Speaker 1: Hello, and welcome to another episode of The Mark Moss Show,
Speaker 1: where we talk about the decentralized revolution that is changing
Speaker 1: the world as we know today. Of course we talk
Speaker 1: about it as bitcoin, cryptocurrencies. Technology is changing the world
Speaker 1: as we see it, and so I'd like to bring
Speaker 1: you some education to kind of help you see this.
Speaker 1: It's hard to see, UM, a new system when you're
Speaker 1: stuck in an existing system. UM. A lot of times
Speaker 1: we get what is it missed the forest for the
Speaker 1: trees sort of a thing where we're so inside of
Speaker 1: one system, where we're so zoomed in that it's hard
Speaker 1: to see the perspective of what's going on. And so
Speaker 1: i'd like to bring you some education to help you
Speaker 1: think about that. Of course, I like to bring you
Speaker 1: the latest breaking news and information so you can stay
Speaker 1: up to date each and every week, and then of
Speaker 1: course we talk about or I'd like to bring on
Speaker 1: some new guests so you can hear some different perspectives UM,
Speaker 1: so you can get a well rounded view of things
Speaker 1: in better context of what's happening today. And boy, each
Speaker 1: and every week I love joining because there is so
Speaker 1: much to talk about. UM. It's a good problem to
Speaker 1: have a consultant I used to work with said, these
Speaker 1: are high class problems. And so I've had problems in
Speaker 1: the past where there was not enough information to talk about.
Speaker 1: I remember doing content through and things were really boring
Speaker 1: back then. Um, now the problem is too much to
Speaker 1: talk about and trying to choose which stories to talk about.
Speaker 1: And so, like I said, it's a high class problem,
Speaker 1: and that's all good, But you know, I want to
Speaker 1: kind of put things into perspective of what's going on,
Speaker 1: and a lot of what we've been talking about over
Speaker 1: the last month or two is really a kind of
Speaker 1: a continuation of what's going on, and I'm kind of
Speaker 1: giving you the play by play of how things are unwinding.
Speaker 1: And so I've been talking about something called the crypto unwind,
Speaker 1: or that I was calling a great unwind, And what
Speaker 1: I'm talking about is an unwind of leverage or de leveraging,
Speaker 1: if you will. Now, Um, we see that there's leverage
Speaker 1: all over the system, and typically leverages built up through credit. Now,
Speaker 1: in our existing monetary system that we have in the
Speaker 1: world today, it's a debt based monetary system, and so
Speaker 1: that means that all money that's created is debt. So Um,
Speaker 1: we talked about the Federalserve just printing buttons, pushing a
Speaker 1: button and printing money. That's not really the way it works.
Speaker 1: Money is created through debt issue. And so when you
Speaker 1: go get a loan for a car, boat, house, boat, whatever,
Speaker 1: that money is created into existence and it creates massive
Speaker 1: amounts of leverage because it's all debt. So think about
Speaker 1: it for your own self, like your own personal household. Um,
Speaker 1: let's say that you were um using leverage to build assets.
Speaker 1: Let's say we're back to two tho a matter of fact,
Speaker 1: is a good parallel to what we're gonna talk about today.
Speaker 1: So back in two thousand eight, people were able to
Speaker 1: buy multiple houses, multiple houses at the same time, and
Speaker 1: so people would go to these like new housing developments
Speaker 1: in California or Arizona or Nevada, Florida, those kind of
Speaker 1: hot spots of the country, and these home prices were
Speaker 1: exploding so fast, they were going up so fast that
Speaker 1: people could just go to a brand new housing development,
Speaker 1: put their name down to a a deposit down on a house,
Speaker 1: sometimes a thousand dollars, five thousand dollars down on a house,
Speaker 1: and then once those houses were built, they could just
Speaker 1: sell them and make dollars per house times five or
Speaker 1: ten however many they bought. So they're putting a thousand
Speaker 1: or five thousand dollars down and then they're making dollars
Speaker 1: down the house. They're using leverage. It was that credit
Speaker 1: that there was being extended to them, and that works great.
Speaker 1: You can grow really really fast with that leverage. Another
Speaker 1: way you can use leverages. Let's say that your business
Speaker 1: is expanding. Let's say that you were in the construction business,
Speaker 1: and so obviously construction business was booming, and so we
Speaker 1: need contractors to go out there and frame the walls
Speaker 1: and hang the dry wall, put the roofs on, build
Speaker 1: the fences, thro the landscaping, et cetera. And so I
Speaker 1: might have or other people might have gone about five
Speaker 1: or ten homes at a time. A lot of people
Speaker 1: were doing this, and so there's a lot of demand
Speaker 1: for houses. And so now these these contractors that deliver
Speaker 1: these services also used leverage, and so they would go
Speaker 1: out and take loans to then buy more trucks and
Speaker 1: buy more equipment and hire more crews. And that leverage,
Speaker 1: that that credit that was extent them allowed them to
Speaker 1: build much faster to scale their business to take advantage
Speaker 1: of all that incoming business. And so leverage works really well. Debt, debt, leverage,
Speaker 1: that credit, whatever you want to call it, um that credit,
Speaker 1: that debt, that leverage allows us to grow really fast.
Speaker 1: And if you were in playing this real estate game,
Speaker 1: you were UM leveraging that credit and you were getting
Speaker 1: five homes and they everyone really fast, or you're building
Speaker 1: your business really really fast, that was great. The problem
Speaker 1: is when um, we get to the end of that
Speaker 1: credit cycle. So throughout this long term credit cycle, we're
Speaker 1: using more debt, using more debt, credit, credit, credit leverage,
Speaker 1: leverage everywhere, growing, growing, growing, not just you, not just
Speaker 1: the roof of the framer, the the window guy, the landscape, etcetera,
Speaker 1: but the homeowners buying the homes, um, but the whole system,
Speaker 1: the entire monetary system is basically doing that. So we
Speaker 1: have these long term credit cycles and all this credit
Speaker 1: debt leverage builds up in the system and we grow
Speaker 1: massive growth. Gross domestic product is exploding, The economy is
Speaker 1: doing good, there's more money. People are going and spending
Speaker 1: more on clothes and at restaurants, and then those restaurants
Speaker 1: and are expanding, etcetera. So you can see how this
Speaker 1: winds up. The problem is when it unwinds down, and
Speaker 1: so just as fast as it grows on the upside,
Speaker 1: it actually unwinds and d leverages way faster. You can
Speaker 1: think about this easy. Um. You know, it takes a
Speaker 1: while to take on debt um to continue to build
Speaker 1: your portfolio using debt, but you can just default on
Speaker 1: that debt instantly and all that can just disappear. And
Speaker 1: that's exactly what happens when things turn. And so back
Speaker 1: to two thousand and eight, all those people that had
Speaker 1: used debt credit leverage to build up those portfolio of
Speaker 1: all those homes, all those contractors who had scaled their
Speaker 1: businesses and bought all new equipment and new trucks, et cetera.
Speaker 1: And then as soon as the market started to crash,
Speaker 1: it just started to unwind really really fast, and of
Speaker 1: course it led to the Great UH Financial Crash two
Speaker 1: thousand and eight. The entire banking system had built up
Speaker 1: so much leverage because then people were buying homes, and
Speaker 1: then those homes, those loans were being sold off, and
Speaker 1: then companies were buying giant package of these home loans
Speaker 1: and they were bundling them together, packing together, selling them
Speaker 1: off in trenches. Then Wall Street was taking these packages,
Speaker 1: they were repackaging, bundling them, and they would take some
Speaker 1: high risk one, some low risk ones. They put them
Speaker 1: all together to try to get this blended risk model,
Speaker 1: and they'd packed them together and they'd sell them off,
Speaker 1: these mortgage backed securities they were called. And so leverage
Speaker 1: built up from the individual homeowner through the contractors put
Speaker 1: it built up all the way through the financial system,
Speaker 1: all the way through Wall Street and into the global
Speaker 1: financial system where all the banks of the world were
Speaker 1: now trading these mortgage backed securities, and it became a
Speaker 1: big mess. So when the financial system crashed, there was
Speaker 1: exposure or to all of this, and this great unwind
Speaker 1: just dragged everything down. Now, I've told you that a
Speaker 1: story just so you can get an understanding of something
Speaker 1: that you understand, something that you know, so you can
Speaker 1: understand how this crypto market crash is also part of
Speaker 1: the great unwind, and how it's interesting that we saw
Speaker 1: Bitcoin was created out of the great financial crash. As
Speaker 1: a matter of fact, it was who was developed by
Speaker 1: Sotoshi Nakamoto famously put a line of text in the
Speaker 1: very first block that was mined on the Bitcoin network
Speaker 1: saying that the chancellors on the brink of another another bailout,
Speaker 1: so basically showing that this was because of the bailouts
Speaker 1: that was happening with the banking system, and so we
Speaker 1: wanted to create something in a response to that so
Speaker 1: that we could get rid of those problems. We would
Speaker 1: be subject to those problems happening again. You know, a
Speaker 1: lot of times it's hard to see where decisions are.
Speaker 1: Things will take us um and so mistakes are made. Right,
Speaker 1: A lot of times people think that we should, you know,
Speaker 1: move fast and and take chances and break things. But
Speaker 1: but you're trying to learn from those mistakes, so you
Speaker 1: don't make those same mistakes again. My dad told me
Speaker 1: over and over and over as I was growing up.
Speaker 1: You pounded into my head always that once it's an accident,
Speaker 1: and twice as stupid. So that means that, hey, look,
Speaker 1: we all make accidents, right, Let's just keep trying, try
Speaker 1: and try, and we will make accidents, but just don't
Speaker 1: make the same mistakes again. But unfortunately we make same
Speaker 1: mistakes again. Is unfortunately U two things I think. One
Speaker 1: they say that history doesn't repeat it rhymes well, it
Speaker 1: does repeat, and and it does rhyme. So we see
Speaker 1: that happen again, and so they say, those who don't
Speaker 1: know history are bound to repeat it um. But then
Speaker 1: also we have human emotions like greed that get the
Speaker 1: best of us, and this time will be different, and
Speaker 1: we're gonna go ahead and bed at all. And so
Speaker 1: I like to say that that this leverage is like fire.
Speaker 1: It can be used to warm up your house or
Speaker 1: cook your food. Those are good things, or it could
Speaker 1: burn your house down. So I want to explain to
Speaker 1: you how the great unwinding the crypto market is very
Speaker 1: similar to the two thous financial crash. What we can
Speaker 1: learn from this, more importantly, what we can see, how
Speaker 1: we come out of this, how we can navigate it.
Speaker 1: I got a whole lot to cover when I come
Speaker 1: back in a minute. You're listening to the Mark Moss
Speaker 1: Show talking about the decentralized Revolution, talking about bitcoin, cryptocurrencies
Speaker 1: and the greater financial system, trying to help you understand
Speaker 1: what's going on and hopefully prevent you from making the
Speaker 1: same mistakes again twice. So I got a lot to
Speaker 1: cover when I come back. We'll be back in a minute,
Speaker 1: all right, Welcome back, you are listening to the Mark
Speaker 1: Moss Show, and uh, you know, each and every week
Speaker 1: I'm trying to give you the play by play, give
Speaker 1: you the context of what's going on in the world
Speaker 1: today and what I called the decentralized Revolution. Last week
Speaker 1: I went through, uh an entire show explaining to you
Speaker 1: what the decentralized revolution is, because I talked about it
Speaker 1: every week and maybe a lot of you are like,
Speaker 1: what the heck is he talking about? So if you
Speaker 1: didn't catch that episode, I would encourage you to go
Speaker 1: back and check it out. UM. You can find it
Speaker 1: on the I Heart Radio network or the I Heart
Speaker 1: app or any podcast app that you use, iTunes, whatever,
Speaker 1: Just search Mark Moss Podcast, Mark Moss Show and look
Speaker 1: back to the previous week. Um, early July. Sorry, um,
Speaker 1: and I had to show breaking down the decentralized revolution
Speaker 1: if you want to know what that means. Um, all right.
Speaker 1: So I was talking about how Bitcoin, which is the
Speaker 1: technology leading this decentralized revolution, was designed after the two
Speaker 1: Great Financial Crash to prevent a lot of the problems
Speaker 1: that we saw from that crash, but unfortunately we sort
Speaker 1: of ended back in the same place. And what I'm
Speaker 1: calling the great unwind, and I'm talking about an unwind
Speaker 1: of all this leverage, all this credit, all this depth
Speaker 1: that's been built up in the system, and so I
Speaker 1: want to kind of break that down so you can
Speaker 1: see what happened, um, but also how we can navigate
Speaker 1: this correctly and how we can maybe learn from these
Speaker 1: mistakes so we don't get caught up. Been this again. Now,
Speaker 1: some people were caught really, really bad. And I've heard,
Speaker 1: unfortunately countless stories of people who have lost everything. And
Speaker 1: some people, um, were caught up a little bit, just
Speaker 1: they maybe their paper gains went down on paper. Now,
Speaker 1: if your paper gains went down a little bit, whatever,
Speaker 1: those paper gains were just paper and they'll come back eventually.
Speaker 1: But some people lost real money as a matter of fact. Um.
Speaker 1: I was in Austin m at Consensus as the largest
Speaker 1: like cryptocurrency conference. It was about a month ago, and
Speaker 1: I was at it an after event and I saw
Speaker 1: I was Some guy came up to me and said, hey, Mark,
Speaker 1: I'm a big fan of your show. I've been watching
Speaker 1: your stuff, and that was cool. Wes talked for a
Speaker 1: little bit and he said, you know, I've been I've
Speaker 1: been in marketing my whole career and I and I
Speaker 1: built up this company. We specifically UM did marketing for
Speaker 1: medicare and you know, government sponsored healthcare stuff. And it
Speaker 1: was a great business, did really well for me, and
Speaker 1: I made a lot of money and I just sold
Speaker 1: the company. We had a big exit, and I'm ready
Speaker 1: to move on to the next stage of my life.
Speaker 1: He's over fifty years old. I'm not exactly sure old
Speaker 1: he was, but over fifty. And he said, I'm ready
Speaker 1: to move on to this next stage of my life.
Speaker 1: And I came to this event. I booked this event
Speaker 1: UM and I bought the whale pass. I bought the
Speaker 1: most expensive pass I get so I can come network
Speaker 1: and try to find my next opportunity. He said. But
Speaker 1: I had taken all that money from the cell of
Speaker 1: my business, and I had put it into this terror
Speaker 1: Luna stable coin because it's supposed to be stable and
Speaker 1: it offers me this awesome yield, and unfortunately I lost
Speaker 1: it all all his money. He had built this business
Speaker 1: for most of his press professional career, had a nice exit,
Speaker 1: was looking forward to taking that money and moving on
Speaker 1: the next stage of his life. He put it all
Speaker 1: in and he got caught in the great unwind and
Speaker 1: lost it all. Now he's not alone. There's probably millions
Speaker 1: of people that got caught up in the same situation.
Speaker 1: It's devastating. So I want to make sure that you
Speaker 1: don't get caught up in that same situation. And like
Speaker 1: I said, even if you're on the perp field. So
Speaker 1: let's take a look at this. So, as I said before, right,
Speaker 1: bitcoin was created about thirteen years ago, UM, coming out
Speaker 1: of the two Great financial crash, UM trying to prevent it.
Speaker 1: And so one of the big problems, as I already explained,
Speaker 1: is that the banks had built up all this leverage
Speaker 1: and then the banks basically caused this crash. Now, a
Speaker 1: lot of times people want to tell you that it
Speaker 1: was the homeowners were way too greedy, they bought too
Speaker 1: many houses and they were the reason why the markets crashed.
Speaker 1: That's not true. Yes, homeowners did get too greedy, sure,
Speaker 1: but they were being given loans by Wall Street because
Speaker 1: Wall Street was too greedy, and Wall Street packaged these
Speaker 1: things up into these zombie sausages and sold them and
Speaker 1: had got way too over leverage. That's what caused the crash.
Speaker 1: And of course, um all markets are cyclical and go
Speaker 1: up and down. So first of all, let me just
Speaker 1: say that the Federal Reserve, who backstops the banks, um
Speaker 1: is supposedly they're telling you. They're telling you and I
Speaker 1: that they print all this money per this what's known
Speaker 1: as Kinsean economics, in order to prevent booms and bus
Speaker 1: because nobody wants to go through a bust. Nobody wants
Speaker 1: to lose money, right, and so if they could just
Speaker 1: pump in more credit, more debt when those bus cycles come,
Speaker 1: they could smooth that out. That's the story they tell us. Now,
Speaker 1: if you believe that I might have a bridge that
Speaker 1: I want to sell you as well, anybody with a
Speaker 1: few minutes online could look at charts and see that's
Speaker 1: just absolutely false. As a matter of fact, we have
Speaker 1: boom and bust cycles going back hundreds of years, and
Speaker 1: right when the Federal Reserve was created nineteen, the boom
Speaker 1: and bus cycles have gotten bigger and bigger and bigger
Speaker 1: and bigger every single time, and so they're not smoothing
Speaker 1: anything out. Now. Boom and bust cycles are normal because
Speaker 1: we're humans and things change, styles change, what we want
Speaker 1: and need change. Uh, greed happens, and people go you
Speaker 1: know too far one way and then they have to
Speaker 1: swing back the way. There's all types of reasons. Why
Speaker 1: you know, I was a manufacturer selling, um, what were
Speaker 1: those last things? So those fidget spinners, for example, right,
Speaker 1: that was a huge boom. Everybody wanted them. You're you're
Speaker 1: ordering tons and tons and tons. You can't keep up
Speaker 1: with the demand. And then all of a sudden that
Speaker 1: nobody wants them anymore. And anybody who jumped into that business,
Speaker 1: it was manufacturing those things, and in order a bunch
Speaker 1: of inventories, they had a bust. It just happens, right,
Speaker 1: people got over too overleveraged in that probably, and so
Speaker 1: that happens, and so um. Unfortunately, that's just a natural process.
Speaker 1: Just like the world. We have seasons, right, spring, summer,
Speaker 1: winter fall, and so the spring everything grows, and the
Speaker 1: winter everything dies and it keeps going, or like a
Speaker 1: forest fire. Anyway, back to two tho eight, so the
Speaker 1: banks created this problem. We had Bitcoin I was created
Speaker 1: and Stosi Nakamoto put a quote in two thousand nine
Speaker 1: and they said, quote, banks must be trusted to hold
Speaker 1: our money and transferred electronically for us, but they lend
Speaker 1: it out in waves of credit bubbles. With barely a
Speaker 1: fraction in reserve, and they don't even have any reserves today.
Speaker 1: So basically they're just they're sending out this money, creating
Speaker 1: credit bubbles. That's what he talked about. So we give
Speaker 1: our money to the banks, they loan the money out,
Speaker 1: and they create these credit bubbles that inevitably crash and
Speaker 1: cause of all. Um, there's a great movie that talks
Speaker 1: about this, two thousand and eight, The Big Short. If
Speaker 1: you haven't watched it or read the book, or the
Speaker 1: book is amazing, or you could watch the movie. Um,
Speaker 1: it's got some great actors in it. And Uh, there's
Speaker 1: a quote that says they mistook leverage for genius. So
Speaker 1: this kind of goes back to warm buffets quote that
Speaker 1: a rising tide raises all boats, and so when the
Speaker 1: markets are going up, everybody looks like a genius. You
Speaker 1: can just close your eyes by anything and you can
Speaker 1: make money, and then you use leverage and then you
Speaker 1: look really smart because you made more money than everybody else.
Speaker 1: So he says the quote, they mistook leverage for genius,
Speaker 1: and so that's exactly what happened. Now, over the last
Speaker 1: couple of months, we've been seeing the effects of this
Speaker 1: in the cryptocurrency market, and we've been seeing basically all
Speaker 1: these cryptocurrency industry giants have been melting down, and uh,
Speaker 1: they've been basically toppling each other like a set of dominoes,
Speaker 1: the smaller ones leading to the medium sized ones leading
Speaker 1: to the bigger ones. And now we're pretty much wiped
Speaker 1: out of that. We're still dealing with that, but most
Speaker 1: of the leverage has been wiped out. But it was
Speaker 1: basically like a bunch of nukes in the balance sheet
Speaker 1: um of these crypto lenders that were supposed to be
Speaker 1: holding money, but they were really just turning themselves into
Speaker 1: over leverage, risky hedge funds. So I want to talk
Speaker 1: about how this unwinds, where we're at with this, and
Speaker 1: how we move forward with this. In a minute, but
Speaker 1: you're listening to the markma Show. We're talking about the
Speaker 1: decentralized revolution, We're talking about bitcoin, cryptocurrencies, the financial system overall.
Speaker 1: Given you context of what's going on today, Uh, we're
Speaker 1: gonna finish talking about what I'm calling the great unwind
Speaker 1: and how you can stay out of trouble as this
Speaker 1: continues and don't make the same mistake twice. I'll be
Speaker 1: back with that and more in a minute, So don't
Speaker 1: go away. I'm gonna be right back, all right, Welcome back,
Speaker 1: and you are listening to the Markma Show. We're talking
Speaker 1: about the decentralized revolution, talking about bitcoin, cryptocurrencies, the greater
Speaker 1: financial system overall, and I'm explaining to you, if you're
Speaker 1: just tuning in, how what we're seeing happen in the
Speaker 1: great in the crypto economy, the great unwind, as I've
Speaker 1: been calling with the last couple weeks, is very similar
Speaker 1: to what happened in two thousand and eight. And bitcoin
Speaker 1: and cryptocurrencies were designed to fix the problems in the
Speaker 1: financial system, but found themselves doing the exact same thing.
Speaker 1: And so we've seen, like I said, these crypto lenders
Speaker 1: that were supposed to be like banks. They're supposed to
Speaker 1: receive your deposits and then um be very careful with them.
Speaker 1: Instead they turned into very risky, over leveraged like hedge funds,
Speaker 1: and one blew up and then it had exposure to
Speaker 1: the next, the next next, and we saw hundreds of
Speaker 1: billions of dollars worth of notional value just collapse, just gone.
Speaker 1: Hundreds of billions of dollars of value gone like that,
Speaker 1: and that's real money. I mean it was on paper,
Speaker 1: but a lot of people were expecting to have that
Speaker 1: money and now they don't have it. Um. Now we've
Speaker 1: I've been reporting over the last couple of weeks. I
Speaker 1: think it's pretty much done as a matter of fact.
Speaker 1: And the founder of f t X, A CEO Sam Bankman,
Speaker 1: freed he's coming in backstop the last couple of exchanges
Speaker 1: that look like they're at risk of blowing up, and
Speaker 1: he has said that he thinks it's over. UM. I
Speaker 1: obviously at mcgreen with him now, as I said, this
Speaker 1: is really happening because of the leverage and the debt
Speaker 1: that was built up, and it builds up really fast
Speaker 1: when markets are going up. As I've explained, when they
Speaker 1: wind up, it's the undwind that's the problem. Just like
Speaker 1: in two now, Bitcoin was, like I said, supposed to
Speaker 1: help us with this because now for the first time
Speaker 1: we could custody our own money without having to give
Speaker 1: it to bank. See the problem. So it's toshiy Knakamoto said,
Speaker 1: if I go back to the original quote, banks must
Speaker 1: be trusted to hold our money and transferred, but they
Speaker 1: lend it out in waves of credit bubbles and so um,
Speaker 1: rather than give them our money and trusting them, we
Speaker 1: could just hold our money on our own and we
Speaker 1: don't have to give it to them, and we don't
Speaker 1: have to um have them put at risk because what's
Speaker 1: known as counterparty risk getting somebody else involved. We don't
Speaker 1: have to have that at risk. The problem is it
Speaker 1: didn't fix it. We still ended up in the great
Speaker 1: unwind um, which is where we're at today. Now, why
Speaker 1: is that, Well, there's a couple of reasons why I think, um,
Speaker 1: and we're gonna take a look at those. One is that,
Speaker 1: you know, as humans, we have something that we suffer
Speaker 1: from called recency bias. So whatever has been happening in
Speaker 1: recent we just assume that's the way it is, or
Speaker 1: normalcy bias. Whatever has been going on is normal, and
Speaker 1: we'll get back to normal, right. And so people are
Speaker 1: just used to putting their money in the bank, and
Speaker 1: they used to be used to getting a little bit
Speaker 1: of yield or a a little bit of return from the bank.
Speaker 1: Of course, for the last decade or so, we get
Speaker 1: basically nothing from the bank, and so we're giving them
Speaker 1: our money and we used to be compensated, and now
Speaker 1: we get no compensation. So these these crypto banks, if
Speaker 1: if we'll call them that loosely, UM, they're typically called
Speaker 1: c FI or defy, which is decentralized finance or centralized finance.
Speaker 1: The block fives, the Celsius is the next, those are
Speaker 1: centralized finance, and then the compound the makers that um
Speaker 1: i've those are like defied decentralized finance. But basically, I
Speaker 1: think that people are so used to they're so uh,
Speaker 1: it's so normal to just put our money into the
Speaker 1: bank that even though bitcoin is a revolution that makes
Speaker 1: it so we don't have to do that, people still
Speaker 1: want to. So there's that normalcy, normal reacency bias. But
Speaker 1: then there's also the creed. So then it's like, well,
Speaker 1: why should I hold my bitcoin or my cryptocurrency and
Speaker 1: it just sits there doing nothing for me When I
Speaker 1: could give it to this platform and earned five, six, seven,
Speaker 1: eight percent, or I could do this and I could
Speaker 1: yield farm it and I could make ten or twenty
Speaker 1: or fifty or sixty. That's a good question. It's the
Speaker 1: question you should be asking yourself. You might ask yourself
Speaker 1: why someone would pay me twenty or fifty or sixty
Speaker 1: or eighty percent when the banks pay me none, you
Speaker 1: might wonder if it's too good to be true. Sometimes
Speaker 1: it is. You might wonder that, um, there's some risk involved,
Speaker 1: and maybe the lower amount of return that you would
Speaker 1: get on that bitcoin of crypto in the bank and
Speaker 1: in Block by Celsius et cetera, UM might be less
Speaker 1: risky than some of those higher risk You might ask
Speaker 1: yourself that, And if you haven't asked yourself that you
Speaker 1: certainly should. But that's exactly what happened, and we saw,
Speaker 1: just like in two thousand eight, all these banks had
Speaker 1: intertwined obligations and exposure to each other that brought down
Speaker 1: Lehman Brothers and AI et cetera. We see now thirteen
Speaker 1: years later the same thing happened where people took their
Speaker 1: bitcoin cryptocurrencies, which they should cuss the on their own,
Speaker 1: but instead they put them into banks. The banks started
Speaker 1: doing all these risky loans, started getting this cross contamination
Speaker 1: to each other, and then it all went south. Now,
Speaker 1: some of these um, some of these troubled entities, like
Speaker 1: Block five for example, was able to get a bailout.
Speaker 1: So back to the two financial crash. Some of them
Speaker 1: got bailouts like A I, D. Some of them didn't,
Speaker 1: and so Block five was able to get I'm a bailout. Now,
Speaker 1: the one difference that I have that I think is
Speaker 1: a very important difference to understand is that in two
Speaker 1: thousand eight, if some of you guys are old enough
Speaker 1: to remember this, in two thousand eight, supposedly the belt
Speaker 1: the banks we're gonna melt down, and the a t
Speaker 1: MS we're going to run dry, is what they told us,
Speaker 1: And so the government had to step in and issue
Speaker 1: emergency credit of seven hundred billion dollars. At the time,
Speaker 1: that was an amazing amount of money. It was like, no,
Speaker 1: you can't do that, it's gonna and everything. Uh. But
Speaker 1: what's important to understand is that came from the government,
Speaker 1: from the FED. They came from your tax dollars, meaning
Speaker 1: you socialize those losses to the banks had private gains.
Speaker 1: All that money they made that was made privately, they
Speaker 1: got to keep it. But when they lost, they didn't
Speaker 1: suffer the losses that those losses were socialized through your
Speaker 1: in I taxes. Now, what's a little bit different in
Speaker 1: this crypto space is that no government or FED stepped
Speaker 1: in to save any of them. Uh, some of them
Speaker 1: saved each other so for example, f t X jumped
Speaker 1: in and bailed out block five. Um, but it wasn't
Speaker 1: it wasn't coming from the taxpayers. And this is a
Speaker 1: big thing. So bitcoin did sort of fix this because
Speaker 1: what happens is we live in a world today with
Speaker 1: no personal responsibility. So um, you know, I'm I'm free
Speaker 1: to make whatever bad decisions I want and someone's gonna
Speaker 1: come bail me out. Or of course, these banks they
Speaker 1: can do as be as risky as they want, and
Speaker 1: they can get a bail out. And so what we
Speaker 1: should see is these banks, when they make risky loans
Speaker 1: and they lose their money, they should go out of business.
Speaker 1: When the airlines um, instead of saving their money or
Speaker 1: reinvesting it, they just bought a bunch of stock by backs.
Speaker 1: And then when the markets turn south in twenty they
Speaker 1: didn't have any money. They should have gone bankrupt like
Speaker 1: they should have had uh, some sort of consequence. Otherwise
Speaker 1: it creates what's known as moral hazard. And again that
Speaker 1: was something that came out of that crash, at least
Speaker 1: for me, a moral hazard, which is basically, um, there's
Speaker 1: they have no reason, no moral reason to be concerned
Speaker 1: because they know that no matter how much dangers they
Speaker 1: get themselves into. There's a bailoutcoming, and so we need
Speaker 1: to we need to see consequence. And that's exactly what
Speaker 1: did happen with bitcoin and cryptocurrency where these um most
Speaker 1: of these agencies that the Three arrows, Capital, the Terror, Luna,
Speaker 1: et cetera. They took way too much risk. The people
Speaker 1: got involved with them and took way too much risk,
Speaker 1: and they all lost it all. And I don't wish
Speaker 1: that on anybody, but it it represented responsibility and those
Speaker 1: people hopefully won't make that same mistake twice. Like touching
Speaker 1: your hand on a hot stove, you don't want to
Speaker 1: do that again. But the problem is the moral hazard.
Speaker 1: What we have in the traditional banking system is that
Speaker 1: these banks make bad decisions and they get billed out,
Speaker 1: which means they don't learn any lesson. As a matter
Speaker 1: of fact, the lesson they learned is that they should
Speaker 1: take even more risk next time, because they could make
Speaker 1: even more money on that risk, and if they lose it,
Speaker 1: who cares because they're going to get bailed out. But
Speaker 1: that's not what happened Celsius is it didn't get bailed
Speaker 1: out three years. Capital didn't get bailed out Voyager Digital,
Speaker 1: how to declare bankruptcy UM, And like I said, it's
Speaker 1: unfortunately they took a lot of depositor money with them. Now, UM,
Speaker 1: it cascaded from Luna and then it went all the
Speaker 1: way down into what I'm calling the three horsemen of
Speaker 1: the crypto apocalypse. So I explain to you what these
Speaker 1: three uh, the three horsemen of the crypto apocalypse are. UM.
Speaker 1: We'll talk about how we're coming out of this, UM,
Speaker 1: what you need to know to survive this, and so
Speaker 1: much more. In a minute. You're listening to the Marketma show.
Speaker 1: We're talking about the decentralized revolution, We're talking about bitcoin, cryptocurrencies.
Speaker 1: We're talking about UM, the problem that bitcoin was created
Speaker 1: to solve, and how we kind of found ourselves right
Speaker 1: back in the very same place. But this time it
Speaker 1: didn't rhyme. I'm sorry it didn't repeat it rhymed. It's
Speaker 1: a little bit different, and I want you understand that.
Speaker 1: Most importantly, I want you to understand the problems so
Speaker 1: you don't make the same mistakes again. I'll be back
Speaker 1: with all that and more in a minute. Don't go away,
Speaker 1: I'm gonna be right back, all right. Welcome back. You're
Speaker 1: listening to the MARKETMA show. We're talking about the decentralized revolution.
Speaker 1: Of course, we talked about bitcoin, cryptocurrencies, the greater macro
Speaker 1: economic financial system that we're moving through, that's that's literally
Speaker 1: changing right before our very eyes. And we're talking about
Speaker 1: continuing to talk about the Great Unwind as I've been
Speaker 1: calling it, how the Great Crypto Unwind is a rhyme,
Speaker 1: a very similar instance of what happened in the two
Speaker 1: eight great financial crash as well, and basically a shakeout
Speaker 1: of the leverage that got built into there. Now it
Speaker 1: As I said, people are just used to putting their
Speaker 1: money in the banks, and so they just thought they
Speaker 1: should put their bitcoin and cryptocurrency into these exchanges and
Speaker 1: into these yield farming things. Um, and a lot of
Speaker 1: people didn't think about the amount of risk that they
Speaker 1: were taking. And while I hate to see people lose money,
Speaker 1: like I said, we were at the age I tweeted
Speaker 1: this out a while ago, that we're about to see
Speaker 1: the age of personal responsibility to snap back. Um, look, man,
Speaker 1: you're responsible for your health. Don't listen to some doctor
Speaker 1: on TV. He doesn't know you, he doesn't know your
Speaker 1: own personal situation. He doesn't know your your own risk profile,
Speaker 1: and so don't listen to him. It's up to you
Speaker 1: to take that responsibility. Now. I know the media is
Speaker 1: trying to tell you don't do your own research, but
Speaker 1: do it. No one's coming to save you, No one's
Speaker 1: looking out for your best interests because nobody knows you personally.
Speaker 1: So some some doctor on TV Dr Fauci, he doesn't
Speaker 1: know what you need, doesn't know your risk profile. So
Speaker 1: look out for your own health. Um, they're not looking
Speaker 1: out for your financial health. It's up to you. They're
Speaker 1: not They don't know what food you need to eat.
Speaker 1: It's up to you. So, you know, while I feel
Speaker 1: bad for a lot of people that have made the
Speaker 1: wrong medical decisions and it's now affecting them the wrong way,
Speaker 1: while I make why, I feel bad for a lot
Speaker 1: of people that have made the wrong financial decisions and
Speaker 1: now it's unfortunately been disasters for them. Hopefully they'll learn
Speaker 1: their lesson and hopefully even better, you and I can
Speaker 1: learn from their lessons without having to go through that.
Speaker 1: But but Tera Luna went down, then it started to
Speaker 1: unwind the three hours capital we've talked about. UM, that
Speaker 1: brought down eighteen billion dollars in assets right from there. UM.
Speaker 1: We've yet to see how how big or or what
Speaker 1: type of legal consequences this will bring UM, but we're
Speaker 1: we're expecting it to be pretty severe for some of
Speaker 1: the people at least. We're starting to see that kind
Speaker 1: of shake out. But then this has led into the
Speaker 1: gray scale Bitcoin trust. We talked about that UM and
Speaker 1: so the gray scale Bitcoin trust has this massive discount,
Speaker 1: and as that discount has been going down, it's put
Speaker 1: a lot more pressure onto these companies that were holding
Speaker 1: on UM. And so we've seen that. But you know,
Speaker 1: one one thing is that, like I said, this was
Speaker 1: supposed to bank the unbanked. So think about that for
Speaker 1: a minute. So right now today, per the UN there's
Speaker 1: about about half the adults in the world today have
Speaker 1: no access to banks for a number of reasons. Mostly
Speaker 1: they're not allowed they don't have permission to join banks.
Speaker 1: So the US financial system, and it's uh, the swift
Speaker 1: banking system around the world basically has requirements called k
Speaker 1: y C Know your Customer and so you have to
Speaker 1: have you have to have all this information and get
Speaker 1: permission to join the financial system. Now, if you're a
Speaker 1: kid growing up in a sanctioned country. You're a you're
Speaker 1: an Iran, for example, Um, you don't get to join
Speaker 1: the financial system. You're you're not allowed. In many other nations,
Speaker 1: they just don't have the right documents. They just don't
Speaker 1: have them. You know, you live out in the sub Sahara,
Speaker 1: Africa or something like that, or sent deep in the
Speaker 1: jungle of south of Central America, you just don't have
Speaker 1: the legal documents to get a bank account, so you're
Speaker 1: not you don't you don't have permission to join your
Speaker 1: unbanked or in some places, even like hel Salvado, for example,
Speaker 1: it's just too expensive to create a bank account, and
Speaker 1: so there they don't have bank accounts. Now, I've talked
Speaker 1: a lot about this, you know, I believe that this
Speaker 1: this this iPhone thing that we have, these smartphone things
Speaker 1: that we have are are like the great equalizer because
Speaker 1: with the phone you can learn anything, and meet anyone
Speaker 1: on and do anything. And we've seen many instances of kids,
Speaker 1: not even teenagers, barely teenagers, creating a YouTube channel or
Speaker 1: an Instagram account and making you know, a hundred thousand
Speaker 1: dollars or more. So pretty much anywhere in the world.
Speaker 1: If you have an access to a smartphone, you can
Speaker 1: learn anything, to meet anyone, to anyone, But if you
Speaker 1: don't have access to the financial system, then you can't.
Speaker 1: You need access to the financial system. So we have
Speaker 1: about half the half the world. Half the adults in
Speaker 1: the world today are unbanked, don't have access to banking,
Speaker 1: and so the bitcoin is supposed to solve that. So
Speaker 1: in al sov it All, for example, anyone can download
Speaker 1: a bitcoin wallet, no permission needed, downloaded, and they could
Speaker 1: instantly start receiving and sending digital payments. There in the
Speaker 1: global financial system. It's the great equalizer, and we're supposed
Speaker 1: to be able to reach the unbanked. So all these
Speaker 1: adults that don't have acts to the finance system can
Speaker 1: now join the financial system, and um, those of us
Speaker 1: that are banked, we could un bank ourselves instead of
Speaker 1: trying or trusting the counterparty risk of one of these
Speaker 1: financial institutions that have proven time and time again that
Speaker 1: that they can't be trusted, instead of being banked with
Speaker 1: one of them, we could unbank ourselves and we could
Speaker 1: move on to a bitcoin or crypto currency thing. And
Speaker 1: that's how it's supposed to be. We're supposed to be unbanked.
Speaker 1: But unfortunately, like I said, even though the greatest technological
Speaker 1: revolution we've seen to date me being able to hold
Speaker 1: my own assets. Now, what do I mean by that
Speaker 1: claim the greatest technological revolution? Well, the oldest problem that
Speaker 1: mankind has had since the beginning is how do I
Speaker 1: hold my hold my assets in a way that can't
Speaker 1: be stolen. So we've made villages, and we've made kingdoms
Speaker 1: and cities and countries, et cetera. But bitcoin solve that.
Speaker 1: We don't need to trust somebody else. We can hold
Speaker 1: it ourselves. But most people still aren't in that. They
Speaker 1: still want to give my money to somebody, A still
Speaker 1: holds it for me. Please just just hold it. Celsius
Speaker 1: block Fire. Even Alex mcsinski from Celsius went around telling
Speaker 1: people people don't want to hold their own cryptocurrency. It's
Speaker 1: too it's too complicated, it's too hard, it's too much,
Speaker 1: it's too risky. Just give it to us, we'll hold
Speaker 1: it for you. Well look what happened. So you know
Speaker 1: if I hold it myself. Back to this age of
Speaker 1: personal responsibility, if I hold it myself, I need to
Speaker 1: be personally responsible for it so it doesn't get stolen.
Speaker 1: But it's not that hard to do. Now, if I'm
Speaker 1: trying to hold my gold, how do I hold my
Speaker 1: gold in a way that it doesn't get stolen? Uh?
Speaker 1: You know in old days, I might go bury it
Speaker 1: and make a treasure map for it, um. And then
Speaker 1: but then I have to secure the map. What happens
Speaker 1: if I don't scare the map properly? If I have
Speaker 1: a lot of gold, I might have to build a
Speaker 1: big vault and a safe. I might have to have
Speaker 1: security they're guarding it to be very expensive, to be
Speaker 1: very difficult for me to secure my wealth in gold. Um.
Speaker 1: I could leave it under my pillow or under my mattress.
Speaker 1: But then if I'm gone, so we can come steal it,
Speaker 1: right um. Or you know, we could put the gold
Speaker 1: into a bank and the bank could give us an
Speaker 1: iou um that we can come get that goal whenever
Speaker 1: we want. But then in nineteen thirty three, the U. S.
Speaker 1: Government seized everybody's gold that was sit in the bank.
Speaker 1: And so you have option one. I store it myself,
Speaker 1: but I have to take responsibility, have to take to
Speaker 1: take the risk of that. Option two is I give
Speaker 1: it to somebody else but not have to deal with
Speaker 1: that risk, and that's what happened with crypto. Now hopefully
Speaker 1: you're learning from this. So uh, the learning lesson to
Speaker 1: have here is that those that use these risky ways
Speaker 1: to earn yield, these defy yield farming it was called. Um.
Speaker 1: Unfortunately a lot of them lost everything. Now, I don't
Speaker 1: want to risk a hundred percent of my investment for
Speaker 1: a five, six ten percent yield. That doesn't work. I
Speaker 1: want to invest tend to make a hundred now, Um,
Speaker 1: what about those who weren't involved in this? So this
Speaker 1: has brought the price of bitcoin from forty or fifty
Speaker 1: thousand down to twenty So even me not involved in
Speaker 1: the these risky things, I've seen my paper value of
Speaker 1: my bitcoin or cryptocurrency drop. So I got affected even
Speaker 1: though I wasn't involved in this. My hope is that
Speaker 1: because there was no bail out, most of these people
Speaker 1: learn their lesson. Um. What I hope is that we
Speaker 1: don't repeat this again. I believe the paper value is
Speaker 1: going to come back. Like I'm gonna hold my bitcoin,
Speaker 1: I'm gonna hold my cryptocurrency. It's gonna come back in value. Um,
Speaker 1: So I lost it on paper, I'll get it back
Speaker 1: on paper. But I hope that we'll see these things
Speaker 1: be used less and less and less in the future,
Speaker 1: because at least this is different than two. There was
Speaker 1: no lesson learned, there's no accountability, but in the cryptocraph
Speaker 1: there was. I believe people will go to jail. I
Speaker 1: believe people who lost money won't do this again. And
Speaker 1: I believe that we'll learn our lesson this time, and
Speaker 1: the paper games come back and we're all better off.
Speaker 1: But what do you think. I'd love to hear your comment.
Speaker 1: You can shoot me a message on any of the
Speaker 1: social media platforms at one Mark Moss. That's right at
Speaker 1: one Mark Moss. Check out my website at one Mark
Speaker 1: moss dot com for more resources. And that's what I
Speaker 1: got to talk about today. Um we repeated, or we rhymed,
Speaker 1: we didn't repeat. Thanks for listening until next time.