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Speaker 1: You're literally a subordinate creditor on your bank accounts.

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Speaker 2: Literally, we're not allowed to actually own anything anymore.

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Speaker 1: You don't have property rights to securities. All the arrangements

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Speaker 1: between transfer agencies, custodians, exchanges get centralized to DTCC.

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Speaker 2: The stocks in your account, your Apple, test of Google,

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Speaker 2: et cetera, you don't actually own those. With bitcoin, it's

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Speaker 2: a bare instrument. If I have the bitcoin, I have

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Speaker 2: the bitcoin. I don' want to take the bitcoin from me.

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Speaker 1: Bitcoin's the embodiment of the Bill of Rights in technological form.

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Speaker 1: Even gold has way more risk than bitcoin. There's so

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Speaker 1: much money waiting to buy bitcoin, it is insane. Larry

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Speaker 1: Fink a black Rock is.

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Speaker 2: Talking about this, Hey, let's just tokenize all these real

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Speaker 2: world assets.

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Speaker 1: Is still not fully decentralized.

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Speaker 2: It can't be decentralized because if it's a real world assets, I.

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Speaker 1: Don't think we've ever seen anything good come out of

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Speaker 1: black Rock.

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Speaker 2: How do you see that playing out in light of

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Speaker 2: these types of laws and regulations that are in place.

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Speaker 1: The maybe cynical, skeptical, nefarious viewpoint of that would.

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Speaker 2: Be Bitcoin's on the move, But where's it going? This

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Speaker 2: is the conversation. I'm gonna have with Chris Sullivan today.

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Speaker 2: We're going to talk about the bigger picture, what's going

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Speaker 2: on with politics and DC, what's going on with macroeconomics,

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Speaker 2: where's global liquidity, what are the price levels when things

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Speaker 2: we should be paying attention to, and what can we

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Speaker 2: do to protect ourselves if there's a big move down.

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Speaker 2: Let's go right now into the conversation with Chris. All right, Chris,

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Speaker 2: thanks so thanks taking the time to join me today.

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Speaker 2: Excited to see you again.

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Speaker 1: Thanks Bud.

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Speaker 2: Happy to be here so for the audience is catching up.

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Speaker 2: We were both just together out in Washington, d C.

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Speaker 2: At the nation's capital for a new event that just

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Speaker 2: started called Bitcoin in DC, and it was all about policy.

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Speaker 1: It's pretty interesting.

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Speaker 2: There was a lot of lawmakers that were there at

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Speaker 2: the event. I believe you were there even before the

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Speaker 2: event was going on. So what's going on in DC

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Speaker 2: and what is the thing that most people, maybe most bitcoiners,

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Speaker 2: don't really understand about how politics are looking at this.

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Speaker 1: That's a great question. I should I think it's easy

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Speaker 1: to just say self sovereignty, mark, but it's another to

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Speaker 1: analyze existing legal structures and upend them with a sovereign

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Speaker 1: based policy and restructure that like you know, as well

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Speaker 1: as most beginning in sixty four culminating twenty ten, US citizen,

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Speaker 1: well in Japan and euro lost property rights to securities, right,

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Speaker 1: and so if we're going to be okay, I have

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Speaker 1: my cold storage in my hand, great. But there's a

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Speaker 1: more macro prudential element of that where I think we

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Speaker 1: have a duty as bitcoiners to address legal concerns on

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Speaker 1: that sovereignty level for all assets, whether it's real estate

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Speaker 1: goal which has been confiscated from US citizens before and

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Speaker 1: certainly with respect to bitcoin.

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Speaker 2: And what do you mean, what do you mean we

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Speaker 2: lost property rights to equities.

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Speaker 1: They don't know property rights to securities. So, beginning in

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Speaker 1: sixty four, the process was called demterialization, and little by

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Speaker 1: little getting to the Safe Harbor provisions of twenty ten,

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Speaker 1: which just put them, you know, nail in the coffin.

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Speaker 1: It went from you have total ownership of your positions

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Speaker 1: and assets to they're held in street name for you

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Speaker 1: at a qualified custodian, approved custodian, and all the arrangements

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Speaker 1: between transfer agencies, custodians, exchanges, they get centralized to DTCC. Yeah.

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Speaker 2: So before that we had bearer instruments though stock certificates,

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Speaker 2: and those were bear bonds, and if any of you

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Speaker 2: are old enough to remember something like the early like

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Speaker 2: deemed bond movies or whatever, they'd be trading bearer bonds.

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Speaker 2: And so whoever held the bond certificate or the stockstick

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Speaker 2: of it owned it correct. And what you're saying is

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Speaker 2: that through that process that was taken away and we're

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Speaker 2: not allowed to actually own anything anymore. We're in a

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Speaker 2: debt based system and so everything is owed to us.

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Speaker 2: So under the new system, this doesn't mean a lot

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Speaker 2: to a lot of people, and maybe they don't understand

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Speaker 2: the nuance of this, But like the stocks in your account,

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Speaker 2: your Apple tests, the Google et cetera. You don't actually

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Speaker 2: own those, they're owed to you. What's the why is

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Speaker 2: that important for people to understand the nuance of that?

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Speaker 1: Well, because it allows for a couple things that have

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Speaker 1: been hot hotter topics since COVID. Right, there's a lot

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Speaker 1: of awakening occurring and people are paying more attention than

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Speaker 1: they did before. But it's essentially twofold. One is understanding

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Speaker 1: the daisy chain of collateralization that occurs, and two understanding

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Speaker 1: what your actual risks are because I don't view prices

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Speaker 1: risk prices opportunity. So what is the benefit or lack

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Speaker 1: thereof of having those relationships? And then you go to

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Speaker 1: your representative and relitigate, renegotiate the terms of those right,

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Speaker 1: So if we hold let's say a million bucks worth

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Speaker 1: of Tesla, it can be rehypothecated an uncountable number of times,

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Speaker 1: and in the event of a custodial bankruptcy, you're screwed,

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Speaker 1: right like they're sorry, and you can go through. David

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Speaker 1: Rogers Webb is the author of the Great Taking. He

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Speaker 1: actually has the letters of the regulators outlining the actual

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Speaker 1: language and then you got to go read YOUCC eight nine.

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Speaker 1: It's right there in front of you.

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Speaker 2: Yeah, And most people don't really understand the amplifications of

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Speaker 2: that because we haven't actually seen that, but in the

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Speaker 2: bitcoin and crypto space we certainly have. And so people

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Speaker 2: found out, unfortunately the hard way, when Blockfi and Celsius

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Speaker 2: and ftx collapsed, that the assets you thought you owned

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Speaker 2: on those platforms didn't actually belong to you. So in

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Speaker 2: the bankruptcy event that those all went through, the assets

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Speaker 2: went with the bankruptcy and you got any little breadcrumbs

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Speaker 2: that were left over versus if they still belonged to you,

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Speaker 2: you would have got them back outside of the bankruptcy.

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Speaker 2: And so the same as with the money in your bank.

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Speaker 2: The money in the bank is not yours. You own it,

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Speaker 2: I'm sorry, they own it. It's o.

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Speaker 1: You're literally a subordinate creditor on your check on your

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Speaker 1: bank accounts.

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Speaker 2: Yeah, literally, Yeah. So you know, that's one interesting thing.

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Speaker 2: There's a lot of talk of tokenization of RWA's real

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Speaker 2: world assets onto the blockchain, where Larry Fink from Blackrock

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Speaker 2: is talking about this, Hey, let's just tokenize all these

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Speaker 2: real world assets. How do you see that playing out

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Speaker 2: in light of these types of laws and regulations that

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Speaker 2: are in place.

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Speaker 1: Great question. It's so the maybe cynical, skeptical, nefarious viewpoint

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Speaker 1: of that would be, it's a trapdoor to re liquefy

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Speaker 1: assets they've already monetized and have possession of, and keep

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Speaker 1: a close system around those so called real world assets

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Speaker 1: so that they don't permeate into the DeFi.

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Speaker 2: Arena.

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Speaker 1: We're outside their control outside of the collateral. That's why

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Speaker 1: in the Genius building they're forcing these stable coins to

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Speaker 1: have treasury collateral at the banks, then the banks can

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Speaker 1: lever them fifty to one.

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Speaker 2: Yeah, but how would so if black Rock or robin

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Speaker 2: Hood or whatever put these stocks, the real world assets

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Speaker 2: and maybe even real estate assets or business assets onto tokens.

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Speaker 2: I mean, they already have control of those, so I'm

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Speaker 2: not sure what you mean by it would kind of

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Speaker 2: keep them keep control over that, because they already do right.

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Speaker 1: In the in the current legislation form. Right, So all

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Speaker 1: they're doing is liquefying again, right, and giving us Albeit

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Speaker 1: there's great settlement structures capital efficiencies of tokenization for sure.

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Speaker 1: I'm not saying that's not a bad idea, but it's

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Speaker 1: basically like a resell, right, right. And then it makes

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Speaker 1: it interoperability, the interoper interoperability between their close system to

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Speaker 1: generate more commissions and fees on top of the same asset.

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Speaker 2: Yeah, because the way I see it is that it's

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Speaker 2: like to the point that that you're brought up and

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Speaker 2: we're discussing, is that because we're not allowed to own anything,

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Speaker 2: so it's cryptocurrency. With bitcoin, it's a bare instrument. If

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Speaker 2: I have the bitcoin, I have the bitcoin. No one

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Speaker 2: can take the bitcoin from me. Crypto people would sort

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Speaker 2: of also say the same thing. Maybe it's not as

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Speaker 2: decentralized and secure, but let's just say that crypto overall,

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Speaker 2: what people are sort of used to is also I

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Speaker 2: have the token. I have the token, and so they

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Speaker 2: would think that then tokenizing a stock or a real

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Speaker 2: world asset like a house or a business would then

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Speaker 2: allow me to have that token, and then you and

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Speaker 2: I could exchange Tesla, Apple, Google over dinner, just like

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Speaker 2: we would exchange bitcoin. But I've often said I don't

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Speaker 2: see how that's possible, because we certainly have the technology

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Speaker 2: for that today, but it's the laws and the regulations

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Speaker 2: that are going to prevent it. So if that so,

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Speaker 2: now we have to think about, Okay, how do we

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Speaker 2: overwrite overturn all these laws and regulations. Now, maybe black

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Speaker 2: Rock has enough power to do that, but I don't

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Speaker 2: understand what they see as as vision Larry Fink's trying

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Speaker 2: to sell to the world of tokenizing everything. If it

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Speaker 2: doesn't work or the laws and regulations would prevent.

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Speaker 1: That, yeah, I think my subjective, actually my objective views

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Speaker 1: it's a trapdoor. Yeah, And I don't think we've ever

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Speaker 1: seen anything good come out of black Rock. There's certainly

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Speaker 1: nothing that has come out of the what economic form

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Speaker 1: other than various repackaging of slavery. And we have to

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Speaker 1: be conscious of what we're facing at the legal level

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Speaker 1: before we can get to the technological level. Right Because

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Speaker 1: and so I was part of a project tokenizing. The

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Speaker 1: first commercial in terms of totization was the third Red

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Speaker 1: Swan was the first commercial real estate project that was

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Speaker 1: mixed use in Miami three hundred and fifty MILI build

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Speaker 1: had multifamily retail, restaurant, hotel, went on avacs and learning

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Speaker 1: all of the minutia of what's required at the ATS level,

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Speaker 1: four step processes at the custodio level, we ended up

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Speaker 1: taking as a sponsor a seven figure loss mark because

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Speaker 1: wait a minute, I can't pull this and swap it

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Speaker 1: on UNI, or I can't hold this on a Ledger

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Speaker 1: or a treasure. And it was that realization of you know,

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Speaker 1: dumb and not knowing the full minutia of the details,

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Speaker 1: just assuming, oh, a token can live in the DeFi

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Speaker 1: space that we learned the hard way. And then sure enough,

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Speaker 1: about a year ago, the Great Taking Book came out,

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Speaker 1: which is kind of caught fire amongst bitcoiners and mister

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Speaker 1: Webb summarized it way better than I can do.

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Speaker 2: Yeah, what I've seen from some of these platforms like

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Speaker 2: Robinhood that's working on it, black Rocks working on it,

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Speaker 2: even Kracking now is rolling out a platform, but they're

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Speaker 2: all sort of approaching a different way. So like one,

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Speaker 2: it's like, if I have an counth Robinhood, you have

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Speaker 2: an acounth Robinhood, we've both been ky seed but from them,

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Speaker 2: and you and I could trade Apple or Tesla Google

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Speaker 2: between us in that close system, but I couldn't trade

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Speaker 2: with somebody with black Rock, for example, right exactly, Look

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Speaker 2: what Kraken is doing, I believe is taking that asset

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Speaker 2: and then and then wrapping it into an asset that

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Speaker 2: represents that share. So then they'll take that that stock,

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Speaker 2: not certificate that stock asset into their custody. They'll wrap

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Speaker 2: it with a synthetic token that then you can trade

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Speaker 2: the synthetic token. It's not really a bare instrument, but

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Speaker 2: it represents that. And then the way it works is

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Speaker 2: then I can have that synthetic token that wrap the

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Speaker 2: token as a bare instrument. But if you want I

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Speaker 2: trade it to you for dinner, and then you want

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Speaker 2: to redeem it you got to go through the KYC process.

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Speaker 1: Which is in I view of one step better than

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Speaker 1: the closed system, but it's still not fully decentralized and

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Speaker 1: giving you the s.

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Speaker 2: It can't be decentralized because if it's a real world asset,

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Speaker 2: it's a business, it's a company, it's an equity, right,

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Speaker 2: so it can't be centralized. It's impossible to which then

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Speaker 2: makes me think, then what are we even doing here?

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Speaker 2: It just seems so futile, Like what's the point because

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Speaker 2: they're all a stock. A stock is already a tokenized

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Speaker 2: share of the company, and when create in a digital

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Speaker 2: so what's the difference.

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Speaker 1: It's it's essentially legal rights to the earnings at your

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Speaker 1: pro rata share of the distribution of that Like like, yeah,

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Speaker 1: you're right, it's already a token so to speak, one

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Speaker 1: hundred percent. Uh. In my view, it's another monetization scheme

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Speaker 1: as I mentioned, and sure you know as a because

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Speaker 1: what we were market makers as well, it's way better

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Speaker 1: to do that where it can settle constantly, then have

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Speaker 1: to go get ready for three thirty, then afford and

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Speaker 1: then okay, futures close. Like that's a pain the ass

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Speaker 1: It's not capital efficient, it's not cost effective. So would

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Speaker 1: a tokenized version of those same things be better? Yeah,

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Speaker 1: but then you're going to have huge opacity, probably lots

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Speaker 1: of lawsuits. What so, is there going to be a

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Speaker 1: world where there's a non token ticker and a token ticker.

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Speaker 1: How you're going to distinguish is one worth more than are?

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Speaker 1: Because there will be probably arbitr right, because there's demand

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Speaker 1: or supply that imbalances. So I don't think people are

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Speaker 1: really underwriting all the minutia here properly.

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Speaker 2: And then when you think about so one, and when

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Speaker 2: I think about it from a first principles level, a

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Speaker 2: token just represents a fractional ownership. So then you hear about, well,

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Speaker 2: what if we tokenized real estate for example, or businesses

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Speaker 2: for example, and imagine all the liquidity that we could

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Speaker 2: unlock with that, right for example. But it's like, if

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Speaker 2: it's fractionalized ownership, I can already put it into some

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Speaker 2: sort of an entity a corporation, LC, ETCA, and create

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Speaker 2: as many shares or fractional ownership units or whatever as

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Speaker 2: it I want it. I want number one. But you

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Speaker 2: also just mentioned something right now, efficient markets, and so

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Speaker 2: in order to have liquidity we have to have efficient markets, correct,

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Speaker 2: But how does somebody price a grant cardone five hundred

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Speaker 2: unit multi family property in South Florida against a office

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Speaker 2: office building in Silicon Valley? I mean, how what is

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Speaker 2: one token versus the other? Like, how is that compared

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Speaker 2: to a three bedroom, two bath in Indianapolis? Right, So

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Speaker 2: then then there's no way that one those aren't fungible two.

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Speaker 2: I can't compare those against each other. So then it's

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Speaker 2: not an efficient market, and it doesn't increase liquidity.

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Speaker 1: No, And because of all the points you just said,

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Speaker 1: that's not going to attract market makers, which are required

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Speaker 1: in order to have a thick order book for a

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Speaker 1: narrow binds spread, right, And because there's such a variance there,

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Speaker 1: even as that coming from a sponsor seat, like I'm

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Speaker 1: the real estate GP putting capital build, I'm sponsoring the

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Speaker 1: sale of shares and or tokens. It's cool to liquify.

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Speaker 1: What we were trying to do is liquify thirty percent

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Speaker 1: of it, right, and have a secondary market that trade

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Speaker 1: so that investors weren't sitting in a you know, five

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Speaker 1: hundred mili type of investment forever just getting some dividends

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Speaker 1: and then weigh down a sale to engine sure or

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Speaker 1: a So that concept is fine, but then when you

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Speaker 1: go to practice, how does that have an efficient, efficiently

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Speaker 1: traded market? It becomes really difficult and it's not like

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Speaker 1: you have the same metrics.

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Speaker 2: Yeah, yeah, I think you know, some of the stuff

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Speaker 2: that Trump's done in some of the executive orders digital

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Speaker 2: token orders are seemingly to allow small businesses to sort

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Speaker 2: of spin up an entity, not going through the full

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Speaker 2: SEC process, registration process to get on the Nasdaq, and

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Speaker 2: skipping three years and millions of dollars of fees to

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Speaker 2: be able to just sort of take an equity offering

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Speaker 2: to the market. And I think there's value in that.

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Speaker 2: I think there's certainly value in that. I mean, certainly

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Speaker 2: peel away as much of those regulations as you can.

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Speaker 2: The fact that it takes three years to go public

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Speaker 2: is ridiculous, and so maybe there's some good from that.

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Speaker 2: What would you say your overall stances as someone who's

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Speaker 2: been in bitcoin for a long time and sort of

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Speaker 2: bitcoin has succeeded in spite of the government sort of

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Speaker 2: working against it all this time. We've gone from you know,

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Speaker 2: night and day, the Biden administration sort of massive headwinds

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Speaker 2: against it and now seemingly one hundred eight degree difference

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Speaker 2: of now tailwinds. I mean, what do you think that

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Speaker 2: means for bitcoin?

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Speaker 1: You know, to your point about being in a long time,

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Speaker 1: like you know, ten ten plus, I don't view it

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Speaker 1: as good or bad. Perhaps I'm jaded and biased towards

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Speaker 1: the bad being good, right, so that I'll readily admit that.

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Speaker 1: But I think for businesses around that ecosystem, it is

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Speaker 1: very good. Right. So, if we're talking in terms of bitcoins,

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Speaker 1: probably one of humanity's greatest inventions ever, certainly one of

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Speaker 1: the greatest assets save you know, maybe water, right, But

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Speaker 1: as far as it being anything other than a unclenching

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Speaker 1: of creative and innovative spirit entrepreneurship, I don't think bitcoin

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Speaker 1: as an asset affected at all.

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Speaker 2: Yeah. Well, like I said, it's done what it's done

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Speaker 2: in spite of the political head rights and so you

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Speaker 2: know Operation Choke point one point zero and two point

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Speaker 2: zero and you know Elizabeth Warren's anti crypto army and

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Speaker 2: all of those types of things.

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Speaker 1: Well, then you're the head of the central bank in Europe.

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Speaker 1: So oh, bitcoin has no intrinsic value. Cool, Neither does

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Speaker 1: the euro.

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Speaker 2: Yeah, yeah, which I don't believe in intrinsic value, all.

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Speaker 1: That subjective term, right, there's all value subjective, right, And

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Speaker 1: if anything, I would argue that the proof of work

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Speaker 1: has a killawa our input to it. That would serve

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Speaker 1: as one of the factors that intrinsic would cover in my.

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Speaker 2: Well, at least as a true cost of capital. So

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Speaker 2: at least there's at least as I can't be printed authentic.

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Speaker 1: That's controlled by a free market forces, not the Federal

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Speaker 1: Reserver ECB or whatever.

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Speaker 2: Let's move on at and think about sort of where

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Speaker 2: we're at in this in the in the bigger sense,

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Speaker 2: in the macroeconomic sense, I mean, we have Bitcoin dies

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Speaker 2: as of a couple of days ago, broke out to

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Speaker 2: a brand new all time high, seems to maybe be

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Speaker 2: retesting the breakout, maybe for support. At the same time,

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Speaker 2: gold just continues to scream like a bad out of

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Speaker 2: hell at this point. JP Morgan of all people, came

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Speaker 2: out with a report last week calling it the debasement trade,

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Speaker 2: which of course we've known for a decade, where you know,

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Speaker 2: we have the Federal Reserve that has now just started

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Speaker 2: lowering rates. Looks like QT is about to end, Like

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Speaker 2: where do you see us in this cycle and the

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Speaker 2: overall macroeconomic picture right now?

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Speaker 1: Good question, Where would you like me to start?

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Speaker 2: We run what's your what's your frame that you're that

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Speaker 2: you're operating in.

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Speaker 1: So a frame and and this is I think we

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Speaker 1: share in common frame from a time horizon duration, and

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Speaker 1: like portfolio construction is infinity, you have to have an

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Speaker 1: affinity time horizon and uh, you know, a low time

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Speaker 1: preference to structure things properly. But let's zoom in and

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Speaker 1: call it from eight to now, which has been debasement.

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Speaker 1: Like even the roup he made a new low. I

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Speaker 1: think Argentinian bonds were breaking above sixty yield before coming

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Speaker 1: on just now. The reality of the central banking era

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Speaker 1: is in its end gain. So whether that's two years

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Speaker 1: or ten, I can't speak to. So that's the supra macro.

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Speaker 1: Then we actually run internal a pretty epic regression model

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Speaker 1: on multi factor analysis of all countries. The problem that

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Speaker 1: we have with this sort of all things m to

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Speaker 1: relate correlated ripping is that you historically, when you've had

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Speaker 1: increases of money supply that's been parallel with the velocity

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Speaker 1: of money, which the higher the velocity of money, the

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Speaker 1: more a unit of currencies turning and making everyone money,

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Speaker 1: building wealth. Here we have this giant jaws where velocity

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Speaker 1: of money continues to go down almost at the same

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Speaker 1: degree that M two continues to go up. So that's

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Speaker 1: that's a concern from a spread the wealth kind of

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Speaker 1: standpoint and a sustainability standpoint. That being said, we're just

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Speaker 1: talking math mark. There is a scarcity of securities and assets.

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Speaker 1: And when one side of the equation is relatively fixed,

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Speaker 1: increasing at one to two percent a year, and the

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Speaker 1: other sides, increed is going vertical, all of those assets

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Speaker 1: have to go up. And that's why correlations gold equities, bonds,

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Speaker 1: bitcoin year to date are around point nine, which it's

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Speaker 1: that's the highest correlation before and then historically. And you

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Speaker 1: know this, when when gold goes vertical in its intermediate

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Speaker 1: rally structure, it's it slows down. Then that's when bitcoin

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Speaker 1: goes vertical, you know, four to six weeks later.

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Speaker 2: Yeah, the bitcoin gold catchup trade as they're calling it

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Speaker 2: right now. So keeping that of gold bitcoin ratio intact,

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Speaker 2: and since gold's been on that crazy tear, as soon

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Speaker 2: as it takes a little bit of a breather, just

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Speaker 2: like you would if you sprinted for four hundred meters,

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Speaker 2: you take a big breather then and then gold I'm sorry,

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Speaker 2: then bitcoin can catch up with that. Yeah, I mean,

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Speaker 2: I guess that's that's pretty much the way that I

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Speaker 2: see it as well. I think the whole world, as

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Speaker 2: I said, we've kind of been operating this under this

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Speaker 2: for a decade. But now the whole world, I think,

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Speaker 2: is starting to realize. One, the governments will always print. Two, yeah,

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Speaker 2: bondholders are going to be liquidated one way or the other.

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Speaker 2: Three Yeah, yeah, Three, if I don't get out of

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Speaker 2: some FIAT denominated assets, I'm going to be the one

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Speaker 2: being liquidated. Four Golden Bitcoin seem to be the way

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Speaker 2: the lifebood I should be jumping into, and I think

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Speaker 2: the whole world is sort of catching up to that

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Speaker 2: real quickly. What about the volatility, now, you know one

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Speaker 2: thing that when you sort of reference some history points,

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Speaker 2: when you look at sort of maybe go back to

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Speaker 2: not that we're in this level, but when you look

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Speaker 2: at the hyperinflation of Weimar Republic and you can look

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Speaker 2: at the German marked to gold spread and like over

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Speaker 2: a nine year period, it is like this hockey stick

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Speaker 2: that went straight up, not unlike the dollar gold chart

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Speaker 2: if you look at it right now over the last

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Speaker 2: couple of months. But when you overlay that chart, I'm

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Speaker 2: sure you've ebably seen it before, you can overlap it

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Speaker 2: with the volatility, and it's just like you know, going

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Speaker 2: up and down, going up and down, and that a

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Speaker 2: lot of people would say that's sort of the characteristics

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Speaker 2: of this sort of dying currency, that you get a

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Speaker 2: lot of that volatility, which seems to be accurate. However,

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Speaker 2: I mean, right now biquin volatility seems to be like

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Speaker 2: an all time record low.

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Speaker 1: Yeah, this poster minds a few points. And you know,

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Speaker 1: when we started doing it, the vault was one ninety, right,

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Speaker 1: and then now it's high thirties, which is about thirty

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Speaker 1: percent above equities.

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Speaker 2: What does that mean for everybody listening? One ninety or thirty.

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Speaker 1: So one nine it means it's one ninety is the

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Speaker 1: realized volatility number. And essentially it's just telling you what

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Speaker 1: could be the percentage delta's within the given period you're

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Speaker 1: analyzing typically implied volatility numbers, which is different than realized.

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Speaker 1: You have to put either a fourteen day, thirty day

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Speaker 1: sixty ninety. Those are the common vintages of those number.

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Speaker 1: The ones I'm quoting now is thirty day volatility.

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Speaker 2: Okay, So is that sort of the percentage it could

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Speaker 2: move up or down in that thirty day window?

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Speaker 1: Correct? And that on the realized side is based off

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Speaker 1: the actual price action. Implied side is based off put

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Speaker 1: put and call option pricing.

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Speaker 2: Okay, okay, So one ninety, so the moves up and

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Speaker 2: down were much more exaggerated. Now they're down to thirty

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Speaker 2: it's very muted.

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Speaker 1: Yeah, I think right now it's at thirty eight to

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Speaker 1: thirty six plus or minus. I don't have the option

432
00:23:51,440 --> 00:23:52,119
Speaker 1: grinning from me.

433
00:23:53,119 --> 00:23:54,080
Speaker 2: Why do you think that is?

434
00:23:54,359 --> 00:23:57,320
Speaker 1: Well, you've got I think fifty three percent give or

435
00:23:57,359 --> 00:24:02,720
Speaker 1: take of bitcoin holders are five year plus, another eleven

436
00:24:02,880 --> 00:24:05,560
Speaker 1: twelve or two year plus. You just don't have that

437
00:24:06,400 --> 00:24:08,760
Speaker 1: many folks who are willing to sell. Then you look

438
00:24:08,760 --> 00:24:13,600
Speaker 1: at on exchange available on exchange, it's at all time low.

439
00:24:14,359 --> 00:24:18,720
Speaker 1: So there's just not the level of supply in my opinion,

440
00:24:19,119 --> 00:24:22,199
Speaker 1: to give at least huge downside thrusts. And then you

441
00:24:22,240 --> 00:24:25,240
Speaker 1: look at the nature of ETF investors. They tend to

442
00:24:25,240 --> 00:24:28,000
Speaker 1: have even longer time horizons, much longer time horizons, and

443
00:24:28,400 --> 00:24:32,880
Speaker 1: there's a lasset traders and maybe we'll meet bitcoin, so

444
00:24:32,920 --> 00:24:36,680
Speaker 1: their only call it year to date type of maybe

445
00:24:36,680 --> 00:24:40,400
Speaker 1: even two year type of vault inducing events are really

446
00:24:40,480 --> 00:24:45,800
Speaker 1: associated with short volatility products that trade on equity or

447
00:24:45,840 --> 00:24:50,800
Speaker 1: ETFs for bitcoin, and then the leverage perpetual futures. Those

448
00:24:50,840 --> 00:24:55,320
Speaker 1: events are what is causing some inter day volatility here.

449
00:24:55,320 --> 00:25:00,399
Speaker 1: But you really are not having full scale VWAP style

450
00:25:00,480 --> 00:25:04,439
Speaker 1: liquidations at size which is not giving you a giant

451
00:25:04,520 --> 00:25:07,320
Speaker 1: drawdown in a twelve hour period. And how does that

452
00:25:07,359 --> 00:25:13,720
Speaker 1: compare to gold, NASDAK, in Nvidia, et cetera from a

453
00:25:13,800 --> 00:25:18,960
Speaker 1: volatility perspective or mechanical volatility. Yeah, so it's roughly so

454
00:25:19,000 --> 00:25:22,560
Speaker 1: if that volt is measured by the VIX, right, and

455
00:25:22,600 --> 00:25:25,240
Speaker 1: then bonds are measured by move and so I think

456
00:25:25,320 --> 00:25:28,920
Speaker 1: VIX is around sixteen, so you're looking at twice the

457
00:25:29,040 --> 00:25:33,000
Speaker 1: volatility s and P probably thirty percent more than the NASDAK.

458
00:25:33,320 --> 00:25:35,520
Speaker 1: The move has been high on bonds. I don't know

459
00:25:35,520 --> 00:25:36,600
Speaker 1: the number off the top of my head, so I

460
00:25:36,600 --> 00:25:38,840
Speaker 1: don't want to misspeak, but I know it's trended higher

461
00:25:38,840 --> 00:25:42,520
Speaker 1: than VIX. We'll call it maybe that's twenty okay, and

462
00:25:43,000 --> 00:25:46,280
Speaker 1: so that's just but you could also extrapolate, forgive me

463
00:25:46,359 --> 00:25:50,480
Speaker 1: being a mathematical purist, if that VIX is twenty, how

464
00:25:50,480 --> 00:25:53,840
Speaker 1: many hours is it allowed to trade to manufacture that twenty?

465
00:25:54,080 --> 00:25:58,440
Speaker 1: If we extrapolate nine thirty to four to twenty four hours,

466
00:25:58,480 --> 00:26:02,159
Speaker 1: does that vall number become more in line with bitcoin? Right?

467
00:26:02,200 --> 00:26:04,800
Speaker 1: And I would argue, guess it's going to get close.

468
00:26:05,000 --> 00:26:07,879
Speaker 1: So the prism with which people are analyzing is distorted

469
00:26:07,920 --> 00:26:10,720
Speaker 1: by the short duration. In my opinion, it.

470
00:26:10,600 --> 00:26:13,639
Speaker 2: Looks like ever since the ets came online, the volatility

471
00:26:13,720 --> 00:26:18,000
Speaker 2: just dropped. And so I'm curious, is that because of

472
00:26:18,040 --> 00:26:20,359
Speaker 2: what the ETF. Then all the traders came in, the

473
00:26:20,400 --> 00:26:23,800
Speaker 2: institutional traders, the creation of all these additional products, the

474
00:26:23,800 --> 00:26:26,639
Speaker 2: options products, and that sort of keeps it collared in

475
00:26:26,680 --> 00:26:30,480
Speaker 2: now because everyone's sort of like running like long long

476
00:26:30,520 --> 00:26:31,880
Speaker 2: short strategies at the same time.

477
00:26:32,119 --> 00:26:36,560
Speaker 1: Yep. So right now, as of this morning, you had

478
00:26:36,920 --> 00:26:40,920
Speaker 1: on the CME futures, which is paper not bitcoin, right,

479
00:26:41,240 --> 00:26:44,560
Speaker 1: and the IBIT there was a nine point eight percent

480
00:26:45,040 --> 00:26:49,800
Speaker 1: net annualized spread, right. And so if you've got this

481
00:26:49,960 --> 00:26:52,240
Speaker 1: buyside on the ETF, that's going to buy it for

482
00:26:52,320 --> 00:26:55,840
Speaker 1: the sole purpose of getting that arbitrage that's fairly delta

483
00:26:55,920 --> 00:26:59,120
Speaker 1: neutral and lower costs. That's it's not going to create

484
00:26:59,160 --> 00:27:03,320
Speaker 1: that downside volatility from heavy selling. So that's that's one

485
00:27:03,359 --> 00:27:05,600
Speaker 1: side of it. But then, well, Chris, none of the

486
00:27:05,800 --> 00:27:08,920
Speaker 1: none of the thirty indicators show we're even breaking out

487
00:27:08,920 --> 00:27:12,119
Speaker 1: to overbought. Yet we've been going up for a few years.

488
00:27:12,480 --> 00:27:15,119
Speaker 1: Where are we in the cycle? Well, you then have

489
00:27:15,160 --> 00:27:18,360
Speaker 1: to understand the upside cap that occurs, right, whether it's

490
00:27:18,400 --> 00:27:21,560
Speaker 1: an mst y right, and mark my words, these are

491
00:27:21,680 --> 00:27:25,960
Speaker 1: pieces of shit vehicles, right, because what they're doing. What

492
00:27:26,000 --> 00:27:32,040
Speaker 1: they're doing is creating what's called short gamma positioning and

493
00:27:32,720 --> 00:27:36,800
Speaker 1: creating yield out of selling upside right, they sell calls

494
00:27:36,840 --> 00:27:40,960
Speaker 1: to give you the so called yield, and that creates

495
00:27:41,000 --> 00:27:44,520
Speaker 1: a price wall, because what does a dealer have to

496
00:27:44,560 --> 00:27:49,080
Speaker 1: do if he's he or she's giving you premium and

497
00:27:49,119 --> 00:27:51,680
Speaker 1: buying the call from you to hedge their book, they've

498
00:27:51,680 --> 00:27:54,880
Speaker 1: got a short So you've got this kind of call

499
00:27:54,920 --> 00:27:59,920
Speaker 1: it vol ribbon or band that is limiting huge down

500
00:28:00,119 --> 00:28:05,240
Speaker 1: side but also limiting big breakouts. And those dynamics are mechanical.

501
00:28:04,920 --> 00:28:09,160
Speaker 2: Right, and so as it gets bigger, more institutional investors

502
00:28:09,200 --> 00:28:12,280
Speaker 2: come in, we get more types of trading and options

503
00:28:12,320 --> 00:28:16,600
Speaker 2: products on top of it, we could very well maybe

504
00:28:16,640 --> 00:28:21,440
Speaker 2: should expect that range to be held within that range

505
00:28:21,440 --> 00:28:22,880
Speaker 2: and potentially even tighten.

506
00:28:23,240 --> 00:28:26,879
Speaker 1: Until you get a break. Right, So somebody's going to

507
00:28:26,920 --> 00:28:30,440
Speaker 1: get lopsided. This is like look at AMD or Oracle

508
00:28:30,680 --> 00:28:33,240
Speaker 1: or Intel, Like, how do these large caps go gap

509
00:28:33,320 --> 00:28:36,680
Speaker 1: up thirty percent? Well, somebody's out of position, right, Okay,

510
00:28:36,760 --> 00:28:41,880
Speaker 1: either via short calls, short future short the stock, whatever

511
00:28:41,880 --> 00:28:43,920
Speaker 1: it is to get them out of position, and then

512
00:28:44,000 --> 00:28:47,040
Speaker 1: you can kind of have a reset occur. But I

513
00:28:47,360 --> 00:28:50,640
Speaker 1: would argue no, I would just argue that there's going

514
00:28:50,720 --> 00:28:55,840
Speaker 1: to be until further notice, contained upside and downside volatility.

515
00:28:56,080 --> 00:28:58,120
Speaker 2: Yeah. I was gonna say Bitcoin needs to have these

516
00:28:58,160 --> 00:29:00,240
Speaker 2: really explosive moves and then it would catch all the

517
00:29:00,240 --> 00:29:03,120
Speaker 2: shorts off sides and then squeeze them and then you

518
00:29:03,160 --> 00:29:06,040
Speaker 2: get it even bigger move. But those days don't seem

519
00:29:06,080 --> 00:29:08,080
Speaker 2: to be happening so much anymore. And to your point

520
00:29:08,120 --> 00:29:09,840
Speaker 2: right there, to continue to get callered in tighter or

521
00:29:09,840 --> 00:29:16,240
Speaker 2: tighter tighter. So yeah, that's interesting from from a trading perspective.

522
00:29:19,560 --> 00:29:22,440
Speaker 2: If I had a loan, if I borrowed against my bitcoin.

523
00:29:23,600 --> 00:29:26,960
Speaker 2: Let's say I borrowed fifty percent of my LTV to

524
00:29:27,000 --> 00:29:30,320
Speaker 2: buy more bitcoin. So I've levered up, but I want

525
00:29:30,320 --> 00:29:33,719
Speaker 2: to hedge my loan so that I don't get a

526
00:29:33,720 --> 00:29:37,880
Speaker 2: margin call. What type of option would I buy that

527
00:29:38,160 --> 00:29:41,680
Speaker 2: if it dropped it would give me enough income to

528
00:29:41,800 --> 00:29:42,800
Speaker 2: cover that margin?

529
00:29:43,200 --> 00:29:46,240
Speaker 1: So that's difficult because as you know, there's five major

530
00:29:46,280 --> 00:29:50,560
Speaker 1: Greeks that go into option pricing, right, So what would

531
00:29:50,560 --> 00:29:53,240
Speaker 1: be the term of the loan? So you gave me

532
00:29:53,320 --> 00:29:54,520
Speaker 1: the margin level at.

533
00:29:54,480 --> 00:29:56,840
Speaker 2: Fifty yeah, yeah, so let's just call it ten percent

534
00:29:56,920 --> 00:29:57,719
Speaker 2: for twelve months.

535
00:29:57,920 --> 00:30:01,920
Speaker 1: Yeah, so you're you're gonna as the duration of the loan.

536
00:30:02,120 --> 00:30:04,720
Speaker 2: So i'd want a one year I'd want a one year.

537
00:30:04,680 --> 00:30:08,000
Speaker 3: Call, right, a put put as well or put yeah

538
00:30:08,040 --> 00:30:13,200
Speaker 3: put sorry, and and you'd probably go no more than

539
00:30:13,240 --> 00:30:16,040
Speaker 3: twenty percent more out of the money because with with

540
00:30:16,320 --> 00:30:20,280
Speaker 3: fifty percent LTV, you don't have to protect all fifty right,

541
00:30:21,120 --> 00:30:23,600
Speaker 3: So and you can just assume on I want.

542
00:30:23,440 --> 00:30:26,160
Speaker 2: To prepare for a sixtieth I have to assume what

543
00:30:26,320 --> 00:30:28,480
Speaker 2: I think the drawdown would be. So let's say I'm

544
00:30:28,480 --> 00:30:30,560
Speaker 2: a fifty percent LTV, but I think maybe the worst

545
00:30:30,600 --> 00:30:32,920
Speaker 2: we'd see, it'd be a seventy percent downturn, so only

546
00:30:32,960 --> 00:30:34,400
Speaker 2: have to really protect that twenty percent.

547
00:30:34,680 --> 00:30:36,960
Speaker 1: That's exactly why I got that number, by the way. Yes,

548
00:30:37,040 --> 00:30:40,800
Speaker 1: so if you've read my mind, and essentially you got

549
00:30:40,840 --> 00:30:45,440
Speaker 1: it right off, the put premium that you're paying because

550
00:30:46,480 --> 00:30:49,560
Speaker 1: you'll have many instances where the theta is decaying. So

551
00:30:49,640 --> 00:30:52,600
Speaker 1: the price is going to decline over time because you're

552
00:30:52,640 --> 00:30:55,760
Speaker 1: paying for that when you're buying the option, and then

553
00:30:55,800 --> 00:30:58,440
Speaker 1: in order to monetize it, you you have to wait

554
00:30:58,480 --> 00:31:01,800
Speaker 1: for the event that's a curring real time, so that

555
00:31:02,160 --> 00:31:06,280
Speaker 1: option blows out to the upside and hedges your downside.

556
00:31:06,360 --> 00:31:09,640
Speaker 1: The problem as time goes on, as at the ferocity

557
00:31:09,680 --> 00:31:16,720
Speaker 1: of that hedge decays. Okay, so depending on the other Greeks,

558
00:31:17,200 --> 00:31:19,680
Speaker 1: you may look like, Okay, I'm buying a twelve month

559
00:31:19,760 --> 00:31:22,800
Speaker 1: option to hedge six months. Then I'm going to exit

560
00:31:22,880 --> 00:31:26,400
Speaker 1: and rebuy another twelve month option to hedge the raining

561
00:31:26,440 --> 00:31:29,840
Speaker 1: six months. That way, you're streamlining the decay rate.

562
00:31:30,000 --> 00:31:33,240
Speaker 2: Right And then if it never drops and I never actually,

563
00:31:33,440 --> 00:31:35,880
Speaker 2: then I guess that would expire worthless and I lost

564
00:31:35,880 --> 00:31:38,800
Speaker 2: the money, and that's the price I paid for the insurance.

565
00:31:39,040 --> 00:31:40,640
Speaker 1: Hedging doesn't make money.

566
00:31:40,640 --> 00:31:44,080
Speaker 2: It costs money, right, exactly exactly, But I'm just trying

567
00:31:44,080 --> 00:31:47,320
Speaker 2: to protect myself. I don't have more margin to collateralize

568
00:31:47,320 --> 00:31:50,360
Speaker 2: the loan with. And so for a small fee a

569
00:31:50,440 --> 00:31:53,160
Speaker 2: point or two points on the loan, for example, than

570
00:31:53,200 --> 00:31:55,320
Speaker 2: I could buy that insurance for myself.

571
00:31:55,560 --> 00:31:58,360
Speaker 1: Yeah, and then writing it's capital efficient, as you know, Mark,

572
00:31:58,520 --> 00:32:01,840
Speaker 1: you're writing off the interest costs them the loan as well, right,

573
00:32:01,840 --> 00:32:04,160
Speaker 1: and then the capity of receiving to make the purchase

574
00:32:05,560 --> 00:32:07,080
Speaker 1: it's not in taxi income.

575
00:32:07,400 --> 00:32:10,280
Speaker 2: Yeah, yeah, I think it's just important. I mean, right now,

576
00:32:11,040 --> 00:32:14,160
Speaker 2: it's it's the Hoddler's dilemma. I never want to sell

577
00:32:14,240 --> 00:32:16,440
Speaker 2: my bitcoin. I've made all this profit, but I don't

578
00:32:16,440 --> 00:32:18,080
Speaker 2: want to. I don't I don't want to sell it.

579
00:32:18,400 --> 00:32:20,400
Speaker 2: I guess I can borrow against it. But what if

580
00:32:20,400 --> 00:32:22,280
Speaker 2: I get a margin call? What if the market drops

581
00:32:22,320 --> 00:32:24,520
Speaker 2: by eighty percent? There's all the what ifs, and so

582
00:32:24,640 --> 00:32:27,880
Speaker 2: then that's where options. That's where options came in for

583
00:32:27,920 --> 00:32:30,640
Speaker 2: all the what if scenarios. Right, so you can cover

584
00:32:30,680 --> 00:32:34,800
Speaker 2: those what ifs for a small fee. I believe that's

585
00:32:34,840 --> 00:32:37,280
Speaker 2: how well. I guess it was futures right originally came

586
00:32:37,320 --> 00:32:39,440
Speaker 2: out for farmers, it's like, how do I hedge my

587
00:32:40,280 --> 00:32:41,080
Speaker 2: or was it for cattle?

588
00:32:41,480 --> 00:32:45,200
Speaker 1: Yeah? Yeah, it was John O'Briens. What was his name

589
00:32:45,240 --> 00:32:45,720
Speaker 1: named R. J.

590
00:32:45,800 --> 00:32:48,240
Speaker 2: O'Brien Yeah, yeah, And he's like, you know, I don't

591
00:32:48,280 --> 00:32:49,719
Speaker 2: know what my I don't know how many cows I'm

592
00:32:49,720 --> 00:32:51,600
Speaker 2: gonna have or if they die, So I'll just sell

593
00:32:51,640 --> 00:32:53,600
Speaker 2: you a contract on it, you know now, and then

594
00:32:53,920 --> 00:32:55,640
Speaker 2: the trader takes the other side of the bet. Right,

595
00:32:57,400 --> 00:33:02,640
Speaker 2: let's just talk quickly about price level. So you know,

596
00:33:02,720 --> 00:33:05,280
Speaker 2: I don't typically think about this is the question I

597
00:33:05,280 --> 00:33:07,760
Speaker 2: get asked most often. You know, where will bigcoins price

598
00:33:07,800 --> 00:33:08,880
Speaker 2: me by the end of the ear, you know, by

599
00:33:08,920 --> 00:33:10,640
Speaker 2: the end of the cycle or whatever. And you know,

600
00:33:10,680 --> 00:33:12,840
Speaker 2: I try to think years out. But you know, as

601
00:33:12,880 --> 00:33:14,880
Speaker 2: you're more of a trader, I'm just curious what you think.

602
00:33:14,960 --> 00:33:19,680
Speaker 2: It looks like Bitcoin is following a pretty classic chart

603
00:33:19,960 --> 00:33:23,960
Speaker 2: right now, and it like it just broke out right

604
00:33:24,040 --> 00:33:26,240
Speaker 2: hit new all time high twenty five. It's pulled back.

605
00:33:26,760 --> 00:33:29,360
Speaker 2: It looks like it's trying to potentially set up this

606
00:33:29,480 --> 00:33:33,480
Speaker 2: new price level as support and then you know, I

607
00:33:33,520 --> 00:33:35,560
Speaker 2: don't know, one thirty five and then one fifty or

608
00:33:35,600 --> 00:33:39,040
Speaker 2: sort of those next price targets or like what what

609
00:33:39,080 --> 00:33:40,440
Speaker 2: do you what do you see when you look at that?

610
00:33:42,160 --> 00:33:47,000
Speaker 1: It's a little sad, right, Like I want to see ferocity, right,

611
00:33:47,120 --> 00:33:49,000
Speaker 1: I want to see I want to see panic on

612
00:33:49,040 --> 00:33:53,720
Speaker 1: both directions, right. And so how how it's manifesting. Its

613
00:33:53,760 --> 00:33:57,600
Speaker 1: expression to me is one of containment, to be honest,

614
00:33:58,360 --> 00:34:01,840
Speaker 1: down or up. I'm I'm bias because, like you mentioned,

615
00:34:01,880 --> 00:34:05,200
Speaker 1: I'm not monetizing any of my b TWOC. That's this

616
00:34:05,320 --> 00:34:07,479
Speaker 1: is legacy planning. You can always borrow against it. I

617
00:34:07,520 --> 00:34:11,279
Speaker 1: only want more, but I don't want to buy a breakout, right,

618
00:34:11,320 --> 00:34:16,320
Speaker 1: I want to buy a correction. So I think people

619
00:34:16,360 --> 00:34:21,600
Speaker 1: need to look at the cycles we've seen and redefine them.

620
00:34:21,680 --> 00:34:27,480
Speaker 1: So in the truest trader sense or market analytics sense,

621
00:34:28,120 --> 00:34:33,560
Speaker 1: from when it came out to now is actually one secular.

622
00:34:33,440 --> 00:34:36,560
Speaker 2: Cycle and the whole fifteen year history.

623
00:34:37,040 --> 00:34:42,239
Speaker 1: Yeah, we've had cyclical market cycles within that that many

624
00:34:42,239 --> 00:34:44,879
Speaker 1: are calling the four year cycle. I don't. You can't

625
00:34:44,880 --> 00:34:47,960
Speaker 1: put like a date on it on cycles, right, It's

626
00:34:48,080 --> 00:34:51,720
Speaker 1: because all cycles are a manifestation of only two things,

627
00:34:52,160 --> 00:34:57,640
Speaker 1: and it's psychology and liquidity, and they envelope. So looking here,

628
00:34:58,200 --> 00:35:01,879
Speaker 1: I can't ap I'll give baron bowl and base case,

629
00:35:01,920 --> 00:35:04,799
Speaker 1: so I'll start with base case. The breakout's good, but

630
00:35:04,840 --> 00:35:08,320
Speaker 1: we need to see follow through, right, So it could

631
00:35:08,400 --> 00:35:11,520
Speaker 1: if we if we knife through the one oh nine low,

632
00:35:11,560 --> 00:35:13,439
Speaker 1: then this is kind of a bull trap, and we're

633
00:35:13,440 --> 00:35:15,880
Speaker 1: going to continue in a correction that I think is

634
00:35:16,280 --> 00:35:21,600
Speaker 1: you could term since July where it's been just chopping sideways. Right,

635
00:35:21,680 --> 00:35:23,880
Speaker 1: So if it just has a little whip one thousand

636
00:35:23,960 --> 00:35:27,360
Speaker 1: bucks above the previous one twenty four high, then that

637
00:35:27,400 --> 00:35:29,920
Speaker 1: would be a classic kind of bull trap, and it's

638
00:35:29,960 --> 00:35:32,440
Speaker 1: still going to stay in this kind of correction that

639
00:35:32,480 --> 00:35:34,799
Speaker 1: I would argue would be limited to maybe ninety seven

640
00:35:34,920 --> 00:35:39,000
Speaker 1: K on the downside, if that at all. Right to

641
00:35:39,040 --> 00:35:42,200
Speaker 1: the upside, the next pivots from here are more in

642
00:35:42,239 --> 00:35:45,680
Speaker 1: the one thirty seven one forty range, and then actually

643
00:35:45,719 --> 00:35:48,239
Speaker 1: one fifty is just kind of psychological. The next one's

644
00:35:48,280 --> 00:35:52,320
Speaker 1: at one eighty range. And what I like to advise

645
00:35:52,360 --> 00:35:56,239
Speaker 1: people to look at is a confluence of things. And

646
00:35:56,360 --> 00:35:59,600
Speaker 1: what I mean by that is using trend lines, using pit.

647
00:35:59,680 --> 00:36:01,680
Speaker 1: When I say the word pivot, I meaning support and

648
00:36:01,719 --> 00:36:06,239
Speaker 1: resistance levels, and then just applying a Fibonacci grid to it,

649
00:36:06,320 --> 00:36:10,440
Speaker 1: and you can see in quantitative terms where all three

650
00:36:11,000 --> 00:36:13,560
Speaker 1: or more of these things line up and that gives

651
00:36:13,560 --> 00:36:15,680
Speaker 1: you a higher probability of understanding the picture.

652
00:36:16,280 --> 00:36:18,000
Speaker 2: Yeah, it looks like we just kind of keep having

653
00:36:18,040 --> 00:36:22,120
Speaker 2: these step ups and then consolidation. Right. So like it

654
00:36:22,200 --> 00:36:26,400
Speaker 2: looks like from twenty twenty four, like February to November

655
00:36:26,560 --> 00:36:28,480
Speaker 2: for the whole year, we sort of just range in

656
00:36:28,520 --> 00:36:33,080
Speaker 2: that you know, sixty thousand and forty to sixty thousand range, right,

657
00:36:33,120 --> 00:36:36,680
Speaker 2: then it's shot up with November twenty four and it's

658
00:36:36,719 --> 00:36:39,720
Speaker 2: kind of been in this like eighty to one hundred range,

659
00:36:40,680 --> 00:36:43,120
Speaker 2: and now it's in the one hundred to one twenty range.

660
00:36:43,560 --> 00:36:46,120
Speaker 1: Yeah, And that's why I kind of it's kind of boring,

661
00:36:46,239 --> 00:36:48,080
Speaker 1: right because I want, I.

662
00:36:48,040 --> 00:36:50,720
Speaker 2: Mean to go from sixty to one twenties. Not so boring,

663
00:36:50,760 --> 00:36:52,959
Speaker 2: but yeah, from what we've expected from Bickoey in the past,

664
00:36:52,960 --> 00:36:53,920
Speaker 2: it's I guess it could be.

665
00:36:54,120 --> 00:36:56,759
Speaker 1: Right because it and then I'm also in putting my

666
00:36:56,800 --> 00:37:00,839
Speaker 1: own little frustration with the correlation equities, because equities have

667
00:37:01,360 --> 00:37:06,040
Speaker 1: infinity risks more than bitcoin, sure, right, and why why

668
00:37:06,040 --> 00:37:08,439
Speaker 1: should they have any correlation? And most of its life

669
00:37:08,480 --> 00:37:10,719
Speaker 1: it's not it's not had any you know, it's been

670
00:37:10,760 --> 00:37:15,120
Speaker 1: point four nine, I think at the highest. So I

671
00:37:15,480 --> 00:37:18,640
Speaker 1: really I think that's maybe on the barecase. That's kind

672
00:37:18,640 --> 00:37:19,720
Speaker 1: of my biggest.

673
00:37:19,360 --> 00:37:23,759
Speaker 2: Could it Could it be because the you mentioned psychology

674
00:37:23,760 --> 00:37:26,440
Speaker 2: and liquidity? And could it be because the liquidity is

675
00:37:26,480 --> 00:37:28,520
Speaker 2: more in the driver's seat and all these assets are

676
00:37:28,520 --> 00:37:30,640
Speaker 2: benefiting from the rising tide lifting all boats.

677
00:37:32,080 --> 00:37:35,239
Speaker 1: Yeah, and then the reason gold's going up, And then

678
00:37:35,280 --> 00:37:38,480
Speaker 1: I do think this is subjective, right, I think bitcoins

679
00:37:38,480 --> 00:37:44,040
Speaker 1: another catchup to gold is counterparty risk management, right, And

680
00:37:44,200 --> 00:37:46,640
Speaker 1: I talked to you know, we run to two edge fronts.

681
00:37:46,680 --> 00:37:50,560
Speaker 1: I talked to institutions and huge family offices. They're buying

682
00:37:50,640 --> 00:37:54,560
Speaker 1: at any price. I can tell you being a professional

683
00:37:54,600 --> 00:37:59,080
Speaker 1: asset management space eight years, everybody's like, well, I kind

684
00:37:59,080 --> 00:38:01,040
Speaker 1: of want to buy under a because there's so much

685
00:38:01,080 --> 00:38:04,920
Speaker 1: money waiting to buy bitcoin. It is insane. Now, either

686
00:38:05,160 --> 00:38:08,480
Speaker 1: it's going to run away from them, right, or it

687
00:38:08,560 --> 00:38:11,399
Speaker 1: keeps rotcheting up as like you're saying, oh, well shit,

688
00:38:11,680 --> 00:38:15,520
Speaker 1: I missed one hundred. Now it's one eighty to one thirty,

689
00:38:16,120 --> 00:38:19,279
Speaker 1: and then okay, then eight months later whatever it is,

690
00:38:19,320 --> 00:38:21,680
Speaker 1: then it's two twenty five to one eighty, and it's

691
00:38:21,719 --> 00:38:24,879
Speaker 1: just going to keep doing that maybe in that pattern. Yeah, yeah,

692
00:38:24,920 --> 00:38:27,920
Speaker 1: and so I always like outlining a trading plan that

693
00:38:27,920 --> 00:38:29,920
Speaker 1: can resolve and solve for anything.

694
00:38:30,320 --> 00:38:32,320
Speaker 2: So as somebody who's been in bitcoin for a decade,

695
00:38:33,600 --> 00:38:36,200
Speaker 2: it's about the time I've been in as well. What

696
00:38:36,320 --> 00:38:38,560
Speaker 2: a run it's been. But you also have two hedge

697
00:38:38,560 --> 00:38:44,080
Speaker 2: funds that are centered around trading around bitcoin, I believe. Yeah,

698
00:38:44,160 --> 00:38:45,919
Speaker 2: so it correct me on that. And then the question

699
00:38:46,000 --> 00:38:49,359
Speaker 2: I wanted to ask is how do you look at like,

700
00:38:49,719 --> 00:38:53,560
Speaker 2: here's my savings, my long term bitcoin, and then here's

701
00:38:53,600 --> 00:38:55,960
Speaker 2: what I'm trading with or trying to create alpha with.

702
00:38:56,480 --> 00:38:59,160
Speaker 1: That's why we ended up designing. So I had already

703
00:38:59,200 --> 00:39:02,960
Speaker 1: been running. I went out of college to Morgan Stanley

704
00:39:03,200 --> 00:39:07,279
Speaker 1: twenty ten, spun out and started a volatility arbitrage fund.

705
00:39:07,560 --> 00:39:13,799
Speaker 1: In that business, came across bitcoin, did personal investment, then

706
00:39:13,840 --> 00:39:17,160
Speaker 1: actually invested one of the first bitcoin ATMs on their rays.

707
00:39:17,880 --> 00:39:22,240
Speaker 1: This was I think maybe Q two twenty fifteen, somewhere around.

708
00:39:22,040 --> 00:39:24,160
Speaker 2: There, like an actual ATM machine that you can get

709
00:39:24,400 --> 00:39:24,839
Speaker 2: shat over.

710
00:39:24,920 --> 00:39:27,680
Speaker 1: Yeah, and it was a friend from the commodity space

711
00:39:27,719 --> 00:39:29,799
Speaker 1: that was he left out to go start this up.

712
00:39:29,840 --> 00:39:33,680
Speaker 1: He was out of Chicago. Oh okay, sure, and then

713
00:39:34,040 --> 00:39:37,759
Speaker 1: just going back to Hayek and roth Parter, it was

714
00:39:37,800 --> 00:39:41,560
Speaker 1: just wait a minute, this isn't just cypherpunk money or

715
00:39:41,560 --> 00:39:45,920
Speaker 1: magic Internet money. This And gradually as I further got it,

716
00:39:45,920 --> 00:39:50,279
Speaker 1: it's like, well, my partners and I were like, we're

717
00:39:50,320 --> 00:39:52,160
Speaker 1: just going to accumulate this like we were already doing

718
00:39:52,200 --> 00:39:55,319
Speaker 1: gold because we're already goldbugs. How do we use our

719
00:39:55,360 --> 00:40:01,200
Speaker 1: skill set to dump more AUM and just profit and

720
00:40:01,280 --> 00:40:05,400
Speaker 1: have that kind of feed into the accumulation. And we

721
00:40:05,560 --> 00:40:09,760
Speaker 1: ended up designing the multi strategy fund that basically always

722
00:40:09,880 --> 00:40:13,880
Speaker 1: holds call it twenty five or thirty percent in cold

723
00:40:14,400 --> 00:40:19,560
Speaker 1: that then gets rebalanced with gains from algorithms and et cetera.

724
00:40:19,640 --> 00:40:23,200
Speaker 1: So it's kind of like there's a portfolio quantitative strategies

725
00:40:23,239 --> 00:40:26,799
Speaker 1: that feed into the accumulation within the fund. Okay, and

726
00:40:26,800 --> 00:40:28,319
Speaker 1: then and you know, I'm not going to pay the

727
00:40:28,320 --> 00:40:30,000
Speaker 1: government to the tacks on the gain I have on

728
00:40:30,120 --> 00:40:31,799
Speaker 1: the bigcoin. I'm just not going to do it.

729
00:40:32,080 --> 00:40:32,880
Speaker 2: On your bigcoin.

730
00:40:33,080 --> 00:40:33,279
Speaker 1: Yeah.

731
00:40:33,320 --> 00:40:35,440
Speaker 2: Obviously the fund buying and selling and that's a different.

732
00:40:35,160 --> 00:40:38,480
Speaker 1: Story, right, But then it can wash itself between losses

733
00:40:38,520 --> 00:40:40,600
Speaker 1: and be tax efficient from harvesting. And then you know,

734
00:40:40,800 --> 00:40:42,239
Speaker 1: when you lose if you have a down year. It's

735
00:40:42,239 --> 00:40:44,520
Speaker 1: a rite off against income, so you don't really lose.

736
00:40:44,719 --> 00:40:46,920
Speaker 2: Yeah, when you're doing their own business entity. So if

737
00:40:46,960 --> 00:40:49,640
Speaker 2: you have two different funds and they're running two different strategies.

738
00:40:49,560 --> 00:40:52,840
Speaker 1: Yeah, one is a trend following fund and we partner

739
00:40:52,920 --> 00:40:55,439
Speaker 1: with coin Desk on it. It's the first hedge fund

740
00:40:55,440 --> 00:41:00,080
Speaker 1: that trades the coin Desk twenty large cap basket and

741
00:41:00,200 --> 00:41:03,600
Speaker 1: it's that's we kind of designed it for institutions that

742
00:41:03,800 --> 00:41:08,240
Speaker 1: needed a diversified exposure Bitcoin sixty percent of it anyways,

743
00:41:09,120 --> 00:41:11,439
Speaker 1: and that's a little easier to understand because this doesn't

744
00:41:11,440 --> 00:41:15,160
Speaker 1: have the complexity of satire market neutral momentum HFT, you

745
00:41:15,200 --> 00:41:19,479
Speaker 1: know where we have thirteen algos in the main fund

746
00:41:19,719 --> 00:41:24,160
Speaker 1: or the multistrat So yeah, those are One is more

747
00:41:24,200 --> 00:41:27,759
Speaker 1: of a what I would call defining Bitcoin MAXI kind

748
00:41:27,800 --> 00:41:32,520
Speaker 1: of fund, and the other is okay, replace your equity

749
00:41:32,560 --> 00:41:35,400
Speaker 1: allocation with this. This is vall controlled, risk controlled and

750
00:41:35,480 --> 00:41:38,680
Speaker 1: diversified exposure to digital assets. I have my own money

751
00:41:38,680 --> 00:41:42,000
Speaker 1: in both obviously, or I would be malpractice. But there's

752
00:41:42,200 --> 00:41:48,960
Speaker 1: just bells and whistles on one, simplistic elegance on the other. Yeah, yeah, okay,

753
00:41:49,560 --> 00:41:51,759
Speaker 1: and it happened organically. We only intended to have the

754
00:41:51,800 --> 00:41:55,200
Speaker 1: one fund. But you know, there's some good people in

755
00:41:55,239 --> 00:41:58,960
Speaker 1: the space, and I think not Bitcoin's one benchmark, and

756
00:41:59,000 --> 00:42:02,000
Speaker 1: then there needs to be another benchmark, right because I'm

757
00:42:02,040 --> 00:42:05,319
Speaker 1: not let's say I was a precious metals fund, I'm

758
00:42:05,360 --> 00:42:07,880
Speaker 1: not going to only trade gold, Like, how could I?

759
00:42:08,200 --> 00:42:10,880
Speaker 1: How could I do that? That's that's kind of silly.

760
00:42:11,280 --> 00:42:14,759
Speaker 2: Yeah, okay, all right, Chris, Well, I think we went

761
00:42:14,840 --> 00:42:17,360
Speaker 2: round the world in bitcoin pretty good. I think that

762
00:42:17,440 --> 00:42:19,560
Speaker 2: sums it up. I mean, it's just so much happening

763
00:42:19,680 --> 00:42:23,200
Speaker 2: with politics and the macro and the charts, and it's

764
00:42:23,239 --> 00:42:26,200
Speaker 2: hard to keep up for most. But you know, I

765
00:42:26,280 --> 00:42:27,719
Speaker 2: asked you kind of at the beginning, sort of like

766
00:42:27,800 --> 00:42:31,280
Speaker 2: what your operating framework is. You know, for me, it's simple.

767
00:42:31,880 --> 00:42:34,520
Speaker 2: Governments will always print money. Yeah, as long as they

768
00:42:34,560 --> 00:42:36,960
Speaker 2: as long as they continue to debase money, I'm going

769
00:42:37,000 --> 00:42:38,400
Speaker 2: to continue to buy hard assets.

770
00:42:39,760 --> 00:42:41,640
Speaker 1: And even if they weren't, you would continue to buy

771
00:42:41,719 --> 00:42:44,600
Speaker 1: hard assets, which is why that's the answer anyways, Right,

772
00:42:45,320 --> 00:42:49,040
Speaker 1: because legacy planning, which we are both doing now at

773
00:42:49,080 --> 00:42:53,040
Speaker 1: our age range, that's agnostic of your fiat price. You're

774
00:42:53,160 --> 00:42:58,160
Speaker 1: entering it now, right, and I think that the risk

775
00:42:58,840 --> 00:43:03,600
Speaker 1: that they have all sturity and stop is almost zero,

776
00:43:04,360 --> 00:43:06,600
Speaker 1: and there is we have to be cognizant of the

777
00:43:06,800 --> 00:43:10,040
Speaker 1: call it ten to twelve percent risk. All of a sudden,

778
00:43:10,040 --> 00:43:13,080
Speaker 1: the lights go out because they went Wymar cube like

779
00:43:13,160 --> 00:43:16,640
Speaker 1: relative to Wymar in terms of the the quantity of

780
00:43:16,719 --> 00:43:21,840
Speaker 1: currency that came in post Versailles treaty, we are orders

781
00:43:21,880 --> 00:43:25,479
Speaker 1: of magnitude higher than that. And then what is it? Gold?

782
00:43:26,120 --> 00:43:30,200
Speaker 1: USDs down forty five percent year to date as of today.

783
00:43:30,880 --> 00:43:35,000
Speaker 1: So on the Dixie Yeah, like, I mean, Holy Christ Almighty.

784
00:43:35,480 --> 00:43:37,719
Speaker 1: So I'm with you a million percent. But we just

785
00:43:37,800 --> 00:43:43,120
Speaker 1: have to understand the debt unraveling is out there. But ultimately,

786
00:43:43,440 --> 00:43:45,520
Speaker 1: what what occurs at that point? There's liquidity one event

787
00:43:46,040 --> 00:43:48,680
Speaker 1: and then the hardest assets rise the fastest, and the

788
00:43:48,760 --> 00:43:50,280
Speaker 1: furthest after that event occurs.

789
00:43:51,080 --> 00:43:53,560
Speaker 2: Yeah, yeah, I mean, the Dixies come down quite a bit,

790
00:43:53,640 --> 00:43:56,560
Speaker 2: but you could argue that historically it's more in the

791
00:43:56,680 --> 00:43:58,800
Speaker 2: eighty to ninety range, and so we might still have

792
00:43:58,960 --> 00:44:01,239
Speaker 2: quite a bit to come down. But I absolutely agree

793
00:44:01,239 --> 00:44:02,719
Speaker 2: with you on that. And and the thing with the

794
00:44:03,880 --> 00:44:06,280
Speaker 2: you know, back to the hyper inflation of y Mar Blick,

795
00:44:06,320 --> 00:44:09,720
Speaker 2: I mean, the bar set to be considered hyper inflation

796
00:44:09,920 --> 00:44:12,000
Speaker 2: is so high fifty percent month over a month of

797
00:44:12,040 --> 00:44:15,880
Speaker 2: a month, like, okay, so if it's only forty percent

798
00:44:15,960 --> 00:44:17,880
Speaker 2: month of a month, that's not hyper inflation, right. I

799
00:44:17,920 --> 00:44:20,040
Speaker 2: think that it's like pretty crazy either like no inflation

800
00:44:20,120 --> 00:44:23,879
Speaker 2: or hyperinflation, and so everything's like a spectrum in between there.

801
00:44:23,960 --> 00:44:26,120
Speaker 2: But I think, you know, yeah, I think we just

802
00:44:26,239 --> 00:44:29,600
Speaker 2: kind of that's my framework I operate from. Obviously, you know,

803
00:44:29,680 --> 00:44:34,560
Speaker 2: bitcoin makes the most sense scarce assets, scarce properties, gold,

804
00:44:34,640 --> 00:44:35,120
Speaker 2: et cetera.

805
00:44:35,760 --> 00:44:38,000
Speaker 1: I tell people, I said this to what were politicians

806
00:44:38,360 --> 00:44:40,960
Speaker 1: when we were up there. Bitcoin's the embodiment of the

807
00:44:41,000 --> 00:44:45,120
Speaker 1: Bill of Rights in technological form. No, there's nothing. Even

808
00:44:45,200 --> 00:44:48,960
Speaker 1: gold has way more risk than bitcoin. They're just different.

809
00:44:49,080 --> 00:44:52,560
Speaker 1: People think Brisbane's price, that's not what risk is. Risk

810
00:44:52,719 --> 00:44:55,760
Speaker 1: is on the humans execution of the trading and investment

811
00:44:55,840 --> 00:44:59,719
Speaker 1: plan and the holding and maintaining the position in that asset. Right,

812
00:45:00,040 --> 00:45:04,800
Speaker 1: Fiat only goes one way, So right, price outside of

813
00:45:04,840 --> 00:45:09,200
Speaker 1: a sixty day prison doesn't even matter, right, Yeah, all.

814
00:45:09,160 --> 00:45:10,759
Speaker 2: Right, Chris, we're gonna we're gonna hang it up with that.

815
00:45:11,040 --> 00:45:13,279
Speaker 2: I want to make sure we'll link down to your

816
00:45:14,000 --> 00:45:15,839
Speaker 2: your funds and the shownes down below. If anybody wants

817
00:45:15,840 --> 00:45:17,160
Speaker 2: to reach out to you, they can get ahold of you.

818
00:45:17,520 --> 00:45:19,279
Speaker 2: Anything else you want draw attention to before we wrap

819
00:45:19,360 --> 00:45:19,560
Speaker 2: it up.

820
00:45:20,120 --> 00:45:23,320
Speaker 1: No, I think people just you know, stick to a

821
00:45:23,480 --> 00:45:28,920
Speaker 1: well thoughnt out trading plan and deploy assets wisely. And

822
00:45:29,239 --> 00:45:31,759
Speaker 1: Bitcoin's the fastest race horse I've ever seen.

823
00:45:32,239 --> 00:45:35,160
Speaker 2: So yeah cool, Chris Well, thanks for joining me today.

824
00:45:35,200 --> 00:45:35,520
Speaker 2: It's fun.

825
00:45:35,600 --> 00:45:36,680
Speaker 1: Yeah, thank you, thanks for having me