Latest / Simply Bitcoin / Why Trump's New Fed Chair Means Bitcoin Number Go Up | Arthur Hayes

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Why Trump's New Fed Chair Means Bitcoin Number Go Up | Arthur Hayes · Simply Bitcoin

0:00
Is it going to be bullish for the price?
0:01
Does it even matter? Does Bitcoin even need
0:03
regulation? The new Fed chair that you know
0:06
he passed the Senate yesterday, is that a good thing for
0:09
Bitcoin? Is that a bad thing for Bitcoin?
0:11
What's your take on the guy or does it even matter?
0:13
Are the best days behind us right now where Bitcoin
0:17
currently sits at $79,824? Where do you believe we are in
0:22
the cycle? I think it'll take longer than
0:24
the Fudsters say it will, but it'll happen sooner.
0:29
And then we say it's just bath. Yeah, welcome to another episode
0:33
of Simply Bitcoin IRL. I'm here with the man, the myth,
0:37
the only Arthur Hayes. Arthur, thank you so much for
0:40
joining us on the podcast. I think this is the first time
0:42
you're joining us. I'm super stoked about it.
0:44
How are you? Excellent.
0:47
Good to hear. Good to hear.
0:49
Hey, man, so many things have changed over the last couple of
0:52
years. We, our industry went from, you
0:54
know, being othered, being on the outskirts to being like
0:59
accepted in a way. Like it was wild seeing the
1:01
president of the United States posting from the White House
1:05
account saying he wants to make America the Bitcoin capital of
1:08
the world, right? You have Wall Street being
1:10
interested in Bitcoin. You have these big banks and
1:13
that you know is a complete change from, you know, the back
1:17
in the 20/16/2017 ICO era where it was like the basic of the
1:22
Wild West, which my opinion was a little bit funner, it was a
1:25
little bit Wilder. What's your take on that man?
1:28
Because it it is different in a way, it feels like we're
1:31
becoming suits. I don't think so.
1:34
I still think that at the end of the day, the reason why Bitcoin
1:37
and crypto has values, it does something differentiated from
1:39
the traditional financial system.
1:41
Why would banks invest time and money onboarding clients that
1:46
trade crypto if it did the same thing that every other financial
1:48
product does, which is a liability of the banking system
1:50
and that comes with issues. So the value of Bitcoin is that
1:54
it's outside of the system. Now, obviously there's trading
1:58
volume that's going on. Banks make business of allowing
2:02
the client to trade stuff. So as it got to a large enough
2:05
asset class with a 2 something trillion dollars, then of course
2:08
they want to trade it. Of course, they want to earn
2:10
fees in this new asset class as uncorrelated with everything
2:14
else that they're selling to their clients.
2:15
So I don't think this is any sort of philosophical alignment
2:21
on what Bitcoin is. So at the end of the day, this
2:23
is all about sound money, and banks are all about the exact
2:26
opposite of that. This is about a bank is in the
2:29
business of making money. Their clients want to trade this
2:31
thing, and they're going to allow them to trade it in a way
2:34
that they feel comfortable with, which is all these sort of
2:35
derivatives and on balance sheet crypto products.
2:40
And so, yeah, I don't think Bitcoin is becoming suits.
2:42
It's just that, OK, the suits feel like they can make some
2:44
money. So they're coming to the
2:45
conference. Great.
2:46
I mean, it's an open, open source system.
2:48
That's the whole point. Anyone who can participate here,
2:50
the set of rules and if you want to join, come on board.
2:54
One of the narratives that I've been hearing on Bitcoin Twitter,
2:57
I so call it Bitcoin Twitter because Bitcoin X sounds weird,
3:01
but one of the narratives that I, I keep hearing, Arthur, is
3:04
that the centralization of the custody of Bitcoin, right?
3:08
And you look at the largest ETFs, except I think Fidelity,
3:12
they all custody their Bitcoin with Coinbase, including
3:15
MicroStrategy as well or strategy as well, right?
3:18
Does that concern you at all? Because I think this is the
3:20
first cycle really that you've actually seen less people taking
3:24
custody of their coins than in previous cycles.
3:28
It's definitely concerning. I hope that we don't, you know,
3:31
that Coinbase doesn't get hacked or have some sort of issue.
3:34
And I hope that all these folks will have to learn why we say
3:38
not your keys, not your coins, though in their own lives.
3:41
Because, you know, it's not very nice to have your your shit
3:43
ganked. But at the end of the day, this
3:45
is the point, right? It's not your keys, not your
3:47
coins. If you don't control the private
3:48
keys, then you are just, you know, a schmuck that is hoping
3:52
that Coinbase does, you know, good on security.
3:55
And I don't think they've been hacked today.
3:56
So their record is is perfect, but there's no such thing as
4:00
100% safety in this world. So there is that is that risk.
4:04
You have to balance that risk versus OK, if you forget your
4:07
password or you don't secure your coins, you know, well,
4:10
there's not like there's another option option that's like
4:12
completely diverse free. It's just you're responsible for
4:14
that. So people have to make those
4:16
decisions and should have used a product that makes sense for
4:20
them. Yeah, absolutely.
4:23
So Arthur, another thing that happened that I think was
4:25
enormous and we are getting so much heat on this particular on
4:29
simply Bitcoin when I was like guys, listen, it's probably a
4:31
good idea to elect Trump into office, right.
4:34
We were living through Operation Choke .2 point O our industry
4:38
was being attacked in 1000 different ways.
4:42
You yourself, right. We're kind of, you know, live
4:45
through some of that, right? The mining industry, every part
4:48
of the industry was getting attacked by, you know, the the
4:51
previous administration. And I said on the show, I said,
4:54
listen, guys, it's probably a good idea that, you know, Trump
4:56
gets elected into office. What is the significance of that
5:00
sea change? And then my following question
5:02
will be regarding the Clarity Act.
5:05
So I think the first thing is, if you look over the history of
5:08
Bitcoin, this is the presentation that I gave look
5:11
about last week in Miami, the person in charge doesn't really
5:17
matter. And I'm talking about in the US
5:18
context, obviously the big world out there and there's seven, 8
5:21
billion people. So really I'm talking about it
5:23
400 million. But at the end of the day, if
5:25
you're talking about in the in the United States, Bitcoin had
5:29
the biggest price appreciation under a Democratic president,
5:32
President Obama. Then there was Trump, then there
5:34
was Biden and there was the second company of Trump.
5:38
And obviously, you know, Trump's second time around, the rhetoric
5:41
changed in terms of the crypto whatever around, OK, enforcement
5:46
agencies acceptance and and all these sorts of things.
5:49
But at the end of the day, like Bitcoin went from zero to
5:53
something, you know, big something with no regulatory
5:56
clarity, with no support. The only thing that Trump has
6:00
actually done in terms of bills signed is I think the genius
6:04
Act, right? That was signed in July of 2025.
6:07
So we've gotten to an all time high, at least in the United
6:11
States, contacts with absolutely no clarity, absolutely no
6:15
regulation, absolutely no support.
6:17
So that isn't the constraining factor in the price.
6:21
And I think that the price performance of Trump post
6:24
inauguration in the second term has proven that the price is
6:27
down something like, I don't know, 20%.
6:30
So in my mind, this proves that Bitcoin's value has nothing to
6:34
do with regulations or the lack thereof or crypto regulation has
6:40
everything to do with how much Fiat liquidity is there in the
6:43
system. And Bitcoin will respond to
6:46
that. And so it doesn't matter.
6:49
It's nice that Trump says nice things about crypto and he shows
6:52
up to the events and obviously takes people's money for the
6:54
campaign donations. And, you know, the SEC and the
6:57
CFTC, you know, have wound down certain enforcement actions
7:01
against crypto people like great.
7:03
But again, at the end of the day, the price action says it
7:06
doesn't matter either way. And to the point about the
7:09
previous administration, if you go back before the FTX implosion
7:13
in 2022, Gary Goetzer was a much different person in terms of at
7:19
least a rhetorical stance towards crypto that it was a lot
7:23
more positive. You know, Sam Paper and Freed
7:24
was about to get almost every single license on offer in the
7:27
United States. It was only because he basically
7:31
bribed all these politicians with hundreds of millions of
7:33
dollars, then turned up and he just stole that money from his
7:36
customers. The Democratic Party had to
7:38
completely switch the attack on crypto because they looked so
7:41
compromised. And so all of a sudden it was,
7:43
this is the most evil thing in the world.
7:45
But Elizabeth Warren and all these other motherfuckers took
7:48
Sam's money and we're perfectly willing to expound on the
7:54
benefits of crypto as long as they were getting campaign
7:55
donations. And so I think this whole people
7:58
need to remember actually what happened.
8:00
It's not that the Democrats are against crypto, it's that they
8:03
looked compromised because their poster child was a thief.
8:07
We thought he was found out to be a thief.
8:09
And therefore in order to save their political skin, they had
8:12
to turn a different tact to become their party of anti
8:15
crypto. And so things can change, right?
8:17
And so I think people need to understand that politics is
8:19
fickle. The priority of politicians
8:21
change all the time. It's all about compromise and
8:24
horse trading. And so there is no like Monster
8:27
Dave, like this party is great for crypto and this party is bad
8:29
for crypto. Things will change.
8:31
And so I think people need to keep that in mind.
8:33
I think that's a Arthur this is, but it's I talked to a lot of
8:37
people. That's that's a very unique take
8:39
and that perspective and it's good to to go back and look at
8:43
the history. And that makes perfect sense,
8:45
right? You know, they, they didn't
8:46
really pay attention to it before FTX.
8:49
They're very, you know, like you said, their poster child ended
8:51
up being a thief and then that kind of forced their hands.
8:55
That's the first time hearing that person perspective, so I
8:57
really appreciate that. What is your take on the Clarity
9:00
Act? Because it's all the buzz right
9:02
now. That's what everybody's talking
9:04
about. They released the pages
9:05
apparently 2 days ago in the dead of night at like midnight.
9:10
Is it significant? Is it going to, is it going to
9:12
be bullish for the price? Does it even matter?
9:14
Does Bitcoin even need regulation?
9:16
You were talking about that earlier.
9:17
Bitcoin number number went up regardless of the
9:21
administration, regardless of the political party, regardless
9:24
of the regulatory environment. Is it a big deal the Clarity Act
9:28
passing? I think for the broader crypto
9:30
ecosystem, the Clarity Act pass and doesn't pass has no effect
9:33
on the price, no effect on the trajectory of Bitcoin.
9:36
However, if you are a founder or builder inside the United States
9:41
and your product or service is predicated on access to that
9:45
market or you are ACEO of a centralized exchange like Jeremy
9:49
Lear or Brian Armstrong, this is a very important bill for you,
9:52
right? Because this is just going to
9:53
define how you interact within the system against the the banks
9:58
and other institutions in the financial services sector and
10:02
what that means for crypto. Now, obviously the mainstream
10:04
media is very Western focused US focus.
10:06
And so they're wearing out all this nonsense about the clarity
10:09
Act this and the Clarity Act that.
10:11
But in general, no, it will have no effect on the price whether
10:13
it passes or it doesn't pass. But again, if that is your
10:15
market, the United States market is what you care about in terms
10:18
of, you know, crypto financial services.
10:20
Yes, it is very important. I have not read the bill.
10:22
I will not read the bill. It has no effect on crypto.
10:26
You know, from my own perspective, if it does end up
10:29
passing both the House and the Senate, I hope Trump vetoes it,
10:32
because it doesn't. That's not necessary.
10:34
It's just adding more complexity, red tape, legal
10:37
costs, all these sorts of things that have nothing to do with
10:40
crypto has nothing to do with open source tech development.
10:43
If, if anything, that's going to happen for open source tech
10:45
development inside the United States.
10:47
But again, it has no it'll have no impact on the price either
10:50
way. Arthur, earlier you're talking
10:53
about liquidity and I had read some of your pieces and you
10:56
mentioned the the funniest one was the one with the picture
11:02
with with all the men and then the girl.
11:04
And then the girl was supposed to be the the Fed chair.
11:08
Jerome Powell absolutely loved that picture was hilarious.
11:13
Perhaps we'll pop it up on screen so you guys will know
11:15
what I'm talking about. But what's your take on the new
11:18
Fed chair that you know, he passed the Senate yesterday.
11:22
He, he, he got nominated to be part of the board.
11:25
I think today is the vote where he gets voted in to be chairman.
11:30
Is, is that a, is that a good thing for Bitcoin?
11:32
Is that a bad thing for Bitcoin? What's your take on the guy or
11:35
does it even matter? So.
11:37
I think people put too much emphasis on the Fed share and
11:40
what they will they they won't do.
11:41
At the end of the day, the Federal Reserve was a part of
11:43
the American empire and it will do what it has to do to make
11:45
sure that the government is well funded.
11:47
And, and you can read now if you really care about Fed history,
11:52
there's a speech in 1979 by Arthur Burns, former Fed
11:56
chairperson, and he basically laid out that you might have all
12:01
these thoughts about what you think monetary policy should be
12:03
as a Fed board member or chairperson.
12:05
But at the end of the day, you are a servant of the American
12:07
people. If the American people want to
12:09
spend a bunch of money on wherever the fuck they want to
12:11
spend a bunch of money on enabled by their representatives
12:14
in Congress in the Senate, then the Fed must set up step up and
12:18
has always stepped up to right the money.
12:21
And that's what he is saying. And so I think I think this the
12:24
speech is called the anguish of central banking something like
12:26
that. And so I think this this
12:28
fixation on who the Fed Sherman person is a sort of a waste of
12:31
time. Like yes, Kevin Wars came out
12:33
and said he was hawkish. But if you read the actual
12:35
papers that underpin what he means by hawkish, they're going
12:38
to reduce their whole of treasuries, but the banking
12:41
system is going to increase by the same amount.
12:43
So the net effect is is 0. It's just passing the potato
12:47
between two different hands. But if you want to talk about
12:50
reducing inflation, reducing the amount of credit in the in the
12:52
ecosystem, that is not what Kevin Warrick is going to do.
12:56
So I know that initially people were bearish on liquidity
12:59
creation because they believe that Warrick is a hawk.
13:02
But I don't think they actually interpreted what he's said
13:06
correctly and have read the papers coming out of the Fed
13:09
where other governors explain what they mean by reducing the
13:12
balance sheet and how they want to do it.
13:14
What no one is ever suggesting is that the Fed take their $6
13:18
trillion portfolio of U.S. Treasuries mortgage-backed
13:21
securities and sell them at the market and immediately drop the
13:24
size of the balance sheet. All these proposals are about
13:27
slow and steady ways in which they can change the regulation
13:30
so the banks buy the thing that this Fed is selling.
13:33
So the net effect on liquidity situation is 0.
13:36
But the Fed can stand up to the people and say, yes, we care
13:39
about the inequality. We reduce our balance sheet, but
13:41
the net effect is 0. And inflation will be when
13:43
inflation is, and the Fed will have no effect on that.
13:46
So I don't really care. Doesn't matter.
13:49
Worse is will do. Worse is going to do what Trump
13:51
was going to do, which is more money creation, lower rates.
13:54
And that's what's going to happen.
13:56
And what does that mean for Bitcoin?
13:59
Right, number go up the the Fed's balance sheet is
14:02
increasing. I don't see that stopping.
14:04
It's you know it started increasing December of last year
14:07
when they stopped the quantity of tightening and started
14:09
reserve management purchases. That's not going anywhere.
14:13
And yes, again, all these people talk shit about the previous
14:17
administration at the Fed, or in Buffalo Bill Besson's case, the
14:20
previous Treasury Secretary. When they get in that seat and
14:25
they see the numbers and the message from the boss hasn't
14:28
changed, right? Free shit for my voters.
14:31
Now the Democrats give out free shit to their people, and the
14:33
public is going to give out free shit to their people.
14:35
And guess what? Or worse, given the program,
14:40
print the fucking money. And I don't care that you came
14:43
out and you derided your predecessor.
14:46
You're going to keep the same policies because the policies do
14:48
what they're supposed to do, which is provide the credit for
14:50
the politicians to spend. Gotcha.
14:53
Makes perfect sense. So Arthur, this last cycle, this
14:58
last cycle I would say was a little bit underwhelming from a
15:02
number go up perspective, right. We didn't have the historic blow
15:06
off top that usually Bitcoin always has.
15:09
We kind of had this like muted top that we kind of topped on
15:12
apathy. We really didn't have this
15:14
explosive price movement. Are those eras gone now that
15:18
Wall Street is involved? What do you consider explosive
15:22
pricing because if you think about the low is what like 1515
15:26
to 20,000 in FTX high at 126. So that's, that's a good 6X in
15:32
two years. So what is explosive to you,
15:34
right. I think that's that if you need
15:36
to understand what, what does that mean?
15:38
I didn't get the blow off stuff, but what's that number?
15:40
What are we, what are we talking about here?
15:42
And I think the failure to be able to define that tells me
15:45
that you don't really understand financial markets in terms of
15:47
what it means for your portfolio and what is return you're trying
15:50
to achieve over a particular time frame.
15:52
And you're just going with vibes, and vibes usually means
15:55
your portfolio value is going down.
15:58
Gotcha. So Arthur question for you in
16:01
particular that because it, it, it was a fantastic return,
16:04
right, like 16,000 to 125,000, right.
16:09
You're as you said 6X it's a fantastic return.
16:11
I don't think you're going to get that anywhere.
16:14
But from a moving forward perspective, like are you
16:18
bullish on Bitcoin? Like what's your perspective on
16:21
diminishing returns because the number is bigger, the market cap
16:24
is bigger, are the best days behind us?
16:28
Again, best days, I think people have this romantic vision that
16:32
oh, if I, if I was in crypto in 2013 or 20, whatever year, you
16:37
know, 20 something teens, I would have made so much money
16:41
because the price went up so quickly and yadda, yadda, yadda,
16:43
right? And then people forget that
16:44
like, you know, when I started in crypto Bitcoin from 250 to
16:49
like $60.00 in the span of a week or two, right?
16:53
Or let's say that you bought at the Mount Box High like 1300, it
16:59
went down $135 over the next year and a half, right?
17:02
So there has been, yes, amazing price returns, but have been
17:06
punctuated by massive volatility.
17:09
So while the volatility of Bitcoin is will decline due to
17:12
the law of large numbers, that also reduces the risk that it
17:17
goes to 0, the Lindy effect, right?
17:19
And so you can't say that you wish that it was like that in
17:24
the past, but then would not have been able to suffer the
17:26
volatility on the downside as well.
17:28
And I think this is the problem with a lot of people who get
17:31
into crypto is that it took them 10 plus years of getting berated
17:36
with, you know, this guy got the Lambo after trading crypto for
17:40
two weeks or looking at the social media of this person, go
17:43
to the nightclub that they wanted to go to or the fancy
17:45
restaurant or whatever, whatever it is that they thought that
17:47
they need in their life. And they don't understand that.
17:52
Like put your mentality and how you think about markets in that
17:55
time is spent. Can you suffer a 50% drawdown in
17:58
24 hours? Because I've been trading crypto
17:59
for a long time. That absolutely happened back in
18:02
the day, but tell me recently when Bitcoin's gone down 50% on
18:06
massive volumes in 24 hours. I guess maybe the COVID March
18:11
13th or whatever it was in 2020, but like since then, I haven't
18:14
really seen that sort of volatility.
18:15
So again, I think it's this rose tinted glasses, it's nostalgia
18:19
for the past. And people don't actually
18:21
understand how they would approach that situation if they
18:23
were there. And therefore the unrealistic
18:25
expectations of crypto had to meet their unrealistic, really
18:29
realistic expectations. They pile on leverage, they get
18:32
wrecked and they say all Bitcoin didn't perform or I should have
18:35
been in the NASDAQ or gold. No, you just don't have the
18:39
right expectations and the right dedication to the art of
18:42
trading. Yeah.
18:44
And by the way, I, I completely agree with that, right.
18:47
So I, I've been, I've been in this industry for a decade and
18:50
the early days were a lot. There was a lot more
18:53
uncertainty. It wasn't like it is today in
18:55
terms of, you know, again, you have BlackRock involved, right?
18:58
You have the US government is saying, you know, bullish things
19:01
about Bitcoin. Back then.
19:02
It was literally the Wild West. And I gotta say though, Arthur,
19:06
you know, yes, we, we did have 50% corrections in a day.
19:10
But I do miss, I do miss that that those dopamine hits, man,
19:15
that volatility was nice in a way.
19:17
Yes, we, you know, 50% was harsh, but at the same time
19:22
things happened in a shorter condensed amount of time is what
19:27
I would say. True, but I think a lot of
19:29
people did not make it out of the other side, right?
19:31
How many people do we know who round tripped some massive
19:33
gains? Because that volatility works in
19:36
both ways. Very few, I would say the amount
19:40
of people that got in into that got in in class of 2013, class
19:45
of 2015, class of 26, class of 2017, a lot of I know more of
19:50
those people that sold than that actually held.
19:55
So I think that says it all. I would say, yeah.
19:57
Exactly. So, Arthur, you've said in the
20:01
past that Bitcoin is the hardest money ever created.
20:04
What does hard money actually do to a society that adopts it?
20:10
It makes things harder and easier at the same time, right?
20:13
It forces honesty in the, if you, I'm going to loan you
20:16
Bitcoin, right? I'm going to have to have very
20:18
high confidence in whatever it is the venture or something
20:21
because I can't just go and create more Bitcoin or there's
20:24
some centralized authority that can go and create more Bitcoin.
20:27
So the type of economic activity that happens under hard sound
20:31
money must be very, very valuable to the community in
20:34
which it's being created, as opposed to today where it's
20:37
really like it's a financialized economy.
20:38
And if you are privileged enough to have direct access to the
20:42
credit spigot, then you can do all sorts of nonsense in terms
20:46
of, I mean, look at the however many services, at least in the
20:50
United States are VC back because they just raise a bunch
20:52
of free money. You know, your, your Uber and
20:55
Lyft was heavily subsidized. Your, your DoorDash was heavily
20:58
subsidized. Your walking out was heavily
21:00
subsidized. So the true cost of all these
21:03
services is essentially gets free money.
21:05
And then you complain about all the inflation that pops up
21:08
because obviously this free money has to find an outlet into
21:11
an A hard asset. It's going into real estate,
21:13
it's going into to stocks and other things.
21:15
I think it creates a more honest society.
21:18
But at the end of the day, the types of services offered are
21:20
completely different. And the price in some respects
21:23
might be higher, but it's going to be a high quality product or
21:26
service. Yeah, I, I, I completely agree.
21:29
Do you, do you ever foresee that future?
21:31
Because I think the the dream, and perhaps it was a, a naive
21:35
dream of us Bitcoiners for many, many years now.
21:39
Is this idea of the separation of money and state and society
21:43
as a whole moving to a hard money standard?
21:46
Do you think that that is even feasible?
21:48
Or do you think we're going to have kind of like this hybrid
21:50
system where, you know, the the governments will maintain Fiat
21:55
and then Bitcoin will coexist? And can Bitcoin coexist with,
21:59
you know, a Fiat monetary standard next to it, I mean.
22:02
I don't think most people want financial freedom at the end of
22:06
the day. If you think about the the
22:08
political rhetoric, depending on that doesn't matter if you're,
22:11
you know, democratic or authoritarian or whatever.
22:14
If you listen to Trump speak, listen to XI speak, listen to
22:17
European leaders speak, listen to African leaders speak, listen
22:20
to African leaders speak. It's all about what am I going
22:23
to do for you? That's not going to cost you
22:25
anything. And the reason why they're able
22:26
to do that is because they have access to the printy press and
22:29
fractional reserve banking. And the way this system is set
22:32
up, and these are the very popular political messages.
22:36
Nobody is out there saying, hey, somebody that you don't know
22:41
spent all this money a decade ago and now you got to pay for
22:43
it and we're not going to create any more money for you.
22:46
So sorry, it's just going to be a little bit harder for you.
22:49
That is not the political message anywhere around the
22:52
world. And so that means that you don't
22:54
want you don't want some money. You know the average person in
22:57
the world does not want some money.
22:58
They want to get the free thing but their neighbor doesn't get
23:01
it right. So I'm on team red Democrat and
23:04
I want my free shit to do my thing but fuck you team red
23:08
Republican, you don't get free money for your thing.
23:10
And then the roles reverse and the red says no fuck you I want
23:13
my free money for my thing. No free money for your thing.
23:16
And that's essentially the world politics, right?
23:19
Politicians just you can jive to see, oh, I'm going to give you
23:22
more free money, so please elect me or please support my
23:25
authoritarian regime. Nobody says, hey, we've done too
23:28
much. It wasn't really your fault.
23:29
You weren't even born, but sorry, you got to suffer the
23:31
consequences. That's just not a a political
23:34
message. And so I think Bitcoin will
23:36
exist. There will be those who
23:38
appreciate hard money, who appreciate being able to save
23:40
and and beat inflation. But from a human perspective, I
23:44
don't think that humanity is going to move to hard money, but
23:47
maybe AI agents will. And maybe, you know, the agentic
23:50
economy and the, the currency that I think is yet to be
23:53
created that will support AI agent commerce will be a form of
23:59
hard money. And you know, if we believe the
24:02
AI cheerleaders, that economy is going to be so much bigger than
24:06
what we consider this carbon based human economy to be.
24:09
That's what I think. If there is going to be hard
24:11
money it'll be an enforced by AI agents, not by humans.
24:16
Because, you know, most humans don't want this.
24:18
I agree with you, by the way. And I think that was a very
24:21
tough lesson from, I guess for me to understand as a Bitcoiner
24:24
is I think a lot of us, a lot of us miscalculated or
24:29
underestimated human nature. And the reality is that human
24:32
nature is, is it's about convenience.
24:35
People would rather have convenience versus freedom and
24:38
sovereignty. And I think that's something
24:40
that, you know, was, was a, was a tough lesson to, to, to, to,
24:46
you know, to take in. But I, I've come to that
24:48
conclusion as well. I think it's going to be a
24:50
minority of people that actually value sovereignty, actually
24:54
value hard money. Now, one of the things that you
24:57
said that really interested me is that regarding the AI
25:00
economy, why do you think the AI economy is going to be attracted
25:05
to something like Bitcoin sound money versus, you know, the
25:09
human LED economy? What what?
25:11
What is it about AI that is going to value hard money?
25:15
Well, at the end of the day, AI or AI Asian just doesn't have a,
25:19
you know, a lawyer. They don't want to interface
25:21
with the, the human squishy feely semantic way that we do or
25:29
do with things, right? They're a different type of
25:31
Organism at the end of the day, one that's based on silicone and
25:35
computers and logic and all those sorts of things.
25:37
And so, and this is my, you know, a philosophical belief
25:41
that they're gonna value a different type of money, that if
25:48
computers can persist forever and the infrastructure is there,
25:51
an AI agent can exist forever, right?
25:54
In theory, right. Obviously, that's not gonna
25:56
happen in practice. And so whatever form of value
26:00
that they're going to trade amongst each other, that
26:03
represents sort of the compute power that they need to do
26:05
tasks. It's going to have to withstand
26:07
the test of time and not have to rely on subjective judgements
26:11
from humans or another actor. It has to be based in math.
26:14
It has to be provable that it is scarce or that the inflation
26:20
rate is known, right? These are things that you can't
26:23
do when you know human forms of money because they're all based
26:27
on political consensus about what we decide to do.
26:29
And that can change. And there's all these rules that
26:32
have to be adjudicated between humans to determine what the
26:35
value of this money is and what it can and what it can't do.
26:38
That just does not. You can't really run an agentic
26:43
economy that's on 24/7 with a currency like that.
26:46
So maybe it's Bitcoin, maybe it's something else, but it's
26:49
certainly cannot be a Fiat currency.
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Got it? Yeah, it makes sense.
27:52
Are are you? Are you bullish on because
27:54
there's a tremendous amount, I think I saw a clip of, of Larry
27:56
Ellison talking about how, you know, all his friends are, are
28:00
literally putting their personal fortunes, you know, behind these
28:04
AI bets. Do do you believe, do you
28:08
believe in in, you know, a, a, a lot of their expectations for
28:11
this, this AI future or do you think it's it's a little bit
28:16
bubbly? I mean, I love slingers of AI
28:19
stonks, right? I got a whole portfolio of shit
28:22
that I did 0 research on, but it's AI and supplies AI and
28:27
somebody sent it in a pocket AI so I fucking bought it, right?
28:29
Fuck it, it's fun. Like are we gonna overdo this
28:34
capital allocation? Absolutely.
28:36
We're Cubans. There was a truth here, right?
28:39
Machine intelligence is better at certain things than human
28:42
intelligence. Faster, better, stronger,
28:43
cheaper, what have you, right? That'll make sense.
28:46
And so we're going to extrapolate a amazing future,
28:50
bring it back to today's present and invest based on that.
28:53
And we're going to overdo it now.
28:54
Have we overdone it yet? I don't know if credit's still
28:58
flowing. The bank are still lending.
29:00
The two largest superpowers are still supporting AI as their
29:04
national security and national economic, you know, interests US
29:08
and China. And so the party is going to
29:10
continue until something, an outside force acts upon it.
29:14
The inertia is to continue to spend money, to continue to to
29:17
forecast as amazing utopian future where the robot does
29:22
everything and you don't, you know, we just sit around and
29:24
draw squiggly lines on canvas and and drink mold wine or
29:27
whatever, right? So I think obviously that's not
29:30
going to happen in the time frame that the market, I think
29:33
that's going to happen and that's the mismatch is going to
29:35
cause this optimism to turn to questions.
29:39
And once you start asking too many questions and you're like,
29:41
maybe I'm overpaying for this AI future and that's when the thing
29:44
crashes. Good.
29:45
I don't think that's right now, but I do believe that we will
29:48
overdo it because we've overdone every other technological
29:51
advance. But at the end of the day, we've
29:53
got railroads, but you've got sort of the Internet.
29:56
We've got all these sort of massive capital build outs that
29:59
improved human civilization on a longer time frame, but people
30:04
still lost a fuck ton of money on the boom and bust cycle.
30:08
Yeah, absolutely. The Speaking of of stonks.
30:12
The SanDisk 50X in a year, man Holy I.
30:17
Did not straight down. That's fucking crazy. 50X like
30:22
Sandis this has. Been.
30:23
Around for like decades and decades and it was my
30:26
father-in-law. He just like, 'cause I've been
30:28
telling him like you got to buy Bitcoin and he just sends me the
30:30
thing and I'm like 5000% in a year.
30:33
What like what is going on? Like that's crazy, and it's
30:36
because of the AI stuff. Yeah, I mean, it's, it's, I
30:40
don't think we're we're not even running anywhere close to
30:42
stopping, right. I think with Jensen's on the
30:44
plane with Trump going to China, you think they're not going to
30:47
do a deal? Please come on.
30:49
Oh man. So Arthur, you, you're talking
30:52
about, you know, approaching this from a trading perspective
30:56
right now we're Bitcoin currently sits at $79,824.
31:02
Where do you believe we are in the cycle?
31:04
Do you, do you believe that the four year cycle is even a thing?
31:07
Do you believe it's still intact?
31:08
Is this a good opportunity to get into Bitcoin?
31:12
What's your take on that? So I I I move everything back to
31:15
liquidity. I don't like to be prescriptive
31:17
in terms of time frames. I say let me analyze what is the
31:20
liquidity situation. Now obviously from October of
31:23
last year until the start of the US Iran war on February 28th, we
31:28
had a situation where in my opinion, not enough credit was
31:31
being created because the market was afraid of AI work, knowledge
31:36
worker replacement deflation. So you worked at Coinbase and
31:42
you know you're bottom 10% knowledge worker and all of a
31:45
sudden the AI and enable team does better and so you get
31:49
fired. Like right now if I did, right,
31:52
14% or whatever, it was reduction in the Coinbase
31:54
workforce because of AI rationalizations, right?
31:57
And these workers made good money, right?
31:58
200 three, $100,000 Now you're making zero.
32:03
You were a mediocre tech worker. Nobody's hiring mediocre tech
32:07
workers. If there's a star, yeah, you can
32:08
get a job, cool. But nobody's hiring mediocre
32:11
tech workers at that salary when you've got Claude that can do
32:16
better than you. And that's the problem and I
32:19
think a lot of people who say, Oh no, yeah, it's going to be
32:20
great for jobs. The net loss is going to be 0.
32:23
It's actually going to be we're going to create more jobs maybe
32:26
in 5-10 years. But like today, the guy or the
32:29
girl who just lost their multi 6 figure job is not getting
32:34
another one next week. And they're still going to pay
32:36
their credit card. They still have to service at
32:39
mortgage. They aren't going to, you know,
32:42
sweet green to buy the $15 salad, right?
32:44
They're going to Walmart now to shop.
32:47
This is what's happening. And and so I think, and this is
32:50
an impact on the banking system because all these all these
32:52
loans are assets on that balance sheet.
32:54
And now you're having some very what were considered the best
32:58
jobs by people being replaced, at least at the lower end by AI
33:03
and these folks can no longer service these debts.
33:05
That's an issue. And that's why we have software
33:09
ETFs like SAS companies selling off.
33:12
I think Bitcoin sort of was foretelling this feature of,
33:15
hey, there's not enough credit being created.
33:17
The central banks believe AI is a productivity miracle and
33:20
they're not pressing the Burr button.
33:22
So, you know, we're going to decline too.
33:24
But the NASDAQ was flat from October till, you know, Iran war
33:27
started in February. But post the Iran war, now it's
33:30
all about let's unleash credit to #1 AI drones, anything AI
33:36
drone, military technology related that's getting funded
33:39
every single country around the world.
33:41
And it's going to get funded by printed money.
33:43
And then it's, hey, I need to replace, I need to make
33:46
redundant supply chains. How is it that like, you know,
33:48
the Persian Gulf has been the Persian Gulf for millions of
33:51
years and yet somehow we all of a sudden discovered that there's
33:54
this choke point and all these countries, oh, I'm the UAE and I
33:59
have all these trillions of dollars worth of oil that I
34:01
export and it only goes to that one place.
34:04
And I kind of like that, that country and those leaders.
34:07
But it's OK, I'm not going to build another pipeline for a few
34:09
billion dollars. I'll just go sponsor live golf
34:12
or some other fucking nonsense. They're like, you know, the
34:14
fucking World Cup instead of building a pipeline to get my
34:17
shit to my customers outside of control of the Iranians or if
34:21
the US wants to fuck my shit up, right?
34:23
So like all this stuff doesn't make any sense.
34:25
And so these people are not going to be OK.
34:26
Let me spend this money. Let me sell these treasuries,
34:29
sell these ETFs, build the pipeline, build the ships, build
34:33
the refineries, stockpile the commodities.
34:36
And again, all inflationary, if everyone is now doing all these
34:39
things at the same time, it's very inflationary.
34:42
Again, the credit will be provided to do this.
34:44
And the, I think these things really were catalyzed by the
34:48
Iran war on what people are learning in real time about
34:50
their vulnerabilities and the things that they ignore because
34:53
they believe that the Americans were going to save them.
34:54
And so these two things combined, I think have created
34:58
the substrate for a massive amount of money printing.
35:01
And that's why I believe, you know, I've ripped that I think
35:04
Bitcoin bottom at 60,000 and the the next stop is the, you know,
35:08
going through the all time high 125 a 126,000.
35:12
Gotcha. But you don't, you don't assign
35:13
any time timeline or timetable or any type of no it'll.
35:17
It'll happen. It'll happen when it happens.
35:20
Gotcha, gotcha. Do you have any expectations for
35:23
2030? Who knows, right?
35:26
I think the next big day for at least credit creation in my
35:30
opinion is U.S. presidential election.
35:34
And it doesn't really matter who wins the election.
35:36
But if we're talking about this AI credit bubble and the biggest
35:40
proponent of that of the US and China, a lot of people don't
35:44
really like AI and a lot of people being hurt by all this
35:47
inflation, right? You know, you electricity prices
35:50
are going up, gasoline prices are going up, and most Americans
35:53
do not own a lot of stocks. And so yeah, standard S up
35:56
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37:00
I'm sure if you polled most American towns and hey, do you
37:02
own any stand discs for enough to make it mean something to
37:04
you? But what the fuck is SanDisk?
37:06
They wouldn't even know what it is right?
37:08
You know I'm worried about working my 2 jobs and trying to
37:11
feed my family, right? This is what the average
37:13
American is talking about. And so if you're the opposition
37:15
party, the team who's Democrats and it's OK, well, I need a new
37:18
political message here to try to win.
37:21
It's anti AI or let's slow down AI because AI is using all this
37:26
electricity, it's using all these these resources to build
37:31
this thing that makes Elon Musk richer.
37:33
And nothing's being done for the average American here.
37:37
It's just like everything else. Then the risk get richer and you
37:40
just get fucked and ignored. Whether or not that's true,
37:42
that's not the point. There's a bit of truth in it.
37:45
And I think that is going to be a very seductive political
37:48
message. And when investors start to
37:50
realize that, OK, there are some politicians that are gaining
37:54
popularity with this message, maybe they're going to win in
37:57
2028. And it's pretty much a coin
37:59
toss, right? Who wins any U.S. presidential
38:01
election? Maybe I should start selling
38:04
some of these investments because what happens if they get
38:06
re elected and they actually do make good on some of these
38:09
campaign promises? Maybe I get a big taxes.
38:12
Maybe the regulations on what AI can do get pulled back.
38:15
Maybe that new data center that was underpinning my AI CapEx
38:18
number does not get built anymore.
38:21
All these questions, all these questions and questions aren't
38:24
good for bubbles. And I think that's when we have
38:27
a pullback in sort of the assumption of credit creation,
38:30
which will affect AI and that will affect crypto as well.
38:33
Gotcha. That makes perfect sense.
38:35
And what I'm getting from this conversation, Arthur, is
38:38
basically Bitcoin's price is just directly correlated to
38:42
global liquidity. So it's basically when they
38:45
print money, that's when number goes up.
38:47
There's no other thing that that drives number going up is, is
38:51
that the base case? Just yes.
38:58
That's simple. I give every, every time I give
39:00
it a tog, I give it a try. I say, what's, what's the value
39:01
of Bitcoin? It's technology.
39:03
And yes, the blockchain works right.
39:05
We can take that for granted for at least for now.
39:07
And it's liquidity, how much Fiat is being created.
39:09
It's a fixed, there's only gonna be 21 million Bitcoin.
39:13
And so therefore tell me how many units of Fiat will be
39:15
created. And I think you've been a price
39:17
approximation of Bitcoin. It's just math.
39:20
So it's Infinity divided by 21 million, right?
39:23
It's just when they print, the number goes up.
39:25
Love it, love it. Arthur, what's your take on
39:29
another thing that's been heavily discussed on on Bitcoin
39:33
Twitter? I'm gonna keep calling it
39:34
Bitcoin Twitter, right? Give me hate in the comments,
39:36
whatever. Another big point of discussion
39:40
is the whole quantum. You know, FUD, I call the
39:44
quantum FUD, right? Which by the way, if you've been
39:46
around for long enough, this has been around since like 2017,
39:50
right? What's your take on the quantum
39:52
stuff? Like, is it as big of a threat
39:55
as people are making it out to be?
39:57
Is it something that potentially could be a problem years down
40:01
the line? Is this something that is going
40:03
to be a problem a year from now? What's your take on the whole
40:06
quantum debate and the quantum? Some threat on Bitcoin.
40:09
I think it'll take longer than the Fudsters say.
40:13
Well, but it'll happen sooner than we say.
40:16
Now we know that it's a problem. Again, as you said, this is this
40:20
comes up every few years. Some, you know, research left
40:23
puts out a paper and they say quantum, you know, we will be
40:27
able to break shot 256 in however many years it's going to
40:30
be. And if you'll freak out and
40:33
whatever, there are mitigation things you can do right now,
40:36
right? Create a new public address,
40:39
send your Bitcoin there. Do not spend from that.
40:42
And if you spend from that address, then create another
40:44
address and move your Bitcoin and you'll be fine, right?
40:47
Obviously the well, if you want to talk about the vulnerable
40:50
coins, it's obviously it's Satoshi's coins, right, because
40:52
that was they've been sitting there for however many years on
40:56
the old addresses and those are the most vulnerable.
40:58
If you believe that this, you know, Q day is in, in the near
41:03
future. Now obviously there are bit
41:06
proposals to sort of move to some hash based signatures and
41:09
you know we're going to have a discussion about what we want to
41:11
do with that as a community, but I'm not particularly worried
41:15
about that again, and there are things that you can do right now
41:18
today to sort of remove that as a consideration from something
41:21
that you're afraid of is just create a new address, don't
41:23
spend from it with your Bitcoin there.
41:25
Gotcha. Yeah.
41:26
So just don't reuse addresses. Simple as that.
41:28
Yeah? I mean, this is and this is not
41:30
anything people people have been telling people that for forever,
41:32
right? Hey, if you want to have proper
41:35
Bitcoin opsec, it's okay. Every time you spend, create a
41:37
new address and move your joins there, right?
41:39
Again, not to say that everybody does it, but this isn't like
41:42
it's new advice that people are giving right now.
41:44
So could you talk a little bit about that, perhaps the people
41:47
that are are just not well versed in it?
41:49
Why is it that new addresses or addresses that haven't been used
41:53
or haven't been spent from are less vulnerable to, you know,
41:57
the quantum computers than addresses that have been reused?
42:02
Yeah. So when you expose your public
42:04
key and the transaction, so when you do a transaction, you expose
42:07
your public key for. What is it the 10 odd minutes
42:10
that it takes to confirm a transaction?
42:12
Right. And so the worry is that someone
42:16
with a sufficiently powerful quantum computer, I think it's
42:19
can use Shore's algorithm and reverse engineer the elliptic
42:23
function. Basically, I'm going to take
42:25
this public key and derive your private key and I'm going to do
42:28
it before you could do anything within that sort of lock window
42:33
and therefore steal your coins. That is the worry about quantum
42:37
computers and at least when you use I think the newest address,
42:42
what BEX 32 or taproot address, whatever it is you serve if you
42:48
use hash based signatures, if you have not exposed your public
42:51
key, then there's nothing to back out about what the
42:53
corresponding private key is. And that's why people are saying
42:58
send to an address that is unused and then when you use it,
43:02
OK, great, use it and then move your coins to a new public
43:06
address. And you can create as many
43:07
public addresses as you want. It doesn't cost you any funds
43:11
other than the transaction fee to move your coins.
43:13
So again, that's just good hygiene.
43:17
But it's people who have very, very old addresses who are most
43:20
at risk from sort of quantum stuff.
43:23
Got it. Arthur, I want to talk about the
43:25
early days of your entrepreneurial journey in the
43:29
industry. What was that like, man?
43:31
What was it like building bit Mex?
43:34
What were those early days like in, in the space?
43:37
Because I, I, I, I have some memories.
43:39
It literally was like the Wild West.
43:41
But I, I want to get your perspective like what were you
43:44
living through? What are some crazy war stories
43:46
that you can share with us? Crazy war stories.
43:50
I mean, I remember back in the day when everything happened on
43:54
Whirlpool and some of these like Teamspeak channels and like
43:58
everybody would like TuneIn from around the world and start just
44:01
talking shit all day on this, like voice activated things.
44:05
It was a lot of fun. And you know, shit was fucking
44:07
volatile, right? There'd be days when should be
44:10
done, like 5060%, right? And this exchange got hacked,
44:15
that exchange got hacked. You know, this wallet had an
44:18
issue, that wallet had an issue. And so there's a lot of risk
44:21
involved at the time, but I think it was it was a lot of fun
44:24
to build a company in the space. Very, very difficult to get
44:30
visibility right, Because at the end of the day, there wasn't a
44:33
large wallet of money that was spent on anything for that
44:36
matter. And so if you had a company that
44:38
had any sort of funding, it was like, Oh my God, wow, you're
44:40
like, you're rich, right? Everyone else is just like Nick
44:44
when diming, trying to guess like figure out how they're
44:47
going to make this particular business work and find some
44:49
clients. So they're going to pay real
44:51
money for their service. And obviously, you know, me and
44:54
my partners, we ran an exchange right when we started building
44:57
after Mt Gox where people are like super anti centralized
45:01
exchange. And especially from, you know,
45:06
capital raising formation perspective, no VC wanted to
45:09
fund an exchange, let alone a, a derivative someone.
45:11
What the fuck you talking about? You want to leverage on Bitcoin?
45:13
Crazy. This thing's went to like 75% in
45:16
like 2 days. Like, well, what are you talking
45:17
about Arthur? I'm like, no, no, just driven
45:19
thing. It's going to be a thing.
45:21
But yeah, it was, it was super fun.
45:23
It was great to be able to you know have a vision, execute on
45:27
it. Definitely had a lot of struggle
45:31
getting the natural clients like a bit Max.
45:33
We pretty much had no trades for 11 months until we figured out
45:38
how to make a product that people actually wanted to trade
45:41
starting with the 100 X leverage, changing our margin
45:44
method. And then obviously in 2016, we
45:46
came up with a perpetual swap. But yeah, it was tough days for
45:49
a lot of exchanges, especially new ones, because there were
45:52
literally just days, many days, 0 trades.
45:55
And so you have to just keep going and believe that this
45:57
ecosystem is gonna grow large enough so that you and everybody
46:00
else can start to make some money.
46:02
But it was fun. The meetups are great.
46:04
Go on on a random Wednesday and have a few beers and just like
46:08
talk shop with everyone else. You have the same issues as you.
46:11
I'm like, how am I going to get some clients?
46:12
Like, yeah, I just want to talk about this Bitcoin thing to
46:15
somebody who doesn't think I'm fucking nuts.
46:17
Like, you want free match Internet money.
46:18
What are you talking about? Right.
46:20
So like, but it was great, you know, and you formed a lot of
46:25
great friendships and camaraderie all around the
46:28
world. He would meet up in these
46:30
things. And I think it was a great ethos
46:33
around, OK, let's just build something.
46:35
If you're doing well, that's great because if you create some
46:38
well visibility for the ecosystem, that helps me and my
46:41
business as well. So I think there's a lot less
46:43
asshole ish behavior because again, we're all in this sort of
46:47
same shit show together. Yeah, and how were like, you
46:53
know, and it was like I remember it was, it was, it was crazy
46:57
days. And I do agree with you.
46:59
It was a tad more fun for sure. What was your background and
47:04
what initially LED you to want to say what would see a, a, an
47:09
opportunity where you're like, OK, you know what?
47:12
This is probably a good idea, you know, and, and I didn't know
47:15
that by the way, 11 months without any single trade.
47:18
I mean that definitely, you definitely need some
47:21
determination and self belief in yourself for you to persevere,
47:25
to say the least. And I think every entrepreneur
47:28
you have to go through that journey and you have, it's
47:31
something that you have to live through.
47:32
It's not something that you can be taught in a textbook or
47:35
anything like that. So what is your background,
47:38
Arthur? And, and what gave you, what
47:40
gave you that initial idea where you're like, OK, you know, I, I
47:44
think something like this could work.
47:46
Yes, I was a trader of my background.
47:49
I made market made ETFs in Hong Kong and Singapore for Deutsche
47:52
Bank and Citibank for the first five years of my career Post
47:55
University. And I think, you know, what got
47:58
me interested in Bitcoin initially was I was a gold bug.
48:01
So I had my one or two gold coins that I had and like, Oh my
48:04
God, the Fed's going to put all this money and hyperinflation
48:07
and yadda, yadda. And, you know, my understanding
48:09
of sort of money markets and the plumbing was very, very
48:12
sensationalist and I didn't really understand what was going
48:15
on. But I did have this view that
48:18
the whole financial system is nonsense, makes, you know, it's
48:21
complete fugazi, especially as somebody who worked and then saw
48:25
what happened after 2008 and which banks did well and which
48:29
banks didn't do well, who lied, who told the truth, right?
48:32
Who was rewarded, who wasn't rewarded?
48:34
And it obviously didn't make sense from a, oh, if you go to
48:38
visit school and you went, OK, sound money and all these sorts
48:40
of things. And this is how things are
48:41
supposed to work. And none of that actually makes
48:43
any sense after looking at 2008. So ahead of distrust of the
48:46
financial system as somebody working from the inside.
48:49
And so when I lost my job and I was like, OK, I don't want to do
48:51
this anymore. I want to do something else.
48:53
I don't know what that is. I heard about this Bitcoin
48:56
thing. Let me read the white paper and
48:57
I wrote the white paper and like, Oh my God, this is fucking
48:59
amazing. And I love reading financial
49:01
history and economic history. And you always, if you think
49:06
about some of the biggest fortunes that ever been made in
49:08
the world, turning points in sort of human civilization,
49:11
whether that's from sort of some sort of industrial technological
49:14
perspective, at least of the financial perspective.
49:16
You talk about the Rothschilds and sort of the, you know, early
49:18
19th century wars and Europe and their use of technology to
49:22
outperform their rivals. Or you think about, you know, JP
49:25
Morgan, the original and sort of the turn of the 20th century and
49:29
what he was able to do with his financial institution.
49:32
Or about how, you know, any of the masters of the universe that
49:36
we all were, you know, look up to today in terms of like the
49:38
larger hedge fund traders, how they made their money in the
49:40
option pits in the 70s and 80s in the United States and mostly
49:44
Europe. And okay, I wanna be in one of
49:46
those periods because if I'm one of those periods and I'm able to
49:49
latch on to something, some trend or new technology or new
49:53
way of doing business, then I can outperform.
49:56
What's that in 2013? And then I read the way people
50:00
were like this. This could be that.
50:01
I don't know if it could be that, but fuck it.
50:03
I'm 2720, whatever, however old it was at the time.
50:06
Who cares if I'm sticking on my friend's couch for a few years?
50:09
I can always get another fucking job at a bank.
50:11
Let's just try this thing out. And I literally was like when I
50:15
run out my Bitcoin, I said, OK, I'm a trader.
50:18
I look at every single exchange that ever been created in
50:20
crypto. I signed up for our account,
50:22
every single one of them derivatives.
50:24
There's a part of options exchange, every single
50:28
centralized spot exchange to try to sign up for that matter.
50:31
And I just started trading and I stumble upon this derivatives
50:36
thing. And I'm like, OK, well, super
50:38
small, super janky. But like, I know that in
50:41
traditional finance, you make money in derivatives, you don't
50:43
make money in spot. So this is what I want to do.
50:46
And I believe wholeheartedly that there would be somebody who
50:49
would succeed in derivatives. And if it might be me, it might
50:52
not be me. So let me see how long I can
50:54
hang on and see if we can make it.
50:57
And that was, and we hung out long enough to make it,
51:00
thankfully. I love man, I love, I love
51:02
hearing entrepreneurs stories and successful entrepreneurs.
51:06
And again, it's always, you always hear that the, the early
51:09
days are the darkest. And, but it's, it's, it's
51:13
fascinating to me how you're able to essentially because it
51:16
was not only just your background, but the historical
51:19
context as well, right? So you, you had the historical,
51:22
you know, outlook, you had the, the background in trading.
51:27
You put that together. And then at the point of your
51:30
life that you were in, you're like, you know what, let's roll
51:33
the dice, right? So you said you were 27.
51:36
When did Bitmex really start taking off?
51:38
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51:42
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52:38
I think we started paying ourselves a very small salary in
52:42
2016, so let's call it two years of of grinding before the three
52:48
of us paid ourselves like some de minimis amount of money from
52:51
the business. But we became profitable in
52:54
about what is that routine? Two years.
52:59
Took us about a year to build it and then about a year of fuck
53:02
all trading and then late 2015 is when we started making money.
53:06
Got you, man, that a fantastic entrepreneurship story.
53:11
I always love to hear them. They're inspiring.
53:13
So Arthur, right now, where are you in your life?
53:16
Like what, what are you, you know, what are you doing?
53:18
What are you paying attention to?
53:20
You know, I've I've heard you on some other podcasts and I'm I'm
53:23
a subscriber to your sub stack, which by the way, I highly
53:25
recommend for anyone for some great reading.
53:29
You know what, what are you? What are you doing these days?
53:31
You know, like, is it kind of like semi retired?
53:33
You know, I made it. I'm just going to do what I want
53:35
with my life. Like what is Arthur Hayes doing
53:37
on a day-to-day? You just mentioned consensus, by
53:40
the way, the simply Bitcoin studios in Miami.
53:43
So I wish I knew we would have got you inside the studio would
53:46
have been which would have been great.
53:48
But what is the day today of Arthur Hayes looking like these
53:52
days, since you've built this successful exchange and you know
53:55
all of that good stuff? At least for me, and everyone's
53:58
different, making money was never the point.
54:01
It's what you can do with it. And I've always wanted to have
54:04
control of my time and I love athletics, so I work out about
54:09
two to three hours a day doing some sort of sporting
54:11
activities. I was running, training, so I
54:13
love playing tennis, play tennis everyday and then I do training
54:17
to support that. And my biggest passion is
54:19
skiing. So I spend two to four months a
54:22
year on the side of a mountain hiking out in the cold and, you
54:28
know, 8 hours a day, just like putting 1 foot on the other,
54:32
going down mountains. And thankfully I'm able to do
54:34
that and I don't really have to do much else in my life other
54:37
than that. And I think that's sort of like
54:39
North star of what I like to do. And then the worksite it's
54:42
Maelstrom. So my family office and we do
54:44
early stage crypto investing. We advise we're starting our own
54:48
private equity vehicle and I do a bit of directional trading.
54:52
And, you know, I started like, keep it super chill.
54:55
Like, I'm not trying to make a bunch more money.
54:58
Like I've got enough and I can work out.
55:01
I want to be healthy. I've gotten into longevity as
55:04
well, like owning clinics that push through the envelope and
55:08
like what we're trying to do to live longer and live healthier.
55:11
And yeah, I want to wake up in the morning and if I want to go
55:14
read a book and drink a cup of specialty coffee for two hours,
55:18
then I'll do it. Or if I want to go for an hour
55:21
long run, then I'll do that. So I guess we'll have control of
55:23
my time and the number that's on the screen.
55:27
In terms of net worth, it's kind of irrelevant as long as I can
55:29
do that. Yeah, and, and I completely
55:31
agree, by the way, like the the ultimately, you know, money is a
55:35
tool and I think an unscheduled life is really a life of
55:39
freedom, I would say. And yeah, it because again, you,
55:44
you, you kind of, you know, you kind of wake up in the morning
55:46
and you get, get to determine what you do with your time,
55:49
which I think is the most precious asset that any human
55:52
being has. So Arthur, we are getting close
55:56
to the top of the hour and I want to end it with this for for
56:00
the Bitcoin listeners out there. Is Bitcoin still a good
56:04
investment in your mind? Are you still bullish on the
56:07
future of Bitcoin in terms of portfolio allocation?
56:11
Perhaps for the older people that perhaps are just starting
56:14
to dip their toes into it? What would be your
56:17
recommendations? So I always say put an amount.
56:21
If you're just starting on this game, put an amount of Bitcoin
56:25
that you are willing to lose. You should not go to bed looking
56:29
at your phone with prices like you could be able to turn your
56:32
phone off for however long a week, a month, whatever.
56:34
And you don't care what the price of Bitcoin is.
56:36
That's the amount of Bitcoin you should start out owning and you
56:40
should use it right? You buy a little bit of Bitcoin,
56:42
like send it to a friend. You use the blockchain.
56:46
See, it doesn't make sense to you.
56:47
So you might say, fuck this, this is so stupid.
56:49
Why I just go down to the bank branch and like, do you think
56:51
it's like I always did it and that's fine.
56:53
The whole point of crypto is not a coercive system, whereas
56:58
traditional finance is a coercive system.
57:00
If you do not use the currency of your particular government,
57:02
they will kill you. You can't go and pay your taxes
57:05
and you want when you have the US dollar in America, they'll
57:08
say sorry, that's how this works.
57:11
So it's all about it's an open source ecosystem.
57:14
So you can buy as much resilience as you want and you
57:17
either agree with it or you don't.
57:18
I know what's forcing you to use it, but again, only investment
57:21
you are willing to lose and then and if you believe in it, then
57:24
you can obviously put more money into it and sort of get into
57:27
that game. You know, I think that's the
57:29
best way and the and the healthiest way to get involved
57:32
and have a good outlook on it. But you're still bullish on it
57:36
for the record. Oh.
57:37
Absolutely. I mean, I think that as Lynn
57:40
Alden says, nothing stops the strain.
57:41
There will be more units of Fiat created.
57:44
Bitcoin is the most responsive asset of its size to that
57:48
liquidity creation. And so if you believe that that
57:51
is a state of the world and the future, then this is the asset
57:55
to own and it's extremely liquid, it's portable, no one
57:58
could take it from you. All these sort of things that go
58:01
along with it. Yes, you know, send, this was a
58:03
5000% this year. Bitcoin did not do that.
58:06
But like if your broker decides that, you know, they want to
58:10
lock down your account for whatever reason, you don't have
58:12
the send disk anymore. You can't.
58:14
That doesn't happen with Bitcoin.
58:15
So again, there's pros and cons, good and bad, but that's why I'm
58:20
bullish on Bitcoin. The sovereignty aspect, it's so
58:23
important. There's nothing like Bitcoin and
58:25
self custody. I think like once you wrap your
58:28
head around that and you're used to dealing with the traditional
58:31
banking system, sending wire transfers, you know, it it, it
58:35
just clicks. It becomes incredibly,
58:37
incredibly obvious. Arthur, this was our first RIP.
58:41
It's been an honor, man. Is there anything in particular
58:43
you want to plug? I already mentioned your sub
58:45
stack of course, like go follow Arthur on on X, but anything
58:49
else in particular you want to plug?
58:51
No, I mean Cryptohaise on Substec, Cryptohaise on X and
58:55
yeah, we publish content periodically.
58:57
Please come read our stuff. Thank you out there.
59:00
Appreciate you joining me. Thanks for having me.