.You have technology sectors, you've got consumer discretionary,consumer staples.You've,
17:32you've got industrial stocks,defense stocks,and you have to decide,well, you could either just buy the S&Pand be more passive about it,which is a closer approximation.And that's a better way to do itif you don't want to have stock-specific risks.
17:51But also,you know, with like real estate,you haveI mean, a lot of different inputs there that you've got to deal with.And they're geographically specific.You've got taxes that you have to deal with.You likely have tenants or you have maintenance on that real estate.Whereas if you buy Bitcoin.
18:18Yeah, it's illiquid.That's right.And you've got big fees coming in and out of it.But with Bitcoin, it's just a more pure representation and reflection of the,It's just a mirror image of the debasement of the currency.Now, it does have a lot more volatility.And so even though we got that report out that I wrote about this in the information last week,even though you had JP Morgan with that report out saying that, hey, look, Bitcoin is at
18:49the top of our list of the expected returns from different asset classes.for the next 10 years.Now, it comes with a dose of volatility, though.So you have to understand that.And so that, because of that,even though J.P. Morgan has kind of,I wouldn't say that I would not go as far to saythat Jamie Diamond has pivoted on this,
19:16but he's given the green light to his companyand to his employees to talk about itand to start doing business with it.They haven't put it in their portfolios.Mala portfolios that they give to their high net worth and key investors, but they have namedit as something that they expect will do very well over the next 10 years.Why would they say that?They would say that because of exactly what we just talked about is the debasement of the
19:45underlying currency, and it's a pretty pure expression of that, and it has a much highervolatility than gold, which is why gold is towards the bottom of this list.So, you know, for the listeners who haven't seen it,there was, this is a chart that they put out.And actually, you know, let me pull this up.Right. So if you go to, okay, so now you can cut to this part.So, but when you look at, when you look at the list of, of assets they have on here,again, it's not Jamie pivoting and saying, oh, go buy Bitcoin, but it's, it's his, it's his team of analysts who have said, look, we expect
20:26Bitcoin to be the best performer in the next 10 years. With that comes in serious volatility,though, of 55%. So I want to know from, because you're obviously traditional finance guy.Like when people are looking at this, like the big money is looking at this, you see compoundreturn rate at 10%, but with the annualized volatility at 55, how do you trade off the risks and how do youthen look at allocating to Bitcoin? That's a great question. And as an investor, if you're, if you'rean investor, okay, so let's be real. This is not taking the place of bonds yet. Okay,some place down the future, maybe it'll get an allocation out of bonds or out of gold intothis. I think it's getting some allocation out of gold into it, but not big. I think the bigger
21:14allocation it's getting is out of tech. Okay, so if you have a portfolio that owns stocks and ownstechnology stocks, you may put some into this. Now, what does that mean for you? Well, it means thatyou likely have a longer time horizonand you've got a smaller allocation.Yeah.Because you're looking at,what you're looking at is the overall riskthe entire portfolio to market shocks.
21:37And if you have an asset with 55% annualized volatilityin your portfolio,then you cannot have a large allocation to this.In, you know, if you have a situation,we have a market shock,then this will, this will,negatively affect your portfolio in a large drawdown. And so as a professional investment manager,you have to go through your risk analysis of your entire portfolio. And you do all kinds of
22:08stuff. You know, you have VAR, value at risk. You have Monte Carlo simulations where you're,what you do is you say, okay, the Monte Carlo simulations are where you take your portfolioand you run it through past shocks,you know, you say, okay, if my portfolio that we have today,if we have something like the long-term capital management shock and drawdown,what would that do to my portfolio?And it goes, boop, and it'll pick, it'll show exactly what all your portfolio would doon that, on that, you know, that day or that week or whatever it would be.
22:44They need the same thing for the 99-2000 tech bubble popping,2001, the 9-11 drawdown, 2008, that months-long drawdown of the great financial crisis,2020, what happened in lockdowns.And you could see in those simulations what would happen.And so you look at those and you say, okay, none of those will happen again.Okay, you could do other things.You could do oil price shocks, you know, you can.you do all kinds of stuff. But you just do these simulations and you say, okay, what can I live with?
23:25What can I stomach? And what will my investment manager, the CIO, what will he sign off on here?And if you come in and you say, okay, here's my portfolio and you've got a 25% allocation of Bitcoin.And he looks and he's going to go, are you out of your fucking mind? This is a 55%, this has a 55 annual vol.You're, no, take that position down, bring it down to one or two percent or get it off the books.It's not appropriate.It all depends on what you're doing, though.If you're at a hedge fund and you manage your own book and it's your money, meaning it's been,it's in your book and your manager has signed off for you to have complete control over it,
24:10well, maybe you do that, but there's very few portfolio managers that have,that kind of freedom and autonomy when investing money.And so that's what people have to realize.When you hear people like, why are the institutions not in more?Why are they not buying these ETS now?Look, it's under 100.Why are they?Well, man, these large institutions move slowly.
24:34They have a lot of personal risk attached to manage the portfolio.And they've, it takes time.So, and that's kind of where we're at.But this was a big development.And that's why I wrote about it.Even though they're not recommending it, man, it cannot be ignored anymore.It is at the top of this list of JPMorgan.It can't be ignored.
24:55And the thing that stands out here is volatility being high makes sense.I think volatility will continue to be high in Bitcoin.But the return rate of 10% seems very low.And I don't know exactly what that number will fall to be.But let's say that's 20, 25%.How much does that change the calculation then in terms of how much you can allocate to it?Well, I mean, it would, if you had a 20, 25% return with the same volatility,it would double the amount that you could have, right?
25:23So is it literally linear like that?Yeah, more or less, more or less.And so, but likely if you're having that, if you're having that kind of return, you know,where are you looking back to?If you're looking back of the life of Bitcoin, well, you know, that volatility has been,vicious on the way down. I mean vicious. And so that's one of the things that you're looking at,too. This is an isolated number here, this annualized vol. Another number you're looking at is drawdowns.You're looking at peak to trough drawdowns on this thing in those market shocks. And so remember,
26:04when we talked about the Monte Carlo situation and whatever, or VAR, you're looking at, okay,When you have one of these shocks,remember that that annualizedVAL, that gets pulled apart, and nowyou're looking at, oh, you've got tothis thing has 80% drawdowns.What?This worked down how much during
26:24that shock, you know?And so, yeah, soit's not quite as simple asthat. But now you've gotAI that'll model out everysingle aspect for you inmilliseconds. And soyou can get to exactly the
26:41the allocation that you want to have according to what you expect.And obviously, we've had 80% plus drawdowns in the past,but this last one was 50, 55%.Like that must change the calculus here quite significantly as well.It should.It should take into consideration.Although remember, okay, so why was it only 55%?Well, I mean, I have my theories about this.
27:03But, and you and I, I think we've talked about power law before.And I'm a, you know, I'm a strong proponent.of the power law because of just the pure fit of it,that R squared fit is so tight that, you know, 96% is like,that's hard to argue with.It's the best thing I think we have for such a short-lived asset.It's only been around for 15 years, 16.And so, you know, but remember, there's no base for the power law.
27:41All it is is it's showing you a, you know, it's a mean value and expected value on those past prices and extrapolating into the future.People say, oh, it broke the support. There is no support. What there is, though, is there's a line of support that has been getting tighter on what we would call a standard.deviation from that expected value so one standard deviation two standard deviations okay so when you look backand i've i've modeled this out myself um you know actually using the the most powerful uh version of um of clodbut when you if you won't i didn't realize i was still sharing that sorry um but and i'll just show you thisso you could see it, and people can figure out how to do this themselves.But can you see this?Yep.
28:51Okay, so, you know, when you, if you look out, and so for some reason, it's, it's, it'sfrozen on that, on that, on that date.But when you look back and you look at the past cycles, you know, back in 2011, we werealmost four standard deviations on our blow off top you know 1.3 standard deviations on the on thedrawdown from them from that expected value okay then you had a 3.5 standard deviation blow off topand then a one point almost a 1.4 on standard deviation drawdown and then 2.7 1.08 1.85 1.17.1.17 okay sowhat do we notice up to this point?We noticed that the blow-off tops and the drawdowns
29:46are both, you know, getting smaller on average.This was bigger than this one, but, you know, on average,they're getting tighter to that expected value.And so down to-The interesting thing there to me, though,is that obviously the blow-off tops are getting significantly smaller.The actual downside is not.all. Like it is relatively similar. Well, but look at the, look at the difference between that,
30:16okay, there's a couple things that we notice here. First, we notice the violent drawdowns.Okay, they are violent. Okay. Yeah. Right. And it takes a long time to build up and then boom,violent down, you know, long time to build up and then violent down. But the other thing wenotice here is that like you said it did the drawdown is only 1.3 1.38 1.1.1.1.7 you know now rememberthere are different versions this model this is just the one that I created so there are differentversions of this so it's not you know um so but what the other thing we notice is that uh this lastcycle was it went from 3.5 to 2.7 to 1.8 to 0.4.5 to 0.4.5 to 0.4.5.of a blow off top.
31:08So this is what you and I talked about beforewith the OG selling so muchand sitting that mental price they hadof $100,000 and when it went to $125,they were just selling and selling and selling.And that just became a self-fulfilling prophecythat that was it, is over.And so I think that this was a muted blow-off top.
31:28I just believe that.And because of that, you know,you still had a one point,one five standard deviation from the from the mean or that for that that expected value right and sowhich is interesting because it still is similar to what the last ones were right so it's still goingoff then that mean but what you just said was or sorry the expected value um right so which is themean, but for people to understand what I'm saying,that expected values to what we usually talk about.
32:07So like today, you're saying,we would say that the expected value would be 144,000.But even though we had the regular drawdown,it was only 55% because we didn't have a blow off top.Yeah, that's why.So extrapolating to the future,I think that we get a, you know, a less muted blow off top,which would come out in somewhere in the beginning to middle of 29, I think,
32:39if you go off of that economic cycle we're talking about and election cycle and all that,then, you know, you're talking about, and you're talking about an expectedblow off top of maybe one standard deviation again,which would be more like $4,000, $600,000 rather than $150,000.So, and that's kind of, I mean, it's a lot of, that's a lot of, you know, if, if.No, that makes sense, though.And it kind of gets to what Checkmate always talks about when he says the ball market authors,the bear that follows.
33:14And so, like, if we do have a real bull market again, where we get that one standard deviationor more above the mean, like maybe an 80% drawdown happens again,it doesn't necessarily mean they're over just because we didn't have it this time.Exactly. Exactly. Yeah. And that's, and I think that I, I just, I believe that it was mute at this time. And then we had that, then we had that October de-leveraging. And who knows what, who knows what, you know, Jane Street or whatever was involved in that. Who knows? But that was significant. And that was just, that just ended it right there. So. Yeah. Yeah. That, that October event is quite interesting because it didn't get talked about that much, especially not in Bitcoin.circles. I think it was more of a crypto thing than a Bitcoin thing. But I do think that was a big,like a part of the impetus that sort of called the top for Bitcoin. Like, I don't know exactlywhat happened, but I think something significant happened there. I do too. I don't know exactlywhat happened either, except it was obviously a massive de-leveraging event. People who had a lot of
34:15leverage got wiped out. And I don't know if, you know, it's hard having been on Wall Street for 30 yearsto not think that something nefarious was going on there. Because,I've seen it so many times that somebody, you know, a few bad actors decided they were just going to wipe out everybody and make a massive amount of profit on it.Maybe that's what happened.Yeah.It could have just been just a terrible event that people got, too many people got over their ski tips at the same time.And when that happens, though, I mean, it even happened.Look, you didn't need for there to be a bad actor.
34:55out in the UK when you had that guilt drawdown,when their pension funds were blowing up.Yeah. What you had was a, you know, a finance minister with a big tax cut with no plan to pay for it.And then sellers were just like bondholders and we're just like, I can't hold this thing.Who knows how they're going to pay for it? The inflation is going to go through the roof.They're going to print a bunch of money. Who knows? And so they sold and that tipped off.a cascade of sellers.And when you have something like that, the way that was structured, which was not too
35:32dissimilar to what we see in Bitcoin sometimes, is you had those, the leveraged debt instruments,basically, that were giving the pension funds a greater return on low volatility assets,the gilts.And so they were levered on top of that asset itself.And when the asset was drawing down,they were forced to sell that asset.And so when they had to sell it,when they had to sell their guilt,
36:05then it forced other players who were on margin,other, you know, who had these leveraged debt instrumentsof the derivatives.It forced them to sell.And so it was a cascading event.And so you don't have to have a bad player for that to happen.But man, it does sometimes does,seem a little bit, you know, there's sometimes where there's smoke, there's fire in Bitcoin
36:32typically is what it seems. So, but recent hardware wallet vulnerabilities have definitely made merethink my entire security setup, as I'm sure it has for a lot of Bitcoiners. And the uncomfortabletruth is that no single security product can promise they'll never be a problem, which is exactlywhy the design matters. BitKee is a self-custody hardware wallet that uses three keys created in threeseparate environments. There's one on your phone, one on the Bitkey hardware itself, and one on asecure BitKee server. Two of those three keys are required to sign any transaction, so a problemisolated to just one key is never enough to move your Bitcoin. So if you are rethinking yourset up right now, as I'm sure a lot of people are, you should really think about the BitKee.
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38:14Anchorwatch is your custody your way.So visit anchorwatch.com to get started.That's anchorwatch.com.I imagine you think the bottom is now in for Bitcoin.What do you think the next sort of 12 months will look like?I think the bottom is in barring some, again, some sort of de-leveraging event across the board.I don't think there's going to be one in Bitcoin isolated.But if we do have a drawdown, let's say that we get one of these, one of the, say,
38:45the peripheral players of this AI.trade that is not an anthropic or a chat GPT or I'm sorry a open AI or SpaceX or even Microsoftor anything but what if we do get a big player that that is just big enough but is not at thecenter that trips a covenant on all this debt that they're taking on to facilitate this this buildoutwe could have a massive drawdown it would be that would be more of a you know wouldn't even be ait wouldn't be a black swan.I mean, it would be like an off, off white swanbecause people be like, oh, yeah, of course, you know.
39:27Of course that was going to happen.So, but if we had something that was unexpected, let's just say,and the whole market drew down from it, Bitcoin could draw down with it.So that's the caveat.However, I do believe that the bottom is inand that we are back in that expansion cycle for Bitcoin.I also believe that AI is going to continue to expand.You know, more money is going to get put into it.
39:54These companies are going to continue to be profitable.I don't believe in the productivity miracle that they talk about,but I do believe that we're going to continue to march forward here.There will be rotation and rotation and rotation,but I believe that we will still march forward here.It's kind of like in the, you know,there could be a short,short-term drawdown like we had, that wouldn't be as painful as the AI, as the tech bubble,
40:22back the internet bubble way back when. But that was different. I mean, those companies weren'tmaking any revenue. And people were just like, oh, pets.com. Here's, you know, billions of dollars.And it is like, there's no distribution, like, they don't have a distribution network. Like,what are you thinking, you know? And so this is different. This is a, I don't believe it's like that.So, you know, I do think we just march forward here.Now, what does that mean for Bitcoin is what you're asking?Yeah.You know, well, the biggest unknown right now is the election.
41:02That's what's right ahead of us.Okay.That seems like one of the catalysts that could cause a drawdown on the AI side.If the Dems do a clean sweep, they're the anti-AI, anti-Data center,Like, I wonder what that means for markets,when everything's driven by these AI trades right now.You would think, but the market loves gridlock.They love it when we have a split, when we have a split in DC.
41:30Whether you have the executive branch and the White House is one party,and Congress is another party, or maybe the US,the House is one party and Senate is another party.Like, they just like gridlock.Because it's safe.It's safer.Like, nothing's going to change.It reduces uncertainty, right?
41:51That makes sense.You get certainty because you know nothing's going to change because it can't.Yeah, it just goes back to glacial movement, you know.And so that's one thing.And then remember the, remember who's at the helm of these companies?Like, they're massive Democrats, you know?Like, they're huge supporters of the Democratic Party, all these big companies, except for SpaceX.So, and Elon.
42:19So that's another thing is that that's, okay,if they have a clean sweep, would that be bad for Bitcoin?Well, it's not like, you know, it's not like the clarity act is, I mean, that's, that'skind of, it's kind of passed.I don't think that that's going to not, I mean, it's, it's been put on the side or wayback burner now.if it gets if it's on the side burner now if we if we get a if we get a clean sweep and democrats takeall of congress then that gets put on the the no-do list you know um but likely uh so what do i think
43:02happens to bitcoin the only thing that i think would be bad is if you somehow had the anti-cryptoArmy had resurgence, you know, if you had one.I don't think that's coming back.I don't think so either.Their attention's on data centers right now.I agree. I agree. And their attention is on that.And then so they're going to want to put regulation around it.You're going to put red tape around it, you know.
43:27So we'll see.But I agree with you.I don't think that they're going to come back.So more certainty.The other thing is, okay, so that's one thing that's right ahead of us.just a couple weeks away.The other thing is,it's being long drawn out,
43:44is the war.That's a big uncertainty.Like, what is going to happen with this thing?I mean, you're hearing all kinds of freakoutswith the leaders across the Western world.You've got, I don't know what they've said out in Australia,but basically all across Europe,they're telling their citizens that have three days to,
44:05three to 30 days of food and waterin their house and at the ready because they you know you could have aa situation where they they bring down the power grid and the power grid goes downthen eventually water goes down all that stuff you know you had the United States evensaid all military bases have to have their 90-day ability to to exist without any poweror food and water of course it's got people freaking outhere a little bit too.So there's uncertainty there.
44:42And what would that be from?Who knows?Who knows what that would be from?That would be a massive Black Swan.But if we can get, let's just pretend we don't have that.And if we could get a resolution here and oil prices can come down again, well, that frees up the Fed to just back off.The prices are going to come down.One of the issues here is that.
45:08that as your listeners are smart enough to know,is energy feeds into the price of every good and service.And so it's a massive portion of it.And so once you bring down that cost of energy,as of now, the producers have been eating a lot of that rise in cost.They've not been passing it on to consumers.But in the next three to six months,it's going to get passed on.
45:35And so that's where the Fed is kind of,hat, going, how much more is this going, like, are they going to be, start passing this onthe consumers if they are, then we're just going to have to, we're just going to have to crimpdemand, like, because then, which I think is wrong. It's, I think it's an error, be a policy error.I agree with Anna Wong on this one. She's a Bloomberg economist that I actually see eye onon all of this in the Fed, and she thinks that they would be making a policy mistake. I believeI hadn't seen her latest posts, so I don't want to speak for her.But, you know, that's kind of where we're at with Bitcoin.
46:17I think that we get that resolution.You get oil prices come down.That means interest rates will come down.That means the fears of inflation getting out of control will come down.And then, of course, we wouldn't be driven into a recession.And that's another fear.Driving into a recession, that means that we're going to, that deficits blow out.It's really bad for borrowing.
46:45And then it means that, you know, we have to put out even more debt to pay for that gap in spending for the government.And then interest rates go up.And it's just, it's this vicious cycle that, I guess today's word is vicious.But it's that cycle that, you know, we're,that they obviously want to avoid.And that's why you get, like today,even after he had his press conference,you have Besant out there saying that, you know,
47:20right now we're getting an energy supply shock.He said this and he said the Fed ought to be looking at thatand have an open mind about it,which feeds right into Lynn Alden's argumentthat we are firmly in fiscal dominance.Why does she say that?Because you've got the U.S.has Treasury directing the Fed to say, hey, be careful.
47:41Don't make it worse for us, you know?Now, I don't think he's directing him, but he's saying it out loud, which is, wow,you know?Yeah.So excluding Black Swan's, are you thinking your site still set on sort of 4,500K Bitcoinin the next few years?Yeah, I would say that we're going to top out somewhere around 29, early to mid-29, it's my guess.and I think it would be, you know,
48:09my base case would be somewhere around400,000 then.Now, that's come down.It's come down from two years ago,and I thought that we would be hitting a million dollarssomewhere around 2030, 2031,but I think that's going to be the next cycle.And once we do get four or five hundred thousand,
48:28if that's where we end up in that,I mean, Danny, we're talking about big numbers here.I mean, you know,300 it could be 600 who knows but my base case around four or five hundred if we do hit thati do believe we have another regular drawdown and that's going to be that's going to be a 60 70percent drawdown um it won't be 70 80 90 percent but i do think it it uh it matches kind of what weit's probably going to be bigger than this last one because it will be a largerdeviation from the mean on the upside um which means that you'll have a larger deviation on the
49:04the downside or you'll have that you'll have that larger number um total peak to trough because you'llhave your typical draw down on the downside and so the peak to trough will will be larger that makes sensei'll take three four five i'll take any of those numbers they all sound good to me that sounds great to mecan can we talk a little bit about what wash did earlier today your time um because he came out theythey didn't do anything with rates which i think everyone expected but the interesting thingthere was, there were two dissents, I think, two people who wanted to hike rates in the committee.So do you want to just fill everyone in with what actually happened today?Yeah.
49:42So if you look at, if you look, they always put out a statement.So the Fed always puts out a statement that is a red line from the last statement, basically, you know.And so sharing all kinds of stuff today.I'm feeling, you know, I'm in a sharing mood, Danny.Let's go.So this is the statement that they put out.So the first thing that happens is you hear, okay,what did they do?
50:10Did they raise rates, lower rates, stay the same?What happened?Okay, so they held steady.They didn't raise, they didn't lower.Fully expected.It was a very low probability they were going to raise rates.Okay.So then the next thing you do is you say,
50:26okay, what did the press release say?And this is the press release.It's very short.Like this was two or three times.this size when Powell was out there, the wordy lawyer,the wordy attorney.Is this because they don't want to do forward guidance anymore?That's what he says, but everybody's out there still talking,
50:41and he even admitted that, you know?It's like, there, it's, okay, we're going to come to that,but yes, that is a very big part of all of this,is that he wants to get out of the game of forward guidance.But he also recognizes that without forward guidance,you know, the marketit is kind of unleashed to do its own thing.And he also wants to control that narrative too.
51:09You can just tell by his words.And now the other governors and officials are out there every single day.Okay, so what's important about this?Well, first of all, the, you know, they maintained, okay, that's obvious.You know, that's an easy red line.This one was interesting.So he said, economic activity is,expanding at a solid pace last meeting. And now this time they said strong pace.
51:38That's a, that's a, that's a, that's a, like a more powerful word than solid.Yeah. Strong pace. Okay. Huh. Now, we're going to come back to that one because this was interesting.So now you said, okay, the accumulation of more information. Basically, they said,they want more information to help determine the next meetingis what they're saying, basically.They're saying, we want more information before we do anything.So we're going to hold Pat.We're not going to do anything until we get more information.
52:10Okay.Voting against the policy action would Lisa Cook and Beth Hammack.No surprise here.Lisa Cook, interesting.Because this is kind of a switch for her.But why would you make that switch?Why is she become more hoax?wouldn't she just love to raise rates right before the election on Trump, you know?
52:34Wouldn't she?So he's a Democrat.Trump is trying to, he has to have her removed.So, remember?So we won't get into all that.I'm, you know.So there's some politicking in half.Yeah.
52:48So, and then I think there's maybe some politicking here.Like to say, hey, look, economy's doing great.but we don't need to do anything.Wait, you're kind of talking out of both sides of your mouth there.The economy's doing great.It's expanding at a strong pace while inflation is well above the target.Inflation is 3.7% versus the target of 2%.Okay.
53:12So that's the first thing.Do you look at this?You kind of scratch your head.You're like, strong pace, but they held pat.Okay.And then that was mildly interesting, but that's about it.No real big deal there.Okay.
53:23So then you get into the Q&A.Well, can I just ask one quick question on that before we got into the Q&A?Like, how unusual is it to have dissenting votes in this?Well, it used to be highly unusual, really unusual to have dissenting votes.But the last few meetings, we've had dissenting votes.And so which, to me, I feel like that is a healthier Fed.You know, that means they're actually debating.You've got people who are willing to say no.
53:55Whereas, you know, past chairs have almost insisted that, hey, we got to all be on the same page here.It's got to be unanimous.So, but it's becoming more regular.So that's interesting.Is it politically driven?Because, you know, let's face it.There's no arguing that Trump is an extremely, you know, he is a, you know, he is a,he's a kind of person that, what's the word I'm looking for?
54:32He's possibly the most polarizing figure in the world right now.That's it, yeah.He's extremely polarizing.Sorry, it's late here.It's getting to the time where my brain shuts off.But yeah, so, you know, but he's polarizing.Of course, you're going to have some politically driven stuff.So to answer your question.
54:52But then you get into the Q&A.And here's the, you know, he gets up there,he's like, one question each, that's it.If you ask two questions, I'm gonna choose which question to answer,you know? So very like hard line on that.He keeps saying, we don't wanna be up here,giving a ton of guidance, we wanna just be,we wanna do our job and not, you know, be moving markets.
55:14Of course the market moves the moment he opens his mouth.They're like, okay, is he dovish, hawkish?What kind of hold was this?Which is just a ridiculous thing, like,well, this was a hawkish hold.Oh, come on.Like, really?Like, that's where what does that mean?
55:31What does they mean?So, anyway, so the long and short of it is he mentioned that 2% target over and over and over again.But the reality is he didn't come out saying, look, we held, but we were really close to, you know, raising here.And we know we need to raise.He didn't say that.He said, we need more information to decide.Why did you say that?Well, because of the energy impact to these prices.
55:59That's why.And he's like, I think without energy, you know, Scott percent is right.That without the spike in energy, it wouldn't be as bad.And of course it wouldn't be.You could see in the numbers, you know.Doesn't mean that inflation is not still above that 2% range.It is, even with the energy impact.It still is above it.
56:22But I don't think it's that far above where,it needs to be like the rates don't need to be much further above this to to compensate for that or toaccount for that so anyways um you saw on the market that the market kind of responded with bitcoinwas like ah okay okay um they're not coming out guns of blazing they're not going to be raisingrates in our face for the next you know there's still only a couple of of rates that are therise, you know, raises that are in the books that are penciled in for next year, you know,one in December, maybe another one early next year, and then kind of hold.It's not a lot of, I mean, 50 basis points is not that big of a deal, you know?
57:10Yeah.25 basis points is almost nothing.So it kind of calmed people down, I think, and now we're going to get the reactionin the markets tomorrow, so.But, I mean, it seems like everything really hinges on the around.situation. And if there was some kind of resolution there, oil prices presumably come down,and then the game is kind of completely changed at that point. I don't know if this is silly,but if Trump wants to have any shot in the midterms, surely he has to try and bring that to
57:36some kind of conclusion very quickly. I don't know if he will be able to or if you can.I think he's already conceded that he's not going to be able to get out of there. And so,you know, there have been reports that were ramping up our military presence there. You know,So I would have thought.And I actually said this.I said this months and months ago.I said, first principle, he's not going to continue this.He's going to get out of this way before midterms.
58:02Yeah.Man, you cannot predict what that guy's going to do.And he's polarizing and unpredictable.It's just reality.And so will the Republicans suffer for it?Likely.We're likely going to suffer a number of seats.and whether the Democrats sweep because of it,
58:22if they do, it's because of that.People vote their wallets.They just, if they're getting killed at the pumpand at the grocery store and on their car insuranceand all of that, they're going to be like,and people say, well, okay, say,well, how does car insurance?Like, that doesn't, like, energy doesn't affect that.
58:43Sure, it does.Because who, like, how do you sell car insurance with people?And he had to pay employees and wages have to go up to compensate, you know.And so it's slower.It's much faster at the pump, but it's still, it makes an impact.So obviously when Walsh was brought in, the idea, sort of the thought process was that rates were going to get cut.That's what Trump wanted.He brought Walsh in to do that.
59:09And so far we've had at least one rise, one hold, and it looks like it's going to be another rate hike in December.Why?Like, why is he not playing the game?Okay.Well, Trump is out there, so much of this is political, right?Trump is out there saying the Fed's got a lower rates because we need mortgages down.We need car loans down.We need borrowing rates down for the American people.
59:35They can't get a mortgage if it's at 7 or 8%.Okay, that's great.What happens if the Fed lowers rates?We know this.The Fed lowers rates in the face of high inflation.What's going to happen to mortgage?The year's rise on the 10-year.Exactly.
59:50We saw it right when they were clearly political the last time they did this,when Powell was lowering rates right before the election.I see what you're saying.So there's almost like a paradox here where they lower rates,but yields rise, therefore mortgage, actually go up, not down.Correct.And he's, of course, of course, Warsh and Bessent have had conversations about thiswith Trump.
01:00:17And that's not collusion, really.It's just like they're...It's cunning.Yeah, they're like,dude, if we lower rates here,that's not going to help.You know, go ahead and bash me.I don't care.
01:00:30And, you know, and he's got his out.We have dissenters, you know?Like, we have a free Fed.And so now Trump can say,oh, we've got, you know,hardline,Democrats on the Fed that want to raise rates to hurt me.And I'm like, okay, whatever.
01:00:50So, but yeah, that's why.And so they're not going to play along, meaning we lower rates.It could have the opposite effect and it could make it worse.So they're stuck in a position now where whether they lower rates or raise rates ispotentially bad for inflation.Correct.They're stuck.Everything leaves inflation.
01:01:14And you could have a situation where you have the economy rolling over because of, you know,because AI starts taking a bunch of jobs.And in that transition, you lose a bunch of jobs.People try to figure out what they need to do.Like, there's a transition period.I don't believe that it's catastrophic.The AI is taking everybody's jobs.Oh, my God.
01:01:36And everybody's going to be, you know, unemployed.No, I think that there could be a situation where you have transitions.And so instead of, you know, instead of being the operator of a horse and buggy,you got to turn around and you got to figure out how to be an operator of a taxi cab.It's different, different skill set, different hiring process, and you'll have to figure it out.But not a perfect example, but what I mean by that is a change in technology.It doesn't necessarily mean you're going to lose all these employment, but it just changes it.Yeah, but there will be a transition period.
01:02:12Okay, so that you've got to slow down there.at the same time that we're still out in the Middle East in this conflict and bombing Iran.And God knows what happens with the Strait of Hermuz.Oil rips up to $200 and prices are screaming and you're back to 1980.And so you'd say, well, in 1980, they just squashed demand.It was easy.They raised rates to oblivion to 16, 18, 20 percent.and they squash the demand.
01:02:46Well, we've all seen that chart of the inflation,how it's tracking exactly like the 80s, right?70s, 80s.But we didn't have the debt problem then.We didn't have the debt problem.So we have $13 trillion of debt to refinance next year.Debt and interest payments that we have to refinance.And we have to basically finance with debt, more debt,
01:03:11refinance it, okay?and $2 trillion plus of deficits.So you have $15 trillion that you're going to refinance here.Can you imagine if the Fed raised rates to 15%,not the 20, but say they raised the 15%because inflation got out of control.Inflation gets up to 7, 8, 9, 10%.Can you imagine?
01:03:36I mean, on $15 trillion,if you raise rates by another 5%,That's $750 billion that's $750 billion that you're adding to the deficit.They just can't do it.I can't do it.So what happens then?Well, man, tough situation.You have inflation.
01:04:03You better own assets.You better own assets.What kind of inflation are you talking about?Like high single digits, double digit inflation.What do you think is the most likely outcome?Who knows?I mean, it depends on how bad the conflict isand how bad energy prices get
01:04:20and what happens to supply chains.If it gets high enough,then goods and services start, they constrict.So you get fewer goods because the manufacturer,like, well, I can't make as many because it costs so much.So there's not as many.Prices go up.It feeds on itself.
01:04:41So it all depends.It really does. But back in 19A, I could tell you it was painful. It was brutal.Man, we sat around. I cannot tell you how many times I heard, we can't afford that.We can't afford that. We cannot afford that.Do you think we're the Rockefellers, Money Grows on Trees? These are all the things that they said in Gen X.All my Gen X friends remember all of these sayings because pretty much every middle class family was saying, we can't, we can't afford that.Are you kidding? We can barely afford gas.this week. And we can't even get it next week because, you know, we have an odd number at the end
01:05:20of our license plate and we're rationed out. We can't get gas for another two weeks. It's scary.It sucked. It's brutal. I remember them like my parents are like they were trying to refinance ahouse because, you know, just to get us into better schools. And man, they're like,mortgages are 20%.But do you still think thatmoney printing in some way,whether that's QE,yield curve control,
01:05:51whatever format it happens to be,is inevitable.And then the question I want to ask with thatis like,how long do we havebefore money printer has to turn back on?Right.That all depends on the severity
01:06:02of a drawdown and the cause of it.But, you know,for the people who are listening saying,so what,$100 trillion of debt?Who cares?You're never going to repay it.Right.
01:06:12But you are going to pay it.the interest on it and you have to constantly refinance all of that. So we're interest rates,you know? So if you got interest rates at 5%, and we've got $100 trillion of debt, even just$80 trillion, you know, you're talking about $4 trillion of interest payments. Four trillion.I mean, like this is...And we're talking about getting to $80 trillion within 10 years. But that's also inflationary. Thinkabout it. Where's that money going? That money's going out to the borrowers, right? So who are theborrowers? The asset owners? Right? So, like, it's going to be a very, I'm sorry, who are the lenders?
01:06:58Sorry. So, you know, so the borrower is the treasury. And so that money just feeds back intomoney market accounts,your investment accountthat all your cash is sitting inis getting those money market rates and they're buyingT-bills for them.So anyway,but your question was about
01:07:23when does the money printerget turned on?Well, tell me what thedrawdown is. Tell me what theshock to the system isor thedisruption to thethe system if you have a if you have a a drawdown like we had in september 2019 which was not a drawdown in the market but it was a
01:07:50shock to the credit markets which is the repo yeah we talked about this the repo market shockwell a shortage of dollars and uh and the need for more liquidity well then the fed comes in and juststarts doing q e um at a paythat is commensurate with the need for the liquidity,whatever that need is, which is not that big.You could see it when you go and look at the expansionof the Fed balance sheet, you know, man, I really amin a sharing mood here, Danny.
01:08:28So if you, let me pull this up so you can see it.Okay, so if you, if you, if you,Look back at that time.Here's the expansion of the balance sheet when you had the repo crisis in 2019, September 2019.It was pretty gentle during the repo crisis.Then you have.Yeah, pretty gentle, pretty gentle.Lockdowns on COVID.
01:08:53My God, here come the money bazookas.Completely different.So what's the, I have to understand what the, either the shock or the need for the quid be is.If it's a credit crisis that's run-of-the-mill kind of vanilla, this was serious.Don't get me wrong.They turn around and pump liquidity in quickly.They stopped QT and started QE like in hours.But that was a serious situation.
01:09:20But it's nothing like this.So, you know, that's really what depends on.Do you think that could be a form of yield curve control?Like we see rates now in 10 years across the world, like I think almost everywhere is above 5% now.Like, what number does that become an issue?And you think that's the most likely place they step into the market and try and juice things?Yeah, a lot of people say there's a line in the sand that's been drawn that, oh, it can't go over 6%,can't go over 7%, whatever it is.
01:09:47I don't know where that line is.You do the math.There's a line somewhere where they're like, oh, we've got to stop.But what I think is we're already at the line of nervousness, which means that that's why Bissent is out there buying bonds.Okay, it's not a lot.He's buying $5, $6 billion a bond a week, whatever.Not that big of a deal.Okay.
01:10:12Add it up over the course of a year, it does add up.It's not nothing, you know, $250 billion with a bonds or whatever.But it's not nothing, but it's not a lot, you know.So, but what is he doing?He's adding liquidity to the market by taking out illiquid bonds that causevolatility in the market and it's just any you want to putting you want to putting papersecurities in the market that are much more tradable um so it's just healthier for the markethealthier for the overall treasury market he already called it you know quasi twist because you
01:10:53you've got the you've got the him out there um doing that while the the short-term rates aregoing up while basically what they're doing is they'rethey're using short-term treasuries, the T-bills, to finance the government while they're buying.So they're selling those while they're buying the longer-term bonds, the illiquid bonds.It's a quasi.He said quasi-twist, I think, was exactly what his words were maybe six or eight weeks ago.So that's what they're doing.and it's a tiny amount.
01:11:36The Fed is out there.They had been putting liquidity into the market, raising the bank reserves.So we don't have a repo crisis again, like we saw in 2019.They're getting ahead of it.So that's the point.So the line of the sand is kind of, I think it's, we're in that, we're in the area.Okay, so it's not really, we're on that beach.we're currently on the beach that they're concerned enough that they're out there doing some things
01:12:07talking a lot about it managing the you know the expectations even though they say they're not going tobecent is out there every day he is out there every single day talking i yellam was out there a bunchbecause we had a crisis but other than that do you remember a treasury secretary out there talking so muchmanaging this, like, they're out there.And so, you know, I think that line of the sand is really more of an area of the beach andwe're in it.And they're just trying to get ahead of it and say, okay, we're going to manage this.Trust us.
01:12:46We're going to manage this.Have confidence in this paper.We're going to manage it.And then when you get a flight to safety like you got when AI stocks had a drawdown recentlyin the last few weeks.then you get a flight safety on the long bond,like we talked about.Pretty good trade.
01:13:06Long term, I would not want to hold these things for 20 years,but 20 days on a trade on this,it's a flight to safety.It's what it is.And so that's what you saw in the 10-year.And so that's kind of where we're at.And so what's the sort of key takeaway here?Is it that things are very hairy right now,
01:13:24intervention in some form, who knows when and how,but intervention in some form is coming,and you better own assets,you better own Bitcoin.Yeah, there's two things.Intervention is already happening on a very small amount.It will get a large intervention if we have some sort of event.That's number one.
01:13:46Number two is at some point, Danny, in the future.And I don't know when this is.And again, I'm not a duma.I don't think it's tomorrow.Larry thinks it's on a shorter timeline than I do.Larry Lepard, who wrote the big print.He believes it's on a shorter timeline that I do.Is it in the next three years?
01:14:11I don't think so.Is it the next 10 years to 20 years?Man, Jamie Diamond said it today.And this is the punchline, is that the United Statesis in an enviable position of having the World Reserve currency.But that is,not something that is a requirement, you know, that is not, that is not ordained to us, the UnitedStates to have that power of currency. And at some point, let's pretend, Danny, that we do get an
01:14:50explosion of deficits and debt, and you get to $100 trillion a lot faster than, you know,2040, let's say it comes in at early 2030s,if something happens and you get an explosion,at some point you get a loss of confidence in the U.S. paper,and you don't want to lend to the U.S. government anymorebecause you know that the dollars that are coming backare significantly,have significantly lower purchasing power than they did when you lent them out.
01:15:23And at that point, the loss of confidence occurs.No currency has existed forever.You are talking about the end of the dollar, at least as we know it today.And so when you said Larry thinks this happening on a shorter time frame, you don't know if it's next 10, 20, 30 years.Is that what you're talking about, the end of the dollar as we know it?I'm talking about the end of, yeah, the end of the dollars you know it through the debt-based system that we're on.What does that mean?I think it's a lot of chaos.
01:15:54And I don't know, you know, there's a lot of other currenciesthat will be in trouble before this.Oh, yeah.The euro is straight up the middle.Basically, every other currency, except maybe the Swiss franc.I don't know, because they're not part of the euro.But, you know, there will be a fight for the global status,and I don't know what that ends up being.
01:16:16There may be a, we may not have a global reserve currency anymore at that point.But the reason for it is the debt.it's because there's a loss of confidence in the debt.If you don't want to hold the debt,then you're not going to hold the dollars.So good reason to earn a moneycompletely outside of the system.Good reason.
01:16:35Is that why that scares them?Maybe.Maybe it is.And by scare, you know,I think there's a lot of people up in D.C.who just don't understand it.There's plenty of people.Clearly, there's plenty of people in Europe
01:16:49who don't understand itwho are in the ECB or, you know,know so does that mean that they're going to fight it well I think we're past that pointI truly believe that we're past the point of governments fighting this thing it could it besusceptible to a you know some sort of quantum attack the moment that quantum is able to do it is thatlike first on the list maybe but that would come from a nation state player that that wasworried about it and did not have it cornered enough to use it for its own good.Meaning if the U.S. had a reserve, a Bitcoin reserve, then they would likely want to see Bitcoin
01:17:40survive because it would help the balance sheet of the United States. And that would help thedebt for a long time. But, you know, I think that quantum and, and, and, and, you know,AI. I heard Lynn say this in a snippet somewhere. And I think she's exactly right that Lynn Alden, for people who are listening who don't know.I think that, and she said, AI threats have basically leapfrogged quantum recently and to any existing protocol and system.And so you're seeing it real time nowwhere J.P. Morgan and other banks are like,oh, you can't have agents doing banking business for you.That's just, that is not safe because they're not,
01:18:33they don't trust the agents won't go in and wreak havocand somehow get into the system and whether it's steal money or whatever.To me, that would be the first attack vector, which is banks.I mean, people are going to want people's money.They're not going to, Bitcoin's much harder to, to steal.Like, you have to, you have to somehow socially engineer an attack, which is what, what basically happened.Well, coal card is a different issue, but with, with the ledgers, right?They, basically, they got into the distribution.
01:19:14The supply chain.Yeah, the supply chain.So, but, but anyway.But anyways, so I think that would be, I'd be much more worried about having a lot of cash sitting in a bank than I would having it on a bunch of cold wallets or, you know, in, in Bitcoin somewhere, you know, in an account that is a custodial account somewhere with with multi-sig protection.So it's, if you take all this to account, $80,000 Bitcoin sounds cheap as hell.Really cheap.And that's, and that's the, and that's the thesis.And every time that I get, you know, fatigued with it and like, what is going on here,
01:19:59I just think I don't have a, I don't have a better place to have my main investment vehicle,especially with the hedge fund.Like, I think it's, it's, this is.I don't see how this fails,especially with everything we have going on here.But remember, there's a lot of distraction out there, Danny.You know, Microsoft did a study back in 2015.And if I remember correctly, a goldfish,
01:20:34I'm going to look this up, so we get this right.A goldfish, here it is, has an,nine second attention span, okay?And so Microsoft did a study years ago,I think it was almost 10 years ago,that human attention span had dropped from 12 seconds in 2000to eight seconds.Damn, we're below the goldfish.
01:21:07We're below the goldfish.So the distraction level on these things is, it's relentless.I'm not on TikTok, but I know people who are addicted to it.Nobody in my family is, thank God, but it is just scroll, scroll, scroll, scroll,hours and hours and hours at a time.People are so distracted.And they're distracted with either that or just trying to make enough money to surviveto pay their bills, pay their mortgage, pay their insurance, pay for the food, pay for the gas.
01:21:38They're distracted with that.And, I mean, it's not where they're focused on that and not focused on anything else.I don't have time to focus on what's the best place to have my money, which is why you and I aredoing this work to make it really easy for them to just listen to this while they're working outand get an idea of how serious the situation is and why our thesis is that Bitcoin is the bestplace to be for the next 10 years. And guess who agrees with us? J.P. Morgan. Let's go.It kind of gets back to the start of the conversation when we're talking about a lot of peoplebecoming fatigued with Bitcoin. I understand why. And I think so much of that distraction that you see
01:22:17online algorithms, a lot of that's engineered. And now's not the time to be fatigued. Now's thetime to lock in. I think we're still so early. So early in the Bitcoin story, I think price is goinga lot higher. I agree. It's been a good episode. I appreciate you, James. Tell everyone why theygo to read your newsletter. It's one of the best ones out there. Thank you. It's called The Informationist,And I talk about all these things in very approachable language.Not AI.I write every word.I do use AI to help me research some stuff and to make charts.
01:22:53Graphics.But beyond that, I really like the process of writing itand making it easy for people understand.And that, you can find it just at James Lavish.com.There's a free version that comes out every month.And there's a paid version that you get all every Sunday.And then if you're an accredited investor and you're interested in Bitcoin and investing the Bitcoinspace, I've got the Bitcoin Opportunity Fund that I'm co-managing, and we're open and we have a
01:23:22second fund that is open for new LPs. And so if you're interested in that and you think it mightbe right for you, just go to Bitcoin Opportunity.fund and reach out to us, and we can get on a calland talk through it and make sure that it's something that would be appropriate for you.We don't think it's appropriate for everybody, but it might be for you.And we're always looking for good LPs.But yeah, I appreciate you.Have me on, Danny.It's always good to talk to you.
01:23:52You know you've got an open invite, man.It's always great.And that's exactly why I love the newsletter.It is super-apportable, even for normies like me.So don't subscribe.Thanks, James.It's been awesome.I will definitely speak to you again soon.
01:24:05Like's why. Likewise. Thanks further.Let's go.
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