Latest / TFTC: A Bitcoin Podcast / US Debt Crisis, Japan's Yield Curve Blowout, and Bitcoin's $100K Resilience | Bitcoin Alpha E008

Transcript

US Debt Crisis, Japan's Yield Curve Blowout, and Bitcoin's $100K Resilience | Bitcoin Alpha E008 · TFTC: A Bitcoin Podcast

• 0:00
  The following is for informational and entertainment purposes only and should not be construed as financial advice.
• 0:05
  This discussion is a presentation by 1031, the leading institutional investor focused on the Bitcoin ecosystem.
• 0:12
  1031 has over 10 years of experience in Bitcoin and has deployed nearly $150 million into the leading opportunities in the space.
• 0:21
  To learn more, visit 1031.vc.
• 0:24
  Bitcoin Alpha, Episode 8, gentlemen. It's good to see you.
• 0:29
  Likewise.
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  We're back again.
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  We're back.
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  I think we've made the promise to the audience that we're only going to come back when we feel there's enough to talk about, enough alpha to glean from a conversation between the three of us.
• 0:43
  And it seems like a pretty good time.
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  You have the long end of the yield curve over in Japan blowing out.
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  You have elevated 10-year and 30-year yields here in the United States.
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  there's deals going on over in the middle east bitcoin treasury company stock price is pumping
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  bitcoin is back above 106 000 so it feels like a good time to congregate and talk about all this
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  john you wanted to open with that clip from treasury secretary scott percent why this clip
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  specifically? Yeah. Um, a few things it's, I think it's an interesting rhetorical shift for
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  the administration. Um, and I don't think we've actually done an episode on a kind of liberation
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  day and the fallout thereafter. So we can kind of cram all that, all that in. I think we were all
• 1:41
  kind of waiting to see how some of the early pieces shook out before we commented kind of at
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  length. But it's interesting. It was interesting to me because kind of signals a move from kind of
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  the, you know, the big stick of we see this huge trade imbalance, this huge capital account and
• 2:01
  current account imbalance that the U.S. has with the rest of the world. We're going to, you know,
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  impose gazillion percent tariffs on everyone until we can just kind of with the big stick
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  enforce a new order in, you know, hopefully a quarter or two and we can get into it. But it
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  seems like maybe that's going to be a little more complicated than some of the administration,
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  you know, might have might have been hoping, although perhaps the chaos was the point.
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  But it's interesting to see that the focus is maybe shifting a little more now toward
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  the the desire to just grow the U.S. economy because that'll be as to hear, you know,
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  talk about it, the engine through which we get out of the debt burden that has has complicated
• 2:50
  the maybe the intentions that were coming out of Liberation Day.
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  So, like I said, we haven't talked about it yet, but mid-April, you saw, you know,
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  the 10 year, which Besson is allegedly focused on, you know, getting down rip from 4% to 4.5%.
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  We immediately have to announce a pause on, you know, the aggressive tariff plans
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  because of bond market volatility. And lo and behold, now the goal is, well, we really need to
• 3:19
  get that debt and deficit down. How do we do that? Well, we need to just step on the gas for
• 3:24
  growth in the US economy, which, you know, if you've been watching Marty's show and if you've
• 3:32
  been following TFTC for a while and kind of the Bitcoin space for a while, you may recognize as
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  the playbook that I think a lot of us have been expecting for a long time, which is let inflation
• 3:44
  run hot effectively, pump growth, get nominal growth above rates, have some sort of financial
• 3:52
  repression, whether that's explicit yield curve control or not, even if it's just, you know,
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  pump growth as much as possible here, and then kind of grow your way out of debt. And it was
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  interesting to hear him talk about that. After all, it's happened this month on the heels of also a
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  downgrade of US debt from from Moody's as they kind of mark to market what their peers have done
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  over the last 10 years. So all that is just to say, I think that tells us a lot about where we
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  are right now in terms of, you know, what the administration is seeing, what's in the
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  art of the possible.
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  And, you know, that has implications for a lot of the stuff that I think we'll want to
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  get into today.
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  Yeah, as it pertains to Liberation Day, I think it's and whether or not it's structured
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  chaos to incite a particular reaction from trade partners and markets broadly.
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  I'm beginning.
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  I'm beginning to believe that we have a Mike Tyson situation on our hands, which
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  is everybody has a plan until you get punched in the face.
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  Because there's so many external variables
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  that can really throw a wrench in the planet.
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  We mentioned Japan.
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  I think all eyes are in Japan today.
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  What I found was particularly interesting.
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  I read about this in the newsletter last week.
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  Everybody was focused on what was happening in the Middle East.
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  And it was just interesting to observe the 10-year and 30-year yield,
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  which re-approached the levels that they reached on the evening of April 12th.
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  And I think it was just an interesting juxtaposition of the conversation
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  around the 10 and 30 year yields on April 12th,
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  which was everybody's hair was on fire.
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  It was five alarm,
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  like chaos.
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  And last week,
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  nobody was really talking about it.
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  They seemed to be distracted with the,
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  the Riyadh accords,
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  But I think this week, more focus has shifted towards the 10 year and 30 year, particularly as Japan's yield curve blows out, because that could have negative effects on on the long end of our yield yield curve.
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  The Japanese are forced to sell the massive amount of not all of them, but a portion of the massive amount of U.S.
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  treasuries they hold, which I believe is at one point two trillion dollars right now.
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  Yeah, I mean, it's it's an awkward spot, right?
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  And with interest costs now exceeding defense spending with tenure, like you're saying, up near like 10 plus year highs, this very awkward level.
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  We've got Trump talking about his big, beautiful tax bill, which, you know, probably on the margin increases, not decreases deficits.
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  Department of Defense getting its first trillion dollar budget coming down the pike.
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  Trump today told Republicans as they navigate tax and spending, don't don't screw with Medicaid.
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  So it's a you know, the CMS spending for health care in this country, massive line item.
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  OK, we can't screw with that. So that collectively, you know, I think helps shed light on and frame up while other bond markets are blowing up around the world.
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  Um, there's, there's not really, you know, the, the options are kind of default, right. And, and just collapse all this and, and kind of take your medicine and move on. Um, or you, you power through and, um, you tell Jerome Powell to, uh, look at, you know, average inflation targets rather than kind of, uh, a particular fixed level.
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  and you just try to power through with nominal growth to get the debt burned down relative to
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  GDP. And it's one of those things where the last 10 years has just been a game of
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  the quiet part getting progressively louder. And it feels like that's another major moment
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  of the Treasury Secretary basically saying, in nice euphemisms, we're going to inflate this away.
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  We're going to grow out of this. There's one thing that that ultimately means.
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  And it's it's as you reference with Japan, it's a global problem, right?
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  So everyone's kind of looking, staring down the barrel of that
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  being, you know, the policy choice that they have in front of them.
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  Well, speaking of saying the quiet part out loud,
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  that was the shocking thing yesterday coming out of Japan that you had the prime minister
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  explicitly say we're in a worse financial position than Greece, which
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  the Japanese are very proud culture.
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  They tend to hold things very close to the chest and project strength.
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  And that comment alone is,
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  it was shocking to me if somebody has been following FX markets for the
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  better part of 15 years, if you've been doing that,
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  you know that the bank of Japan and the Japanese prime minister essentially
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  tied at the hip and they try to keep a very, very,
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  sort of strong facade from a public facing perspective.
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  And the fact that he said that yesterday was pretty mind blowing to me.
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  Yeah. I mean, so to pull in the senior member of the team who's had the most experience of any of us with carry trades effectively, Grant comes from a private equity background, as we talked about before on the show.
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  And, you know, curious to get your thoughts on, you know, we're coming out of like 15, 20 years of asset classes, including PE, probably PE most notably, most notably benefiting from kind of secularly declining rates on the margin, both from just leverage capacity and also, you know, what that does for, you know, growth that financial tarot companies.
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  seems like we are in a position where, you know, whether it's like international carry trades,
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  like the one that has dominated out of Japan or just the general like carry of, you know,
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  borrowing at meaningfully lower costs and you think you can reinvest that as that kind of
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  unwinds. And we sit at this awkward spot of rates higher, a lot higher than everyone would like.
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  and, you know, maybe going higher without some sort of like yield curve control type intervention.
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  Like curious how you look at just the spot that like all of alternative investing is like sitting in right now with that headwind.
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  Yeah, I think I mean, to me, the first thing that comes to mind is just like all roads.
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  I mean, we're talking about increased cost of capital across the board.
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  And to me, all roads lead back to cash flow or to sats flow, you know, in our in our perspective for alternative investments, whether it's private equity funds or venture funds.
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  A lot of the times investment returns were just driven from pursuing growth, but you also got the benefit of increased valuations because of the lower cost of capital, which manifested in increased multiples or premiums being paid for the same set of cash flows or not even the existence of cash flows.
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  is just paying for assets. I think in a world where the cost of capital is going up,
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  you have to focus more on generating real profits with the capital that you invest.
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  And you can't rely on your returns from increased multiples for the same asset that you're buying.
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  Usually what we would think of is when you would model out an investment in any business,
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  you know, you're putting equity in, in the private equity model. Some of that is financed
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  with debt because theoretically you have cash flows that can service the debt and that allows
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  you to have levered equity plays. But you put in the equity, maybe there's some debt.
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  Once you monetize an investment, there's a terminal equity value. Hopefully that results
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  and some sort of gain. And then you can pretty easily, it's just a math equation on, well,
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  what were your sources of gain? Were your sources of gain from growth in the underlying earnings of
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  the business? Was sources of gain from the cash flow that you generated along the way so that
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  your net debt position or your net cash grew over time so you accumulated more equity value
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  effectively on your balance sheet? Or did someone decide to pay more for your business on a multiple
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  perspective than what you paid for it? Those are pretty much the only three levers that you had
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  that would drive equity value growth. And when you have carry trade dynamics like this, that
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  manifests itself in people just paying higher prices for the same asset. So when that goes away,
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  that leaves two levers of growth.
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  That's generating cash flow and trying to grow your business.
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  Yeah.
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  And when you apply this to governments and you're looking at the debt they're
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  taking out in the form of bond issuance and the revenue they're bringing in to
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  try to pay that back, which is tax revenues, it's collapsing.
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  As Bissent mentioned, 6.7% are deficits that we're running.
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  And it looks like that number is only going up and bringing it back to what is the public narrative that the Trump administration is putting out there, which is we're going to grow our way out of this.
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  I'm finding it hard to believe that that's going to be possible when you when you look at the state of the American consumer specifically.
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  Logan, if you can pull up the newsletter that went out this morning and just diving into some of the stats, I think there is one anecdote.
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  From the headlines yesterday that came out, if you go down to the Klarna announcement, Klarna came out with data up right there.
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  And basically that their credit book is taking on more losses.
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  They have 100 million users leveraging their buy now, pay later services.
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  And if any of you remember, we talked about this a couple of months ago when Klarna announced their partnership with DoorDash.
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  Since then, they've expanded their partnerships, but they've sort of moved down market from these big ticket items that have a longer payback period to fast food deliveries, which have a shorter payback period.
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  And at the time, a couple of months ago, end of March, I believe, I was saying like, this is a signal to me that their charge off rates on the bigger ticket items are probably increasing because around that time, Discover and Capital One released information on their charge off rates, which are reaching levels not seen since 2008.
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  And so you just surmise that Klarna is experiencing similar charge off rates and they're moving down market to sort of fill that hole.
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  And it's becoming clear that that hole does exist as data comes out from Klarna.
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  And then on top of that, bring it back to the U.S. consumer.
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  Logan if you pull that chart up right below that mortgage rates average start a year mortgage rate is over 7 percent now at 7 percent And so you have a situation here And then if you go down one more to this section
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  the national association of realtors came out with data stating that the
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  median age of home buyers hit an all time high of 56 years old up from 49
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  years old in 2023.
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  So last year the average home buyer was 56 or the median.
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  Homebuyer was 56 year before it was 49.
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  So it seems like the only people that are able to actually buy houses right now in the U.S. are old Gen X and boomers.
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  And so when it comes to the growth narrative, we're going to grow out of this.
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  I'd be interested to get your thoughts if you guys think that's actually possible, considering this this debt backdrop of the U.S. consumer, which seems to be feeling the pressure.
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  I mean, I think it's definitely possible. You know, there's no limit on STEMIs that can be
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  provided. There's no limit on the, you know, the rates that effectively the U.S. government
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  slash Fed slash Treasury can kind of manipulate and demand. You know, there are a lot of cards to
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  be played on, say, like the Fannie and Freddie side. There are a lot of, I think, cards in still
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  to be played on providing facilities to make it easier to either buy a home or leverage existing
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  equity you might have in a home or, you know, more relaxations that can be made for first time
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  homebuyers. I think it's pretty much it's it's doable. The question is, you know, what is the
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  the downstream impact on actual experienced inflation, right, by the average consumer.
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  And I definitely think you can get growth above a stated, you know, CPI number,
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  particularly given how creatively the CPI is used and kind of manufactured by the BLS. So I think
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  it's, it's definitely doable. The question is just how aggressive and how quickly, um, will these
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  various agencies, you know, want, want to move and how will they have to package it? I think it was,
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  um, Mel Madison, uh, who's a good kind of macro analyst who's been making the rounds on some
• 17:59
  macro podcasts recently. Um, you know, was talking about someone like Peter Schiff or,
• 18:05
  you know, some other gold bug basically saying, um, you know, I would have been right on,
• 18:11
  on all the trades post 08. But I never imagined that the Fed would grow its balance sheet, you
• 18:18
  know, as aggressively as it did. And, you know, his retort to that was, well, you should imagine
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  it, right? Because that's what they do. So we never imagined that the monetary base could go from,
• 18:28
  you know, two to eight trillion very quickly, and kind of just up and up and up after that.
• 18:32
  We never imagined in COVID that we could go, you know, multiples higher of that. And of course,
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  we did. We're really fully, I think, in the making up numbers phase. And, you know, I think all it
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  requires is just a sufficiently, you know, expansive imagination to to kind of get there.
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  The question is just who's going to take it on the chin, which constituencies in the U.S. are
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  going to take it on the chin and when will they feel the pain? And can, you know, politicians kind
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  of keep that pain at bay long enough to kind of get debt to GDP into a more manageable level that
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  brings us, you know, for far enough away from this cliff that some of these issues aren't as
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  aren't as dire. So I think it's doable, but it's just a question of who's going to pay for it.
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  One thing I've been wondering, I mean, recent pretty much all
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  experiences of where we've seen sudden injections of liquidity to try to, you know,
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  fix a problem, drive nominal growth. I mean, it always has come after you've been punched in the
• 19:41
  face, after that there was something unexpected that broke something. Markets reacted significantly.
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  you know, it does seem like they've pivoted their approach from tariffs to,
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  you know, capital accounts and whatnot. But I'm just wondering, do we think that,
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  you know, we'll still see that similar dynamic where they're going to keep trying and maybe they
• 20:11
  can come up with some creative solutions here, figure out where the money can come from, where
• 20:16
  the liquidity gets injected into, but is it actually going to come before something breaks
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  or are they just going to wait until something breaks again?
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  Yeah, that's the big question.
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  That's, I mean, is something breaking right now?
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  Is this Japanese yield curve blow up the incident that will lead to the big print?
• 20:37
  And on top of that, as you mentioned, John, you should be able to think creatively about
• 20:44
  how expansive they can get.
• 20:45
  But I've always wondered, I've always been wrong, because they're a diminishing marginal return on on the print.
• 20:54
  I mean, I think there certainly is a diminishing marginal return when you consider the magnitude growth of each print, each subsequent print since 2008 specifically.
• 21:04
  But is there a psychological level where it's like, all right, we did six trillion in 2020.
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  We're going to do 18 trillion now.
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  Is that is there some sort of psychological trigger that creates panic?
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  And this is a good segue into the the your tweet, John, about Bitcoin's performance compared to other assets since Liberation Day is Bitcoin.
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  The price of Bitcoin, again, hovering near all time highs right now, telling us something.
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  Is it acting as a leading indicator for where liquidity may end up in the future?
• 21:37
  Yeah, I mean, the this, you know, this tweet's a couple weeks old at this point, but it's, you know, it's there for charts here.
• 21:44
  that we can scroll through. But the upshot is you kind of see Bitcoin over these recent
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  time periods, you know, post election day, year to date in 25, and then post the February 2021,
• 21:59
  like the start of the sell off, which I kind of attribute to the release of Trump's memo,
• 22:05
  basically kind of indirectly saying that foreigners should repatriate assets and that,
• 22:10
  you know, that the U S doesn't want as much foreign capital here. Um, you look at that,
• 22:15
  all of those kind of like Bitcoin is generally like in line with, or even slightly better than,
• 22:21
  and again, this is, you know, a few weeks old now, so I'd have to rerun the numbers, um, for,
• 22:26
  for how it's, it's been in the last few weeks when we've been on a heater kind of in every
• 22:30
  single asset class. But, um, in the first three, like through this more turbulent period, Bitcoin
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  has, you know, either outperformed, uh, notably all of these indices, all the major equity indices
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  or kind of been in line. And then you compare that to, um, the, the last, uh, the last chart
• 22:48
  there, um, all the way over, um, Bitcoin versus those indices during the COVID sell-off. And you
• 22:55
  can kind of see like a pretty marked difference in, you know, I was kind of tracing back to like,
• 23:01
  you know, when did the indices really start to roll over? And I think what I was doing for Feb 14
• 23:07
  there was basically like when they went negative for the year. I can't tell you remember how I got
• 23:12
  to that date, but that was basically like what it looked like for when you started to see much more,
• 23:16
  you know, downside volatility. And in that case, as we all remember, Bitcoin had, you know,
• 23:21
  it's horrific, you know, flash crash, like 50% plus in a day, recovered some, but still like,
• 23:28
  you know, definitively more downside volatile and shaky than your major equity indices during
• 23:34
  that time period. You fast forward five years and, you know, pretty much the what I would say is
• 23:40
  almost definitely the the next most collectively like volatile period that we've had since COVID
• 23:46
  where the president came out and said, hey, by the way, I'm completely turning the table over on
• 23:51
  the global trade system that's been set up for the last 50 years and I'm doing it in a dramatic way.
• 23:56
  um so similarly volatile time and and bitcoin held up pretty well it held up you know better
• 24:03
  on some time periods than the equity indices were kind of right in line um and so and you know also
• 24:09
  coming off of like all-time highs right like it wasn't like the equity indices were at all-time
• 24:14
  highs and they were kind of mean reverting back below very back down and bitcoin had been like
• 24:20
  crushed for the past year and it was just kind of getting a bounce you know reversal trade like
• 24:23
  you know, Bitcoin was also coming off an all time high. So theoretically, a lot of error to come out
• 24:28
  of it. And it held up, you know, as you can see, like, certainly pretty well, much better than I
• 24:33
  think most, you know, macro analysts and kind of investors who aren't really looking at the space
• 24:38
  closely, probably would have guessed. And so I, you know, I'm not going to use the D word that
• 24:44
  everyone kind of wants to use decoupling, as it relates to Bitcoin and traditional markets. But
• 24:49
  I think this is a really interesting signpost for everyone, you know, every investor, every asset allocator around the world to be aware of and take a look at.
• 25:01
  And I definitely think if you look at commentary from around the time, there were definitely raised eyebrows among kind of the cognoscente of traditional asset management that like, hey, what's going on here?
• 25:15
  This is definitively not the way I would have thought Bitcoin would have would have behaved at this moment.
• 25:20
  Feels like Bitcoin's growing up. Is it?
• 25:23
  Not going to say the D word, but it has shocked even me in terms of its relative performance since Liberation Day.
• 25:31
  And right now, I mean, you have this in the show notes.
• 25:35
  It's on its longest streak above 100K in its history.
• 25:38
  30 day volatility is near a one year low.
• 25:42
  Doesn't feel frothy if we look at the mempool.
• 25:45
  Fees are in single digits per V byte sats per V byte Google search trends near five-year lows
• 25:53
  And then you don't have this on the notes, but I think it's important to note as well that I believe
• 25:58
  The amount of leverage in the system is is pretty low from a historical level as well
• 26:03
  So you don't have too many DGN traders going 10 to 50x long right now
• 26:09
  So people aren't levering up
• 26:11
  It seems like
• 26:15
  It's performing well on its own right now, which is.
• 26:20
  Yeah.
• 26:21
  Yeah.
• 26:22
  The leverage, you know, the leverage numbers can move around like a lot, you know, in a 24 hour period.
• 26:27
  But I think the latest that I saw, you know, showed that as well.
• 26:31
  So, yeah, but it's an odd.
• 26:33
  I mean, Grant, you and I talked about a little bit the other day, like it's it's an odd time in the market and in Bitcoin.
• 26:40
  Right. Because all of those trends we just talked about, kind of the price action.
• 26:45
  are all pretty encouraging. We're like a couple of percentage points off of an all time high.
• 26:51
  Doesn't feel like it doesn't feel like a ton of, you know, unsustainable froth.
• 26:56
  But at the same time, like we've got all these tailwinds behind Bitcoin that we've talked on,
• 27:01
  talked about in the show this year from the SBR to much greater kind of regulatory
• 27:07
  certainty and regulatory embrace of Bitcoin. You know, it's getting much more institutionalized
• 27:15
  with the ETFs and institutions and companies kind of wanting to adopt it in different ways.
• 27:21
  And yet, when you talk to people in certainly in crypto broadly, but then much more importantly,
• 27:29
  traditional asset management or kind of different high net worth circles or institutional investor
• 27:35
  circles, despite all of that, there's not necessarily like I think some people are
• 27:41
  definitely starting to get it, but there's not like a sense of massive urgency to, you know,
• 27:47
  to introduce Bitcoin to a portfolio or grow a Bitcoin position within a portfolio, even though
• 27:52
  I think we all on this call certainly feel very urgent, you know, about expanding our Bitcoin
• 27:58
  position as much as we can. So curious what you think is going on there and what does it take to
• 28:05
  get, you know, certain people, certain institutions kind of to take a closer look when we've got all
• 28:10
  these tailwinds. Yeah. I mean, I agree with what both of you said. It doesn't, it doesn't seem like
• 28:18
  the strong relative performance that it's getting like a mainstream bid. It seems like there's
• 28:25
  strong support, but it's not coming from, you know, your general retail, your mainstream
• 28:32
  investors that are noticing the momentum and wanting to participate in the momentum. I don't
• 28:39
  think that, you know, I think that that may come later and that there's support in a bid from
• 28:48
  other sources. I do think that, like, say the scenarios, you know, that as the agencies
• 28:58
  and policymakers keep tinkering with their ideas to ignite the economy,
• 29:04
  if and when something breaks, you know, I would I still would expect some type of dynamic that we saw in 2020,
• 29:14
  where despite there seemingly being some level of decoupling over this shorter period of time,
• 29:23
  that you would still see a pretty significant decline.
• 29:27
  Like that's normally what you see is that Bitcoin has the most liquid market,
• 29:31
  tends to lead and tends to move the most dramatically. I think that both of those things
• 29:40
  can and likely will happen at some point that there's likely to be some significant downturn,
• 29:47
  but also people will recognize that what's happening right now is actually kind of interesting
• 29:53
  when most, it doesn't seem like to me, are paying attention to it or have noted it yet. I mean,
• 29:59
  Are you really seeing people talk about it on TV, on CNBC?
• 30:04
  It doesn't really seem that way.
• 30:06
  And maybe they don't start doing it again until after the all-time high has been pierced again,
• 30:12
  which we are right up to those levels just about.
• 30:16
  We more or less were at the all-time high.
• 30:18
  I don't know how many days we traded above where we are today, but it's probably not many.
• 30:24
  look and if you can pull up i've got a rough updated version of john shartz from earlier
• 30:31
  just a rough year to date performance comparison of bitcoin nasdaq s&p through nvidia in there
• 30:38
  just because it's the darling of the tech world right now bitcoin's up 13.7 percent
• 30:44
  nasdaq down 1.23 nvidia down 50 basis points give or take s&p up slightly 0.71 year to date and so
• 30:53
  Bitcoin performing extremely well from relative performance And I think building on what you were just saying Grant it is interesting to get into the psychology of investors because we were talking about this earlier this week on our on our catch up call which is like the psychology of investors when they getting in just hearkening back to our experiencing raising LTP fund too
• 31:20
  and for whatever reason it's not even like once it passes all-time high it's when it's rip roaring
• 31:26
  and well above the previous all-time highs when people really start getting FOMO and I think it
• 31:33
  would be productive to anybody out there who's bitcoin curious listening to this episode to give
• 31:40
  them the pitch like don't wait for that moment like why why wait until it's significantly above
• 31:46
  the all-time high to get in when there's plenty of value to to basically take advantage of between
• 31:53
  here and then one and particularly you know it it increasingly just feels like the the counter
• 32:02
  arguments to to uh to knock to getting involved the the reasons to stay on the sidelines or to
• 32:08
  you know kick it take the can down the road and think about it later um or to kind of be scared
• 32:13
  about what could happen, like are just getting, you know, more and more, the answers are getting
• 32:19
  better and better, you know, by the day. The concerns I think are shrinking, you know, more
• 32:25
  and more. You know, I referred earlier to the SBR and the regulatory piece, but to the extent that
• 32:31
  like you're sitting there thinking, well, there's a lot of tariff uncertainty and I don't know where
• 32:37
  the kind of the macro backdrop is going to go and what the, what's the kind of go forward system
• 32:42
  going to look like? Well, in the first place, like you've already kind of seen the interesting
• 32:49
  preview of, you know, the market tanking on that. And as we just discussed, like Bitcoin held up
• 32:54
  remarkably well during that. And I think that there's a deeper reason for that, which is to the
• 33:01
  extent that we do kind of move into this more multipolar, fractured global trade scenario.
• 33:09
  there's very clear role in that in that world for neutral reserve assets to take the place of
• 33:17
  the US treasury market as the de facto reserve asset backing up backing up global trade and as
• 33:24
  the default place where you recycle trade surpluses. So to the extent that, you know,
• 33:31
  someone, you know, investor, an allocator, a family, whatever is frightened about kind of
• 33:36
  the uncertainty that the Trump administration is creating with its desire to kind of upend global trade.
• 33:43
  I think if you're worried about that, then you should be even more interested in something like Bitcoin,
• 33:49
  particularly given the growing interest that we're seeing among non-U.S. sovereigns in owning Bitcoin,
• 33:57
  building their own strategic reserves, getting into Bitcoin mining,
• 34:01
  some of which we've talked about on the show, much of which has been kind of publicly discussed in the last few months.
• 34:06
  But all that is just to say, yeah, the last thing probably remaining holding Bitcoin back to some degree right now is uncertainty, policy uncertainty, etc.
• 34:16
  As it relates to trade.
• 34:17
  But if that's a fear for you, then Bitcoin makes even more sense in the world where, you know, that really goes south.
• 34:24
  Another interesting dynamic is like the question we always get is, well, if I believe in Bitcoin, like why should I not just buy Bitcoin?
• 34:35
  Like, will you do do you expect to outperform Bitcoin?
• 34:39
  Like we all believe that Bitcoin has this dramatic upside.
• 34:42
  How will you actually outperform that versus I could just hold Bitcoin?
• 34:46
  And one part of the one part, I'd say it's like a tertiary answer is that most people will not outperform Bitcoin, even if they're just holding Bitcoin, just because of the psychology of it.
• 34:58
  They will decide to buy the Bitcoin when it's already too late to have bought and they will decide to sell it when it's down, when they shouldn't sell.
• 35:08
  It's a very hard thing to do.
• 35:10
  The time people should be buying is right now, as opposed to in a few weeks or a few months, whenever it starts really making a run.
• 35:19
  But the psychology is a tough thing for the average person to grapple with.
• 35:24
  and as a consequence most people probably will not perform as well like in line with bitcoin as
• 35:33
  they otherwise could have yeah psychology especially if it's your first cycle uh as
• 35:40
  i'm sure you guys felt this too but your first cycle you get in um by a pico top i did that in
• 35:48
  2013 panicked a little bit as it fell to 200 and it takes a lot of muscle building.
• 35:56
  But John, to your point, in a world of uncertainty, I think the asset that makes the most sense to hold is an asset that revels in uncertainty because it provides the world with a very certain rule set and protocol that you can be certain is going to operate.
• 36:18
  In a particular way, despite what anything, despite anything governments or corporations or any other actor in an economy may do external to the protocol in a world of increasing uncertainty.
• 36:33
  You want a dumb protocol that can provide you incredible certainty while the world begins to reset from a geopolitical and macroeconomic landscape.
• 36:43
  Yeah. And I mean, you know, as as just one example to dig even further into that, just to put on people's radar and flag Logan, if you pull up this this tweet from Michael McNair, you know, we don't have to get into all of the arcana here because it's it's very complex and goes above my pay grade as it relates to kind of tax policy.
• 37:06
  But, you know, this guy's a fund manager who's flagging a recent headline on the U.S. wanting to retaliate against unfair foreign taxes and potentially by levying new taxes on foreign holdings of U.S. assets.
• 37:24
  So whether that's primarily treasuries would be the target, but also, I believe, you know, foreign holdings of U.S. equities.
• 37:30
  previously in like the prior to like 1984, these were these were taxed and then various changes
• 37:38
  were made to make them tax exempt by a lot of foreign holders. And I think this is this is
• 37:44
  interesting because to the extent that they want to go this way, this looks a lot like the user fee
• 37:50
  concept that Stephen Myron proposed in his Hudson Bay Capital paper late last year. Myron now runs
• 37:58
  the, I believe, Council of Economic Advisors for President Trump. And it was kind of one of the
• 38:03
  architects of kind of, you know, re-architecting concept for global trade and global capital flows.
• 38:10
  But this basically something like this, like no idea if, you know, what this guy's proposing is
• 38:14
  exactly the direction they're going to go. But, you know, you're starting to see these trial
• 38:18
  balloons floated about something hitting, you know, the capital account side of things. Like
• 38:23
  there's the, for the last month and a half, we've been focused on, you know, the current account with
• 38:27
  the U.S.'s trade deficit with the rest of the world. The flip side of that is the massive
• 38:31
  capital account surplus that we have as foreign trade partners recycle their trade surpluses into
• 38:37
  U.S. assets, primarily treasuries, but also equities and property. And so to the extent that,
• 38:43
  you know, we're moving away from targeting, you know, the current account piece as aggressively
• 38:48
  and moving more toward the capital account side of things with something like this,
• 38:53
  like this user fee concept for U.S. assets. I mean, there are some some obvious knock on effects
• 39:00
  there, right? Like that's that's kind of the thing I was referring to earlier with, you know, if
• 39:04
  you're if you're fearful and uncertain about what Trump wants to do with kind of his policy as it
• 39:10
  relates to global trade, you know, well, here's another thing he could do and potentially a reason
• 39:15
  to be uncertain about what's going to happen. But the most immediate knock on effects of something
• 39:20
  like this would be, okay, at the margin, you know, foreign trading partners have to shed or
• 39:25
  are incentivized to shed to some degree, US, US assets, to help kind of then mechanically on the
• 39:32
  other side lead to or help support a closing of or a decline in our trade deficits. But then that
• 39:40
  means grant to your point earlier, error comes out of multiples on, you know, US stocks, we're all
• 39:48
  We're still we're still sitting at, you know, very high multiples on major indices historically.
• 39:53
  So there's room to go there.
• 39:55
  There's incremental demand potentially to come out of the U.S.
• 39:58
  Treasury market and mortgage-backed securities and other kind of key pieces of U.S.
• 40:03
  fixed income.
• 40:04
  So if that happens, like if something like this flows through, then OK, well, the first
• 40:08
  effect is you likely need some sort of stimulative activity on the other side to offset.
• 40:13
  And maybe, Grant, that's where things start to break.
• 40:15
  And that's where you get your next alphabet soup facility for the Fed or other agencies to kind of step in and make up the difference to keep asset prices elevated since they are on the margin, the main driver of U.S. tax receipts.
• 40:30
  And so that's one piece, like to the extent that we want to move in this direction.
• 40:34
  Yeah, maybe that creates uncertainty.
• 40:35
  Maybe it's scary.
• 40:36
  But Bitcoin's the fastest horse in the race where the Fed has to come in and kind of support multiples to offset this.
• 40:42
  Um, and the second piece is, you know, the wealth that's exiting us assets in a world like that is
• 40:49
  going to be looking around for alternatives. And, you know, you could go into like, uh, maybe you
• 40:54
  want to go into Chinese assets or Japanese assets or European assets, but a lot of these markets
• 41:00
  have their own capital controls and it's, it's not super easy to get capital in and out. And you
• 41:04
  probably, you know, if you're trying to move a decent amount of capital as kind of a more, um,
• 41:09
  you know, a member of like the developed world, a Western leaning investor, like you probably
• 41:16
  aren't looking to go deploy it aggressively into, you know, territory controlled by the CCP.
• 41:22
  And so what you might be more interested in is something like, you know, neutral reserve assets
• 41:27
  like gold or like Bitcoin. So all that is just to say any world where the trade deficit is closing,
• 41:35
  whether because, you know, of something like the tariff regime that we were trying for the last couple of months or because of dynamics that, you know, force the capital account surplus to come down.
• 41:47
  Both of those, I think, are going to have pretty clear knock on positive effects for assets like Bitcoin.
• 41:54
  So to the extent that you're worried about that, it might make some to might make sense to get some Bitcoin just in case just in case we go that direction.
• 42:03
  Yeah, and this is particularly interesting because I think that's one of the points of clarity, at least in my mind, over the last six months is really digging into the dynamics of Triffin's dilemma and how all this works in terms of supporting asset prices here in the United States.
• 42:23
  and essentially you flood international markets with dollars for their cheap labor,
• 42:27
  but then they take those dollars and reinvest them in our equities, real estate, whatever it may be.
• 42:33
  And something like this would completely throw a wrench in that.
• 42:38
  And I mean, to that point, and going back to is this 3D chess is playing out exactly how they imagined
• 42:46
  or are they getting punched in the face?
• 42:48
  Like, let's run with the idea that the Trump administration, Scott percent specifically, is basically saying, I don't want to say game over, but things need to change.
• 43:04
  And we're going to sort of throw conventional wisdom and the playbook that's been used for the last 50 years out of the room and just let things do what they do.
• 43:17
  Sorry, somebody setting up for an event tonight.
• 43:21
  Let things play out.
• 43:23
  It's going to scare a lot of people, but we're going to reset on the back end, which brings us to the topic of the Genius Act and stable coins.
• 43:32
  And there are many people surmising that there's been so much focus on a stablecoin bill here in the United States because the stablecoin industry or complex, however you want to describe it, is something that Scott Bessent and the Trump administration plans to incorporate into this transition and use it as a mechanism to soak up a lot of liquidity and prop up the U.S. treasury markets specifically.
• 44:00
  Yeah, it's interesting how the conversation shifted. There was a lot of focus on, you know, Bitcoin and strategic Bitcoin reserve during, you know, during election season and kind of in the lead up to Trump's inauguration.
• 44:16
  And, you know, certainly we we moved forward with that in a way that I think was was impressive and probably I think should silence some of the people that said, you know, that was all entirely fluff and was never going to happen.
• 44:28
  The executive order we talked about in the last episode, I think, was pretty meaningful and pretty.
• 44:33
  It shifted the Overton window pretty significantly relative to what any of us probably would have expected a year ago.
• 44:38
  But the focus point, Marty, to your point on, you know, the conversation in Washington after Trump's inauguration definitely seemed to shift much more toward kind of a stable coin regime and something like the Genius Act and getting that passed and creating some sort of, you know, defined market structure, you know, whatever that means for stable coins in the US.
• 45:02
  Um, and, you know, it's, I think the, the untold or undiscussed, you know, or very slightly
• 45:11
  discussed, um, piece of, of that, uh, that the no politician will ever really come out
• 45:17
  and say on, you know, the Senate floor, um, but seems to be like, uh, on the margin of
• 45:21
  the, you know, most important piece is, um, the incremental valve of demand that that
• 45:27
  can create right for, uh, us treasuries, you know, especially kind of short dated notes,
• 45:33
  um, and, and bills. Um, there was a, uh, the treasury borrowing advisory committee,
• 45:39
  um, put out a report, um, like late April, early May, uh, with some really interesting slides I
• 45:46
  recommend people go look at. And, um, Logan, if you want to pull up one of them here, um,
• 45:50
  We just point out one thing on it, but basically it's it's again, as it relates to like quiet parts being said out loud.
• 46:01
  You know, the analysis kind of runs through all the different kind of dynamics behind stable coins and, you know, how they work and things like that.
• 46:10
  But as you as you kind of scroll through on the left hand side of this page, page 11 of the report, you know, there's a very kind of explicit declaration that.
• 46:21
  And also, by the way, if stable coins experience exponential growth, the demand for USD should be correlated in this case, likely at the expense of bank deposits.
• 46:29
  But and there some sensitivity math in here kind of showing you know what a growing stable coin market could do for demand for U treasuries And so you know it certainly looks like there a healthy appetite
• 46:40
  to create for this to be another, you know, rabbit to pull out of the hat for, you know,
• 46:47
  creating incremental demand to sop up UST issuance. And so I think, you know, it's of a
• 46:54
  piece with everything we've talked about, right? Like, I think there's much less real concern about
• 46:59
  kind of encouraging quote unquote payments innovation and much more about, you know,
• 47:05
  recognizing the what this could mean for bringing in yet another lever to soak up
• 47:11
  incremental issuance. Yeah, I agree with that. I think, I mean, there's clearly some
• 47:16
  potentially more obvious financial motivations for them to focus on this versus like anything
• 47:25
  Bitcoin related, put aside actually the U.S. government holding a Bitcoin strategic reserves
• 47:32
  and the positive benefits that could come from that. It does seem like they're likely motivated by
• 47:40
  the impact stablecoin regulation could have from them from a financial perspective. But I also think
• 47:47
  that it's just an easier, it's easier for them to conceptualize, to think through like the framework
• 47:56
  for just thinking about the direct impact on the U.S. dollar and stable coins that they can fit
• 48:05
  into their box and think about, okay, well, there's assets that need a custody and it's the U.S. dollar
• 48:11
  versus, you know, something that requires an entirely different line of thinking for Bitcoin
• 48:18
  and how do they come up with the right approach to that?
• 48:20
  It feels to me like it's a combo of both where they naturally are gravitating towards it
• 48:25
  because of perhaps some financial motivations, putting aside like the long term benefits of Bitcoin,
• 48:30
  but also because it's maybe the easier thing,
• 48:33
  like the more obvious thing to them to focus on versus the one that matters more than Bitcoin.
• 48:39
  yeah they're all hot and bothered over stable coins right now and i think it is just to soak
• 48:47
  up that that treasury demand and that chart you had up i believe tether alone had 94.5 billion
• 48:54
  dollars in short dated treasury exposure the average duration was less than three months or
• 49:02
  30 days but i think it's important to make clear to anybody in the audience listening to this and
• 49:08
  Like, oh, is there a massive opportunity here for me?
• 49:10
  Probably not.
• 49:12
  Like, really?
• 49:12
  Like, the people that are going to benefit the most from this are the select few stablecoin issuers
• 49:19
  that get anointed the ability to play ball in the United States and more broadly outside the world.
• 49:27
  And then, obviously, the Treasury itself, because it has significant demand from these buyers moving forward.
• 49:34
  we've seen companies like Stripe announce that they're integrating stable coins into their platform,
• 49:41
  creating some marginal efficiencies from a cost perspective.
• 49:44
  But in terms of game-changing opportunity to realize a lot of value accrual,
• 49:54
  I don't think there's really many things in the private market outside of issuing a stable coin
• 50:00
  or maybe incorporating them into your business to save some cost on interchange fees or cross-border transactions.
• 50:07
  I think in the long term, stablecoins, I want to call them a distraction, but they're certainly noise compared to Bitcoin,
• 50:16
  which is stablecoins have the inherent problem that they're operating on a U.S. dollar system that is being run by a central bank and a federal government that is addicted to debt.
• 50:28
  And so the form factor by which the dollar is able to move changes a bit and create some efficiencies.
• 50:36
  But the root cause of why people are adopting Bitcoin in the first place is because the dollar is being continually debased.
• 50:44
  And even if stablecoin issuers drive up demand for U.S. Treasuries orders of magnitude, it does not solve that core issue, which Bitcoin does.
• 50:53
  So point being, in terms of signal, in terms of opportunity to take advantage of insane value accrual, I think the signals squarely on Bitcoin.
• 51:04
  And I think over time, based off of everything we've discussed on this discussion, it's going to come more and more clear that it's going to be extremely advantageous to hold a neutral reserve asset for and fit for the digital age moving forward.
• 51:19
  yeah for sure and i think you know if you're imagining to your point on tether marty um and
• 51:26
  the the idea of the few um incumbents that are likely to capture most of the market i think that's
• 51:32
  spot on um you know if you're imagining some bright stable coin future where there are thousands of
• 51:38
  different stable coins proliferating and everyone is issuing their own and you can kind of you can
• 51:43
  issue your own stable coin and you can be tether and you can kind of you know benefit from the same
• 51:48
  kind of dynamic. Um, I think it, it just misses, uh, I think that's, you know, you're gonna have a
• 51:53
  bad time if that's what you're, um, banking on, um, you know, it misses that, that, that kind of
• 51:59
  future that you're imagining is just a world of massive is basically reintroducing barter, right?
• 52:04
  Um, it's, it's coincidence of once non-coincidence of once as a service. Um, and I think the,
• 52:10
  what people want, right. Is if, if, if I, if I accept Tether, I don't want your stable coin that
• 52:15
  I didn't have to convert to Tether. You know, I want you to give me Tether. And if you have a
• 52:20
  balance of Tether, you know, you want to you want to pay with that balance. You don't want to have
• 52:24
  to convert it into, you know, something that I want to receive. So, you know, from a payments
• 52:29
  perspective, like there is a natural gravitation. We've talked about this before with, you know,
• 52:33
  the savings case for Bitcoin in the interim. There's somewhat dynamic plays out, I think,
• 52:38
  with stable coins as well. There's a tendency toward a couple issuers, maybe even just one
• 52:43
  issue or ultimately that can build up the network effect and of having like the database essentially
• 52:50
  that everyone wants to be, you know, a part of. And to the point on efficiencies, like, you know,
• 52:56
  maybe you're getting efficiencies for now, but as long as stable coins are leveraging, you know,
• 53:01
  non-Bitcoin blockchains, like it's just a cat and mouse kind of whack-a-mole game,
• 53:05
  jumping from one blockchain to the next as, you know, as usage of this stuff really ramps up,
• 53:10
  there will, and we've already seen this, you know, fees spike on chain, these different blockchains,
• 53:16
  and you have to move over to kind of the next one where fees are lower and kind of rinse and repeat
• 53:20
  ad infinitum. Ultimately, it seems like the long term, you know, process here, the long term
• 53:26
  outcome is you move away from from blockchains entirely, and you just kind of have a database,
• 53:32
  right? Tether has a database, USDC has a database. That's really what we need to get kind of max
• 53:38
  efficiencies if you're not optimizing for trustless, you know, fixed supply digital cash
• 53:44
  that solves the double spend problem without a, you know, a third party intermediary,
• 53:48
  which is what Bitcoin is. So if you don't need that, then you should probably just move to a
• 53:51
  database. And so it seems like that's the long term, you know, play here. And in that world,
• 53:55
  you know, I think there will be the the offshore dollar, like the kind of the gray market dollar
• 54:02
  substitute, maybe that's Tether that kind of wins out and gets huge demand from, you know,
• 54:06
  from international markets, there will be the the onshore, highly KYC dollar that is maybe used in,
• 54:14
  you know, in U.S. and our allies jurisdictions. You know, maybe that's USDC. Maybe that's also
• 54:21
  Tether. I don't know. But all that is to say, yeah, I think any any thesis that involves
• 54:27
  some massive proliferation of all these different kind of stable coin technologies is
• 54:32
  probably headed in the wrong direction.
• 54:35
  And I think this is a market, again, similar to Bitcoin in many ways.
• 54:40
  It's a winner-take-all or winner-take-most type situation that we're looking at here.
• 54:44
  And while we're on the topic of stablecoins, USDC specifically,
• 54:50
  great segue into the deal breakdown section of the show.
• 54:54
  I know you don't have this on the show notes,
• 54:55
  but it has been floated the last couple of days,
• 54:58
  the potential for Coinbase to acquire Circle and fold them into their operations.
• 55:05
  They've had a pretty tight partnership, I believe, with some degrees of exclusivity as well up to this point.
• 55:12
  And Coinbase has been maniacally focused on building a brand and some would argue a regulatory moat here in the United States.
• 55:23
  Circle has been running in parallel, trying to do something similar in the world of stable coins.
• 55:27
  I think that's a lot of what the stable coin bills that are being discussed in Congress revolve around right now.
• 55:33
  It's conversations about who should be able to do it, apply in USDC or the pirates that are Tether.
• 55:41
  What are your thoughts on the potential of Coinbase acquiring Circle?
• 55:45
  Makes sense to me.
• 55:47
  Yeah, I didn't know if Grant was burning to answer, but I agree.
• 55:52
  You know, directionally, I think that makes sense.
• 55:54
  Um, I, I think when I saw the, you know, the headline floating that rumor the other day,
• 56:01
  um, my knee jerk reaction was, uh, you know, essentially like, oh, that hasn't happened yet.
• 56:06
  Like I, you know, I kind of know that they're separate, but, um, the, I've always just kind
• 56:11
  of thought that that was kind of directionally where it would go. Um, so yeah, I wouldn't be
• 56:17
  surprised at all. Clearly that's a, it's a business model that, um, it's, it's a good gig if you can
• 56:22
  get it for now and uh you know wouldn't be surprised for the largest um player in in kind
• 56:30
  of u.s crypto markets broadly to to be the one to take that swing another coinbase in the news the
• 56:38
  last couple weeks too for a security breach i think this is actually a really good topic to touch on
• 56:43
  particularly in the context of things that we focus on a lot here at 1031 which is dealing with
• 56:52
  companies that have to handle kyc aml information how to best do that seems like coinbase um
• 57:00
  outsourced a lot of that process to third parties and countries outside the united states and
• 57:07
  the individuals running those support jobs turned out not to be as trustworthy as one would like
• 57:15
  them to be considering that position less than one percent of coinbase users data was sold
• 57:22
  to nefarious actors who are successfully able to convince some of these customer support
• 57:30
  contractors to give over the information.
• 57:34
  We don't know exactly what customers, but one would have to imagine that
• 57:39
  if a nefarious actor is targeting Coinbase users, it's probably those that have a lot of Bitcoin
• 57:44
  or older users who are more susceptible to phishing attacks.
• 57:49
  but this is a big problem.
• 57:51
  KYC, AML data that these companies are forced to collect
• 57:56
  and ideally secure properly.
• 58:00
  Seems like Coinbase hasn't done it in this case.
• 58:03
  And I think a lot of the reason is just they've been spread thin.
• 58:08
  They grew a lot, have a lot of headcount,
• 58:11
  and they sort of outsourced a very vital part of their business,
• 58:16
  particularly the trust-building part of their business, too.
• 58:19
  somebody that turned out not to be trustworthy well i think uh it's difficult for us to
• 58:26
  like point and laugh at coinbase and say see they didn't do it the right way and
• 58:33
  and sort of assume or imply that maybe there's companies that are doing it the right way
• 58:39
  in the Bitcoin ecosystem, which there very well may be, but it's just a fact of life that
• 58:49
  if you want, like if you are touching, you know, users money and there's regulations involved,
• 58:58
  you have to, I mean, we don't like KYC AML, but you have to do it if you want to comply
• 59:04
  with the law. And it's fairly common to outsource this. It's not like Coinbase is the only one
• 59:14
  doing it. We've seen various data breaches within the Bitcoin ecosystem in the past as well. And
• 59:22
  there's vulnerabilities from working with any partner. There's even vulnerabilities if you are
• 59:28
  running the KYC AML program in-house. But for most of these companies that are building technology,
• 59:36
  you can make a strong argument that that's not, you know, that is not their, their bread and
• 59:43
  butter. Like they are trying to build certain technology and there are best in class services
• 59:48
  providers that provide KYC services to companies and that do do this across, you know, lots of
• 59:58
  different services providers in the space that can create a honeypot, obviously. But I think it's
• 1:00:07
  it would not be correct to imply that, you know, Coinbase is out there doing something that others
• 1:00:13
  are not. It's an unfortunate thing that will, has happened, will happen when you're dealing with
• 1:00:23
  customer data. And that's why it's really important for users to just be aware of the
• 1:00:32
  data that they're providing and be aware where their vulnerabilities are. If they're holding
• 1:00:37
  Bitcoin with a custodian, that could be at risk. And that's why we always
• 1:00:43
  recommend if users are comfortable with setup and cussing themselves or having some type of
• 1:00:51
  collaborative custody model that that's the best way to custody bitcoin because either way
• 1:00:57
  there's going to be attackers that are trying to get access to your data trying to get access to
• 1:01:02
  bitcoin yeah i mean i think there's the tough thing is like given the nature of the laws right
• 1:01:08
  now, um, there really is no way to like do it right because there's just the, the whole, like
• 1:01:14
  the requirements are such that you have to put, you know, the, if you want to interact with these
• 1:01:19
  services, um, data into like a centralized database and try as they might. Um, even if everyone in the,
• 1:01:25
  in, in all these industries is well-intentioned, like, um, it's impossible to keep it. It's just
• 1:01:30
  been proven. It's impossible to keep it a hundred percent secure. Um, so I think the, the solution
• 1:01:36
  that we have right now, other than, you know, lobby for, you know, change into the Bank Secrecy
• 1:01:40
  Act or things like that, is, granted to your point, like something like collaborative custody,
• 1:01:46
  like what's offered by Unchained or what Anchor Watch offers, you know, with insured custody,
• 1:01:51
  soon to be, you know, some multi-institution custody options, but creating basically frictions
• 1:01:57
  for the way that you hold Bitcoin such that, you know, you're not just a SIM swap away from
• 1:02:03
  losing Bitcoin or you're not one social engineering phone call
• 1:02:07
  away from, you know, signing away your Bitcoin or, you know, you log into a fake portal from an email
• 1:02:14
  and then you you have indirectly authorized your movement of funds. You want to put a lot of
• 1:02:20
  frictions basically between you and, you know, your any significant amount of Bitcoin that you're
• 1:02:25
  holding so that you have much less likelihood of kind of getting emotional, you know, getting a
• 1:02:32
  social engineering, social engineering kind of phone call from somebody and emotionally making
• 1:02:36
  a big decision, it should kind of be hard to move any kind of meaningful amount of Bitcoin, right?
• 1:02:41
  And so one of the services that a company like Unchain, a company like AnchorWatch can offer is
• 1:02:46
  adding that those layers of useful kind of institutional grade friction, you know,
• 1:02:52
  private wealth management, white glove service type friction to, you know, movement of your
• 1:02:57
  holdings such that it's not super likely that, you know, you can easily get phished or easily
• 1:03:04
  socially engineered or easily have an account compromised because you've got so much private
• 1:03:09
  key material, ideally, you know, geographically distributed in kind of different offline spots.
• 1:03:15
  So I think that's a huge mitigate is services like that that just make it harder to go through
• 1:03:20
  something like that. Yeah. And I know we didn't want to talk about it, but the the operaturn
• 1:03:24
  kerfuffle in the Bitcoin world, I'm pretty sure many of you listening to this probably
• 1:03:29
  blissfully unaware of this whole debate that's been going on,
• 1:03:33
  but it has taken away from other conversations that I do think are very
• 1:03:38
  important to be having right now,
• 1:03:39
  especially in regards to this specific topic,
• 1:03:42
  which is the idea of potential covenant soft fork,
• 1:03:44
  whether that's op check template verify or others that are,
• 1:03:51
  that are being proposed that would make it significantly harder for people to
• 1:03:56
  socially engineer successfully,
• 1:03:58
  socially engineer somebody to giving up all their their bitcoin essentially creating spending
• 1:04:03
  conditions and fallback options for bitcoin that if a nefarious actor is successfully able to get
• 1:04:10
  access to your private keys and begin moving bitcoin or socially engineer you to move your
• 1:04:15
  bitcoin something like covenants would create conditions that'll give you a fail safe to
• 1:04:20
  to move that bitcoin to another address as it's in transit so um something to be aware of
• 1:04:28
  You heard it here first.
• 1:04:29
  1031 is trying to change Bitcoin.
• 1:04:32
  Not trying to change it.
• 1:04:34
  It's a worthwhile conversation.
• 1:04:35
  If you're worried about something like this and you think it's a big enough problem that it makes sense having conversations about incorporating something new into Bitcoin.
• 1:04:45
  That's how I'd frame it.
• 1:04:47
  But last on the list.
• 1:04:51
  Deal breakdown.
• 1:04:52
  Bitcoin treasury company is hot right now.
• 1:04:56
  Metaplanet over in Japan.
• 1:04:57
  we were talking about this in our group chat earlier is it sort of this flight to safety
• 1:05:02
  asset that exists um in japanese equities markets as their yield curve goes crazy meta planet stock
• 1:05:09
  has been going up uh pretty rapidly i believe it got halted twice today during japanese trading
• 1:05:15
  hours trading around three billion dollar market cap obviously we have the emergence of nakamoto
• 1:05:22
  21 Strive Asset Management
• 1:05:25
  announced that they will be going public and applying a sort of unique
• 1:05:30
  Bitcoin treasury strategy, which is to go out and find companies that are trading
• 1:05:34
  below book value, take them out
• 1:05:38
  or not take them out, acquire them, turn their cash into Bitcoin.
• 1:05:42
  What are your thoughts on this trend of Bitcoin treasury companies
• 1:05:46
  flooding the market? Is it a flash in the pan?
• 1:05:50
  or is there some some staying power with this strategy uh i can i can start um i mean one thing
• 1:05:58
  that i found interesting like if you think about it over time over the last several years i mean
• 1:06:03
  when we started 1031 um 2020 uh time frame a lot of the pitches and the inbounds that we got
• 1:06:14
  back then, 2020, 2021, even 2022 was like every pitch, like nine out of 10 pitches that came in
• 1:06:22
  inbound, um, through the website were founders that were looking to build like a mining company,
• 1:06:30
  right? They're like, well, we got, we got some trad five people. We got some energy people. We've
• 1:06:36
  got a low cost energy and we've got direct attractive, uh, access to ASICs. And we're
• 1:06:43
  going to go do, you know, we're going to be the next greatest Bitcoin mining company.
• 1:06:49
  We did hardly any of those deals. In fact, like any inbound that comes directly to our website,
• 1:06:54
  like that's generally a no for us. And there's a reason why we don't have an intake form on our
• 1:07:02
  website for founders to reach out directly, because that's just not the way that we,
• 1:07:07
  we make investments to begin with a cold inbound to the website. It's not really going to work
• 1:07:13
  for us. But the point I was making is like everyone wanted to be a mining company. Very
• 1:07:21
  few of those were successful. It does feel like right now there's just a massive influx of these
• 1:07:27
  inbounds that are coming for, you know, we're going to create the next Bitcoin treasury company
• 1:07:31
  of Brazil or of Australia. We're going to pursue the micro strategy play.
• 1:07:36
  I don't think that it can only be micro strategy that is successful.
• 1:07:43
  I think micro strategy, you know, their their strategy or strategy, I guess their new name has evolved over time.
• 1:07:53
  And I think they didn't really find out, didn't really determine what they were and what they were doing, except over some trial and error.
• 1:08:03
  And I don't think that they're the only one that can be successful.
• 1:08:08
  But I do think that this feels it feels very trendy at the moment.
• 1:08:14
  And I personally don't get too excited about it.
• 1:08:18
  You know, when the next inbound comes in and says, well, we're going to be a Bitcoin treasury company.
• 1:08:22
  to me it's like i like finding founders and companies that are carving out their own path
• 1:08:32
  and doing something different now there might be a way to do something different
• 1:08:36
  with bitcoin on your balance sheet with a strong bitcoin treasury say you're building
• 1:08:42
  you know bitcoin oriented financial products or you're operating in the bitcoin space like that's
• 1:08:50
  clearly part of our thesis is that there are interesting ways to participate and drive growth in the ecosystem and to do so with Bitcoin on your balance sheet So I don personally get excited by the next announcement of you know the next treasury
• 1:09:12
  company that's going to be doing something.
• 1:09:15
  There may be ways for them to differentiate themselves relative to what others have done
• 1:09:24
  in the past.
• 1:09:24
  But I also think that we're I don't think it's really played out.
• 1:09:29
  Like, I don't think it's saturated really at this point.
• 1:09:32
  Like, it still feels like we're pretty early.
• 1:09:34
  You haven't seen you've started to see a lot of these announcements happen of companies that are trying to go down that path and announce a Bitcoin treasury strategy.
• 1:09:44
  But we haven't seen any that just haven't worked out that have blown up.
• 1:09:48
  So I think we're still in the early days and likely with the Bitcoin conference start happening next week.
• 1:09:56
  I bet a large percentage of the announcements that people are waiting to to make at the conference are going to be a lot of Bitcoin treasury announcements.
• 1:10:08
  So that's some initial comments. Curious how you guys think about it.
• 1:10:12
  But yeah, I mean, on the point of blow ups, you know, it's it's it's too early to say kind of that any of these are going to blow up or that any of them are going to work out.
• 1:10:21
  I mean, a lot of the ones have been announced are still like, you know, the deals haven't even closed yet.
• 1:10:25
  So it's like, you know, let's let's see. Let's see how it kind of comes to market.
• 1:10:29
  And then you've also got, you know, you're kind of struggling companies like circling the drain in some random industry that, you know, put out their press release that they're going to they've initiated their Bitcoin treasury strategy.
• 1:10:40
  And they plan to buy, you know, a billion dollars of Bitcoin or some crazy number.
• 1:10:45
  And then you look into the details and it's like, well, we at our next board meeting, we are going to initiate discussions of ideating on how we could go about acquiring Bitcoin for the company or whatever.
• 1:10:55
  Right. And so there's there's some of the press release games going on as well with some of these, you know, smaller companies that's reminiscent of, you know, Long Island blockchain in 2017.
• 1:11:07
  Long Island Iced, you know, adding blockchain to their their company name and trying to get a little pop and a benefit from interest from that.
• 1:11:16
  But, yes, I mean, it's it's it's too early to really kind of pass any judgment on any of them.
• 1:11:21
  I do think it's like, Grant, to your point on Bitcoin mining, you know, something that we've talked about a long for a long time is that capital efficient Bitcoin companies that can generate sats flows are, you know, basically much more capital light versions of Bitcoin miners.
• 1:11:40
  Right. Every company effectively, you know, you wrote about this in our launch piece for 1031 back in 2020.
• 1:11:46
  Every company, you know, essentially that can produce net economic value and stack Bitcoin with it or spit off cash flows denominated in Bitcoin, you know, is a Bitcoin miner.
• 1:11:56
  So everyone wants to be like, you know, even even Bitcoin miners want to be necessarily as capital efficient as they can be because that's how they actually stay alive.
• 1:12:04
  But every company wants to, you know, be effectively a more capitalite, more capital efficient Bitcoin miner, which is just to say they want to have the highest Bitcoin denominator returns that they can.
• 1:12:15
  And I think there's definitely something interesting that a lot of people in the space have grabbed onto, which I think is fair and legitimate that right now, given the state of capital markets, traditional fiat capital markets, one of the most capital efficient ways to acquire as much Bitcoin as possible or to produce, you know, sats flows, not really sats flows because there's not any sense of, you know, distributing them yet.
• 1:12:40
  But one of the most capital efficient ways to get access to Bitcoin is to become a Bitcoin treasury company and go tap the public markets, go tap convertible debt markets, go use these different instruments that are kind of trapped in fiat land and can't necessarily buy Bitcoin directly, but might have appetite to to get exposure to to Bitcoin in some way or find investors that are actively looking for, you know, levered fiat plays on Bitcoin.
• 1:13:08
  um clearly there's a lot of demand for that as well and so um you know i think it's it's no
• 1:13:13
  surprise that people would would grab onto the fact and kind of realize that one way to be a
• 1:13:18
  very capital efficient bitcoin miner is to mine fiat from the public markets and you know um
• 1:13:25
  build a capital structure that you hope is sustainable and can last through the cycles
• 1:13:29
  to allow you to accumulate bitcoin on net year on year um and you know grow uh shareholders
• 1:13:36
  exposure per share to Bitcoin over time. So that's not surprising to me. And I think a lot of it is
• 1:13:43
  legitimate and commendable for that reason. I think it's also an interesting, you know,
• 1:13:49
  manifestation of Pierre Richard's speculative attack, you know, that he wrote about from over
• 1:13:53
  10 years ago, basically to get back to our topic at the top of the show, you know, it's a carry
• 1:13:58
  trade, right? It's it's go find cheap capital and deploy it into, you know, a higher returning
• 1:14:03
  project. And historically, that's been, you know, you can borrow at low rates or maybe issue equity
• 1:14:10
  in the public markets if your company is trading at some crazy, you know, PE multiple and go buy
• 1:14:15
  data centers or go buy, you know, buy another company that you can bolt on into your company
• 1:14:20
  and that, you know, that'll clear a certain cost of capital for you. And, you know, this is this is
• 1:14:25
  no different. It's it's finding cheap capital and going to try to deploy it into the highest
• 1:14:30
  returning project that there is out there. Right. And, you know, the meta planets of the world,
• 1:14:35
  the strategies of the world have made the good point that the the cycle, the deployment cycle
• 1:14:40
  is also very, very quick here. It's not like we go get cheap capital and then deploy it into
• 1:14:46
  a factory that takes a year to build and then it takes another six months to ramp up and actually
• 1:14:50
  be profitable on like a, you know, a net unit economics basis. It's, you know, I raise the
• 1:14:55
  capital and then tomorrow, basically, I can go deploy it entirely into Bitcoin, the slug of
• 1:15:00
  Bitcoin if I want. Right. So I get the deployment immediately and kind of rinse repeat. And so
• 1:15:03
  there's a lot of, I think, rationality to that. There's a lot of, like I said, a lot to recommend
• 1:15:10
  it. But it's very possible and very likely that not everyone is going to do it as conservatively
• 1:15:16
  as Saylor has been able to do it. You know, if you look at his balance sheet right now, he's
• 1:15:21
  reasonably under leveraged relative to the Bitcoin that they have on the balance sheet,
• 1:15:25
  even if you haircut the value of it pretty significantly. He's not dramatically over
• 1:15:29
  his skis in terms of the debt burden. He's taken advantage of, you know, the NAV multiple that they
• 1:15:35
  have to, you know, whether you think that's a logical thing or not. He's doing exactly the
• 1:15:40
  right thing of issuing more equity to go pump it into Bitcoin and further shore up the balance
• 1:15:44
  sheet. But not everyone's going to have that benefit. Not everyone's going to be able to,
• 1:15:49
  you know, to get get to that point. And I think there are a lot of people who are going to
• 1:15:53
  to use I can remember who said it but someone in the Bitcoin community said you know Lever everyone thinks leverage is a time machine to being an OG There are a lot of these companies out there that I think you know
• 1:16:06
  they're going to think that leverage is a time machine to being, you know, sailor.
• 1:16:10
  And I think there will be some some companies definitely that are in for a rude awakening on,
• 1:16:15
  you know, managing the strategy appropriately through all the volatility.
• 1:16:19
  But yeah, I think it's the first inning.
• 1:16:22
  I don't think it's I don't think we're close to the eighth or ninth inning yet.
• 1:16:25
  Yeah.
• 1:16:26
  Yeah, I completely agree there.
• 1:16:28
  But I think there's got to be some sort of parade of distribution
• 1:16:32
  of network effects that take hold,
• 1:16:34
  and economies of scale will benefit the winners massively in the long run.
• 1:16:42
  And I do think first inning is going to be a massive trend this cycle,
• 1:16:47
  I imagine.
• 1:16:48
  But to both of your points, Grant, it does feel very trendy,
• 1:16:53
  which makes me uneasy.
• 1:16:54
  I just had my caveman been in this game for 12 years.
• 1:16:58
  Alarm bells ringing like this feels very trendy.
• 1:17:02
  Somebody's going to blow up somewhere down the line.
• 1:17:04
  And then long term, I mean, Michael Saylor's explicitly said this in one of his shareholder meetings.
• 1:17:11
  Like they think that MicroStrategy is going to become a Bitcoin bank of the future in its next chapter after its accumulation phase.
• 1:17:18
  And if you just look at how banks trade very close to their book value.
• 1:17:24
  So I think these multiples can expand to the point of what I'm looking for.
• 1:17:33
  Again, it's the point of absurdity for a time.
• 1:17:38
  But in the long run, I think they'll compress to book value.
• 1:17:42
  And I think that's just we're just got to see animal spirits play out in these markets.
• 1:17:47
  But look and bring up the tweet into what both of you said.
• 1:17:49
  I think Grant, we align very well on the point.
• 1:17:52
  Like the thing that really fascinates me in terms of like actually bringing value to the world in terms of productive goods and services is profitable operating businesses that roll profits in the Bitcoin.
• 1:18:04
  I think this is way more exciting and I don't want to say worthwhile, but something that makes it easier for me to get out of bed in the morning and focus on is like, what are the companies that are providing value to the world?
• 1:18:17
  doing it efficiently, getting profits, funneling that into Bitcoin,
• 1:18:21
  scaling up the strategy.
• 1:18:23
  And to that point, like there's never been a better time in history for
• 1:18:27
  companies.
• 1:18:28
  So like taking this the other end of the market,
• 1:18:29
  we've been talking about like publicly traded behemoths speculative attacking
• 1:18:34
  the cheap credit in the fiat world.
• 1:18:37
  Like many of you listening out there, particularly if you're younger,
• 1:18:40
  which I know there are a few of you out there.
• 1:18:42
  instead of trying to hop in a time machine
• 1:18:46
  using leverage to become an OG.
• 1:18:48
  There's never been a better time
• 1:18:49
  to start a company that cash flows quickly
• 1:18:51
  with two to three people.
• 1:18:54
  Bitcoin, particularly if you're leveraging AI,
• 1:18:57
  I think Bitcoin and AI will be the most powerful
• 1:19:00
  sort of combined force of this decade
• 1:19:02
  if you leverage both of them correctly
• 1:19:04
  to build a business
• 1:19:05
  and then make sure that you're storing the value
• 1:19:07
  that business creates in a hard asset like Bitcoin.
• 1:19:12
  Yeah, I mean, fundamentally, there's really two high at a high level, two ways to add Bitcoin.
• 1:19:20
  It's some sort of capital transaction that you do like external to your business.
• 1:19:26
  You raise equity, you raise debt, you raise some sort of convertible security.
• 1:19:29
  You know what you're seeing with these Bitcoin treasury plays or it's just adding it internally with generating cash flow or sats flows.
• 1:19:39
  ironically, even though it feels very trendy and people are just, you know, they they're trying to
• 1:19:47
  replicate the success that, you know, they've seen others have with this strategy. To John's point,
• 1:19:55
  it also does make sense from a corporate finance perspective. Like, say you have Long Island Ice-T
• 1:20:02
  2.0 that says, you know what, we're going to become a Bitcoin treasury company. They're allocating
• 1:20:08
  capital to something that appreciates 30%, 40%, 50% a year, whereas their underlying base business
• 1:20:16
  probably wasn't doing that. So from a corporate finance perspective, it likely is better in the
• 1:20:24
  long run for a lot of companies to not be allocating capital to their business and instead consider
• 1:20:35
  holding it in Bitcoin, basically saving their capital until you have some normalization of
• 1:20:42
  the return on invested capital from a business that you're building relative to
• 1:20:47
  the return on capital that you have from Bitcoin or said maybe a slightly different way. It's just
• 1:20:53
  the opportunity cost of Bitcoin. More will appreciate that over time. So, you know, ironically,
• 1:20:59
  it likely is a good thing for more Bitcoin treasury companies to exist. It's sort of,
• 1:21:09
  again, to John's point about the carry trades, it's taking advantage of an arbitrage that
• 1:21:17
  exists right now in the public capital markets for demand for these types of securities.
• 1:21:24
  the thing we have to watch and especially for any company that's
• 1:21:31
  pursuing that type of path is are they taking taking on any leverage whether it's direct
• 1:21:38
  financial leverage or implicit leverage somewhere in the business that could
• 1:21:43
  you know blow themselves up some way because you know then you're not actually
• 1:21:50
  creating long-term value.
• 1:21:53
  You're just destroying it quickly.
• 1:21:55
  And I wonder at what point do enough of these companies come to market
• 1:21:59
  that it dries up the cost of capital?
• 1:22:01
  Because right now you have so few options to go run the strategy with.
• 1:22:06
  At what point are there enough Bitcoin treasury companies
• 1:22:09
  where liquidity providers are like, all right,
• 1:22:12
  you guys are going to have to bid for these dollars now.
• 1:22:16
  Or does that not even...
• 1:22:17
  I mean, maybe like the thing is also to our earlier conversation, like there's so much fiat sloshing around and there's probably going to be a lot more like and kind of just the cost of capital almost like definitionally to what we were talking about earlier with, you know, Besson's the Besson clip, like the cost of capital in our system, like almost definitionally has to be suppressed below like kind of what the rate that would be market clearing otherwise.
• 1:22:46
  And so I think there always probably going to be like an under not not at every point in the cycle and not at every you know every year necessarily but like over the stretch of five 10 plus years like I think there always directionally like a fiat bid available for virtually anything that can
• 1:23:06
  spend the story to especially public markets. I don't know that like access to capital necessarily
• 1:23:12
  or the cost of it would be the constraint. But I think Marty, to your earlier point,
• 1:23:17
  I do think there's a mindshare saturation point where, you know, the top, I don't know if it's the
• 1:23:23
  top two or top five or top 10, whatever. But the players that can get out in front the fastest and
• 1:23:31
  build up the biggest Bitcoin treasuries, like I definitely think, you know, there's room for more
• 1:23:35
  than just MSTR, you know, but whether it's 10 or 20 or whatever, there's not room for probably a
• 1:23:42
  thousand, right? There's going to be a Pareto type, I think, distribution of consolidation of
• 1:23:48
  attention toward the companies that can build up, that can get to scale the fastest and, you know,
• 1:23:55
  that can get to the biggest Bitcoin treasuries before everybody else. Because there will be,
• 1:23:59
  I think, you know, liquidity begets liquidity and the larger capital base will beget, you know,
• 1:24:04
  yet more investor interest and yet more ability to go invest more capital into those businesses,
• 1:24:11
  potentially with, you know, depending on each company's capital structure, but potentially with
• 1:24:16
  better, uh, better terms and, you know, less volatility and more assurance of kind of repayment
• 1:24:21
  of these different instruments, you know, the, the bigger the capital base is. Um, so I do think
• 1:24:26
  like, as we go through this cycle, there is an advantage to being fast and big and early,
• 1:24:31
  obviously to be balanced against, you know, having a sustainable capital structure,
• 1:24:36
  that's not going to blow up at the, you know, the first sign of a bear market. Um, but yeah,
• 1:24:40
  I do think that that'll be like the, the point of diminishing returns, I think is more on like the,
• 1:24:44
  the investor mindshare side, like at a certain point, you're going to ask yourself,
• 1:24:48
  why should I give money? Why should I allocate capital to this vehicle in your Bitcoin treasury
• 1:24:53
  company? You know, number 85, when I could just do the same with MSTR or Metaplanet or,
• 1:24:59
  you know, pick your other company that's out there right now. So that's where I think
• 1:25:03
  I see it tailing off in that way over time, for sure.
• 1:25:06
  I could see how, you know, perhaps there could be more, you know, more of these treasury companies that exist in different jurisdictions, you know, different geographies that operate with their own financial regulations that, you know, there are securities.
• 1:25:27
  There are there are walls set up between geographies from a securities perspective.
• 1:25:32
  So that likely is a reason why there's specific demand for MetaPlanet versus, you know, other Bitcoin treasury companies from local investors.
• 1:25:42
  So I could see that being the case more so than you might see with Bitcoin companies itself.
• 1:25:52
  Like when we think about our philosophy of investing in the ecosystem, you know, we have backed like we try to back the leaders and their respective businesses, like a strike, for example.
• 1:26:05
  And we like the Bitcoin is an open, interoperable network.
• 1:26:10
  So, you know, there are local regulations from a, you know, money transmitter perspective that you have to deal with that strike like strike as an example has to deal with.
• 1:26:22
  But theoretically, it can operate across the globe because the network is open and interoperable.
• 1:26:27
  So we like the idea of backing a strike who is a clear leader versus, you know, the second or the third, you know, this strike of, you know, name your country in South America or Europe or Australia.
• 1:26:43
  And so I can see how because of the dynamics with just traditional financial markets and securities, perhaps that allows for the proliferation of more Bitcoin treasury companies.
• 1:26:54
  But it would be interesting to see.
• 1:26:56
  It certainly will be. If it's the first inning, we've got a lot of game left to watch it play out. So we'll keep all of you abreast of the Bitcoin treasury play as it unfolds in the coming years.
• 1:27:09
  what i will say on this is as it compares to last cycle i i'm pretty sure i would much rather have
• 1:27:16
  you know the the dgens have be wearing suits and be kind of working on you know wall street in some
• 1:27:25
  way and doing kind of display be careful versus going no well well there are a couple of
• 1:27:31
  considerations with it but i i think i'd rather have this than the 100x levered long offshore
• 1:27:36
  you know, FTX, BitMEX type degen who can give us probably a much faster, bigger FOMO run up
• 1:27:45
  and is almost, you know, that is certain to kind of pop and give us, you know, an 80 percent,
• 1:27:50
  you know, decline in short order as well. I think you can build things with some of these
• 1:27:57
  structures that can last and build up a little more base. I think you're more likely to be able
• 1:28:04
  to do that with some of these structures than you ever would be with the market structure that
• 1:28:09
  we've had kind of up to this point. There will definitely be blow ups and maybe the kind of
• 1:28:17
  cumulative like amount of these types of companies coming to market, all making terrible kind of
• 1:28:22
  financial decisions, maybe that collectively, you know, becomes a huge headwind for that the market
• 1:28:26
  has to absorb. But if you have companies that look a lot more like MSTR, again, not that MSTR is
• 1:28:33
  impregnable or bulletproof. But if you have companies that take an approach to leverage that
• 1:28:40
  they have taken thus far, and then that's what these these plays look more like, then I think
• 1:28:47
  that's probably a better position to be in from a kind of externalities on the rest of Bitcoin
• 1:28:54
  holders perspective than, you know, everything we were dealing with in the last cycle. But time will
• 1:28:59
  tell it's a good point time will tell gentlemen it's been a great catch-up i feel like we covered
• 1:29:05
  a lot there was there was plenty to talk about not forcing the content it's good to get the people
• 1:29:11
  an update on what's going on out there yeah we provide artisanal alpha so just we don't we don't
• 1:29:18
  mass produce the alpha uh it just it just comes out you know whenever whenever the moment is right
• 1:29:23
  artisanal alpha i like that i may have to we have to uh we have to test that out as a as an official
• 1:29:31
  as official slogan of the podcast small we need it on hats small batch alpha small exactly
• 1:29:39
  all right gentlemen this has been great we will see uh we've we will see you all
• 1:29:45
  when we put together a menu of alpha to artisanally deliver to you at some point in the future
• 1:29:51
  that was your alpha for the week