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Speaker 1: Micro strategy becomes the most valuable organization from an equity

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Speaker 1: perspective in the entire world, because they will become like

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Speaker 1: the central bank of bitcoin in the future.

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Speaker 2: There's a group of children that exist in.

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Speaker 1: The world today that are around that timeframe that have

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Speaker 1: only ever been alive since bitcoin has been around. If

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Speaker 1: you believe in artificial intelligence is going to be successful

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Speaker 1: long term, you inherently need to understand that bitcoin will

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Speaker 1: be as well. These bots are going to have to

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Speaker 1: get paid somehow, and they can't set up a bank

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Speaker 1: account of Bank of America.

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Speaker 2: Bitcoin price will decline.

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Speaker 1: Some of these companies may have to start selling their

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Speaker 1: bitcoin to buy their shares back to.

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Speaker 2: Balance out the end nab of the company.

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Speaker 1: The more bitcoin we can actually acquire, the bigger geopolitical

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Speaker 1: advantage we.

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Speaker 2: Have in the future.

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Speaker 3: They've lowered their transaction to these by fifty percent.

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Speaker 2: That's remarkable.

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Speaker 4: How are you looking forward to that?

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Speaker 2: I still believe that our.

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Speaker 3: Hi Brian, So, what is the single biggest fundamental shift

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Speaker 3: that an investor has getting their head around bitcoin?

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Speaker 1: I think the biggest change that people haven't figured out yet,

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Speaker 1: especially a lot of traditional investors and asked managers, is

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Speaker 1: the difference between the value accretion at the protocol versus

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Speaker 1: the application layer, and that's flips with blockchain technology. So

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Speaker 1: to give you an example, in the early days of

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Speaker 1: the Internet, nobody could invest in IP like Internet Protocol

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Speaker 1: or TCP IP right like, that was the open source

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Speaker 1: infrastructure layer for the Internet, but if they wanted to

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Speaker 1: invest in it, they built on the application layer. So

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Speaker 1: your Facebook's, your Google is your yahoos. So if you

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Speaker 1: want to invest in email, you couldn't invest in SMTP

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Speaker 1: Simple Mail Transfer Protocol, the email protocol itself, but you

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Speaker 1: could invest in a company building an application that provided

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Speaker 1: email to the markets. Right and so since the Internet

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Speaker 1: up until just recently, most of the value accretion happened

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Speaker 1: at that application layer, but the software protocol layer couldn't

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Speaker 1: accreate any value relative to having an asset that you

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Speaker 1: could hold as an individual retail. What's flipped with bitcoin

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Speaker 1: is now all the value accretion is happening at the

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Speaker 1: software protocol layer. So basically, buying bitcoin, buying that chunk

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Speaker 1: of the bitcoin protocol is significantly out performing the businesses

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Speaker 1: that operate at the application layer. And a great example

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Speaker 1: is if you think about investing in Coinbase in twenty

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Speaker 1: thirteen versus fuying bitcoin in twenty thirteen, and the value

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Speaker 1: appreciation over that time period to now bitcoins significantly outperform Coinbase,

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Speaker 1: even though Coinbase has done very very well, And I

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Speaker 1: think that's the big shift people need to wrap their

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Speaker 1: heads around.

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Speaker 3: But is that is that something that changes through as

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Speaker 3: this system matures in the protocol and the applications mature.

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Speaker 4: So you mentioned Coinbase, but over.

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Speaker 3: The last since coin coin Base went public, has it

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Speaker 3: outperformed Bitcoin?

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Speaker 2: No? I believe Bitcoin is still still one buick point

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Speaker 2: over that time period. Yeah.

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Speaker 4: Okay, Well, your fund off the Chain Capital, which thank

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Speaker 4: you for dinner last night. Yes, of course.

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Speaker 3: So your fund, though, is investing into companies that are

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Speaker 3: building on and around the bitcoin ecosystem in hopes that

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Speaker 3: they're going to outperform Bitcoin.

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Speaker 2: Yeah.

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Speaker 1: So we do a mixture of private companies and then

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Speaker 1: also liquid assets in our portfolio. So our core goal

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Speaker 1: is we try to outperform Bitcoin after fees and we

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Speaker 1: take a Warren Buffett Benjamin Graham deep discount value approach

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Speaker 1: and we're just applying it to this new technology sector

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Speaker 1: and that strategy has fortunately allowed us to outperform bitcoin

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Speaker 1: six of the last eight years after fees, and so

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Speaker 1: on the private company side, we're looking for very mature

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Speaker 1: businesses that are cash flow positive, minimum to no debt,

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Speaker 1: and we think are on a one to three year

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Speaker 1: pathway to liquidity. And what we do is we find

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Speaker 1: early investors or employees that are looking for liquidity and

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Speaker 1: become forced or motivated sellers, and we'll go at and

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Speaker 1: offer them that liquidity at a large discount to where

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Speaker 1: we believe that asset's intrinsically valued. And so we have

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Speaker 1: a portion of the portfolio in private companies where we

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Speaker 1: do those kinds of things. And then on the liquid side,

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Speaker 1: we look for unique ways to actually buy digital assets

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Speaker 1: at a discount or things that we think are intrinsically discounting.

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Speaker 1: A great example of that is the Mountcox bankruptcy. So

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Speaker 1: in the early days of the mountgox trade, we originated

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Speaker 1: the way to buy those bitcoin bankruptcy claims with our team.

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Speaker 1: And what was interesting about that particular trade is in

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Speaker 1: Japanese bankruptcy law, when a bankrupt he concludes, they pay

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Speaker 1: out the liquid asset, versus a US bankruptcy law, they

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Speaker 1: pay out the assets cash value strike at the point

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Speaker 1: of the bankruptcy filing. So not only were we getting

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Speaker 1: a discount on the claim value, we were getting Bitcoin's

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Speaker 1: future performance. So that's an example of something else we've

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Speaker 1: deployed to help us outperform over time.

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Speaker 3: Yeah, but if we go back to the example of

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Speaker 3: the protocol versus the application layer, right, So to your point,

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Speaker 3: you couldn't invest into the protocols of the Internet SMTP, TCIP,

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Speaker 3: so the value of creed on the application layer the Facebook,

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Speaker 3: the Google, etc. And now Bitcoin gives us an opportunity

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Speaker 3: to invest into the base protocol layer. We can buy

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Speaker 3: Bitcoin today and certainly, to your point, it's been outperforming

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Speaker 3: all the applications. But I guess the point that I

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Speaker 3: was trying to ask is do you think that as.

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Speaker 4: Of this evolves, that starts to flip.

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Speaker 3: So certainly the based protocol Bitcoin will continue to build value,

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Speaker 3: but we'll start to see applications being built on top

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Speaker 3: of it that eventually, maybe down the road, are growing

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Speaker 3: faster than Bitcoin.

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Speaker 2: Like give me like layer two type applications on top

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Speaker 2: of Bitcoin, or businesses that are built I mean, I

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Speaker 2: would consider like.

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Speaker 3: Other businesses that are built on top of the Bitcoin

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Speaker 3: system and application of that potentially, I.

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Speaker 2: Think that's possible in time.

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Speaker 1: An interesting way to think about it is that it

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Speaker 1: took about the first fifteen to sixteen years, I would say,

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Speaker 1: with the Internet to build the infrastructure protocol layer before

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Speaker 1: the application layer really started evolving and getting adoption with

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Speaker 1: user friendly applications on top.

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Speaker 2: Of the Internet.

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Speaker 1: And you know, we're kind of that same time span

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Speaker 1: into bitcoin now. So I wouldn't be surprised if in

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Speaker 1: the years to come we'll see interesting applications built on

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Speaker 1: top of bitcoin. I still believe that our thesis around

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Speaker 1: the applications that are built that are still more software

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Speaker 1: enabled as opposed to a company, I think will still

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Speaker 1: outperform over time. And why I think that is because

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Speaker 1: the value of a digital asset has exponential growth capabilities

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Speaker 1: compared to the equity of a company. Because an equity

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Speaker 1: of a company, you know, bitcoin can sometimes trade up

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Speaker 1: you know, twenty thirty percent or more in a couple

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Speaker 1: of weeks, whereas the equity value of a company is

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Speaker 1: generally never going to move this yes, so it'll catch

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Speaker 1: up and it's going to create a dragon performance with that,

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Speaker 1: and so if you can balance that correctly, you can

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Speaker 1: I think you can make money in both areas, right,

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Speaker 1: if you can get deep enough discounts on certain assets.

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Speaker 1: Once that volatility smooths out from the private equity catching

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Speaker 1: up with liquid parts of someone's portfolio, they can work

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Speaker 1: well together in tandem. But I do think the liquid assets,

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Speaker 1: just by the very nature of how quickly they can

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Speaker 1: move from their performance appreciation, will probably continue to outperform

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Speaker 1: over time.

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Speaker 4: Yeah.

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Speaker 3: And you know, I looked at like the early days

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Speaker 3: of the Internet in nineteen ninety seven, ninety eight, ninety nine,

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Speaker 3: and you were like trading these things called like internet stocks,

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Speaker 3: and today there's just no such thing as internet stocks.

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Speaker 3: They're just companies, right, And so you know, maybe there's

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Speaker 3: this future like that. And I think of like bitcoin

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Speaker 3: sort of like as a minu. It's a commodity, it's

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Speaker 3: an asset, like oil is a commodity or an asset.

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Speaker 3: And over the last fifty years, oil's been in a

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Speaker 3: sixty seventy dollars range plus or minus. But then we

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Speaker 3: have the oil industry that's the eighth artist industry in

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Speaker 3: the world. Right, it's woe point eight trillion dollars. So

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Speaker 3: I sort of look at, as you know, the course

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Speaker 3: bitcoin will continue to appreciate. But then what about the

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Speaker 3: industry that gets built around that?

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Speaker 4: How would you do that?

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Speaker 2: I think that it's going to grow significantly over time.

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Speaker 1: So if we look at bitcoin as the base layer

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Speaker 1: and the new types of applications being built on top,

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Speaker 1: and some of these applications are like the difference between

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Speaker 1: software and equity. So the Lightning Network is an example, right,

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Speaker 1: that's a software enabled application built on top of bitcoin.

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Speaker 1: Whereas a company that offers like a wallet is an

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Speaker 1: example that integrates with the Lighting network would be more

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Speaker 1: of the equity structure that's interfacing with that. But I

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Speaker 1: think as these new layers get built on top one

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Speaker 1: of the thesises that I've had for many years, it

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Speaker 1: will be interesting to see how this plays out. Is

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Speaker 1: many many years into the future, are we going to

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Speaker 1: have all these different blockchains, so bitcoin and other digital

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Speaker 1: assets that serve different use cases, or just like IP

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Speaker 1: in the early days in the Internet, well that collapse

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Speaker 1: on top of bitcoin. Well, the whole digital asset universe

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Speaker 1: collapse on top of the bitcoin protocol. Because the applications

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Speaker 1: on top get so much more efficient as technology advances

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Speaker 1: over time, It's too early for us to know that,

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Speaker 1: but if we use the Internet is a lesson from history.

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Speaker 2: That's what happened with IP.

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Speaker 3: Yeah, yeah, I mean I also understand that and my

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Speaker 3: thesis as it does, all collapse, and I think we're

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Speaker 3: already starting to see that. And so through the different

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Speaker 3: layers that we have right now, we can do pretty

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Speaker 3: much all of the if you want to call it

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Speaker 3: utility from other layers or I'm sorry, other base layers

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Speaker 3: coming over, even to the point of Charles Hoskin from

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Speaker 3: our Cardano saying he wants to put it on top

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Speaker 3: of bitcoin layer two, smart contracts on layer to privacy

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Speaker 3: on layer too.

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Speaker 2: All of that.

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Speaker 3: I would say, it's sort of like if you think

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Speaker 3: about just from like a philosophical level, like a business level,

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Speaker 3: like a business's goal should be to remove as much

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Speaker 3: friction as possible, and so it's like and then you

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Speaker 3: have network effects, and so it's like trying to manage

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Speaker 3: different blockchains and different tokens.

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Speaker 4: It just doesn't really make sense.

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Speaker 3: Like Bitcoin makes sense to me because it's like we

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Speaker 3: could have one global, recognized, borderless, you know, type of asset.

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Speaker 4: So it'll be interesting to see how that shapes up.

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Speaker 4: I mean, don't you think we're starting to see that

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Speaker 4: or know it's true.

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Speaker 1: No, I think I think we're starting to see it.

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Speaker 1: I'll be interesting to see how it shakes out over time.

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Speaker 1: I think it's too early to say everything's going to

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Speaker 1: collapse because some of these new protocols are using Bitcoin

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Speaker 1: for certain things but not for everything. So a great

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Speaker 1: example is there's a new protocol called himI that is

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Speaker 1: basically taking the speed of the transaction of Ethereum in

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Speaker 1: some of things Ethereum does, but they're anchoring it into

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Speaker 1: the security network of Bitcoin. So basically they're taking you

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Speaker 1: know what Bitcoin is so brilliant on is it's the

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Speaker 1: most secure protocol ever invented. But they're using some of

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Speaker 1: these other protocols to create a connective tissue between the two.

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Speaker 1: So what I'm trying to figure out over time is

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Speaker 1: are we going to see more of that where maybe

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Speaker 1: the most valuable parts of Bitcoin get connected through this

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Speaker 1: tissue to these other blockchains, or as Bitcoin becomes more

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Speaker 1: advanced over time, what collapse on top of it. I

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Speaker 1: think today it's a little too early to give a

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Speaker 1: definitive answer, but I don't think either. I think it's

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Speaker 1: possible that could happen over time.

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Speaker 3: Yeah, yeah, and we are starting to see a lot

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Speaker 3: more side chains and things like that. There's like the

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Speaker 3: whole arc ecosystem that's like developing on top of that.

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Speaker 3: So yeah, it's interesting. What do you think are the

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Speaker 3: most interesting things? What are you most focused on in

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Speaker 3: the sort of like this bitcoin opportunity space right now.

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Speaker 1: So I think right now there's a huge hype around

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Speaker 1: these bitcoin treasury type opportunities, and I think it's very interesting.

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Speaker 1: I think that we've participated in some of these, and

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Speaker 1: I look at it in kind of two ways. I

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Speaker 1: think these treasury companies will have great opportunity, especially the

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Speaker 1: ones that hit the markets early in the short to

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Speaker 1: near term with them. I do think if we start

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Speaker 1: to see a drawdown with bitcoin, like we've seen many

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Speaker 1: many times historically through these cycles, there's going to reach

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Speaker 1: a point where there'll be too many of these market

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Speaker 1: entrants that'll be in there, and it will create a

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Speaker 1: washout phase or a shakeout phase, because as the bitcoin

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Speaker 1: price will decline, some of these companies may have to

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Speaker 1: start selling their bitcoin to buy their shares back to

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Speaker 1: balance out the end nab of the company, and that

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Speaker 1: could actually create an accelerated drawdown in the space. If

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Speaker 1: you have a tenure vision for this, I think it's

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Speaker 1: going to be very successful. Overta, I think some of

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Speaker 1: these companies will become some of the most valuable businesses

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Speaker 1: in the world. Thesis says that long term, micro strategy

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Speaker 1: becomes the most valuable organization from an equity perspective in

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Speaker 1: the entire world, because they will become like, in my opinion,

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Speaker 1: the central Bank of Bitcoin in the future, and the

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Speaker 1: other ones around the world that are smaller versions of

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Speaker 1: this become like central.

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Speaker 2: Bank derivative branches in a sense, but bitcoins and.

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Speaker 1: Ominated and I think that over time that happens that

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Speaker 1: they have this wash out phase and then a little

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Speaker 1: bounce back from that, right, But short term that could

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Speaker 1: create an accelerated draw down. But in the near term,

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Speaker 1: as these companies are coming online and doing the strategy,

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Speaker 1: there's a lot of opportunity there.

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Speaker 3: Yeah. So when you talk about the draw down, you're

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Speaker 3: talking about the sort of for your cycle volatility of bitcoin.

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Speaker 2: If that continues.

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Speaker 4: Yeah, okay, so let's let's talk about that. If it continues,

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Speaker 4: is what you said.

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Speaker 3: So last cycle, Michael Sailor said, all your all your

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Speaker 3: models are broken, and I started thinking, you know, I mean, man,

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Speaker 3: these institutions are buying it, they put in a deep

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Speaker 3: cold storage. They're not really trading around it, although they were.

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Speaker 3: And then we had we had the draw down again.

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Speaker 3: So you said, if it happened, So how do you

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Speaker 3: think about that?

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Speaker 4: How are you looking forward to that?

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Speaker 2: So I want to shore I'm understanding cre if what particulod.

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Speaker 4: You said, if another drawdown happens?

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Speaker 2: Oh? Got it? Okay? So when you said if right,

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Speaker 2: it's not like there's like a certainty.

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Speaker 3: It's not for sure it's going to happen, even though

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Speaker 3: it's happened, you know, multiple times in the past. By sure,

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Speaker 3: are you thinking that there's a there's a chance of

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Speaker 3: probability that maybe it doesn't or it's it's muted.

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Speaker 1: I think it's muted or damp and compared to what

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Speaker 1: we've seen historically. And the big reason I think that

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Speaker 1: is because there's so many new avenues that have occurred,

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Speaker 1: like you noted before, to remove friction like a good

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Speaker 1: business removes friction and on ramps to an ecosystem, and

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Speaker 1: with the bitcoin ets, that was the first huge friction

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Speaker 1: remover we've seen for most people that don't trust a

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Speaker 1: crypto exchange like that demographic of people around the world

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Speaker 1: to now enter the bitcoin market by being able to

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Speaker 1: do it in a traditional brokerage in a fashion they're

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Speaker 1: used to, right, and so that created a way for

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Speaker 1: people to basically get exposure where they didn't have to

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Speaker 1: think about it.

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Speaker 2: They can just go in and click.

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Speaker 1: Because of that, because of the institutional adoption evolutioning compliance

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Speaker 1: around the space as well, we're seeing tremendous capital inflows

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Speaker 1: from parties that really never had exposure to it before.

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Speaker 1: And so a lot of these investors, in my opinion,

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Speaker 1: especially at the institutional level, they're not short term traders.

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Speaker 1: A lot of them have long term oriented use with this,

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Speaker 1: especially when we start thinking about what country governments could

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Speaker 1: do in time, like they're thinking about multi generational strategic

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Speaker 1: asset holds. And so, even if there is a drawdown,

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Speaker 1: because all markets go through cycles, every market in history

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Speaker 1: has always gone through some kind of cycle, I think

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Speaker 1: the drawdowns in the future aren't going to be seventy

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Speaker 1: to ninety percent like we've seen before, but maybe the

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Speaker 1: drawdowns fall somewhere between, you know, twenty five to forty

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Speaker 1: percent or something like that.

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Speaker 3: Yeah, So basically you're talking about the volatility is decreasing,

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Speaker 3: So does that mean the upside potential also gets muted?

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Speaker 1: So over time it will, but I think we still

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Speaker 1: have quite a few years before we're going to see

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Speaker 1: that get muted so much. And as a very nature

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Speaker 1: of bitcoin being a scariest finite asset, right like, the

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Speaker 1: more money that flows in, I think it'll just exponentially

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Speaker 1: grow over time. So I think we have a ways

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Speaker 1: to go, probably like another at least five to seven

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Speaker 1: years before we see like that tremendous adoption that's going

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Speaker 1: to be happening over this time period from a growth perspective,

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Speaker 1: and then I think we could probably see a little

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Speaker 1: more dampened growth on it. But I think that for

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Speaker 1: the physample suituture, it's going to be really, really valuable.

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Speaker 3: So if understanding correctly, you're saying that the upside volatility

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Speaker 3: isn't dampened very much until maybe five to seven years later,

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Speaker 3: but the downside volatility is dampened. So does that make

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Speaker 3: it a better risk adjusted entry today than we saw

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Speaker 3: in the past.

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Speaker 2: It's possible.

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Speaker 1: I mean we've got now what sixteen years of data

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Speaker 1: on bitcoin and what we've seen is when you add

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Speaker 1: bitcoin as part of a diversified portfolio from the traditional

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Speaker 1: sixty percent stocks, forty percent bond split even two percent

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Speaker 1: into bitcoin two percent out of stocks, and you transition

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Speaker 1: that into the Bitcoin actually enhances your sharp ratio, your

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Speaker 1: risk adjustine returns while lowering the overall ballotility of the portfolios.

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Speaker 1: So that's the data we have over the last sixteen years.

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Speaker 1: So like you noted, I think it's possible that can

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Speaker 1: continue to enhance the portfolio as this non correlated asset

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Speaker 1: which fiduciaries when you understand what bitcoin is. This is

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Speaker 1: actually one of the things that I think is very

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Speaker 1: interesting today. There's so many int situtional asset managers and

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Speaker 1: have a fiduciary duty to their clients to find non

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Speaker 1: correlated assets that can enhance risk adjustion returns, and so

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Speaker 1: many people still.

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Speaker 2: Have in bought baycoin.

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Speaker 1: Yeah, and it's like we have enough data now to

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Speaker 1: figure this out where you're almost violating, you know, or

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Speaker 1: infringing on your fiduciary duty to your clients by not

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Speaker 1: getting them exposure to this.

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Speaker 2: Yeah, because the data is clear.

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Speaker 3: Yeah. Just I think it was just this week we

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Speaker 3: saw Charles Schwab make a big announcement that they're getting

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Speaker 3: into bitcoin. They actually I heard about this a couple

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Speaker 3: of weeks ago because my sister in law is the

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Speaker 3: vice president over at Charles Schwab, and we have a

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Speaker 3: lot of fun at family get together for sure, because

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Speaker 3: I don't believe in that advisor model, we don't actually

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Speaker 3: talk about it too much. But you know, she's told

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Speaker 3: me for years that even if a client that she's

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Speaker 3: advising and comes to her and asks her about bitcoin,

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Speaker 3: she's not even allowed to discuss it.

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Speaker 2: Yeah, it's common across off with several different asset managers

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Speaker 2: like that.

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Speaker 3: Yeah, so back to the futary of duty. It's like

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Speaker 3: even if I'm asking you, you know, you're advising me

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Speaker 3: on my portfolio, and hey, do you think I should

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Speaker 3: include this? Like I can't talk about that, and what

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Speaker 3: a big gap. Now they just had a big meeting

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Speaker 3: I think it was two weeks ago, two three weeks ago,

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Speaker 3: and they announced, Okay, we're going to start allowing our

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Speaker 3: clients to do this. And now I've I posted about

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Speaker 3: this on Twitter and I got a lot of people

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Speaker 3: commenting the I'm with Schwab. Now they're talking with me

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Speaker 3: about it. Okay, Vanguard seems to be maybe the last

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Speaker 3: hold out there.

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Speaker 4: We'll see what happens there.

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Speaker 3: But so I guess so, but if we still have

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Speaker 3: a lot of the upside left, the downside's been damp,

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Speaker 3: and then it's a little bit of a better asymmetric opportunity,

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Speaker 3: I would think.

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Speaker 4: So.

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Speaker 1: Yeah, I think over time, it's just pretty clear economics, right,

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Speaker 1: like if you have something that you can't create more

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Speaker 1: and then we know the predictable issuance schedule over time

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Speaker 1: and the adoption growth gurbling thing that can change his price.

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Speaker 4: Yeah.

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Speaker 3: I look at it from like the cycles and the

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Speaker 3: different phases that we go through. And so phase one

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Speaker 3: was like this retail eruption, and so we had the

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Speaker 3: retail money coming in, which was big and it got

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Speaker 3: the market up there, but at the same time, the

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Speaker 3: risk was so high because like when I started buying

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Speaker 3: bitcoin it was twenty fifteen, but like what is it

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Speaker 3: and what was it going to do? And then you

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Speaker 3: had all the competition, like which layer one is going

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Speaker 3: to win out? And now most of that's been sort

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Speaker 3: of settled a little bit. And then you have now

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Speaker 3: the institutions and they're bringing in hundreds of billions of dollars,

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Speaker 3: and so we have sort of the risk removed, as in,

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Speaker 3: the government's not going to make it illegal, and the

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Speaker 3: US adopted it. That's a big one. It's not going

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Speaker 3: to be illegal. It's pretty much won the store value race,

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Speaker 3: and now we have hundreds of billions of dollars coming

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Speaker 3: in at the same time. So I look at it

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Speaker 3: as a much better risk adjested entry right now.

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Speaker 1: One thing that's important too, I think that you just

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Speaker 1: noted about the government not making it illegal or take

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Speaker 1: it over. There's a very important court case that happened

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Speaker 1: back in the day. But in twenty thirteen when bitcoin

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Speaker 1: went from a couple hundred bucks up to I think

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Speaker 1: around twelve to fourteen hundred bucks and crash back down,

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Speaker 1: the US government actually had congressional hearings and they were

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Speaker 1: considering banning bitcoin. But what they discovered was there was

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Speaker 1: a just I think it's an ap pellet case that

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Speaker 1: went up and I forget exactly what jurisdiction it was in,

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Speaker 1: but there was a university professor named Bernstein who created

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Speaker 1: open source cryptography software for some mathematical algorithms, wanted to

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Speaker 1: publish to the public that the government said, no, you

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Speaker 1: can't publish because this open source cryptography needs to be

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Speaker 1: approved for military arms dealing with the US government. And

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Speaker 1: this university professor said, that's not fair. This has nothing

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Speaker 1: to do with arms dealing or rocket launch systems and

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Speaker 1: things of that nature. I should be able to publish

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Speaker 1: this in an open source community to show the world

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Speaker 1: this work and this algorithm and things I figured out.

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Speaker 1: So he sued the US government. So the name of

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Speaker 1: the case is Bernstein versus the Department of Justice. The

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Speaker 1: Court's ultimately determined that open source cryptography software is considered

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Speaker 1: language and protected under the First Amendment with freedom of speech.

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Speaker 1: And so when they looked at that, they said, well, one,

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Speaker 1: we have court precedent on this. We can't actually ban bickcoin.

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Speaker 1: So we all know they slowed it down. It is

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Speaker 1: some things to try to slow down this option, but

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Speaker 1: they do. They couldn't ban it. I think the other

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Speaker 1: thought too, is how can we really ban it? How

442
00:18:49,080 --> 00:18:51,439
Speaker 1: can you ban open source cryptography software that you're going

443
00:18:51,480 --> 00:18:53,840
Speaker 1: to shut off the telecommunications grid or the energy grid, Like,

444
00:18:53,920 --> 00:18:56,280
Speaker 1: it's just not reasonable, right. But that's a very interesting

445
00:18:56,359 --> 00:18:58,240
Speaker 1: court case that kind of set some precedent many years

446
00:18:58,280 --> 00:19:01,080
Speaker 1: ago for open source cryptography software, which is exactly what

447
00:19:01,160 --> 00:19:01,680
Speaker 1: bitcoin is.

448
00:19:01,840 --> 00:19:02,040
Speaker 2: Yeah.

449
00:19:02,720 --> 00:19:04,440
Speaker 3: Good, it's a good point to bring up. And to

450
00:19:04,480 --> 00:19:06,399
Speaker 3: your point, they've done things to slow it down. I

451
00:19:06,440 --> 00:19:08,840
Speaker 3: remember in twenty seventeen, Bitcoin ran from like a thousand

452
00:19:08,880 --> 00:19:12,639
Speaker 3: to twenty thousand that year, and then in a coordinated

453
00:19:12,680 --> 00:19:15,399
Speaker 3: fashion in December of twenty seventeen, you had Facebook and

454
00:19:15,480 --> 00:19:18,640
Speaker 3: Google shut down all advertising around it. You know, most

455
00:19:18,680 --> 00:19:21,080
Speaker 3: of the banks blocked you from sending money over to

456
00:19:21,119 --> 00:19:24,280
Speaker 3: crypto exchanges, credit cards blocked you from making purchasing your

457
00:19:24,280 --> 00:19:24,680
Speaker 3: credit card.

458
00:19:24,720 --> 00:19:26,800
Speaker 4: And so if you think about like markets stopped going

459
00:19:26,840 --> 00:19:29,400
Speaker 4: up when there's no more buyers. Yeah, and so as

460
00:19:29,480 --> 00:19:30,119
Speaker 4: it was going.

461
00:19:30,040 --> 00:19:33,399
Speaker 3: Higher and hire and it sucking in more and more buyers,

462
00:19:33,400 --> 00:19:36,360
Speaker 3: there was less less buyers available, but then they shut

463
00:19:36,400 --> 00:19:39,119
Speaker 3: the door, right, And so to your point, now when

464
00:19:39,160 --> 00:19:41,040
Speaker 3: you look at the market cycle, the structure of the market,

465
00:19:41,080 --> 00:19:43,880
Speaker 3: I would say, to your point, the ETFs and now

466
00:19:44,119 --> 00:19:47,800
Speaker 3: these companies being included in the indexes and now financial

467
00:19:47,840 --> 00:19:51,200
Speaker 3: advisors bringing on board, so like instead of blocking the

468
00:19:51,280 --> 00:19:53,680
Speaker 3: exits like they did in twenty seventeen, it's like or

469
00:19:53,840 --> 00:19:54,920
Speaker 3: I guess they blocked the entrance.

470
00:19:55,680 --> 00:19:57,240
Speaker 4: Now they've just opened up the doors.

471
00:19:57,520 --> 00:19:59,840
Speaker 1: And from a friction standpoint too, I think between now

472
00:20:00,160 --> 00:20:03,400
Speaker 1: twenty thirty we're going to go through a remarkable span

473
00:20:03,480 --> 00:20:06,119
Speaker 1: of adoption because of the amount of friction that's going

474
00:20:06,200 --> 00:20:08,640
Speaker 1: to be relieved. And I noted before that it took

475
00:20:08,640 --> 00:20:11,359
Speaker 1: about sixteen years to build this infrastructure later for bitcoin,

476
00:20:11,440 --> 00:20:13,600
Speaker 1: and now we're reaching this mass adoption phase. I think

477
00:20:13,680 --> 00:20:16,720
Speaker 1: from ease of applications for these unique user experiences, it

478
00:20:16,720 --> 00:20:19,560
Speaker 1: will be developed. An interesting data point is that most

479
00:20:19,720 --> 00:20:22,960
Speaker 1: children around the age of sixteen is when they become

480
00:20:23,040 --> 00:20:24,359
Speaker 1: interested in computer science.

481
00:20:24,720 --> 00:20:26,760
Speaker 2: Now there's a group of children that exist in the world.

482
00:20:26,600 --> 00:20:29,280
Speaker 1: Today that are around that timeframe that have only ever

483
00:20:29,400 --> 00:20:32,640
Speaker 1: been alive since bitcoin has been around, right, and they're

484
00:20:32,680 --> 00:20:35,920
Speaker 1: reaching age sixteen. And if these people follow statistics and

485
00:20:35,920 --> 00:20:38,160
Speaker 1: they start to become interested in computer science, this could

486
00:20:38,160 --> 00:20:41,080
Speaker 1: be the generation of children that build the very very

487
00:20:41,320 --> 00:20:44,280
Speaker 1: interesting killer apps for bitcoin that removes this friction to

488
00:20:44,400 --> 00:20:47,320
Speaker 1: allow the world to just adopt this asset and technology

489
00:20:47,359 --> 00:20:47,800
Speaker 1: in mass.

490
00:20:48,640 --> 00:20:50,920
Speaker 3: Yeah, it's certainly a generational thing. It's like my grandparents

491
00:20:50,920 --> 00:20:53,399
Speaker 3: wouldn't buy bitcoin, but my grandkids or my kids wouldn't

492
00:20:53,400 --> 00:20:55,600
Speaker 3: buy gold kind of thing. And I know even with

493
00:20:55,680 --> 00:20:57,680
Speaker 3: my kids that are older now, but I remember my daughter.

494
00:20:58,480 --> 00:21:00,240
Speaker 3: She just thought everything was a touch screen to go

495
00:21:00,280 --> 00:21:02,280
Speaker 3: to every screen, and it's like, that's not that screen,

496
00:21:02,520 --> 00:21:04,760
Speaker 3: but they just they just think that, right, that's native

497
00:21:04,800 --> 00:21:05,080
Speaker 3: for them.

498
00:21:06,359 --> 00:21:06,479
Speaker 2: Now.

499
00:21:06,560 --> 00:21:08,520
Speaker 3: I know you've been doing a lot of trips over

500
00:21:08,560 --> 00:21:10,840
Speaker 3: to the Middle East, and when you think about the

501
00:21:10,840 --> 00:21:14,280
Speaker 3: Middle East, I had recently. I was over there in

502
00:21:14,440 --> 00:21:18,000
Speaker 3: Abu Dhabi in December and it broke a lot of

503
00:21:18,119 --> 00:21:20,960
Speaker 3: preconceived notions that I had. Right, I hadn't been there before.

504
00:21:21,359 --> 00:21:23,320
Speaker 3: And when you think about the Middle East, you might

505
00:21:23,359 --> 00:21:28,480
Speaker 3: think of old money, oil, right, things like that, But

506
00:21:28,560 --> 00:21:31,119
Speaker 3: they're pretty interested in this. Tell us what's going on

507
00:21:31,200 --> 00:21:33,399
Speaker 3: over in the Middle East. I think Saudi Arabia, UAE,

508
00:21:33,600 --> 00:21:33,960
Speaker 3: things like that.

509
00:21:34,200 --> 00:21:35,760
Speaker 1: Yeah, of course, So if we look at the UAE,

510
00:21:36,320 --> 00:21:40,320
Speaker 1: they were probably the earliest in the world to develop solid,

511
00:21:40,480 --> 00:21:44,200
Speaker 1: understandable crypto regulations. I think it was around twenty eighteen timeframe.

512
00:21:44,520 --> 00:21:46,480
Speaker 1: They just laid out the rules and said everything's a

513
00:21:46,560 --> 00:21:50,399
Speaker 1: digital commodity. So they were complete clarity on what regulatory

514
00:21:50,440 --> 00:21:53,200
Speaker 1: infrastructure was in for digital asset entrepreneurs that wanted to build.

515
00:21:53,280 --> 00:21:54,760
Speaker 1: So there's a ton of people that moved to the

516
00:21:54,840 --> 00:21:57,920
Speaker 1: UAE for that reason, so they're very advanced there. I

517
00:21:58,040 --> 00:21:59,880
Speaker 1: believe the sovereign wealth funds, like one of their top

518
00:22:00,040 --> 00:22:03,760
Speaker 1: holdings is the bitcoin ETFs. They also have big exposure

519
00:22:03,800 --> 00:22:05,919
Speaker 1: to coinbase and some of the asset managers that are

520
00:22:05,960 --> 00:22:09,080
Speaker 1: publicly traded in the crypto space, and I think they're

521
00:22:09,200 --> 00:22:11,280
Speaker 1: very forward thinking in regard to that. And they're making

522
00:22:11,440 --> 00:22:14,440
Speaker 1: huge investments in technology. And actually President Trump was just

523
00:22:14,480 --> 00:22:17,160
Speaker 1: over there recently on a tour. They were talking about

524
00:22:17,160 --> 00:22:19,240
Speaker 1: a lot of the investments they're making in digital assets

525
00:22:19,280 --> 00:22:22,280
Speaker 1: and artificial intelligence to grow the economy over time. And

526
00:22:22,359 --> 00:22:25,080
Speaker 1: then when you look at places like Saudi Arabia, whenever

527
00:22:25,280 --> 00:22:29,120
Speaker 1: the Crown prints NBS came and took over power, he really,

528
00:22:29,280 --> 00:22:32,760
Speaker 1: in my opinion, started this cultural renaissance in Saudi Arabia

529
00:22:32,760 --> 00:22:35,240
Speaker 1: because they were very traditional for many many years, and

530
00:22:35,320 --> 00:22:37,040
Speaker 1: I think he stepped in and he probably looked at

531
00:22:37,080 --> 00:22:39,200
Speaker 1: other things that were going on around the world, and

532
00:22:39,280 --> 00:22:42,240
Speaker 1: even UAE that was attracting tremendous amount of tourists and

533
00:22:42,359 --> 00:22:45,639
Speaker 1: opportunities from technology standpoint, and they started to lay out

534
00:22:45,680 --> 00:22:48,440
Speaker 1: this vision twenty thirty for Saudi Arabia, and that has

535
00:22:48,880 --> 00:22:52,320
Speaker 1: huge investments in technology and clean energy and infrastructure and

536
00:22:52,640 --> 00:22:54,840
Speaker 1: artificial intelligence and a variety of different things in these

537
00:22:54,880 --> 00:22:56,560
Speaker 1: new projects that they're building in the region. I think

538
00:22:56,640 --> 00:22:59,920
Speaker 1: long term to grow the region, attract more types of

539
00:23:00,040 --> 00:23:02,440
Speaker 1: opportunities and tourism to the reason for very unique things

540
00:23:02,440 --> 00:23:04,680
Speaker 1: that they're building, But technology is at the forefront of it,

541
00:23:05,000 --> 00:23:06,800
Speaker 1: and I think long term part of the goal is

542
00:23:06,840 --> 00:23:09,880
Speaker 1: they want to become less dependent on the remaining oil

543
00:23:09,920 --> 00:23:12,160
Speaker 1: reserves that they have, which has been such a tremendous

544
00:23:12,200 --> 00:23:14,639
Speaker 1: income generator for the region over time. And I think

545
00:23:14,720 --> 00:23:16,160
Speaker 1: one of those ways to go about it is thinking

546
00:23:16,200 --> 00:23:18,800
Speaker 1: how do they integrate in the future of technology, which

547
00:23:18,880 --> 00:23:20,800
Speaker 1: is bitcoin, in digital assets, these kinds of things.

548
00:23:21,040 --> 00:23:24,879
Speaker 3: Yeah, Yeah, I saw Trump's announcement of that. Is there

549
00:23:25,000 --> 00:23:27,040
Speaker 3: some joint i think cooperation with the United States to

550
00:23:27,119 --> 00:23:30,040
Speaker 3: build out is it some AI tech data centers or

551
00:23:30,080 --> 00:23:30,960
Speaker 3: something something like that.

552
00:23:31,720 --> 00:23:34,800
Speaker 1: In the UA specifically, there's a tremendous amount of large

553
00:23:34,840 --> 00:23:37,520
Speaker 1: scale bitcoin mining operations that are going on over there

554
00:23:37,880 --> 00:23:40,639
Speaker 1: and they're making the government's making a tremendous investment in

555
00:23:40,720 --> 00:23:41,080
Speaker 1: that space.

556
00:23:41,200 --> 00:23:41,400
Speaker 4: Yeah.

557
00:23:42,200 --> 00:23:45,160
Speaker 3: What are you seen in regards to sort of maybe

558
00:23:45,160 --> 00:23:47,920
Speaker 3: the convergence of bitcoin and AI and how those things

559
00:23:47,960 --> 00:23:50,040
Speaker 3: are working together so long term.

560
00:23:50,119 --> 00:23:54,119
Speaker 1: I always tell people that are hesitant or concerning of

561
00:23:54,200 --> 00:23:58,159
Speaker 1: crypto in bitcoin that you need to understand that if

562
00:23:58,200 --> 00:24:00,560
Speaker 1: you believe in artificial intelligence is going to be successful

563
00:24:00,600 --> 00:24:04,280
Speaker 1: long term, you inherently need to understand that bitcoin will

564
00:24:04,280 --> 00:24:05,840
Speaker 1: be as well. And the reason I say that is

565
00:24:05,880 --> 00:24:09,840
Speaker 1: because all these agents and these people doing these technology

566
00:24:09,880 --> 00:24:13,200
Speaker 1: technology algorithms doing virtual labor and work. There's an energy

567
00:24:13,240 --> 00:24:16,240
Speaker 1: expense to that from the computing power that's necessary whenever

568
00:24:16,359 --> 00:24:19,160
Speaker 1: we're querying groc or chat beat, GPT.

569
00:24:18,960 --> 00:24:19,440
Speaker 2: And things like that.

570
00:24:19,720 --> 00:24:21,600
Speaker 1: So there's going to be a whole economy of these

571
00:24:21,720 --> 00:24:25,720
Speaker 1: virtual agents creating virtual labor to service us and service

572
00:24:25,760 --> 00:24:27,720
Speaker 1: themselves as well. I think there'll be a whole economy

573
00:24:27,800 --> 00:24:29,879
Speaker 1: of even these bots that are doing things for themselves

574
00:24:29,920 --> 00:24:33,159
Speaker 1: in virtual economy, because there is an energy expenditure for that,

575
00:24:33,320 --> 00:24:36,000
Speaker 1: and it creates a computing cost. These bots are going

576
00:24:36,040 --> 00:24:38,720
Speaker 1: to have to get paid somehow, and they can't set

577
00:24:38,800 --> 00:24:40,639
Speaker 1: up at a bank account of Bank of America right,

578
00:24:40,880 --> 00:24:43,720
Speaker 1: or a traditional financial institution, so they will get paid

579
00:24:43,960 --> 00:24:46,200
Speaker 1: in like bitcoin or an astheletic piccoin, right, because it's

580
00:24:46,240 --> 00:24:48,920
Speaker 1: the most Internet native way to exchange value, and so

581
00:24:49,000 --> 00:24:50,960
Speaker 1: I think long term, if you believe AI is going

582
00:24:51,040 --> 00:24:53,640
Speaker 1: to be exponentially revolutionary to our world, which I think

583
00:24:53,680 --> 00:24:55,800
Speaker 1: most people that see it do believe that and understand

584
00:24:55,840 --> 00:24:58,119
Speaker 1: that's going to grow very quickly, you inherently need to

585
00:24:58,119 --> 00:24:59,080
Speaker 1: believe in bitcoin as well.

586
00:24:59,600 --> 00:25:04,359
Speaker 3: Yeah. Do you think that the AI revolution is going

587
00:25:04,400 --> 00:25:06,600
Speaker 3: to take everybody's jobs, is going to depress the economy

588
00:25:06,680 --> 00:25:08,760
Speaker 3: and then kind of hurt the long term trajectory of

589
00:25:08,840 --> 00:25:11,080
Speaker 3: these financial assets, or you think it's going to be

590
00:25:11,640 --> 00:25:12,680
Speaker 3: add to it.

591
00:25:12,960 --> 00:25:14,720
Speaker 1: I think it'll be a combination of both. I think

592
00:25:14,720 --> 00:25:18,320
Speaker 1: there'll be some jobs that'll get replaced completely by AI.

593
00:25:18,840 --> 00:25:21,600
Speaker 1: I think there'll be other jobs that will allow an

594
00:25:21,760 --> 00:25:24,720
Speaker 1: individual or a company to do things significantly more efficient

595
00:25:24,840 --> 00:25:27,840
Speaker 1: and then be able to reallocate their labor in other areas.

596
00:25:28,600 --> 00:25:30,639
Speaker 1: And I'll give you a great example. So I have

597
00:25:30,760 --> 00:25:33,040
Speaker 1: a family member of mine who runs a law firm,

598
00:25:33,280 --> 00:25:36,199
Speaker 1: and in the law firm, he was able to structure

599
00:25:36,680 --> 00:25:40,760
Speaker 1: chat GPT queries so that they could provide information into

600
00:25:40,840 --> 00:25:43,800
Speaker 1: it to help them develop reports and things that they

601
00:25:43,880 --> 00:25:46,760
Speaker 1: needed significantly faster than the manual way they were doing

602
00:25:46,800 --> 00:25:49,520
Speaker 1: it before. And what that allowed him to do was

603
00:25:49,600 --> 00:25:52,159
Speaker 1: actually expand the caseload that each of the pair of

604
00:25:52,240 --> 00:25:54,320
Speaker 1: legals could take on in the firm, So it didn't

605
00:25:54,359 --> 00:25:56,520
Speaker 1: replace the pair of legals, right, but it made them

606
00:25:56,640 --> 00:25:59,080
Speaker 1: ten x more efficient than what they were before. So

607
00:25:59,160 --> 00:26:01,080
Speaker 1: I'm hopeful that that'll be a likely outcome where you

608
00:26:01,160 --> 00:26:03,800
Speaker 1: still had this integration into the traditional economy, but it's

609
00:26:03,840 --> 00:26:05,080
Speaker 1: making people much more productive.

610
00:26:05,200 --> 00:26:05,400
Speaker 4: Yeah.

611
00:26:06,040 --> 00:26:08,000
Speaker 3: Yeah, that's the way I see it too, And that's

612
00:26:08,040 --> 00:26:09,679
Speaker 3: exactly what I was thinking as well. Everyone's like, oh,

613
00:26:09,720 --> 00:26:11,040
Speaker 3: they're going to fire everybody. It's like, why would they

614
00:26:11,040 --> 00:26:12,440
Speaker 3: fire everybody? Like why would'? They just want to be

615
00:26:12,640 --> 00:26:15,040
Speaker 3: more productive, more efficient and make more money, right, yeah,

616
00:26:15,119 --> 00:26:18,640
Speaker 3: which seems to make sense. What about with the bitcoin

617
00:26:18,800 --> 00:26:21,639
Speaker 3: mining and sort of like the AI data centers, is

618
00:26:21,680 --> 00:26:23,680
Speaker 3: that an area that you guys invest in or follow.

619
00:26:23,840 --> 00:26:24,640
Speaker 2: We've looked at it before.

620
00:26:24,720 --> 00:26:26,720
Speaker 1: So a big allocation that we had historically was in

621
00:26:26,800 --> 00:26:30,600
Speaker 1: a group called core Scientific, which was the largest bitcoin

622
00:26:30,680 --> 00:26:32,800
Speaker 1: miner in North America. And one of the things that

623
00:26:32,880 --> 00:26:34,600
Speaker 1: we found interesting about them is we were doing our

624
00:26:34,680 --> 00:26:36,920
Speaker 1: due diligence. Is core Scientific, I think, was coming out

625
00:26:36,920 --> 00:26:39,199
Speaker 1: of bankruptcy from the twenty twenty two events that occurred,

626
00:26:39,720 --> 00:26:40,679
Speaker 1: and when we were doing.

627
00:26:40,520 --> 00:26:41,280
Speaker 2: Our diligence on it.

628
00:26:41,359 --> 00:26:44,600
Speaker 1: What we discovered is about seventy five percent of their

629
00:26:44,640 --> 00:26:48,080
Speaker 1: mining infrastructure could be redirected towards AI computing, and the

630
00:26:48,200 --> 00:26:51,399
Speaker 1: profitability on the AI computing contracts was probably five to

631
00:26:51,520 --> 00:26:54,480
Speaker 1: seven x what the bitcoin mining profitability was and didn't

632
00:26:54,480 --> 00:26:56,040
Speaker 1: mean they were going to shut down the bitcoin mining.

633
00:26:56,080 --> 00:26:58,399
Speaker 1: It just means this was an expansion of their revenue models.

634
00:26:58,680 --> 00:27:00,680
Speaker 1: And when we discovered that that something, we're like, Okay,

635
00:27:00,680 --> 00:27:02,479
Speaker 1: this is very interesting haus a lot of opportunity here,

636
00:27:02,760 --> 00:27:05,119
Speaker 1: So we end up investing in that business. And then

637
00:27:05,119 --> 00:27:07,800
Speaker 1: they started launching these AI contracts and that created a

638
00:27:07,800 --> 00:27:10,879
Speaker 1: tremendous opportunity and for performance for that company, and I

639
00:27:10,920 --> 00:27:12,440
Speaker 1: think that's something that's going to be akin to a

640
00:27:12,520 --> 00:27:14,879
Speaker 1: lot of these bitcoin miners. The thing is is that

641
00:27:15,560 --> 00:27:17,879
Speaker 1: the bitcoin mining companies, as they get into that space,

642
00:27:18,080 --> 00:27:21,239
Speaker 1: most bitcoin miners, from my understanding, have built out their

643
00:27:21,280 --> 00:27:24,520
Speaker 1: infrastructure specific to bitcoin mining, and a lot of the

644
00:27:24,600 --> 00:27:27,280
Speaker 1: AI computing requires different kinds of hardware than what you

645
00:27:27,359 --> 00:27:30,600
Speaker 1: need for bitcoin mining, and so they will have to

646
00:27:30,640 --> 00:27:33,600
Speaker 1: have large capital capax expenses to build that out. But

647
00:27:33,680 --> 00:27:36,560
Speaker 1: over time, I think it's totally makes sense for their

648
00:27:36,560 --> 00:27:38,440
Speaker 1: business model because they're already doing it. They're already hosting

649
00:27:38,440 --> 00:27:40,080
Speaker 1: these data centers for bitcoin mining. You might as well

650
00:27:40,080 --> 00:27:41,159
Speaker 1: expand in that area as well.

651
00:27:41,640 --> 00:27:47,520
Speaker 3: Okay, Now for bitcoiners that are I mean, hopefully most

652
00:27:47,560 --> 00:27:50,000
Speaker 3: bitcoiners are here for the freedom aspects of bitcoin, but

653
00:27:50,160 --> 00:27:51,600
Speaker 3: a lot of us also like the number go up

654
00:27:52,000 --> 00:27:54,159
Speaker 3: part of bitcoin as well. So for people that are

655
00:27:54,200 --> 00:27:57,119
Speaker 3: thinking about allocating towards bitcoin to get their number to

656
00:27:57,160 --> 00:27:59,720
Speaker 3: go up, to protect their savings from inflation, things like that,

657
00:28:00,119 --> 00:28:03,600
Speaker 3: you think about allocating to bitcoin versus maybe some of

658
00:28:03,640 --> 00:28:07,040
Speaker 3: these bitcoin treasury plays, public plays, bitcoin minors or funds

659
00:28:07,119 --> 00:28:08,119
Speaker 3: like off the Jam Capital.

660
00:28:08,400 --> 00:28:08,560
Speaker 2: Yeah.

661
00:28:08,680 --> 00:28:12,840
Speaker 1: So if you're an individual investor that is probably not

662
00:28:12,960 --> 00:28:15,040
Speaker 1: going to have direct access to a lot of these

663
00:28:15,080 --> 00:28:18,320
Speaker 1: bitcoin treasury opportunities in the early stages when they're getting

664
00:28:18,359 --> 00:28:21,280
Speaker 1: the investments to go public and then do that, I

665
00:28:21,359 --> 00:28:23,440
Speaker 1: think it's probably better just to buy bitcoin.

666
00:28:23,680 --> 00:28:26,959
Speaker 2: However, that being said, some of them will do very

667
00:28:27,119 --> 00:28:27,480
Speaker 2: very well.

668
00:28:27,600 --> 00:28:30,280
Speaker 1: Right Like we saw micro Strategy have tremendous performance since

669
00:28:30,320 --> 00:28:32,720
Speaker 1: twenty twenty they adopted the standard and they've outperformed bitcoin

670
00:28:32,760 --> 00:28:36,040
Speaker 1: over that timeframe. So I think that I'm a big

671
00:28:36,119 --> 00:28:38,840
Speaker 1: believer is I don't like market timing if I invest

672
00:28:38,920 --> 00:28:42,160
Speaker 1: in something like Warren Buffett says, I wouldn't hold something

673
00:28:42,240 --> 00:28:44,560
Speaker 1: for ten minutes that I wouldn't hold for ten years, right, Like,

674
00:28:44,640 --> 00:28:47,479
Speaker 1: I'm a very long term oriented thinker, and so from

675
00:28:47,520 --> 00:28:49,760
Speaker 1: that perspective, I actually think you could be looking at

676
00:28:49,760 --> 00:28:52,920
Speaker 1: allocating to both, right, because the bitcoin treasury companies had

677
00:28:52,920 --> 00:28:56,320
Speaker 1: the potential during certain market cycles to outperform bitcoin. And

678
00:28:56,400 --> 00:28:58,719
Speaker 1: then if you have bitcoin directly too, if there's time

679
00:28:58,760 --> 00:29:01,320
Speaker 1: periods where they underperform, that as part of your portfolio

680
00:29:01,400 --> 00:29:04,160
Speaker 1: as well, because they're both getting exposed to the same space.

681
00:29:04,440 --> 00:29:05,960
Speaker 1: But long term, if you think about it from a

682
00:29:06,000 --> 00:29:08,840
Speaker 1: five year, ten year perspective and you have the mindset

683
00:29:08,920 --> 00:29:12,040
Speaker 1: that's possible these bitcoin treasury companies can become these bitcoins

684
00:29:12,040 --> 00:29:14,440
Speaker 1: and nominated central banks in the future. You're talking about

685
00:29:14,440 --> 00:29:16,240
Speaker 1: some of the most valuable organizations in the world in

686
00:29:16,280 --> 00:29:18,720
Speaker 1: my opinion, And so I would look.

687
00:29:18,640 --> 00:29:21,120
Speaker 4: At both, okay, and then where does a fund fit

688
00:29:21,200 --> 00:29:21,840
Speaker 4: in on top of that.

689
00:29:22,520 --> 00:29:25,400
Speaker 1: So from a fun perspective, if as an institution, if

690
00:29:25,440 --> 00:29:27,920
Speaker 1: you're finding the opportunities for these bitcoin treasury plays in

691
00:29:27,960 --> 00:29:31,640
Speaker 1: the early components where people are doing these pipe investment transactions,

692
00:29:31,840 --> 00:29:34,400
Speaker 1: usually you can get exposure at very favorable entry points,

693
00:29:34,760 --> 00:29:37,520
Speaker 1: and then once those companies ultimately do their reverse merger

694
00:29:37,600 --> 00:29:40,280
Speaker 1: or whatever their public offering is, as long as the

695
00:29:40,320 --> 00:29:43,200
Speaker 1: markets are interested in that and they allocate to it,

696
00:29:43,320 --> 00:29:44,680
Speaker 1: there's a lot of opportunity there as well.

697
00:29:45,120 --> 00:29:48,320
Speaker 3: But from an individual investor standpoint, is it something like

698
00:29:48,480 --> 00:29:51,280
Speaker 3: get your bitcoin first. Absolutely, And depending on how big

699
00:29:51,320 --> 00:29:52,880
Speaker 3: your portfolio is, then you might want to take a

700
00:29:52,920 --> 00:29:55,320
Speaker 3: small percentage of that move into some treasury companies. And

701
00:29:55,360 --> 00:29:57,320
Speaker 3: if your portfolio is even big enough, then maybe even

702
00:29:57,360 --> 00:30:00,280
Speaker 3: a small percentage goes into some funds. And so those

703
00:30:00,320 --> 00:30:03,000
Speaker 3: are sort of like different risk levels, different duration levels

704
00:30:03,040 --> 00:30:04,720
Speaker 3: that hopefully have different return profiles.

705
00:30:04,760 --> 00:30:07,240
Speaker 1: So what I always recommend, and this is both for

706
00:30:07,360 --> 00:30:11,480
Speaker 1: institutional investors that don't have crypto exposure and individual investors,

707
00:30:12,040 --> 00:30:13,960
Speaker 1: I always say you should look at three parts of

708
00:30:14,040 --> 00:30:17,520
Speaker 1: your investment strategy. One is bitcoin direct that should be

709
00:30:17,560 --> 00:30:21,440
Speaker 1: the biggest portion of your exposure to the space. And

710
00:30:21,640 --> 00:30:24,200
Speaker 1: then you should also have a smaller percentage of your

711
00:30:24,240 --> 00:30:27,440
Speaker 1: exposure for venture type opportunities, like what are the new

712
00:30:27,520 --> 00:30:29,320
Speaker 1: things happening on top of bitcoin, Like one of these

713
00:30:29,360 --> 00:30:31,560
Speaker 1: new application layers and things are being built, and that

714
00:30:31,600 --> 00:30:33,640
Speaker 1: should be you know, like any venture portfolio, maybe that's

715
00:30:33,640 --> 00:30:35,480
Speaker 1: five to ten percent of the exposure you have to

716
00:30:35,560 --> 00:30:37,560
Speaker 1: the space. And then the third one I tell people

717
00:30:37,600 --> 00:30:39,280
Speaker 1: to consider is what we do with off the chain

718
00:30:39,280 --> 00:30:41,920
Speaker 1: because it's very different. It's its Warren Buffett value strategy.

719
00:30:42,320 --> 00:30:45,440
Speaker 1: But with that, the biggest part of the portfolio for anybody,

720
00:30:45,480 --> 00:30:46,600
Speaker 1: in my opinion, should be a big point.

721
00:30:46,800 --> 00:30:50,400
Speaker 3: Yeah, yeah, yeah, depending yeah, start start there first, and

722
00:30:50,480 --> 00:30:51,680
Speaker 3: then and then and.

723
00:30:51,760 --> 00:30:52,880
Speaker 2: On the treasury companies too.

724
00:30:53,280 --> 00:30:55,360
Speaker 1: The reason it's interesting, I think to find an asset

725
00:30:55,480 --> 00:30:58,840
Speaker 1: manager who's very experienced to do that component is most

726
00:30:58,880 --> 00:31:00,880
Speaker 1: people are going to have a very challenging time trying

727
00:31:00,920 --> 00:31:03,520
Speaker 1: to figure out which one do I invest in, right like,

728
00:31:03,600 --> 00:31:05,520
Speaker 1: which one has a lot of potential, and most people

729
00:31:05,520 --> 00:31:08,200
Speaker 1: won't even understand the differences behind the scenes of what

730
00:31:08,400 --> 00:31:10,720
Speaker 1: these some of these bitcoin treasury companies are doing that

731
00:31:10,840 --> 00:31:13,640
Speaker 1: makes one different from another. And if you can't figure

732
00:31:13,680 --> 00:31:15,600
Speaker 1: that out, in my opinion, it's better for you to

733
00:31:15,680 --> 00:31:18,040
Speaker 1: find an asset manager that's allocating to those types of

734
00:31:18,040 --> 00:31:20,240
Speaker 1: strategies because they're the ones with the boots on the

735
00:31:20,280 --> 00:31:22,600
Speaker 1: ground doing the diligence figuring that out, and then you

736
00:31:22,720 --> 00:31:24,200
Speaker 1: just put your other exposure in bitcoins.

737
00:31:24,280 --> 00:31:27,200
Speaker 3: Yeah, is that because there's all new terminology and all

738
00:31:27,280 --> 00:31:29,360
Speaker 3: new metrics to measure them that people aren't used to.

739
00:31:29,480 --> 00:31:31,480
Speaker 1: There's new terminology, there's new metrics, and a lot of

740
00:31:31,520 --> 00:31:33,640
Speaker 1: these companies too, they're not all doing the same thing, right,

741
00:31:33,760 --> 00:31:36,880
Speaker 1: Like some of them are issuing equity or debt to

742
00:31:37,000 --> 00:31:39,640
Speaker 1: acquire more bitcoin for share. Some of them are taking

743
00:31:39,720 --> 00:31:43,280
Speaker 1: other components where they're going into a certain industry segment

744
00:31:43,520 --> 00:31:46,600
Speaker 1: and they're buying discounted cash off a publicly traded balance sheet,

745
00:31:46,800 --> 00:31:48,840
Speaker 1: which then allows them to get more bitcoin for share

746
00:31:48,880 --> 00:31:50,680
Speaker 1: when they issue their equity. And so there's a lot

747
00:31:50,720 --> 00:31:53,120
Speaker 1: of nuances to it. And so if you don't fully

748
00:31:53,240 --> 00:31:56,600
Speaker 1: understand the differences between each one, you could maybe invest

749
00:31:56,680 --> 00:31:58,520
Speaker 1: in one that doesn't perform as good as another one.

750
00:31:58,560 --> 00:32:01,479
Speaker 4: Cause yeah, yeah, especially when it's very frothy right now.

751
00:32:01,680 --> 00:32:04,400
Speaker 3: Yes, And then to your point, if a market cycle

752
00:32:04,520 --> 00:32:06,480
Speaker 3: turns down, then like who gets left hold.

753
00:32:06,320 --> 00:32:06,680
Speaker 2: In the bag?

754
00:32:07,760 --> 00:32:08,880
Speaker 4: All right, let's wrap this up.

755
00:32:09,280 --> 00:32:11,760
Speaker 3: What would you say is maybe the thing that you're

756
00:32:12,440 --> 00:32:15,240
Speaker 3: most looking forward to over the next five years developing?

757
00:32:16,480 --> 00:32:18,200
Speaker 1: I think I think I'm most excited about is we're

758
00:32:18,240 --> 00:32:20,720
Speaker 1: finally reaching a point after many many years in the

759
00:32:20,800 --> 00:32:25,760
Speaker 1: space where governments are opening their eyes after being so

760
00:32:26,040 --> 00:32:28,960
Speaker 1: resistant for so many years. And I truly believe the

761
00:32:29,000 --> 00:32:32,640
Speaker 1: first government that prints to buy bitcoin wins in mass right,

762
00:32:32,720 --> 00:32:36,240
Speaker 1: like the first government that understands that the more bitcoin

763
00:32:36,640 --> 00:32:40,440
Speaker 1: we can actually acquire, the bigger geopolitical advantage we have

764
00:32:40,560 --> 00:32:42,560
Speaker 1: in the future. And I think the United States government

765
00:32:42,640 --> 00:32:45,080
Speaker 1: is waking up to that relatively quickly. And so I

766
00:32:45,160 --> 00:32:48,320
Speaker 1: think that's a very interesting thing because that, in my opinion,

767
00:32:48,480 --> 00:32:52,800
Speaker 1: is a major step towards potentially backing our currency by

768
00:32:52,840 --> 00:32:56,040
Speaker 1: bitcoin long term, having bitcoin being the global currency, which

769
00:32:56,080 --> 00:32:58,600
Speaker 1: I think long term is the real value because Satoshi's

770
00:32:58,640 --> 00:33:01,479
Speaker 1: original vision was a peer to peer cash electronic system, right,

771
00:33:01,800 --> 00:33:04,680
Speaker 1: And we've gotten so ingrained with how bitcoin has transitioned

772
00:33:04,680 --> 00:33:07,960
Speaker 1: over time and evolved as an asset that we don't

773
00:33:08,000 --> 00:33:10,040
Speaker 1: want to forget that one of the most valuable things

774
00:33:10,040 --> 00:33:12,200
Speaker 1: about bitcoin is transacting value between.

775
00:33:12,000 --> 00:33:14,640
Speaker 2: Two parties peer to peer with no central party intermediary.

776
00:33:14,760 --> 00:33:17,719
Speaker 1: I mean, it's a brilliant, brilliant thing that never existed before, right,

777
00:33:18,240 --> 00:33:20,560
Speaker 1: And I think long term we'll get back to that.

778
00:33:20,960 --> 00:33:22,640
Speaker 1: And I think that is that's a major step for

779
00:33:22,720 --> 00:33:24,560
Speaker 1: governments to have that trust and belief in it where

780
00:33:24,600 --> 00:33:26,760
Speaker 1: we can start backing some of the dollar by bitcoin

781
00:33:26,800 --> 00:33:28,840
Speaker 1: and then maybe eventually it's only bitcoin.

782
00:33:29,040 --> 00:33:32,920
Speaker 3: Yeah, so the government adoption, the sovereign adoption, it's sort

783
00:33:32,960 --> 00:33:36,000
Speaker 3: of like the nuclear or arms race, or like the

784
00:33:36,080 --> 00:33:38,520
Speaker 3: space race, and like which nation is going to acquire

785
00:33:38,520 --> 00:33:41,760
Speaker 3: it first? Yeah, I agree with you on the medium

786
00:33:41,800 --> 00:33:44,040
Speaker 3: exchange front. And it's interesting to know. I think about

787
00:33:44,080 --> 00:33:46,960
Speaker 3: this monetary evolution and it's like we haven't quite got

788
00:33:47,000 --> 00:33:48,640
Speaker 3: to the medium of exchange phase.

789
00:33:48,440 --> 00:33:50,320
Speaker 4: Yet, but in some instances it makes sense.

790
00:33:50,920 --> 00:33:53,200
Speaker 3: And this morning I opened up the show here at

791
00:33:53,200 --> 00:33:54,840
Speaker 3: the Bickcoin conference was the I think it was the

792
00:33:54,880 --> 00:33:57,200
Speaker 3: president or CEO of a Steak and Shake, which is

793
00:33:57,280 --> 00:33:59,400
Speaker 3: like another franchise that just started accepting bitcoin, and he

794
00:33:59,440 --> 00:34:03,320
Speaker 3: was talking about how just since they've started accepting bitcoin

795
00:34:03,480 --> 00:34:07,080
Speaker 3: at the trans at the locations, they've lowered their transaction

796
00:34:07,240 --> 00:34:08,480
Speaker 3: fees by fifty percent.

797
00:34:08,680 --> 00:34:11,480
Speaker 2: That's remarkable, that's I mean, that's no brainer for companies.

798
00:34:11,560 --> 00:34:15,560
Speaker 4: I mean to the bottom line, like, Okay, sign me up.

799
00:34:15,600 --> 00:34:16,440
Speaker 4: But who's not going to do that?

800
00:34:16,600 --> 00:34:18,880
Speaker 3: Right sure, because they're paying whatever three four percent on

801
00:34:19,200 --> 00:34:21,239
Speaker 3: you know whatever two three percent on transactions and now

802
00:34:21,320 --> 00:34:23,799
Speaker 3: they get it for like a point or whatever.

803
00:34:23,880 --> 00:34:26,240
Speaker 4: Right, So okay, cool, Well.

804
00:34:26,120 --> 00:34:28,120
Speaker 3: I think anything else that we should be paying attention

805
00:34:28,200 --> 00:34:31,560
Speaker 3: to that you want to shout out, and.

806
00:34:31,560 --> 00:34:33,440
Speaker 2: I think, yeah, I think that's the main core copis

807
00:34:33,440 --> 00:34:35,319
Speaker 2: we covered? Yeah? I appreciate you having me on. All right, thanks,

808
00:34:35,360 --> 00:34:36,040
Speaker 2: all right, thanks man,