What Bitcoin Did - Why Everyone Is Wrong About Inflation | Ansel Lindner

Episode Date: April 15, 2026

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The credit-based system is going to malfunction. It's not going to work as it once did. Boom. Inevitably, bus. What would happen in a deflationary bus situation? Pretty much that means everything goes to zero. Credit goes to zero. The supply of money actually goes to zero.

Everyone defaults simultaneously. There's no more money and liquidity to go around. It's all wiped out. Do you still see this as being something that could cause the end of the Fiat system? Yes. but it won't look like hyperinflation or hyper deflation even. I think of what it's going to look like is countries backing their currency with Bitcoin. There's very low trust in the world.

Bitcoin fits perfectly within that new system. As soon as Bitcoin finds its legs, I think it's going to happen pretty fast. Ansel, good to see you, man. This is the first time we've met. I've had quite a few people reach out saying I need to have you on the show. So welcome. Do you want to start with a bit of an introduction about who you are? Yeah, thanks, Danny. It's a pleasure. I'm excited for this talk.

Yeah, so Ansel Linder, I've been public in Bitcoin going back to 2016 with the scaling conflict, started a podcast back then. And right when the user-activated soft fork dropped that night, I made a podcast and said, this is how Segwit's going to get adopted. So I was on top of the scaling conflict back then, more from an economics angle than anything else. And then I just been, there's been a few hiatus, you know, breaks in my content over the years, but I've been producing content for this whole time. I concentrate on economics, of course, the macro of Bitcoin. I also have a background career in the military.

And so this stuff around Iran and different things that have been happening recently, you know, with Venezuela and then Iran, kind of have some insight there as well. Yeah, we should get into that because, like, as you said, you sort of concentrate on the macro side, specifically. And this around war seems to have changed everything. And there's a few things that have come out of it from a Bitcoin perspective that are particularly interesting, especially in the recent, you know, the last few days really. But from a macro side, has this changed the entire picture, this war? No, I don't think so. I think it's a continuation of where we're going. So I think we've been evolving away from this post-World War II era into something new.

into a de-globalized sort of paradigm. And this is just one more step along the road. And we're going to continue down this. I mean, the next one is going to be even crazier, and people are going to say, is this the breaking point? Is this the breaking? No, it's just we're stepping down the road towards de-globalization. And I think it will continue.

So I'm not surprised at all that this is happening. I mean, it could be anything. I mean, it could be something blowing up in Eastern Europe or in the Middle East. I mean, anything, but that we're going to have these kind of breaks in the old system where we see allies not being allies, trade, not being aligned the way it was before and getting rerouted. We're just going to see all these types of signs of de-globalization, and that's going to take us into the next paradigm. So your listeners might know like the fourth turning, right? It has something to do with that. There's these generational cycles, and we're about, what, 80s?

years since the end of World War II. And so it's right on time for the next cycle. So I think that's where we're at. It definitely feels like forth-turning times at the moment. And like the most interesting thing that I've seen in Bitcoin in a little while, one that truly surprised me is when the Iran government, whoever's in charge there now, said that they're going to take Bitcoin as payment for ships traveling through the Strait of Hormuz. And this kind of plays into that multipolar world thing you're talking about where it's like if you are in a trust, in a situation with zero trust, what money do you use? Like, you can't use the US dollar in that situation.

You have to go to something neutral like Bitcoin. It feels like a really pivotal moment, but I know as Bitcoin as we get sort of excited about things like this, do you think it is a real shift? Yeah, I think it's an acknowledgement or maybe a wake-up call for people because this was inevitably going to happen because the dollar system that we've been on. a credit-based system, you have global credit markets, and what happens to a global credit market in de-globalization?

Well, it starts breaking down, starts shrinking, starts contracting, and so you have this financial system that was built for an era of high trust, it's not going to work as well in an era of low trust, if at all. I mean, some countries are gonna be cut off. There's gonna be these multipolar regional, alliances that they might not be trusted by a whole third of the rest of the world or something like that.

And so you need a currency that is able or money that is able to move between these big blocks when there's very low trust in the world. If Bitcoin didn't exist, that would be gold. Most likely we'd go back to gold. But with Bitcoin, being able to be sent anywhere in the world in 10 minutes, very low storage costs, easy to add. assay and all this stuff, then Bitcoin is just really suited for this very specific use case, which Iran has highlighted now. And I think we will continue to see it. I mean, we've already seen the seeds with the strategic reserves in different countries,

different countries mining Bitcoin, even in that era or in that area with the UAE and Qatar and stuff. They're very interested in investing in mining and in strategic reserves of Bitcoin. So I think it's just one, again, it's one more. step down this road towards de-globalization, and Bitcoin fits perfectly within that new system, at least as high-powered money. We might not be using it in daily transactions, but it will be used with international settlement, settlement between central banks, things like that. That, I would think, would be the first thing. And then eventually down the road, we will get peer-to-peer payments.

That feels like the real Bitcoin story in this whole conflict, alongside the fact that it's performed relatively well since the conflict began while everything else was crashing. Bitcoin has been sideways to slightly up during that period. And there's a lot of people that are asking, is Bitcoin becoming a risk off asset? Which I think it's way too early to say that. But it has almost been a hedge during this conflict. How do you see its place in the markets right now? Well, I reacted to, I don't know if you know Michael Green. Yeah. Yep. I reacted to one of his posts a while back about Bitcoin not being a geopolitical hedge. And this was specifically around October 7th. So just going back a few years and that Bitcoin immediately on October 7th, Bitcoin crashed. And I said, well, okay, this isn't really, you're kind of changing the definition of what a geopolitical

hedge is a geopolitical hedge is not necessarily a short position, right? So you have you have a hedge that you take out that is specifically designed to move contrary to something else. But if you have a geopolitical hedge, you're actually trying to get uncorrelated returns. So it doesn't matter necessarily if something crashes and then Bitcoin skyrocketed immediately or vice versa. It matters that over the long term, your returns are uncorrelated. And so there was actually somebody that did a study a couple of years back. I don't know. I cited it in that blog post, but, and they detailed out statistically that gold and Bitcoin are really close to being the same from an uncorrelated geopolitical hedge type of scenario. And so, yeah, I pushed back on that and I said Bitcoin was a geopolitical

hedge at that time. And I think this time, too, it shows that, you know, Bitcoin is not crashing and it's not skyrocketing, anything like that. It's very stable. It's kind of uncorrelated to the craziness that we see out there in the world. So I think very much so that it is stepping out on its own right here as being a very good geopolitical hedge. At least it has to be in the conversation when you talk about gold, treasury bills, treasury bonds, and Bitcoin has to be in that conversation. Bitcoin is, as you know, with Fiat money constantly debasing, wealth preservation isn't optional. That's why I recommend Swan Bitcoin, a team of dedicated Bitcoiners who work with families and businesses to build and secure generational wealth with Bitcoin.

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and that tends to be Bitcoin. And so it is the thing that moves first. And if it's a negative statement or something that the market deems a negative statement, then Bitcoin does sell off. Does that make it a tricky asset to be a proper hedge? Yes, if you're looking for, you know, you want to maximize or you're day trading and you want to make sure that you're scalping as much of the gains as you can. But if you're in it for the long term, I don't think so. I think that that stuff levels out over the long term.

I mean, just zoom out to like 52 weeks or something like that and you won't see any of those real reactions to the market like that. Fair. I do think that's also one of the most interesting elements of Bitcoin in that it is like a 24-7 prediction market essentially. And it does move first. And quite often it will move actually before announcements happen. It's like the way you keep your finger on the pulse across markets. But with this war, we've obviously seen oil prices go through the roof. And there's a load of talk of like inflation coming back in a stronger war. way. And I know that's something that you've quite often talked about and you think that instead of inflation being the concern, it's deflation. Has this war changed that perspective? Not at all. Not at all. It's just made it stronger, I think. So my, my, there's some people out there that talk about deflation as like price is falling. I don't talk about deflation like that. I think it's the money contracting. So the supply of money getting smaller. And what is money today? Money is credit. And so like we just mentioned at the beginning there was global credit markets and how

are they going to react to de-globalization, they're going to shrink. I think about it like a carrying capacity. So the globe has a certain carrying capacity for debt and credit. But if you start de-globalizing, that carrying capacity goes down. So you had to shrink credit markets, and that is actual deflation that's happening. And the problem with actual deflation, is that it spirals out of control. You get hyper deflation instead of hyperinflation. Everybody's been worried, myself included 10 years ago, was worried about hyperinflation, right?

But we didn't get that after trillions, tens of trillions of dollars of QE and fiscal spending and all that, and we still do not have hyperinflation. That's because the overriding pressure is deflationary. So in a bubble, just think about boom and bust cycles, right? Boom, inevitably busts. Right. So you juice the credit, you juice the inflation, you get a boom, and what happens, it busts.

You can't avoid the bust. Even if you try to print your way out of the bust, you can extend and pretend for maybe a decade or something like that, but eventually it's a bust. Eventually it's a deflationary bust. And so I think that's what we're seeing here, specifically with the oil markets. I think that we have a surplus of oil right now on the market. It might not seem that way because shipping is affected. But in 2026, so far up until the beginning of this conflict and all of the forecasts

from most of the major forecasting firms in the oil market, they were thinking three to four million barrels per day surplus. So that means that they would go into inventories, et cetera, et cetera. So the world right now is in a fundamental surplus or glut for oil. That's why when you look at the chart, you see a spike during the Ukraine-Russia kickoff. It spiked up to like 120, 130, and then it drifted down for two or three years. Then we see this spike, and it's going to drift back down. It'll probably be faster this time if the conflict is faster.

I don't think this conflict will last into the three or four years like the Ukraine-Russia conflict has. So overall, we're in a oversupply situation and the U.S. continues to increase its pumping. Venezuela now promises to increase its pumping. Brazil is forecast to increase by a million barrels per day this year. I mean, it's just everywhere you look, the oil market is oversupplied, except for this Hormuz situation. So once the Hormuz situation gets cleared up, which I expected to get cleared up relatively shortly, we're going to be back in that same situation.

Oil prices are going to keep going down. Interesting. But what are you seeing in the broader market outside of just oil that makes you think deflation is coming? I mean, you can look at the bond market, and you can see that, you know, people have been predicting bond yields to, explode and get out of hand. That's what we would see in a high inflationary situation. Even a high risk of inflation, we would see 10% on the U.S. tenure. But we're not seeing anything like that. The kind of pressure is downward. Same with the oil price. Same with a lot of commodities. I mean, commodities have had a little bit of a run here in the last six months or so. But

overall, if you look back to the great financial crisis compared to today, very few commodities are above, you know, 15 years ago, they're all lower. You know, I speak to a lot of macro people, and the general consensus is that inflation is the worry at the moment. And I'm just curious, like, why you see it differently, what it is that you see that makes you go, kind of go against that consensus for you? Because for inflation to be sustainable,

you need to have economic growth. So in a system, in a credit-based system, we're not in a real, technically, we're not in a fiat system or in a credit-based system when you print money if we were in a fiat system and you printed money you would have just assets being put on a balance sheet but in a system we have today you have asset and a liability so you don't have more money chasing the same amount of goods you have more money chasing more goods because that bond is actually tradable and stuff so you don't really have inflation the way that people that talk about fiat that we have inflation like

that. So to have sustainable high levels of inflation and credit creation, you have to have productivity gains. You have to have growth in the economy. If you don't, then the pressure turns from boom into bust and you start getting contractionary forces and that, you know, if the credit market isn't growing, it's shrinking. And so that's the bust phase. And overall, 75 years, building up to now. I think now we're in this bust phase and we can't run away from it forever. We can kick the can down the road, but the overriding pressure is still going to be towards a bust. Obviously, with the people that think that inflation is going to get out of hand, potentially move to the hyperinflation, again, timelines vary depending on who you talk to, but eventually

most people will see this as being like, there will be a time when the Fiat system comes to an end. On the deflation side, is it the same thing, just it plays out in a different way? Do you still see this as being something that could cause the end of the fiat system? Yes. But it won't look like what most people think about. It won't look like runaway hyperinflation or hyper deflation even. I think of what it's going to look like is countries backing their currency with Bitcoin. So a lot of people, they just kind of completely discount the possibility that the U.S.

government decides to back the dollar with gold. or Bitcoin again. I don't see why that would be the case. They've changed it so many times throughout its history. This has been a floating currency experiment for 75 years, and we're getting to the end of that, especially if, say, other countries are like, we don't want to accept your dollar unless you have some other collateral with that, which would be Bitcoin or something like that. So I think it naturally, the end state of this is towards backing of the dollar with Bitcoin or gold, but Bitcoin would be the better answer in my opinion. And what do you think would force a country to do that? Because like they will love having the superpower of being able to print money

with nothing backing it. Like, why do you think they would go back to a hard money backed currency? Credit collapse? Because no one accepts. their money anymore because to do business, you don't trust other people, you don't trust other countries, you don't trust other regions. And so you have to have some sort of asset that's flowing with the money to give it value. And so that's why they would do it because the old, the credit-based system is going to malfunction. It's not going to work as it once did. You know, it used to be where the, you could just, these developing countries could join

system, join the WTO, get access to foreign capital, foreign credit, build up their export industries, export to the world. Well, what if nobody's importing? What if they have to run a bunch of bilateral trade agreements instead of accessing the global market for things? You have to go to this country and this country and this country to negotiate your stuff. It's just a world where if you want your currency to work, you're going to work. going to have to do what the market wants.

And if the market is demanding Bitcoin or a gold-back currency of some sort, you're going to have to do that. You don't really have a choice. I know as Bitcoiners, we like to jump on these things quite often too early. But do you think the stuff that's happening in the straightforward moves with a rant-taking Bitcoin as payment is like a very early sign of that happening? Yes. Yep.

I think it's just a sign of what we're going to say. I mean, like I said earlier, we're seeing some other similar steps. just the U.S. talking about a strategic reserve of Bitcoin is a sign that it's going this direction. Now we have the Iran thing. One thing that I predicted last week in my newsletter is that we're going to see China easing the ban. So they're going to ease their stance on Bitcoin as well because they see that they probably, this is total speculation on my part, but I think that they might view Bitcoin as another attack vector on the dollar. So if Iran can use it, it's an attack vector on the dollar to circumvent Swift and to circumvent these other payment processors and things.

And so they might look at Bitcoin as being a way to attack the dollar at the same time. But in reality, what they're doing is, you know, the U.S. has 300,000 Bitcoins. It has a push towards a strategic reserve. It's kind of in a first mover type of position for governments at least. And so I don't think it's going to hurt. hurt the United States. But that was my prediction is China is the next one maybe that we'll hear loosening their ban. That would make sense. I mean, they've done that before. I could see them doing it again. But the interesting thing there is like you say they may see it as an attack

on a dollar. We've obviously had a lot of people like in the US, the sailors, the politicians, the policymakers in the world saying that Bitcoin can actually help strengthen the dollar, which I've always found very hard to really believe. Which way do you see that going? Do you think Yeah, it can help strengthen the dollar, or is this just a straight up attack? I think it will be viewed as an attack by China, but I don't think it really is an attack. Okay. Being that the U.S. is the biggest, has the biggest government stockpile, I think any adoption of Bitcoin is actually just going to help the United States.

One thing I've said for a long time is that Bitcoin aligns incentives, and I just, I don't see how Bitcoin can be against the dollar. You know, they, it's like saying gold. against the dollar. They're totally competing in opposite realms. The dollar can simply just say, okay, now it's 10 Satoshes per dollar, and that's the exchange rate. That's what we're backing the dollar as, and that's it. So in that scenario, how would the dollar be going against Bitcoin or Bitcoin be an attack on the dollar? I guess maybe I'm wrong in this, but I think my perspective on that would be it only helps the dollar if the U.S.

adopt Bitcoin to a degree. Like, I can see it really helping the dollar if they start doing bit bonds and they really integrate it into the system. But if they try and ignore it for too long, then I do think it's probably an attack on the dollar because it's just like a separate system that the dollar's can flow into. I don't think, to be honest with you, I don't think the people that are buying a bunch of treasuries are worried about if it's backed by Bitcoin or it has some Bitcoin tied to it in the structure. I really don't think they care about that. It actually might be more of a risk

to many of them if that was the case. So, you know, demand begets supply. A lot of times people think, oh, I can build this shit coin and people are going to buy it and it's going to be so great and it solves all these problems. But really, the demand needs to be there first. So the demand for these bit bonds needs to pull that supply onto the market. It's not. not like they're going to offer bit bonds and all of a sudden there's a market there. You have to do the right order of operation. If we do get this deflationary bust that you talk about, how do you think Bitcoin performs during that?

Because in a hyperinflation event or a high inflation event, the sort of pathway for Bitcoin looks clear. Who knows what will actually happen, but you can see, you can project what you think may happen based on like COVID stimulus and things like that. What would happen in a deflationary bust situation? Well, a hyper deflationary scenario, like a financial crisis where you have, remember, during the great financial crisis, and then during the September repo rumble in 2019. 2019, yeah. And I think also in COVID for a very brief period, the markets went bidless.

They had zero liquidity in the financial system. And pretty much that means everything goes to zero. credit goes to zero. The supply of money actually goes to zero, which is very interesting to think about. Wait, what does that actually mean the supply of money goes to zero? Well, because money is credit. And if everyone defaults simultaneously, there's no more money and liquidity to go around. It's all wiped out.

So anyway, so if that happens, I think that's very bad for Bitcoin because people are going to bid for food and water and, you know, they're going to run out there and try to save themselves. But in the long term, in the buildup of those financial crises, I think it's going to be positive for Bitcoin. So Bitcoin is not going to do well in those instant crashes, but it will do well in a deflationary environment. For the same reason why gold will do well in like a buildup to a recession, people start getting worried. They start, you know, squirreling away their money and safer assets, the same aspect is going to happen with Bitcoin. And so, yeah, that's, so the buildup is good, but the actual financial crisis is bad for Bitcoin. So deflation or inflation, Bitcoin wins.

Yes, it actually is an inflation hedge and a deflation hedge. And gold bugs should tell you the same thing. And Bitcoiners should tell you the same thing. So in a system that's built on counterparty risk, If you have an asset that has no counterparty risk, then that asset's going to be bid in a period of deflation or default, I would say. That's going to be bid. So that is the deflationary side. And then the inflationary side, obviously, that's pretty self-explanatory. There's a fixed number of Bitcoin and the supply of money goes up. So the price of each Bitcoin is going to go up.

So, yeah, it's an inflation and a deflation hedge. Let's go. One of the interesting things that happened over the last 12 months or so is that commodities have caught a bid, gold's been flying, silver had an amazing run, and Bitcoin had an all right 20, 25, and then so far a bad 26. Have you been surprised with Bitcoin's price action? Absolutely, man. Absolutely. I thought 2025 was going to be much. I thought by this time last year that we would be, you know, going in the top of the blowout. phase of the bull market, but that never occurred. It's been very tamped down. I mean, it's been how many years and we're still at 70,000? You know, when did we hit 69 the first time back in 2020? 21, I think. Yeah, 21. So five, six years later, we're still in the exact same spot. So I have definitely been surprised by it. How do I explain that? I think it is, options markets. I also think that there was a four-year cycle that a lot of OG bitcoins

that had tens of thousands of coins, perhaps, oh, that's the end of the four-year cycle. We didn't get our blow off top, so I'm going to sell now. And they sold at 100K. I said before we got to 100K, I was like, there's probably going to be significant resistance of people selling at that round number. You know, like they bought in for $10. And then they held, I'm just going to hold to 100K and they held, then they sold. It didn't happen right away, but that whole kind of zone around 100,000 provided a lot of resistance to the Bitcoin price. And so I think, you know, we just have to eat through that supply and come out on the other end.

It's just really hard to think, man, strategy is buying tens of thousands of bitcoins every week and the price is not moving. What's going on? So I don't know. I'd be interesting to hear your take on that. No, I'm the same. I was surprised. And I sort of fell into the camp of thinking maybe this time will be different. And so far at least it's not been. I still think there's the potential that it could be proven different. Like if we have a decent 2026 sort of end of 26, then I still think that. Like the four year cycle, do you mean? Yeah, I think I think it probably still breaks that four year cycle idea. And I don't really understand why the four year cycle would still exist. You know, the subsidy coming online is kind of irrelevant now. Like you say, strategy is buying way more than the mining subsidy. So I don't know exactly why the four-year cycle would stay.

I don't see any real reason for it. So I would love to see that narrative get thrown out of Bitcoin. But I was definitely surprised. I thought we were going to go higher last year, and I didn't think we'd go as low this year. But Bitcoin market humbles you, I guess. Do you think we're going to have a positive sort of second half of 2026? As soon as Bitcoin finds its legs, I think it's going to happen pretty. fast. I don't think it's going to be like a slow buildup, you know, at the end of the year,

we're at 100, and then six months later, we're at 125. I think it's going to go from 75 to 125 in a couple weeks when it does happen eventually. Now, when is that going to be? I don't know. It could be some major country like Iran or some major situation that everyone has to sit back and say, okay, they're accepting Bitcoin. This is real. Maybe, maybe. Maybe. Maybe. be the China thing. So we just talked about maybe China easing their ban on Bitcoin. Maybe that's a trigger to see a repricing in Bitcoin by 100% up. So I don't know. But that's kind of what I expect to happen is fast and furious when it does come because the market wants to screw everybody possible out of every last dime that it can. And so it's not going to let fence sitters

get the chance to jump into a trade. It's going to happen really fast. And everybody that's in gets to go. Everyone that's not in, they get a buy at the top, and we repeat. So that's what I'm thinking. Yeah, I think one of the other dynamics that was different this time is, like, since I've been in Bitcoin, we had the 2017 run. We had the 2021 run.

And both those times, Bitcoin was like the exciting, fresh new thing that everyone was interested in. There was FOMO. Whereas this time, that was AI. Like, it was the AI trade that stole so much of the hype. And even within Bitcoin, I think it was the treasury company hype rather than buying spot Bitcoin. I think that has definitely played into it.

I don't know if that comes back. Maybe it does. I think price action fixes that. Like, if Bitcoin starts absolutely ripping, it will get the attention. But you mentioned the options markets there. And it's some, like, I don't pretend to fully understand options markets. But why would that have a negative impact on spot Bitcoin price? If you're in a different regime, you can have,

options that either accentuate the volatility or depress the volatility, depending on what regime you're in. And we've just been in this regime where the options are set up to sell the rips and buy the dips. So that keeps you in a range until something changes that. And that's why you see the very fast dips, because it was being held, managed, and then all of a sudden something changed, maybe a big player blew up or something, and it went to a new level, and it has stayed in that new level in that regime in the options market. Now, it can happen in the other direction,

and that's kind of what I'm talking about, is as soon as the regime changes to enhancing volatility, so you buy the rips and you sell the dips in the options the way you trade your options, then that means that it's a reinforcing loop higher. And also there's talk about, a gamma squeeze or a vana gamma squeeze. I'm not an expert in the options market,

but these things are reinforcing. So as price goes up, these people have to reevaluate their risk. The market makers have to reevaluate their risk, and they have to go out and buy Bitcoin. So if they're taking the other side of a trade and they're shorting Bitcoin and someone else is longing Bitcoin,

well, they do that based on a formula. How much Bitcoin do I have to have to hedge this short position that I'm taking to make a market. And as the price of Bitcoin goes up, well, they got to buy more Bitcoin to hedge that position that they have on. And so that is a reinforcing volatility loop to the upside, right? And so eventually that will happen in Bitcoin. When that happens is unknown, but I tend to believe it's sooner rather than later.

I don't think we can go on for another two years like this. I think it really does have to happen relatively soon. Maybe around the middle of the year, we will see how it goes. The thing that keeps me up at night is the idea of a critical error with my Bitcoin cold storage, and this is where Anchorage comes in. With Anchorage, your Bitcoin is insured with your own A plus rated Lloyds of London insurance policy, and all Bitcoin is held in their time-lots multi-sig volts. So you have the peace of mind known your Bitcoin is insured while not giving up custody.

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Check out your rate using a loan calculator at ledden.io and use code WBD for 0.25% off your first loan. That's LEDN.io forward slash WBD. So this idea that volatility is going to be suppressed going forward in Bitcoin just because of how this sort of market dynamics have changed. Is that something you don't buy into then? You think we still can have the crazy runups, the blow off tops, and then obviously, bear market always follows a blow off top.

But you think we can still have that volatility in Bitcoin? Well, yes, I do. But I think it's going to be fewer and far between. So if you look at gold, right? Gold has been, it's not that much older than Bitcoin in the sense of having like an ETF. I think the gold ETF was in 2006. Listeners can correct me if I'm wrong on that.

It's 2006. And we couldn't even own gold until my lifetime. Like people could actually own gold again in the United States. So it's not that much older. And it is also heavily manipulated in the same way. But it has just done a parabolic move. It did a parabolic move during the great financial crisis. And then another parabolic move.

move here now. So it can't happen. It's just going to be fewer and far between. But I think Bitcoin is going to have these like moon shots. One one week it's going to go 50% up and then it's going to find a new level. And then maybe the next week it goes 25% down and goes at that level. But it's going to have it's going to break the options regime that it's in. It's going to reprice. And then it's going to be held there for a while. This is the idea of sort of extended cycles. You think it might not be the four-year cycle, but it's always going to play out in boom-bust cycles.

Yes. That's how assets work pretty much. That's how gold has worked, even though it was paid to the dollar, say. And so $35 an ounce was, that's how much gold was. But its purchasing power did fluctuate. And so, yeah, I think there will be booms and bus

until it's pegged. And then maybe that will even suppress it even more, because once you back a currency with a commodity, that commodity is held in everybody's account, right? And it's a very, very deep market. It takes a lot to move and bring volatility to a market where everybody owns some. And so it will suppress it more.

But it will happen in that respect as well. So a bit earlier in the conversation, you called Bitcoin currency and then kind of corrected yourself and called it money. And I'm curious what you were, differentiating between there? Yeah, I think, well, first off, I think cryptocurrency was a really bad branding mistake. And I don't think Satoshi used it.

I can't remember now, but maybe he used it later on after somebody else used it, but he didn't come up with it. He didn't brand it. Maybe later, like 2010 or something like that, that he used the term cryptocurrency, but a currency is a measure of money. That's what I think of it as. So you have a money, gold or Bitcoin, and then you have currency that is a denomination of that money. So one ounce, you have $35 per ounce of gold.

So dollars is the currency, gold is the money. And same would be for Bitcoin. If you pegged it at 10 Satoshes, you would have 10 Satoshes per dollar. The dollar is the currency and the Bitcoin is the money. So that's how I would define it. So you don't think Bitcoin can. be both money and currency? Yes, it can be.

A gold coin is both, you know, a gold coin with a face value is both money and a currency. It can be, but it probably won't be. The UTXO set kind of limits how many people can use Bitcoin. Even if we had huge blocks, you know, unlimited block space, you still would have UTXOs. And you really wouldn't want to have a UTXO set that had, 100 billion entries because it would take almost as long as a block to just find one UTXO out of the

list of the UTXO set. It was always going to be a derivative. I mean, even how Finney talked about Bitcoin banks, right? And so it's always been known that most likely if it really does become some sort of global money, then it will be a derivative that's traded. You don't think this will be solved with like layer two solutions, layer three solutions, whereas you might, you know, you might be using Spark or Arc or lightning or whatever. Like, because even with an open time, there's still a UTXO there. I know you can trade it physically so you don't need to do any. There's no like on-chain footprint of swapping that UTXO.

But you don't think this can just be solved technically at different layers. Well, I really like side chains. And I really haven't thought about this for a long time. I used to talk about side chains being what's going to scale. Bitcoin because you could, you know, each country could have its own side chain and then you could have atomic swaps between side chains and this would all be cryptographically proven and managed. And so side chains are a really good solution.

That way you don't have to mess with the on-chain UTXO set and all of this. You just have your side chain. And you can have your own rules as well. So one government might allow confidential transactions. and another government might not allow confidential transactions. And so each government can have their own side chain that is cryptographically pegged to the actual Bitcoin, and they can have as many transactions as they want.

But overall, I think that the biggest, I saw you had Junceth on, one thing that he would always say, at least in the past, was there's benefits to fraud protection, there's benefits to being able to reverse a transestine, And if you have it on chain, especially, you can't do that. But even if you had it on a side chain, that would be much harder to have those type of protections. And so I think there is demand for a layer like on chain for major, major transactions,

maybe even demand for a side chain type layer. But then there's also a demand for just a regular old payment rail that's centralized, that somebody can reverse and manage and you trust the bank and, you know, that's that. So, yeah, I don't mind the idea of sidechains either. Obviously, Liquid really hasn't got any traction. People are trying to build out these BitVM things. We'll see if they work. But it sounds like you're talking about Bitcoin, even, you know, decades into the future,

as having, as Fiat still being around. Do you think that is what's going to happen? Or when you talk about Fiat, is this like a Tether-type stable coin? What are you thinking the future looks like? Well, I think the dollar, I think currencies will be backed by Bitcoin. Or we might go into a Bretton Woods situation, you know, where the dollar is backed by Bitcoin. And then all these other countries are backed by the dollar. But it really goes back to Bitcoin.

You know, Bitcoin or the dollar at the end was 40% backed. So we had reserves to cover 40% of the supply of dollars. it could be reinstated something. Maybe it's 10% for Bitcoin. I don't know. There's all sorts of different plans and how that, or there's all sorts of different ways that you could plan it to institute it. But that's what I see.

If it's not backing of the dollar by Bitcoin, it's going to be what we have today. I really don't see Bitcoin just being floated out there as its own thing. You know, like gold has that opportunity right now. but it's not. Yeah, it's gone up to $5,000, but it hasn't really, it's not used in transactions with central banks

or with anybody. I think maybe I ran and some sanctioned people might use it once or twice, but it hasn't really been a currency used or a money used. And it's had a long time to do that. So I don't think that Bitcoin, if it doesn't get backed,

or if it doesn't back a currency, I don't think there is an opportunity for Bitcoin to really be used globally. I hope that makes sense. It will always have a place in a portfolio and as a store value, but it won't be used for that medium of exchange rule. So in that normal progression of money from store of value to medium exchange to a unit account, you think Bitcoin will never get to the sort of full stat? No, I think it will. But I think it gets. there by backing or by backing the dollar and backing other currencies. Not on its own. Right.

Hmm. Interesting. I mean, that still seems like a massively positive outcome. I guess at that point you probably don't have things like the Federal Reserve because there's not just six people in a room or 12 people in a room, whatever, is deciding the price of money. Yeah. Well, I think that the Federal Reserve will probably lose its independence. I mean, it'll go away naturally. I don't think I don't think, I don't think, I don't think, I don't foresee, like, losing the actual role of the Federal Reserve for a long period of time, but there will be losing of independence of the Federal Reserve. So one thing we've seen recently, you know, Besant and Powell and Trump, they all are kind of, there's all sorts of different stuff going on.

So Trump is trying to fire Lisa Cook, if you remember that. She's trying to fire one of the governors. She actually wasn't one of the bad ones. Like she was relatively doveish. She was one of the dovish board members, which is what Trump wants on the FOMC. But he wanted to make a statement. He wanted to say that you guys work for me and I can fire you at any time. Well, he tried to do that.

Powell said, no, I'm not going to listen to you. And so now it's going to the Supreme Court. And it's still at the Supreme Court. and we'll see what they say. I think there's good arguments on both sides, but I tend to believe that if the government wants to subsume that back under itself, it eventually will. If it will be this president, the next president,

somebody will bring that back into the fold and put the Federal Reserve as a subordinate of the Treasury Department. So I think that's going to happen maybe 10 years down the road, but that's going to happen for the Fed. I mean, I can totally buy the Fed losing its independence. I think it's arguable how much independence has already, but I think we're about a month away from Walsh coming in as governor, as chairman, sorry.

And I think that's already a huge step in the direction of it losing its independence. Do you think he will be a positive appointee? Oh, man. I think he is a yes man. He'll do what he's told. He'll do what he's told. Even though I think personally he probably disagrees with letting accommodate a monetary policy at this time.

I think he personally will disagree with that, but he will do what he's told, and he'll try to run it hot. Now, whether he can or not, I mean, that's another question. Because I don't believe in like an omniscient Fed. I don't know if they can really do just anything they want. They can pretend to print money, or they can print money, whatever, but that doesn't mean the economy is going to take off

and there's going to be inflation. Just like a QE. I mean, QE, people that were watching the markets in 2009, we thought there was going to be instant hyperinflation. Or at least over the next two years, there's going to be like really high 100% inflation rates. Never happened. It never happened.

It didn't matter how much QE they did. Actually, when they were doing QE, yields dropped, you know, like this is not what we would expect to happen if inflation is picking up. And so what the Federal Reserve actually has power to manifest is up to debate, I think. So I think there is going to be somewhat of a boom in the U.S. relative to the rest of the world, but I don't think that's going to be a result of the Federal Reserve. I think that's just going to be the U.S. is booming. Okay, I want to get into both of those things. So first of all, with the Fed, clearly Trump wants him to cut rates. I think that's most likely going to happen, whether it's this year or next, it's going to happen at some point relatively soon. They've also been doing a small amount of QE over the last couple of months. Do you think that continues? Do you think it even potentially ramps up?

Well, I predicted the QE that they're doing. And I said, like a couple months before they started it, I said, you know, they're probably. going to do something like a minimal QE and call it something like reserve management. And sure enough, like a meeting or two later, they came out with the reserve management facility, I think is what they call it. So, yeah, I think that's going to continue. As the amount of credit, as the absolute number in the banking system goes up, then, like, if they say, oh, we need 20% reserves in the banking system to maintain stability. but the system keeps growing.

They have to increase the amount of reserves. And so I think that's what they're doing. That is what they're doing with QE. At least that's the rationale, what they're doing right now. And I think that'll have to continue, at least under this textbook of what they're using. Now, does that mean they have to do that to maintain a good economy? No, they don't have to do that,

but they probably will. Is what you're saying there essentially, even if they cut rates and they continue, continue QE, that's not on its own going to boost the U.S. economy. You think it's really because of the unshuring efforts that are happening right now? Yes. I think that they could have some confidence, you know, influences, but mechanically, it's not going to, that is not what mechanically makes the economy grow. And why are you so confident that the unshoring, one, is going to work and two, isn't going to be massively disrupted by sort of AI and automation? And,

things like that. Well, one, I don't, I mean, those are several different questions there. Automation I'm not worried about because automation is a good thing. You know, for when new technology is adopted by a market, it actually makes the market more complex and it makes it more productive and all those things. So I'm not worried about automation. I think it's good. If automation is adopted, it's actually a positive. It's like definitionally, it has to be positive to get adopted. Let's say AI is all it's hyped up to be.

You could have a massive increase in the sort of K-shaped economy where there's still the people that become like almost a permanent underclass from this, but then you have, the economy could be ripping at the same time. Yeah, well, I think there's going to be a K-shaped global economy for sure. Developing markets are going to go back to third. world markets, most likely. You're going to have a big divergence.

And are those developing countries, are they going to be able to afford using AI? Maybe not, maybe. Right now we have this kind of, I think, unwarranted assumption that running AI is cheap. Oh, it's cheap. I just ask this prompt and I get all this, or I ask it to build me some software with these specifications and it's really, really cheap. But that's the subsidized price. That's the subsidized CAPEX price.

I don't think it's going to be globally like post-scarcity. It's not going to bring us anything like that. That's just a silly assumption that people make is that we're going post-scarcity. Universal, what did Musk say? Universally high income instead of basic income. No, that's just fantasy land that that's not going to happen. in the foreseeable future, I mean, maybe hundreds of years down the road, but we can't, we can't see that. So in the near term, it has to pay for itself.

And right now, it's being subsidized by all this CAPEX. We'll see what happens when that subsidy runs out. So when do we get to the point where the working population isn't enough to sustain the retirement of everyone who has already gone into retirement? Like, when do those payments stop? It's going to be different for different countries. the countries that are the worst off right now, South Korea, China, Taiwan, Japan,

these are hitting it right now. Like I did a calculation about Japan, and they're not quite at 1% yet, but they're getting really close to losing 1% of their population every year. That's not sustainable for any sort of retirement or any sort of government assistance or pension plans. So if they haven't hit it yet, they can probably, you know, financially engineer it for a little while longer.

But pretty soon, yeah, you have to have people there to actually work to not just pay, not just pay into the system, but to actually do the jobs of the economy to keep the economy running. But once those retirement accounts can't be paid, like the obvious thing is they're probably just going to print the money, right? It depends. Yeah. I mean, probably if they're on the same system that they're on right now, yeah, sure, they could print the money. But that wouldn't help them at all. That would just, it would be instantly into inflation.

And people would be fleeing out of that system to buy hard assets of anything. Just like in any hyperinflation or high inflation environment, people instantly dump their cash and try to buy any sort of durable good that they can. If there is major capital controls in China, and these other economies, then that's going to be more difficult. But no, that's not going to solve the situation. It's, there's still going to be the same amount of pain. It's just whether it's pain with high inflation or pain with low inflation.

Ansel, this has been great. Is there anything that we've not talked about that you wish we had? Nope, de-globalization is my big thing, demographics, and then, of course, deflation. So I think we covered it all. I love it, man. Tell everyone where you can go to find out more of your work, hear your podcast, all that kind of stuff. Bitcoin and Markets.com is my original podcast and content. I just recently started Rogue Macro, so you can check out Rogue Macro.

org.com for my writing. That's more 90% macro and only 10% Bitcoin. So you guys can check out Rogue Macro and Bitcoin and Markets. Awesome. Thank you, man. We'll have to do this again. I really enjoyed this. Thank you, Ansel.

Thanks, Danny.