Latest / Simply Bitcoin / How to Live Off Bitcoin Without Selling It | Mark Moss

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How to Live Off Bitcoin Without Selling It | Mark Moss · Simply Bitcoin

• 0:00
  I call it a perpetual Bitcoin machine, so I literally have the
• 0:02
  government buy my Bitcoin for me.
• 0:04
  OK, So what does that mean? Go into that please.
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  The problem is if you're making 100 grand a year and spending
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  40,000 in taxes, you're trying to live on 60.
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  You're only stacking sacks. If you do this, you can stack
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  Bitcoin. I'm connecting the dots on the
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  show mark. What the wealthy do is they make
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  income and buy assets, don't pay taxes on that, and then they
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  have the assets pay for their life.
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  Are you saying this is a viable strategy for most?
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  People, everybody could do this and I can break it down for you.
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  Break it down. So.
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  Holy cow. Yeah, but as a bitcoiner, I
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  think that my life should be represented by a block of proof
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  of work. Why would I want to die with
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  zero? I should leave the proof of my
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  work, of my life here. And then why should my kids
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  start from zero? Why can't they add the next
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  block? The reason why you have to work
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  so hard is because your money doesn't.
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  Most people are willing to go get a side hustle or a second
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  job, but your money is only going to do one.
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  No, No, no, no, no. Most Bitcoin conversations stop
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  at price predictions, macro takes and just huddle.
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  Today we're going to take a different approach with this
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  conversation. And of course, I have the one,
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  the only, the legendary Mark Moss in the Simply Studio with
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  me today. And we're going to be talking
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  about all of that, how you should be building a personal
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  Bitcoin treasury for your life, build liquidity so volatility
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  never threatens your lifestyle and retire without killing
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  compounding by selling your Bitcoin Mark.
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  You've got that line that nails the whole thesis.
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  Bitcoin isn't the inheritance, the system is.
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  So let's start right there. First, Mark, welcome to the
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  Simply Studio. Happy to have you on today
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  brother. Yeah, Nico, super excited to be
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  here. I just found out I'm the first
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  person in the Simply studio, so I'm even more excited about
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  that. Christen it with you right here.
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  Always a pleasure sitting down with you, though.
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  Let's go. Absolutely man.
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  Dude, I, I Mark gross seeing your presentations and then
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  seeing your, your, the way that you make content throughout the
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  years, it's been so inspiring as a content creator.
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  But I, you, you sent me this, this, this document and I, and I
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  would, it blew my mind because again, I think bitcoiners are
• 2:16
  approaching this completely wrong.
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  I think they're approaching this incorrectly and that was a major
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  part of what you're talking about.
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  And the line here that I love is Bitcoin isn't the inheritance,
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  the system is. What does that mean?
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  So the system is a lot of people think that Bitcoin is the end,
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  just buy Bitcoin and do nothing and it is the cheat code.
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  So it does allow you to do that. But I think a better way to do
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  it is to think about building a system around Bitcoin.
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  And so if that line specifically the inheritance, what I sent you
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  was an entire thesis from A-Z, how do we start and where do we
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  end? And we end with the inheritance.
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  We end with passing that down. A lot of people today and in the
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  Bitcoin community today think that passing down an inheritance
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  is a bad thing. I could hurt my kids, damage my
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  kids. I don't want them.
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  I want they need to go earn their own way, those types of
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  things. But as a Bitcoiner, I think that
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  my life should be represented by a block of proof of work.
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  Why would I want to die with zero?
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  I should leave the proof of my work, of my life here.
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  And then why should my kids start from zero?
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  Why can't they add the next block?
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  But the problem is that it's not the money that gets passed down
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  to the generations that make them bad, right?
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  Money just amplifies behavior. So rather than passing down
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  assets that the next generation will probably just sell, I need
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  to pass down the system that built the asset.
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  I need to pass down the system that uses the asset to pay for
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  their life and continues to compound without having to be
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  sold. I'm not going to sell my Bitcoin
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  ever. And I don't want my kids, my
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  great grandkids, or my great great grandkids to sell the
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  Bitcoin either. So what I want to pass down is
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  the system that created the Bitcoin.
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  The system that uses Bitcoin to fund their life, to do all the
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  things they want to do without selling it.
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  And let's talk about that for a second, Mark, because again, I
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  think the mentality of most Bitcoiners, at least my
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  audience, is accumulate and wait, You're basically saying,
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  no, no, no, that's not how you do it at all.
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  You should actually be focusing on cash flow, on generating cash
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  flow, building that stack, and then using that cash flow to
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  accumulate more Bitcoin. Why do you think so many
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  Bitcoiners get it wrong? Well, because everybody gets it
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  wrong, not just Bitcoiners. Bitcoiners bring the inherent
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  problems that everybody else has.
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  So here's a quick reframe for everybody that's going to make
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  sense. We can talk about Michael
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  Saylor. Your audience knows Michael
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  Sayler very well. Now, what Michael Sayler is
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  doing is what people have been doing for a long period of time.
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  It's not new, but it is new in the Bitcoin space.
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  So for example, let's just look at MicroStrategy.
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  He did, we've probably listened to dozens or hundreds of his
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  interviews, but he did one with Jordan Peterson that was pretty
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  good. I'm sure you saw that.
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  And he said, I, he said, I did 10 trips around the world in a
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  decade trying to grow MicroStrategy and I couldn't
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  grow it. I couldn't compete against
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  Microsoft. I had $500 million of cash,
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  capital of treasury. But what am I going to do?
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  Buy another company? Merge.
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  Nothing I could do could increase my revenue.
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  OK, so let's take that to a personal level real quick.
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  So what happens is for most of us, we're trying to earn money.
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  But what happens is hustle culture tells us we have to work
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  harder. We have to save harder.
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  Skip your coffee, work harder, save harder.
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  Get a side hustle, start a new business, get more skills, do
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  more sales, work extra hours, work overtime, work harder
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  trying to make more revenue. That's what Sailor tried to do.
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  He couldn't make more revenue. At some point we Max out.
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  We can only work so long. At some point we Max out.
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  So what Saylor decided, you know what, instead of trying to grow
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  more revenue and make micro strategy more profitable by
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  revenue, instead of that, how about if I change the name of
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  the company to strategy and instead I build the treasury and
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  not make more revenue? So he used tool, 2 tools to do
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  that, which all of us have at our disposal, credit and equity.
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  And within five years, he took micro strategy from a $3.6
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  billion company to 50 billion. So he was unable to grow it
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  chasing revenue. But when he worked on the
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  treasury, it went from 3 to 50. So us as individuals, we can
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  only work so hard. I can't increase my revenue, but
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  that's what everyone tries to do.
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  I need to work harder, I need to save harder.
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  But we have assets, we have equity and credit.
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  And if we want to go from 3 to 50, we can do the same thing if
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  we focus it that way. Absolutely.
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  And and again, I I think it's really interesting, Mark.
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  And why do you think that it was so difficult for a sailor to
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  break free? Because essentially you had a 20
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  years of him going sideways. Credit to him for
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  survivingthe.com crash, right, But 20 years and I remember in
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  so many of his interviews, he's basically look, I tried
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  everything and it just wouldn't work.
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  Microsoft just would out compete me.
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  It seemed like Bitcoin was really his breakthrough.
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  And then one of the things that I remember in the Danny Knowles
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  podcast that went pretty viral the other day, he kept saying
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  he's like, look, like if you're a struggling company or if you
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  just kind of want to get ahead and, and you don't have a
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  monopoly, this is a way for you to be competitive.
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  Right. I think what people miss, and I
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  just recorded with Danny, we went into that and I gave him a
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  more layman's term to try to answer the questions that he was
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  trying to get from Sailor but couldn't.
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  So I gave him layman terms that I think made more sense.
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  Sailor just talks it out at a higher level.
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  But anyway, back to the answer to that question.
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  The problem that we have, and you know this because you study
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  this, but the Fiat system is stealing from us, right, by
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  inflating the currency. So the problem is, is that the
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  cost of living is going up faster than your income.
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  So if you're trying to build wealth with income, you're
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  always going to be behind because you can't keep up with
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  the rate. OK, So let's just say with some
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  numbers, let's say the cost of living is going up at 10% a
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  year, but your pay is going up by 3 or 4% a year.
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  So you're falling by them, but your assets are going up by 30%
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  a year. So the switch that sailors
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  talking about to become more competitive is like you can't
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  increase your revenue and profit margins fast enough for the rate
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  of debasement that's happening. So you need to use an asset that
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  can outpace that. That's what he's saying.
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  And so for us individually, we can do the same.
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  Now again, Bitcoin is a cheat code.
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  Buy the Bitcoin, wait 10 years. You're going to have plenty of
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  money. You can sell it off.
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  You can die with 0, and that works.
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  But that's terrible. Why would you want to die with
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  0? Why would you want to live poor?
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  You know, modern portfolio theory tells you to save up for
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  40 years, sell 4%. Hopefully you die before you run
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  out of money. And I just, I think that's a
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  Fiat mindset. And So what Sailor saying is use
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  Bitcoin to outpace that inflation and then we can build
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  wealth and push that value forward.
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  What do you think is the actual inflation rate Mark 10?
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  Percent. 10% So even if you just buy, you know, an index fund S&P
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  5:00 and you're, you're underwater.
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  So why would I say 10%? So you know, I would look at the
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  the original and what I consider the real definition of inflation
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  is the money supply increase. So inflation is always a
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  monetary phenomenon, right? And so when you think about even
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  the term of inflation, if I if, what does that word even mean?
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  So if I inflate a balloon, what does what does that word inflate
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  mean? I'm increasing the volume of air
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  in the balloon. So inflation is increasing the
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  volume of money. That was the original
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  definition. Around the 1950s, they started
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  to change that to CPI or consumer price inflation.
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  And von Mises was very vocal in this period.
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  And he said, hey, hey, watch what they're doing.
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  They're trying to change the definition of the word.
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  And he warned us of that. And the reason why they want to
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  change it, as he told us, and now we see it today, is because
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  if we if we tie it to CPI price inflation, well, we don't know
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  why. Why do some prices go up and
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  some prices go down? It's certainly not the money.
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  And so then they can distract us.
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  And now today in the last presidential election cycle,
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  inflation was probably the hottest debated topic, but
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  nobody understands it because they've changed the definition.
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  We can't really tie back. So anyway, if it's the money
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  supply, then we just look at how fast is the money supply rating
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  going. Now, since I think 2008, it's
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  gone up by about 8%, but since about 2020, it's been going up
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  at 10% a year. That's the number.
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  We can also look at another way, and this is a little bit
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  different, but gold today is at 4600 an ounce, which is insane,
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  which means $1.00 represents 146 hundredth of an ounce of gold.
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  In 1913, when the Federal Reserve was created, it was
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  120th. So that means in 113 years it's
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  gone up by 5% a year. So you can say 5% a year, but
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  the problem is it's accelerating.
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  So it was 5% a year for 113 years.
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  It's about 1010% for the last five.
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  Man, that's first of all, again, it's absolutely crazy because
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  everybody who's been thinking that they've been getting a
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  return have not been getting a return whatsoever.
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  They've just been literally treading water at best.
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  But again, let. Me break that into math.
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  So at 5%, that means every 40, every 14 years, your money gets
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  cut in half. So if you're 25 years old, you
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  get out of college, you start your career and at the at the
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  time you're 25, you start saving, you save $1,000,000.
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  By the time you retire, it's worth 130 grand.
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  If you save 2 million, it's worth, you know, whatever 200
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  and 32140. So like, you understand, like
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  it's stealing so fast. And so that's why half of baby
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  boomers today have zero, and of the half that do have money is
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  an average of $240,000. That's wild.
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  That's wild. Now, Mark, one of the things
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  that really stuck out to me in the document that you sent me is
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  the strategy is to build a personal Bitcoin treasury with
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  layer liquidity, cash for safety, cash equivalents for
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  stability. Bitcoin is the core engine and a
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  higher beta Bitcoin business or treasury companies.
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  You also said that part of your thesis was this treasury
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  thinking, which is the same frameworks that institutional
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  that institutions use. What do you mean by that?
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  And what can bitcoiners do today?
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  What would what would be the advice that you would give to
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  bitcoiners? Because I said all of this
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  stuff, most of my audience is like, all right, stay humble
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  stack sats. What would be the advice that
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  you would give to, you know, the everyday bitcoiner to, to
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  implement this thesis so that they could actually truly build
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  wealth? Yeah, so stay simple, stay
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  humble, Stack sats. Great advice, everyone.
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  Again, it's a cheat code. You can just buy Bitcoin and you
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  can outperform Wall Street private equity venture cap.
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  You can just do that and then you can sell it off little
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  chunks at a time and you probably won't run out of money
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  because it's compounding faster than you're selling it.
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  Depend on how much you're spending.
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  And that works. Sure.
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  I'm a surfer, I'm from Southern California.
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  Most people haven't ever gone swimming in the ocean when
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  there's big waves and they probably shouldn't because they
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  could drown. If you wanted to surf, you
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  wouldn't go to like pipeline in Hawaii and jump out into 30 foot
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  waves because you'll probably drown.
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  But yet there's hundreds of people in the water there every
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  day surfing, having fun. So the reason why I bring that
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  story up is that the first thing that people hear when they hear
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  this, especially Bitcoiners, is Mark, isn't that risky?
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  Are you saying that I should use debt?
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  Are you saying that I should use leverage?
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  Because what if I get liquidated?
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  And what if I lose my money? And Dave Ramsey said that I
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  should never use debt and I should never use.
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  I should pay off everything. I should pay off my house.
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  Mark, what you're saying sounds extremely risky.
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  Sure, like going in the ocean is extremely risky, but I could
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  learn how to swim. I could put on a life jacket, I
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  could make sure there's a lifeguard there.
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  I could have a jet ski follow me.
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  And so we can de risk the situation.
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  So the first thing I would say is we have to understand that
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  there's never an absence of risk.
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  There's only a difference of risk.
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  An easy analogy would be if I go to the gym because I want to get
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  in shape, it's risky. I could get in a car accident on
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  the way there. I could get in a fight when I'm
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  there. I could drop a weight on my head
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  when I'm there. That's risky.
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  I could hurt my shoulder lifting overhead, so I'm not going to go
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  to the gym because that's too risky.
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  So I stay on the couch. But then I get obesity, I get
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  heart disease, I get cardiovascular disease.
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  So there's always risk. So the risk is you either learn
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  how to leverage the Fiat system and use credit and equity, the
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  Treasury model, or you try to save your way and that's
• 14:15
  guaranteed loss. So what do we do?
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  You want to break down the Treasury model.
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  Keep going, man, Keep going. So the treasury model is
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  basically just like what Saylor did and it's what the wealthy
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  have been doing forever. The problem is that these tools
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  have only been available to the 1%.
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  Bitcoin is the cheat code that allows all of us to do the same
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  thing. So what the wealthy have always
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  done. So let me the traditional path
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  that everybody's on is go to school, get the grades, save for
• 14:42
  40 years for retirement and when they have enough money to sell,
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  right? So what they do is they earn,
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  they pay taxes, they live on whatever's left and then
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  hopefully save a little bit in stack a couple sets.
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  What the wealthy do is they make income and buy assets, don't pay
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  taxes on that, and then they have the assets pay for their
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  life. Are you saying this is a viable
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  strategy for most people? Everybody could do this and I
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  can break it down for you. Break it down.
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  So you have to make, this is not how to make money.
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  You need to figure how to make money and and get credit.
• 15:15
  If you can't figure out how to get a credit card just in the
• 15:17
  podcast right now. So let's say that you're making
• 15:20
  $100,000 a year. You know how to get a credit
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  card, you have a home, you have a business, whatever.
• 15:27
  OK, So step number one, whether you're 100 thousand, 100 million
• 15:31
  or whatever. Wait, wait Mark, hold on.
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  Sorry to interrupt you now I'm connecting the dots.
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  Now I understand by the jiu jitsu, the jujitsu analogy that
• 15:39
  you used, and it's all coming together in my mind.
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  What I said was a judo because judo is about like throwing your
• 15:46
  opponent, right? So what happens is when you
• 15:48
  attack me, you have energy moving towards me and I would
• 15:51
  transfer your energy and throw you.
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  Using the very system of credit against the system itself.
• 15:57
  It's a speculative attack. So what happens is in the game
• 16:00
  of building wealth, the two main penalties that we have to deal
• 16:03
  with are taxes and inflation. So taxes steal half of our
• 16:07
  wealth and inflation robs us 10% of our wealth.
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  So we have to offset those two things.
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  So how can we minimize that? So step number one, if I make
• 16:15
  $100,000 a year, and let's just say 40% tax rate depending on
• 16:19
  what state you're in, whatever for easy numbers, I'm not good
• 16:22
  on the fly with my math. So 40% tax rate.
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  So I make 100 grand. I pay 40,000 in taxes.
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  I have 60,000 left. I live off 60,000, which is
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  tough. And hopefully I save a couple.
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  I stack a couple sets. OK, So what step #1 would be
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  would be to access credit and I would use that credit to buy an
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  asset that gives me tax depreciation.
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  Now I use credit so there's no money out of my pocket because I
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  don't have any. I'm broke, I'm barely stacking
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  sats. So I use some credit that gets
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  me an asset that gets me tax depreciation.
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  And let's say that I get $20,000 of tax depreciation.
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  So now instead of ending up with 60,000 after taxes, I end up
• 16:59
  with 80,000 after taxes. I have an extra 20,000 without
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  working a single extra hour without working harder, and I
• 17:08
  just made an extra 20 grand, which gets me more sats.
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  So now I buy $20,000 worth of Bitcoin.
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  Next year I do the same. The next year I do the same when
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  five years without without working an extra single hour
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  without making an extra single dollar of stacked $100,000 in
• 17:23
  Bitcoin. And that's not accounting for
• 17:24
  any appreciation. All right, so now I've got a
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  hunt hunt out. So you're following me.
• 17:29
  I didn't work harder, but now I've got a treasury that's being
• 17:31
  built up. OK.
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  Then I can start to leverage the Treasury to get more tax
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  depreciation. OK.
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  And I can use the treasury to now pay for my living expenses.
• 17:44
  And the goal, let me let me Fast forward to the end goal to
• 17:46
  connect the dots and I'll stop. But the end goal that we want to
• 17:49
  is, as I already said, is I want my earned income to be offset.
• 17:53
  So there's no taxable amount and 100% of my earned income goes
• 17:56
  into Bitcoin. And then I leverage my Bitcoin
• 18:00
  to pay for my living expenses. And that's tax free because I'm
• 18:03
  using debt to do that. Man, this is this is first of
• 18:08
  all is blowing my mind. And again I want to I want to
• 18:12
  talk about the judo aspect of it, right.
• 18:15
  How is it a speculative attack on the system?
• 18:18
  Yeah, because I'm using cheap credit, cheap Fiat credit to buy
• 18:22
  a harder asset. So I am using both the cheap
• 18:27
  Fiat credit system and the tax system to lever up and stack a
• 18:33
  giant Bitcoin treasury. So I'm speculative, attacking
• 18:36
  using credit, buying, using cheap money to buy a harder
• 18:40
  asset. And you said?
• 18:41
  It's exactly what sailors doing. Sailor is borrowing stretch the
• 18:46
  iPhone moment. He's paying 11% yield today, so
• 18:49
  he's borrowing money at 11% to buy Bitcoin.
• 18:53
  Most of us can get money for cheaper than 11% and we can buy
• 18:57
  Bitcoin. I could borrow against my
• 18:58
  Bitcoin at 10% and buy more Bitcoin.
• 19:01
  I'm getting money cheaper than sailors.
• 19:03
  We can all do the same thing. OK.
• 19:04
  So but what's the downside here? What's the downside risk?
• 19:07
  The downside is if you go to the gym, you can get in a car
• 19:09
  accident, you could drop a weight on your head, you could
• 19:11
  hurt your shoulder when you lift weights.
• 19:12
  The downside is if I go in the ocean, I could drowned.
• 19:15
  So what can we do to mitigate that?
• 19:18
  That's the that's the right question.
• 19:19
  The question again is not, it's risky.
• 19:21
  I shouldn't do it. The question is, but I want to
• 19:23
  surf. So like, how do I just learn to
• 19:25
  swim, man, right? So OK, so we want to mitigate
• 19:28
  the risk. Now, Sailor just built up a $2
• 19:30
  billion cash war chest. He is now has multiple levels of
• 19:37
  security before he'll ever have to sell his Bitcoin.
• 19:40
  So for example, most of the the debt doesn't even encumber the
• 19:43
  Bitcoin, right? There's actually no forced
• 19:45
  mechanism that even get him to sell.
• 19:47
  So how could we de risk the situation?
• 19:49
  There's no absence of risk, but we can de risk it.
• 19:51
  So a couple things we do #1 we want to understand that
• 19:56
  liquidity and cash is not the same thing.
• 19:58
  I'm sure you've talked plenty about Michael Howell and you
• 20:01
  know, Nick Body, a shout out to the Bitcoin layer.
• 20:03
  They have a beautiful global liquidity lay model as well,
• 20:08
  right? But how do they come up with
• 20:10
  global liquidity? So it's a proprietary model.
• 20:12
  So that's why they had to build their own.
• 20:14
  And it's not just M2, it's the total amount of available credit
• 20:18
  that could create more money. Right.
• 20:21
  So think about this. So we don't want to think in
• 20:23
  terms of cash. We want to think in terms of how
• 20:25
  much liquidity do I have? That's step #1 cash on
• 20:29
  liquidity. Cash is liquidity, but liquidity
• 20:31
  is not cash. Copy me.
• 20:33
  OK. So we want to understand
• 20:35
  liquidity from 4 layers #1 I need to have my level 1
• 20:39
  liquidity is my operating capital.
• 20:42
  So that's my total monthly expenses in including all my
• 20:45
  debt service, everything I have to pay monthly.
• 20:48
  What is that and then how much of A buffer do I need?
• 20:51
  One month, two months, three months, six months.
• 20:53
  Now how do I come up with that number?
• 20:55
  It depends. If I'm a sales Rep and my income
• 20:58
  is very lumpy, I probably and and I have high expenses, I
• 21:01
  probably want three to six months.
• 21:03
  If I am a government contractor, I get paid every single week
• 21:05
  like clockwork and I and my expenses are low, then maybe one
• 21:09
  month is fine. OK, So you have to figure where
• 21:10
  that layer one liquidity is important for you.
• 21:13
  One to three months. OK, Level 2 liquidity is a cash
• 21:18
  equivalents. So this would be money market
• 21:21
  short term treasuries making 5%, it's stretch making 11%.
• 21:25
  So then I want to have some money in liquidity layer #2 and
• 21:29
  that could be, and This is Money I could access in less than 7
• 21:32
  days. So if I had a margin call, if
• 21:36
  something happened, I can get money quickly to solve that
• 21:39
  problem. So if I'm drowning, there's a
• 21:42
  lifeguard that can throw me around.
• 21:44
  OK, liquidity layer 3 is then assets that I can get liquidity
• 21:50
  against, but it might take me weeks to months.
• 21:53
  A home that I could refinance, I could pull a home equity line
• 21:57
  against it stocks in my brokerage account that I could
• 22:01
  take a a margin loan against Bitcoin that I could borrow
• 22:04
  against. And then the layer four are
• 22:07
  assets that are non liquid. So I bought a a lot in Mexico.
• 22:11
  I can't really get liquidity out of that.
• 22:12
  So I need to make sure that step number one, do I know how to
• 22:16
  swim? That's the operating step #2 do
• 22:19
  I have a life jacket on? That's my short term liquidity
• 22:21
  step #3 do I have a, a lifeguard watching that could throw me a
• 22:25
  line? That's so that's the first step.
• 22:27
  Does that make sense? Absolutely, it makes sense.
• 22:30
  Yo, I want to tell you about the best place to build your
• 22:34
  automatic self custody Bitcoin stack.
• 22:36
  I'm talking about bitcoinwell.com.
• 22:40
  What makes bitcoinwell.com different is that it's a
• 22:42
  completely non custodial platform, meaning as soon as you
• 22:46
  buy Bitcoin and the funds clear, it goes straight to yourself
• 22:50
  custody Bitcoin wallet address. And that perfectly aligns with
• 22:53
  simply Bitcoin ethos of the separation of money and state
• 22:57
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• 23:01
  To get started, go to bitcoinwell.com today.
• 23:04
  Takes 2 to 5 minutes to sign up and bada Bing, bada boom, you're
• 23:07
  ready to buy Bitcoin again. I'm coming from the traditional
• 23:12
  Bitcoin mindset, but you're basically it's, it's, it's a
• 23:18
  layer, it's a, it's a layered system that allows you to
• 23:23
  essentially not only live off your Bitcoin, but accumulate
• 23:27
  more Bitcoin And it's also a system that allows it.
• 23:31
  It becomes multi generational. So this is something that you
• 23:34
  can pass on to the next generation.
• 23:37
  They can implement this themselves.
• 23:39
  And rather than like the traditional, you know, the
• 23:42
  saying, which is like within two generations, you know, they've
• 23:44
  just the money's gone. You're building a system, you're
• 23:48
  leveraging Bitcoin in order to just, you know, create this
• 23:53
  flywheel. That's what I'm seeing.
• 23:55
  I call it a perpetual Bitcoin machine, so I literally have the
• 23:59
  government buy my Bitcoin for me.
• 24:02
  OK, So what does that mean? Go into that please.
• 24:04
  Well, so let's say for example, I use debt, however I get it, a
• 24:08
  credit card or I borrow against my Bitcoin and I buy Bitcoin
• 24:11
  miners. I know you found fond of that.
• 24:13
  I buy Bitcoin miners under Trump's one big beautiful bill.
• 24:16
  I'm allowed to depreciate those miners 100% in year 1.
• 24:19
  So I use credit from some source, $0.00 out of pocket.
• 24:22
  I buy Bitcoin miners that those Bitcoin miners offset my income
• 24:26
  100%. I pay 0 taxes.
• 24:28
  I use the money that I was going to send to the government so
• 24:30
  they could pay the daycare centers in in Minnesota.
• 24:33
  But instead I don't send it to the daycare centers.
• 24:35
  I keep it and instead I buy instead.
• 24:37
  Instead, I buy more Bitcoin. Wait, wait, Mark, but it's just
• 24:41
  a matter of time. I, I was thinking about this the
• 24:43
  other day. People are literally going out,
• 24:46
  especially here in Miami, right? People are literally buying
• 24:50
  properties just to sit on them. The rents from those properties
• 24:55
  don't even pay for the expenses. The property something could,
• 24:59
  you know, something could break the property tax.
• 25:04
  Isn't it just a matter of time before people realize what you
• 25:08
  just said? That there's a better mechanism,
• 25:11
  there's a better strategy they can implement, no pun intended?
• 25:15
  There is, yes. And so obviously the world is
• 25:17
  waking up to that. I started my career in real
• 25:18
  estate. I still own real estate, but I
• 25:20
  started my career in real estate.
• 25:21
  At one point I owned over 200 doors as we call them, units
• 25:24
  that were making rent, rental income.
• 25:26
  In 2021, I sold the last apartment that I had to go into
• 25:30
  Bitcoin. I still own properties like I
• 25:33
  talked about my ranch property you've been to in Austin.
• 25:34
  I live on a beach and. But for utility reasons.
• 25:37
  But for rental properties, they're gone.
• 25:39
  I'm out. I don't make rental properties
• 25:41
  anymore. I'd rather just own the Bitcoin
• 25:42
  for all the reasons that you said.
• 25:44
  I do think that Bitcoiners are a little bit overly optimistic in
• 25:47
  the demonetization of real estate in a sense, because it's
• 25:51
  not just that we need more homes.
• 25:53
  It's not just that Bitcoin is a better investment.
• 25:56
  There's, there's real scarcity here.
• 25:58
  If you want to live in Miami Beach, there's only so many
• 26:00
  homes in Miami Beach. And so the law of scarcity
• 26:02
  applies there. To your point, there are
• 26:04
  potentially a lot of vacant investment homes and maybe a lot
• 26:07
  of that does go away. So that will change a little
• 26:09
  bit. But I think at the same time,
• 26:10
  they're always going to be someone who wants to be downtown
• 26:12
  Manhattan, somebody wants to be lakefront in Lake Austin.
• 26:15
  And so the scarcity is still going to be there.
• 26:17
  You can't get around that. No, absolutely.
• 26:19
  I mean, I completely agree on on the scarcity aspect of it.
• 26:24
  But I do also see it like as if you are a property owner and you
• 26:31
  own multiple properties and now there's a superior investment of
• 26:35
  which you don't have to pay property taxes, you don't have
• 26:38
  to pay maintenance on. And I think.
• 26:40
  But but here's what's missing, and this is what I want to fill
• 26:43
  in the blank for. Here's what's missing.
• 26:46
  If I'm that real estate guy. And to your point, I have to pay
• 26:49
  the maintenance and I have to deal with all the issues, right?
• 26:51
  But at least it provides me some cash flow.
• 26:54
  Sure, Bitcoin should appreciate faster if I, if I believe that I
• 26:59
  do, obviously, but not everybody is.
• 27:01
  I believe it will appreciate faster, but it doesn't provide
• 27:03
  cash flow and I need money to pay my bills every month.
• 27:07
  And this is where bitcoiners lose this they, they, when they,
• 27:09
  when they, they don't understand what sailors doing.
• 27:11
  They don't understand where how big digital credit is.
• 27:14
  They can't even wrap their head around it because they don't
• 27:15
  really understand the, the, the real world.
• 27:17
  And the real world is you're 78 years old, you need money like
• 27:21
  actual dollars every month to buy your freaking medication,
• 27:25
  man. You got to pay your electricity
• 27:27
  bill. People need income.
• 27:29
  And so digital credit solves income.
• 27:31
  Bitcoin doesn't. Bitcoin is an asset and Warren
• 27:34
  Buffett would say it's a non productive asset.
• 27:37
  So the first thing is I'm getting deeper into the
• 27:39
  treasury. I have to understand what assets
• 27:40
  do I own? And then there's four categories
• 27:42
  I'd put those assets in. And Bitcoin is a non productive
• 27:45
  asset. That's why, just like gold, it's
• 27:48
  not a bad thing. O how do I take a nonproductive
• 27:50
  asset when I need income? So I'll buy the rental property.
• 27:53
  It's not going to appreciate as much, but it gives me the
• 27:56
  income. But what I'm saying is I can
• 27:58
  turn Bitcoin into an income asset.
• 28:02
  I can take a non productive asset like Bitcoin and turn it
• 28:05
  into a productive asset to replace real estate by
• 28:08
  harvesting the appreciation through debt leverage, not by
• 28:12
  selling the asset. Now if, if real estate investors
• 28:16
  can catch on to that, like I used to be a real estate
• 28:18
  investor, then they go, oh, so Bitcoin doesn't have tenants,
• 28:22
  there is no maintenance, It appreciates faster and I can get
• 28:25
  income from it, tax free income at that, because income from
• 28:29
  properties is taxed. So now no, no maintenance, no
• 28:32
  headaches, I can move it wherever I want, it appreciates
• 28:34
  faster and I get tax free income.
• 28:36
  I'm all in, Mark. How complicated is what you
• 28:39
  said? Is anybody?
• 28:41
  Borrowing at your Bitcoin? I mean, pretty Dang easy.
• 28:44
  It's just as simple as that. It's borrowing against your
• 28:47
  Bitcoin, being very careful with the the margin aspects of it.
• 28:51
  It's just that simple. Yeah, and and, and Nico, there's
• 28:55
  always risk. How do I manage the risk?
• 28:57
  If I borrow 10% LTV against my Bitcoin, what is the probability
• 29:02
  I get liquidated? Very low.
• 29:04
  Like single digits? Low.
• 29:05
  Very low because you can always just put on more put put up more
• 29:08
  collateral. But at at 10%, what's the odds
• 29:11
  I'm going to even give you a collateral call because,
• 29:13
  because. Extremely.
• 29:14
  I mean unless unless Bitcoin goes to 10K it's it's like.
• 29:17
  Extremely low and what is the odds of that?
• 29:19
  Minimal at this point. Single digit, yeah.
• 29:21
  OK, So what about? So if I borrow?
• 29:25
  But where? But where?
• 29:26
  Are you going to get 10% LTV? I would no.
• 29:29
  If I had $100,000 in Bitcoin, I'd borrow 10 grand.
• 29:31
  That's OK. Gotcha, Gotcha On the borrowing
• 29:33
  thing, I understand I. Loan to value, I understand.
• 29:35
  So I'm saying if I only borrowed, if I set a liquidity
• 29:38
  rule, I'm never going to borrow more than 10% LTV.
• 29:40
  The chance that I get a margin call is like single digits, of
• 29:44
  course. And if I'm still worried about
• 29:46
  it, then I make sure liquidity layer two and three are built up
• 29:48
  enough to cover it. I have a home equity line.
• 29:51
  If I do get a margin call, I'll just pull a little equity out of
• 29:53
  my home liquidity so we can de risk this thing now if I borrow,
• 29:57
  if I borrow. And so here's how it works.
• 29:59
  What do you what do you think and.
• 30:01
  I'm connecting the dots on the show, Mark.
• 30:04
  Okay, now okay, this is it. Now understand when you're
• 30:07
  saying, okay, so the the judo analogy makes sense.
• 30:11
  Now the perpetual Bitcoin machine.
• 30:14
  I think I finished that. I think it let me just finish.
• 30:16
  That it's I'm having explosions in my brain, Mark let me finish
• 30:20
  the. The perpetual Bitcoin machine.
• 30:22
  OK, OK. So what I've done is I've used
• 30:24
  credit to buy Bitcoin miners. The Bitcoin miners offset my
• 30:27
  income, so I pay no taxes. The money that was going to go
• 30:30
  to fund the daycare centers now, and I get to keep and I get to
• 30:32
  buy Bitcoin with it. So the government funded my
• 30:35
  Bitcoin next year, next year, next year, I borrow against the
• 30:39
  newly mined Bitcoin and the Bitcoin I bought to offset my
• 30:44
  income again. Instead of going to the daycare
• 30:46
  centers, I get to buy more Bitcoin again, and every single
• 30:49
  year than the Bitcoin. I say that the Bitcoin I
• 30:52
  acquired because I saved taxes, plus the newly mined Bitcoin I
• 30:55
  bought for the tax depreciation is perpetually funding itself.
• 31:01
  And and what? Do you?
• 31:01
  And it's and it's all with $0.00 out of my pocket.
• 31:06
  No extra hours worked, not working harder, having my money
• 31:10
  work harder. What I say, Nico, the reason why
• 31:12
  you have to work so hard is because your money doesn't.
• 31:15
  Most people are willing to go get a side hustle or a second
• 31:18
  job, but your money's only going to do one.
• 31:20
  No, no, no, no, no, no. My money's going to do 3 or 4
• 31:23
  jobs. I'm going to do a job.
• 31:25
  Why do you think most bitcoiners think like savers when Bitcoin
• 31:28
  actually rewards the treasury thinking?
• 31:32
  It's not just Bitcoiners. It's because we've all been
• 31:35
  taught to go to school, get good grades, save for 40 years and
• 31:40
  then hopefully one day spend it down.
• 31:42
  Bitcoiners bring that lens in. But because now Bitcoin is a
• 31:46
  superior asset, I can just buy Bitcoin and do nothing and I can
• 31:50
  outperform everybody else. So Bitcoin allows that allows us
• 31:54
  to actually be the saver. But the problem is if you're
• 31:58
  making 100 grand a year and spending 40,000 in taxes, you're
• 32:01
  trying to live on 60, you're only stacking sats.
• 32:05
  If you do this, you can stack Bitcoin.
• 32:08
  Absolutely now. Which would you rather stack,
• 32:11
  stats or Bitcoin? Stack Bitcoin, man, I just I'm
• 32:15
  I'm I'm digesting. And, and if I might throw out,
• 32:19
  we might have a moral obligation to stop funding daycare centers.
• 32:23
  I mean, that was crazy, wasn't it?
• 32:25
  That was crazy. That was crazy.
• 32:26
  We might have a moral obligation to stop doing that.
• 32:29
  Why do you think Mark they why do you think it took a 23 year
• 32:34
  old kid with a camera with, you know, an everyday camera and an
• 32:38
  everyday, you know, like lapel Mike for him to uncover that
• 32:44
  amount of fraud where legacy media, literally some legacy
• 32:49
  media even denied it. They tried to discredit they're.
• 32:52
  Trying to cover it up. Why?
• 32:54
  Why do you think like where are we in the movie?
• 32:57
  Like I'm seeing like from my from my perspective, I'm seeing
• 33:01
  like this feels like end of empire type of days.
• 33:03
  Yeah, I mean, not to keep, I guess I kept going back to that.
• 33:06
  I didn't want to go down the rabbit hole, but to answer the
• 33:09
  question, I think to your point, end of empire days, I think and
• 33:12
  I maybe I'm hopefully thinking this is sort of the straw that
• 33:16
  breaks the camel's back. I think, I hope obviously legacy
• 33:20
  media has a million reasons why they wouldn't want to cover it.
• 33:22
  They need to protect that they're not interested.
• 33:24
  They only want to talk about the the current thing.
• 33:26
  They're really trying to use propaganda more than actual news
• 33:29
  journalism. There's a.
• 33:30
  Has it? Has it always been that way?
• 33:33
  No, certainly not. Certainly not I.
• 33:36
  Think. Or was it social media that
• 33:37
  uncovered that the legacy media isn't actually in the business
• 33:41
  of telling the news? No, I, I, I would think that
• 33:44
  back in. OK.
• 33:45
  So first of all, I think there used to be real journalists who
• 33:48
  would really go break stories. I do.
• 33:51
  There's a show on Netflix or it's on, it's on Apple TV.
• 33:54
  My wife's been getting me to watch and it's with Reese, Reese
• 33:57
  Witherspoon. And what's her name from friends
• 34:01
  anyway? But they're like morning show
• 34:03
  hosts or whatever. And the Reese Witherspoon
• 34:05
  character is like, she's like real abrasive.
• 34:07
  And I have to go for the truth. And and they're like, whoa, slow
• 34:10
  down. The network doesn't want that.
• 34:12
  She's like, I'm only going for the truth.
• 34:15
  What truth? I can say nice truth.
• 34:17
  I can say bad truth. Why does the truth have to be
• 34:19
  antagonistic? Like when I watch her character,
• 34:21
  I'm like, I understand that's true, but like you just don't
• 34:24
  know that's mean. Why would you say that?
• 34:25
  You could say truth here too, right?
• 34:27
  Like, So what story are you choosing?
• 34:28
  I guess is what I'm trying to say.
• 34:30
  So I do think that people used to do a lot of undercover
• 34:32
  journalism and used to expose things like that.
• 34:36
  Today, they're certainly not well or maybe they're trying to
• 34:38
  expose things that don't need to be exposed.
• 34:40
  But but today we are the news, right?
• 34:42
  It's been democratized. And I think that people are
• 34:45
  willing to you and I Americans, we're willing to take a lot of
• 34:51
  abuse and punishment. But man, when you, you, you saw
• 34:55
  Mike Green put out that whole article about the new poverty
• 34:58
  line is 140,000, which got a big uproar, right?
• 35:02
  And one of the reasons why 140 is a new poverty line is because
• 35:05
  it takes 2 incomes to get there. Two incomes then require what
• 35:08
  second car and daycare The single biggest, the single
• 35:13
  biggest expense 30. I believe what he said in the
• 35:16
  report fact checked me it was 32,000 a year for daycare.
• 35:21
  So the reason why the American people are in the poor house 140
• 35:25
  is the new poverty line is because daycare has become the
• 35:28
  single biggest expense they have to deal with.
• 35:31
  And then we see that the daycare fraud is going to illegal
• 35:36
  immigrants and funding overseas operations.
• 35:38
  That is like the ultimate kick in the nuts.
• 35:41
  It it totally is and I mean it, it makes you because you know,
• 35:45
  you bust your ass, you pay at least half your income.
• 35:49
  Again, I'm averaging here to the government.
• 35:51
  The government has the answer to no one right.
• 35:55
  If you don't pay your taxes, you're going to jail, right.
• 35:57
  Like you don't want to mess with the IRS, at least if if you live
• 36:00
  in the States and you know, but there's no accountability for
• 36:05
  them, right? Like they can just recklessly
• 36:07
  spend, they can recklessly debase.
• 36:10
  Elon tried to get in in there in the beginning of the year.
• 36:13
  They literally ran him out of town.
• 36:16
  It's an unfixable system, which is why what you're saying
• 36:20
  regarding the judo aspect of it resonates with me so much,
• 36:24
  right? Because again, you're using
• 36:26
  pre-existing tools that are already there.
• 36:30
  You're leveraging them to not only grow your stack, right?
• 36:36
  Not sell your Bitcoin, but you're actually speculatively
• 36:40
  attacking the system itself at simultaneously.
• 36:44
  Do you think that Michael Saylor was the first one that figured
• 36:47
  this out? And what do you think Bitcoiners
• 36:50
  misunderstand about what Sailors doing?
• 36:55
  Could you kind of oversimplify it?
• 36:57
  Oversimplify it? Could you walk us through what
• 37:00
  Sailor is doing with the Treasury strategy?
• 37:02
  Because what I got, and I love Danny Knowles, I love what
• 37:05
  Bitcoin did, amazing content. But I heard him.
• 37:10
  I heard Sailor get frustrated, but I heard the logic that he
• 37:15
  was using and it made sense. It made sense what he was
• 37:18
  talking about. So could you talk about that?
• 37:21
  Like what did Sailor discover? I would love to talk about that.
• 37:25
  So first of all, Sailor's not the first person that's done
• 37:27
  this. The the big story that I usually
• 37:31
  reference is Hugo Stenez from Weimar, Republic of Germany.
• 37:35
  And when they were going through hyperinflation, he used the
• 37:37
  failing currency to go buy hard assets.
• 37:40
  He bought factories, he bought all types of hard assets, and he
• 37:42
  became the richest man in Germany.
• 37:44
  I'm sure you've probably heard of Hugo Stenez.
• 37:46
  That was a speculative attack. Pierre Richard wrote about
• 37:49
  speculative attack, I think in 2014.
• 37:51
  So Sailor didn't invent it, obviously, but what he did
• 37:54
  invent was creating a Bitcoin treasury company.
• 37:57
  So using Bitcoin and a treasury to build asset bases.
• 38:00
  Now, the wealthy have been using assets for tax depreciation, to
• 38:05
  lower taxable income and to fund their life with debt for a long
• 38:09
  time. But it's Bitcoin that allows you
• 38:11
  and I to do that because typically to do it with
• 38:13
  traditional assets like real estate, we'd have to be
• 38:15
  billionaires because because with real estate, you only
• 38:17
  depreciate over 27 1/2 years and you and so you're only getting
• 38:20
  little bits of depreciation. So to get enough depreciation to
• 38:23
  write off an income of 100 or 200 grand, you need a lot.
• 38:26
  But Bitcoin allows us to do it very quickly.
• 38:28
  That's why it's the cheat code. Now back to sailor, I think.
• 38:31
  What if I summarize one big statement?
• 38:38
  Bitcoiners. Bitcoiners are very smart, and
• 38:41
  they very quickly caught on to the Fiat monetary system, the
• 38:44
  leverage in the system. They understand in what
• 38:46
  inflation really is, how it affects us.
• 38:48
  They understand that sound money can be, can fix.
• 38:51
  A lot of this societal pressures are breaking down because they
• 38:54
  understand that. What they don't understand is,
• 38:57
  is the financial system. They don't understand security
• 38:59
  analysis, They don't understand credit markets.
• 39:02
  They don't understand that. And So what happens is they
• 39:04
  bring a Bitcoin lens in and try to understand what he's doing in
• 39:08
  the credit and the equity markets.
• 39:10
  And then they can't comprehend it and they try to bring the
• 39:12
  Stay Humble Stack SAT's into that and it just doesn't work.
• 39:16
  It's like you're speaking in a different language.
• 39:18
  But I can, I can break it down And, and very simply, So what
• 39:22
  most bitcoiners don't understand, again, I made the
• 39:24
  comment here earlier, what a 70 year old person needs is income.
• 39:28
  They got to pay their bills. They can't huddle Bitcoin, they
• 39:32
  can't they, they're they're not going to be alive long enough to
• 39:35
  have Bitcoin compound. They got to pay their friggin
• 39:37
  bills, man. So most of the world needs
• 39:41
  income. There's a there's a massive
• 39:43
  demand for yield. The fixed income markets are the
• 39:47
  largest markets in the world. They dwarf commodity and equity
• 39:52
  markets. So you you know that.
• 39:54
  OK, so most Bitcoiners don't even understand what that means.
• 39:57
  Why would you need income? Just stack stats, bro.
• 40:00
  Dude, most people can't. OK, so most Bitcoiners can't
• 40:04
  even get past that. So if we can agree on that, the
• 40:07
  biggest markets in the world are fixed income and Bitcoin doesn't
• 40:10
  change that. A lot of times bitcoiners think
• 40:12
  that credit goes away. There's two types of people in
• 40:15
  the world. There's creators and there's
• 40:16
  consumers. Creators will always create more
• 40:19
  than they consume. That's why Warren Buffett stayed
• 40:21
  working active until he was 93 years old.
• 40:23
  He just creates. All billionaires are still
• 40:26
  working today, not because they don't have enough money, because
• 40:29
  they're creators. So there's always going to be
• 40:31
  people who have created more than they've consumed and want
• 40:35
  yield. And there's always going to be
• 40:37
  people that need to borrow money.
• 40:39
  So there's always going to be people that want to borrow, hey,
• 40:41
  I need to expand my factory. I need to build this new plant.
• 40:44
  There's always going to be a demand for borrowing and there's
• 40:46
  always going to be yield available that Bitcoin doesn't
• 40:52
  change that. Now, we would lend from our
• 40:55
  savings, not Fiat money that we print from thin air.
• 40:58
  Bitcoin changes that, right? So can we agree on that?
• 41:01
  OK, so #1 we've established the biggest market in the world is
• 41:04
  the fixed income market. There's always going to be a
• 41:06
  demand for yield. Now currently the bond market
• 41:10
  has created yield instruments on a dollar standard.
• 41:14
  What sailors doing is creating yield products on a Bitcoin
• 41:18
  standard. Now where where I believe some
• 41:21
  of the misunderstanding between Danny and and Sayler were, was
• 41:25
  what what? What Danny was asking I believe
• 41:28
  was 2 questions #1 when the if or when the M NAV drops below 1,
• 41:34
  why would it ever come back? I think that was his main
• 41:37
  question he was trying to get to and #2 why why?
• 41:40
  Why does there need to be more than one micro strategy?
• 41:43
  Like how many can there really be?
• 41:46
  Are those the two questions? Those are those are the two
• 41:47
  questions. I love the answer to the second
• 41:50
  one, which is like, look like if you're in Brazil, you don't have
• 41:52
  access to the American markets, right?
• 41:54
  That's that's like so small that's barely scratching the
• 41:56
  surface. So let me answer those two
• 41:58
  questions. I had it OK anyway, but let me.
• 42:00
  Let me ask, let me ask you a, a question before that Mark again.
• 42:05
  I've been in this industry for 10 years.
• 42:07
  I would like to think that I know what I'm doing, right.
• 42:11
  I have I have a business. I employ 15 people.
• 42:14
  Why is it so difficult for me to understand this?
• 42:18
  Yeah, because you've never 2 reasons.
• 42:21
  Number one, you've been living life on a pre programmed track
• 42:24
  that everybody goes down because since you were a little kid in
• 42:27
  school, they asked you what do you want to be when you grow up,
• 42:29
  not what do you want to. Do I dropped out of school and I
• 42:32
  became an entrepreneur at 22 years old?
• 42:34
  Yeah. So, so that, and then we were
• 42:36
  just taught to just save, save, save and then retire one day.
• 42:39
  And then the second reason is most of us don't have people
• 42:43
  around us that we can see doing something different.
• 42:46
  So the story of the four minute mile is that humans thought it
• 42:49
  was impossible to run a 4 minute mile.
• 42:51
  But as soon as one person did it in a short period of time, then
• 42:54
  multiple people started doing it.
• 42:55
  So the very fact that someone else could do it, the very fact
• 42:57
  that I can see someone else do it, then all of a sudden makes
• 42:59
  me believe I can do it. And most people just don't know
• 43:01
  billionaires and you just don't know how they build wealth.
• 43:04
  And so you just haven't seen it. Your parents are not good.
• 43:06
  I don't know your parent well. I just met you wrong.
• 43:08
  But like my my parents, most of our parents are not good role
• 43:12
  models for this. If you want to get in shape, you
• 43:14
  talk to somebody who's in good shape.
• 43:15
  And if you want to build wealth, you talk to someone who build
• 43:17
  wealth. And most of our parents are not
• 43:18
  that. So the model that's been set for
• 43:20
  us, the education system that trained us and what we've seen
• 43:22
  on TV, in the news, etcetera, has not trained us and we don't
• 43:25
  have access to the billionaires. Really where my mind started
• 43:28
  shifting on this was about 10 years ago, but where it really
• 43:31
  got kicked into gear was in 2021.
• 43:33
  I left California, went to Puerto Rico, partly because
• 43:36
  California was locked down. I was tired of being locked in.
• 43:38
  My own part Number 2 was the tax situation.
• 43:41
  And I was speaking a bunch of conferences and I spoke at
• 43:44
  several conferences with Robert Kiyosaki, you know, on the same
• 43:46
  stage, and he would call me out from stage.
• 43:49
  These guys like Peter Schiff and Mark Moss, they got to move to
• 43:53
  Puerto Rico to get out of taxes. Doesn't, don't, don't they know
• 43:56
  that we don't pay taxes? Donald Trump doesn't pay taxes.
• 44:01
  Robert Kiyosaki doesn't. And and I've got to know Robert
• 44:03
  Kiyosaki. Our friends are now.
• 44:04
  And I'm like at dinner, I'm like, OK, Robert, break it down,
• 44:06
  dude. Like break it down for me.
• 44:08
  Right, because they take loans against their assets at very low
• 44:13
  interest. They use depreciation to write
• 44:15
  off against the income. OK, but now, now that this is
• 44:19
  getting out of the bag, wait, no, let's take it back to the
• 44:21
  let's just go back to to to the Danny and say going back to the
• 44:25
  so the two key questions so do. You want to answer the M NAV 1st
• 44:28
  and then we'll get to why there can be 10,000 or 10 million of
• 44:30
  these. Companies, yeah.
• 44:31
  So let's talk about the M NAV first.
• 44:32
  Let's talk about the M NAV first.
• 44:33
  So first of all, there's a gross misunderstanding of the global
• 44:36
  financial system and different types of businesses and funds
• 44:39
  and all of these things. And so to ask that question
• 44:41
  shows that you don't, I want to be careful.
• 44:45
  I love Danny. I just ripped with Danny.
• 44:46
  We, we talked about this. Most people that ask that
• 44:49
  question don't really understand what they're asking.
• 44:51
  So 2 reasons why. First of all, why would it trade
• 44:57
  for less than 1 * M NAV? So there's a truth.
• 45:01
  If if you and I both buy one Bitcoin and Bitcoin goes up 5X,
• 45:05
  who makes more money? The person the same.
• 45:11
  We just, yeah, the same. Why?
• 45:12
  Why? Because we both bought one
• 45:13
  Bitcoin. Yeah, right.
• 45:14
  OK. If I borrowed 50% of my Bitcoin
• 45:18
  value and bought more Bitcoin and you didn't, and Bitcoin went
• 45:21
  up 5X, we made more money. The person who borrowed the
• 45:24
  leverage. Yeah, of course.
• 45:26
  So we can establish that if I use leverage, I will outperform
• 45:30
  people who don't. Yes.
• 45:31
  OK, So what's Sailor doing? Using.
• 45:34
  Leverage right? So his goal is to get a 30%
• 45:36
  leverage ratio, right? So he has his charts, he shows
• 45:39
  if Bitcoin averages a 30% ARR and I do a 30% ratio of leverage
• 45:44
  and I pay out no more than 10% coupon yield, we'll do a 2.8
• 45:48
  times factor. It's math.
• 45:50
  It's friggin math, bro. So if I, if I lever my assets up
• 45:54
  30% and Bitcoin goes up 30% and I don't pay more than 10% on the
• 45:57
  debt, I make a 3X return. So what he's doing is he's
• 46:02
  levering the position. That's why it will outperform
• 46:05
  Bitcoin. Now, why will the trade for more
• 46:08
  than one times? Then we have to also understand
• 46:10
  the actual financial system. So there are what's called close
• 46:13
  in funds. close in funds are sort of like ETFs.
• 46:16
  They're like wrappers, right? They buy assets.
• 46:19
  And then what I can do is I can buy into that basket of an ETFI
• 46:22
  can buy into that, that fund. There's about, there's about
• 46:26
  1000 funds in the United States that are sort of like these
• 46:30
  business Development Fund corporations or, or some sort of
• 46:32
  funds right now. Why, why is there 1000?
• 46:36
  Why isn't there just one? I don't understand that.
• 46:38
  Why do we need more than one fund?
• 46:40
  I so why do we need more than one treasury company?
• 46:43
  We're going to come back to that.
• 46:44
  But just that even the line of thinking, why would we need more
• 46:46
  than one fund? Why do we need 10,000 ETFs,
• 46:49
  Nico? Like, why isn't one ETF And
• 46:51
  like, OK, we'll come back. Why do we need 32 flavors of ice
• 46:56
  cream? Can't we just have vanilla?
• 46:58
  Actually? Why do we need 30 flavors of
• 46:59
  vanilla, old fashioned vanilla, vanilla bean?
• 47:03
  Like how many flavors of vanilla?
• 47:05
  Like, OK, we'll come back to that.
• 47:06
  But so there's all these types of funds.
• 47:08
  Now we have ETFSETFS are like a wrapper where I put a dollar in,
• 47:12
  they buy a dollar of Bitcoin. Now that that ETF should trade
• 47:16
  below 1 times NAV because I'm actually losing money because
• 47:20
  they're taking fees, they're doing no operations to grow
• 47:25
  that. OK.
• 47:27
  Now I don't think that's a good a parallel.
• 47:30
  A better parallel to compare a Bitcoin treasury company would
• 47:34
  be a bank is a better parallel. It's not the best, I'll tell you
• 47:37
  what the best is, but it's it's better.
• 47:39
  So what a bank does is a bank receives deposits, it pays you a
• 47:43
  yield for the deposits, it invests the money and it makes
• 47:46
  the difference. Sort of like what sailors doing,
• 47:48
  right? So he takes the money, he pays
• 47:50
  you a yield and he invests the money into Bitcoin.
• 47:51
  So sort of like a bank. Now, a bank would typically
• 47:53
  trade between 1.5 to 2 point fives in NAV Why?
• 47:58
  Because they have an operating business that can apply leverage
• 48:02
  depending on who the management team is and their connections
• 48:04
  and JP Morgan, whatever, it's going to trade at a higher
• 48:06
  premium. If it's a bad bank, a local
• 48:09
  community bank that can't really do much, it'll trade a lower
• 48:11
  premium. But it's always going to trade 1
• 48:12
  1/2 to 2 1/2 times. So why would it ever trade for
• 48:15
  more than one times? Because that's what these types
• 48:18
  of businesses do. But a better, a better parallel
• 48:20
  would be like another asset heavy type of business, like a
• 48:23
  like a gold mining company. So gold mining company has gold
• 48:27
  in the ground, it's assets, right?
• 48:30
  But it's an operating business that's bringing the gold out of
• 48:32
  the ground. But it gets a better premium
• 48:34
  because it's got gold and gold's going to be worth more in the
• 48:36
  future. So because gold will be worth
• 48:38
  more in the future, I'm going to give it a 3 1/2 times.
• 48:42
  Well, they, they don't trade it at MNAB.
• 48:44
  They trade at a book value. It's the same thing.
• 48:47
  So when I look, when I understand the world and I go,
• 48:49
  well, what, what's a parallel? Well, I understand an asset
• 48:52
  heavy business that uses the assets of the business and
• 48:55
  provides some sort of operational leverage should
• 48:57
  trade somewhere between a 2 1/2 to a 3 1/2 times.
• 49:00
  So I believe that Bitcoin is better than gold.
• 49:04
  I believe it's going to go up more than gold.
• 49:07
  So if a gold company like Barrick or Newmont, for example,
• 49:10
  if they're trading at 3 1/2 times, then certainly a Bitcoin
• 49:13
  company should trade at 3 1/2 times, if not more.
• 49:16
  When I did an interview with Saylor, we we went down this
• 49:18
  path. He said that he thinks the
• 49:19
  minimum should be a 3X, but then why does it go down to 1X or
• 49:23
  below? Because it's a frigging market,
• 49:25
  man. Like like an ETF or a closed end
• 49:28
  fund should always trade a little bit below NAV because of
• 49:30
  the fees. But sometimes they trade way
• 49:32
  over because it's a market. And then people can arbitrage
• 49:35
  the spread and they can do things like that.
• 49:37
  So. So first number one, I would
• 49:39
  just understand 1. So to recap #1 because there's
• 49:42
  leverage that will outperform Bitcoin, that's just math #2
• 49:46
  because of the operating company, the better the company,
• 49:49
  the better the team, the more I believe in the safety and the
• 49:52
  teams ability to use intelligent leverage without blowing up, I
• 49:54
  get a premium. And if I compare it to a bank 2
• 49:57
  X 2 1/2 X or a gold company three 3 1/2 X, that's where it
• 50:01
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  Leaden. Dot IO today so and as a
• 51:15
  Bitcoiner advocate for self custody, Mark, you've known me a
• 51:18
  long time now, right? I'm, you know, cookie cutter
• 51:22
  Bitcoin right? Stay humble stack stats put into
• 51:24
  self custody. I completely agree on the
• 51:27
  leverage aspect. Why we saw this before sailors
• 51:30
  been in this position. This is what people forget about
• 51:32
  this cycle 2021-2022. What happened to micro strategy?
• 51:37
  It got absolutely hammered right?
• 51:39
  It reached an all time high I think.
• 51:40
  It was down to .8, right? Yeah, it it it got hammered, the
• 51:44
  stock got absolutely hammered. And then what happened?
• 51:47
  What happened in this previous cycle?
• 51:49
  It 30 XD. So I 100% agree with the
• 51:53
  leverage aspect. I do think that once the price
• 51:56
  starts picking up again, a micro strategy will outperform Bitcoin
• 52:00
  because of the reasons that you laid out.
• 52:02
  So that's topic one, that's question one, which is the M NAV
• 52:06
  aspect. The topic too, which is what
• 52:09
  Danny was asking, which is why are there so many Treasury
• 52:11
  companies? Thousands or 10s of.
• 52:13
  Thousands. Why is that?
• 52:14
  Why is that necessary? So I do want to just say real
• 52:17
  quickly, 2 two things. I had dinner with Sailor when I
• 52:21
  was in Prague a few months ago. Awesome con conference, by the
• 52:25
  way, Bitcoin Prague, go there if you can.
• 52:27
  And two things that he said there.
• 52:29
  So 1 he said that. People to well.
• 52:33
  Let me answer the bitcoiner for it, he said.
• 52:35
  I've never targeted bitcoiners. I I've never wanted Bitcoiners
• 52:39
  to buy this. I've never received money from
• 52:41
  bitcoiners as far as I know. And so let me ask you a question
• 52:44
  first. BlackRock has now started saying
• 52:48
  they may recommend Bitcoin for portfolios we see like big, big
• 52:52
  names like Paul Tudor Jones talking about taking small
• 52:54
  allocations. What percent of people do you
• 52:57
  think have at least minimum of a 5% allocation to Bitcoin?
• 53:02
  Extremely small minute. Like 1% or less than one, Yeah,
• 53:06
  OK. And and that's to take a 5%
• 53:08
  allocation which we would consider pretty bullish.
• 53:10
  But Even so, even those people that would reach that point less
• 53:14
  than 1%, those people are pretty bullish.
• 53:16
  They did a 5%, they still have 95% not allocated to Bitcoin.
• 53:21
  And the reason why I bring that up is because you and I, we say,
• 53:25
  will this beat Bitcoin? And if not, then I'm not doing
• 53:27
  it because Bitcoin is my hurdle rate.
• 53:28
  And that is the right question. And I believe that we should all
• 53:31
  be on that. Bitcoin is the hurdle rate.
• 53:33
  If it can't make more than Bitcoin, then don't buy it.
• 53:36
  OK? But less than 1% of people even
• 53:39
  have 5%, which means 95% is not allocated to Bitcoin, which
• 53:43
  means they're not asking will it be Bitcoin.
• 53:46
  What they're asking is will it beat inflation or will it beat
• 53:49
  the S&P 500? That's all they're asking.
• 53:51
  And so for them MSTR or whatever Bitcoin treasury that you want
• 53:56
  to fill in the blank with, they're not saying will this
• 53:59
  beat Bitcoin yes or no that they're not asking that
• 54:01
  question. So for again, we, we take this
• 54:03
  Bitcoin or lens into it. These are not products for
• 54:06
  Bitcoin. Yes, just buy Bitcoin and put in
• 54:07
  cold storage. You don't need Bitcoin treasury
• 54:09
  companies, but that's not who they're going after.
• 54:11
  And then we'll get to the weather's 10,000 of them.
• 54:13
  So oh, but I was going to say one more thing.
• 54:15
  So Sailor said so he said that and then he also said what what
• 54:19
  people want is MSTR to be a more volatile version of Bitcoin.
• 54:25
  You hear him talk about volatility is vitality, right?
• 54:27
  So they want it to be more volatile.
• 54:29
  So Bitcoin or micro strategy is one of the most heavily traded
• 54:31
  stocks. People love it because of the
• 54:33
  the volatility, right? So professional investors love
• 54:35
  volatility. Most people think volatility is
• 54:37
  bad. They love it.
• 54:38
  OK, So what they want is they want micro strategy to be two
• 54:40
  times volatile to Bitcoin. So if Bitcoin, we talked about
• 54:43
  it going up by two or three X in that right.
• 54:45
  So if Bitcoin goes up 2X, then micro strategy should go up 4X,
• 54:49
  right? But what it also means is if
• 54:51
  micro, if Bitcoin goes down to X, then MicroStrategy goes down
• 54:55
  to X. So he said, he gave us the
• 54:56
  story. He said, imagine, imagine
• 54:59
  tonight in my sleep, God comes to me and God says, hey, the
• 55:03
  market's going to crash tomorrow.
• 55:05
  And so I wake up and I hedge the positions of MicroStrategy and
• 55:09
  sure enough, the markets crashed.
• 55:12
  But MicroStrategy didn't because I hedge the positions, he said.
• 55:14
  He said, that'd be great, right? Right.
• 55:17
  No, it'd be terrible because the market needs me to be
• 55:20
  dependable. The market wants me to trade 2
• 55:23
  times. If somebody doesn't want 2 times
• 55:24
  exposure, they'll hedge their position.
• 55:26
  They don't want me to be irrational.
• 55:28
  So I'll ask a rhetorical question.
• 55:30
  How much did Bitcoin drop by about 30%?
• 55:33
  How much did micro strategy up by 60% two times volatile to
• 55:39
  Bitcoin? Isn't that exactly what we buy
• 55:41
  it for a more volatile? So it's like like what did you
• 55:45
  buy it for? What were you expecting?
• 55:46
  It did exactly what you're expecting.
• 55:48
  Anyway, that's a sidetrack. No, not a sidetrack.
• 55:51
  I mean, it is a sidetrack, but it it hits the nail on the head.
• 55:54
  And then also to me, it highlights that Bitcoin Twitter
• 55:58
  is not reality, it's not the markets.
• 56:02
  And I think us Bitcoiners, we, we operate in a little bit of an
• 56:07
  echo chamber, right? I think the, the example that
• 56:12
  that you laid out, which is like, look like this was a
• 56:15
  product that was never designed for Bitcoiners.
• 56:18
  This was a product that was designed to tap into different
• 56:21
  pools of capital that otherwise would have no ability to get
• 56:25
  exposure to Bitcoin whatsoever. And I love the comment that you
• 56:29
  that you pointed out, which is like a lot of these people are
• 56:32
  really not, they're not interested in outperforming
• 56:34
  Bitcoin. What they're really interested
• 56:36
  in is outperforming the S&P 500, which is why they would buy
• 56:39
  something like MicroStrategy itself.
• 56:41
  Now I do want to focus on the second question, which is why
• 56:45
  are there so many, so many Treasury?
• 56:48
  Yeah. And and what and is that
• 56:50
  necessary and will it get to a point where we'll see a
• 56:53
  consolidation? Yeah.
• 56:54
  OK. So this is the this is the good
• 56:56
  part. So we've already made the case
• 56:59
  and we agree that the fixed income market, the demand for
• 57:02
  yield is the largest market in the world.
• 57:05
  There's about $300 trillion of fixed income, about 145 trillion
• 57:10
  of that is tradable securitized fixed income, 145 trillion.
• 57:17
  That's the demand for yield. And as I said, currently it's
• 57:20
  the bonds are on a dollar standard.
• 57:22
  So what sailors doing is he's taken Bitcoin and built up a
• 57:25
  Bitcoin war chest and he's now that's what he calls digital
• 57:28
  digital capital and he's created digital credit on top of that.
• 57:31
  OK, So what he's done is launched preferred, right,
• 57:34
  Preferred strike, strike stride and stretch by stretch is a
• 57:39
  stretch is a they're all perpetual.
• 57:42
  So they're not termed they're perpetual and they're different
• 57:45
  and far as their seniority, the yield and then potential upside.
• 57:49
  OK, I don't want to get in the details of that.
• 57:50
  We can if you want, but they're preferred meaning their
• 57:54
  equities, meaning their stocks. But most of the world that once
• 57:57
  yield buys bonds. So funds that buy yield, buy
• 58:03
  bonds by mandate, they can't buy equities.
• 58:08
  So most of the market can't even buy what he offers.
• 58:13
  So, so just by that alone, sailors, like he told me on the
• 58:18
  interview with him, he said you could make $100 billion just
• 58:21
  doing a 30 year bond. I'm not going to do it.
• 58:24
  You should do it. You could make 100 million on a
• 58:26
  10 year bond. I'm not going to do it.
• 58:28
  You should do it. So let's just think about bond.
• 58:30
  So Apple or Google sells a bond and then they use that money to
• 58:36
  go build a new data center, right?
• 58:38
  Apple has a bond, right? All these corporations say sell
• 58:42
  bonds. That's debt.
• 58:43
  There's 10,000 bonds available in the USI can buy an LA County
• 58:52
  municipal bond. I can buy an Orange County
• 58:55
  municipal bond. Why?
• 58:56
  Why does LA have one in Orange County have one?
• 58:59
  Why would I buy? Why would I buy an LA County
• 59:02
  municipal bond or an LA County water municipal bond?
• 59:07
  Why? Why do I need a LA county water
• 59:09
  one and an LA county one and an Orange County?
• 59:11
  Why? Why can't there just be an LA 1?
• 59:14
  I don't understand. Each one has a different risk
• 59:17
  return profile. They have different risk return
• 59:20
  profile. I don't know, Orange County went
• 59:22
  bankrupt once before. So I don't know if they're as
• 59:23
  good, but they do pay a little bit better yield, but I'm going
• 59:26
  to put a little bit towards that.
• 59:27
  But I'm going to also get some LA County because I think
• 59:28
  they're safer. So I'm going to do a little
• 59:30
  elegant, but I also like the water.
• 59:31
  So OK, I'm going to get a little of those, those couple bonds,
• 59:34
  but oh, shoot. But the water ones only a five
• 59:36
  year. I kind of want a 10 year.
• 59:37
  So I'm going to get a little bit of the 10 year like pro like and
• 59:41
  and and and so there's like there's 10. 1000 bonds man.
• 59:45
  It's different flavors for what you're looking for.
• 59:49
  For different use cases. So you want to fix your car?
• 59:53
  I got a professional tool chest right here.
• 59:55
  You're like, Mark, hand me a tool.
• 59:57
  OK, Did you want a hammer or a screwdriver?
• 1:00:00
  Like what do you want? So professional investors,
• 1:00:04
  allocators. Think about, I'm trying to solve
• 1:00:06
  a problem. What tools do I need to help me
• 1:00:08
  solve the problem? And so then we build different
• 1:00:10
  financial products to serve different use cases.
• 1:00:13
  And again, most Bitcoiners just understand this and that's fine.
• 1:00:16
  But like what? What they'd also to understand.
• 1:00:19
  Most Bitcoiners probably caught this a little bit, but they
• 1:00:21
  hadn't really thought deeply about this.
• 1:00:22
  You remember when three banks collapsed in 2023 and what
• 1:00:25
  caused their collapse was a duration mismatch, right?
• 1:00:29
  So they were locked up in 30 year debt, but they needed short
• 1:00:33
  term liquidity. So they had a, remember I talked
• 1:00:36
  about 3 layers of liquidity. They had a they had a liquidity
• 1:00:38
  mismatch. They needed more short term, but
• 1:00:40
  they had it all long term. OK, so the way that the
• 1:00:43
  financial world works is we time duration.
• 1:00:47
  So most of the world has six month, five year, How long is
• 1:00:52
  your auto loan? 5 or 6 years?
• 1:00:53
  How long is your home loan? So we have term debt, OK.
• 1:00:56
  And I match my liabilities in my assets and I try to match the
• 1:01:01
  duration. So Sailor has perpetual
• 1:01:03
  products. What do I do with that?
• 1:01:06
  My debts, 10 years. I just need a 10 year bond.
• 1:01:08
  I don't, I don't even know how to price or use a perpetual.
• 1:01:11
  But it's not even a bond. It's a it's an equity.
• 1:01:14
  I can't even use an equity. So like there's a market for
• 1:01:17
  10,000 bonds. And that's just in the US alone.
• 1:01:20
  We haven't even gotten to Brazil and the UK and every other
• 1:01:23
  currency. We're just talking about the US.
• 1:01:25
  There's 10,000. Let me give you another example
• 1:01:27
  why there could be 20,000 or 50,000.
• 1:01:30
  Nico, do you have insurance? Of course.
• 1:01:34
  How many types of insurance? For the car, for the house, for.
• 1:01:40
  Metal for disability. Why do you need all those types
• 1:01:43
  of insurance? Why not just one?
• 1:01:46
  Because the house insurance ain't going to insure.
• 1:01:48
  So how many, how many companies in the world offer insurance?
• 1:01:53
  So many. How many?
• 1:01:54
  10s of thousands, Thousands and thousands?
• 1:01:57
  Like AIG was like the too big to fail in 2008.
• 1:02:00
  Like the biggest insurance. Warren Buffett has insurance
• 1:02:03
  companies. Why not just Warren Buffett's
• 1:02:04
  insurance company? Why do we need all those
• 1:02:06
  insurance companies? We need competition.
• 1:02:09
  But we need thousands of insurance companies.
• 1:02:12
  Like why not just one insurance company I mean.
• 1:02:14
  Because. Because they're going to.
• 1:02:15
  Offer different prices, but Nico man, Warren Buffett's insurance
• 1:02:19
  company is the biggest and it's the most well backed.
• 1:02:21
  So why wouldn't everybody just use Warren Buffett?
• 1:02:23
  Maybe not everybody could afford Warren Buffett's insurance.
• 1:02:27
  I'm. Making my case, yeah,
• 1:02:29
  absolutely. So there's 10,000 bonds.
• 1:02:31
  And so each company can create a security.
• 1:02:35
  They can. So right off the bat you have
• 1:02:36
  equities and bonds right off the bat, then you have 100 different
• 1:02:41
  terms of bonds. And then each of those bonds is
• 1:02:44
  different risk return profiles. And I'm going to use them all
• 1:02:47
  differently for different types of debt that I have and
• 1:02:49
  different income needs. And then I lat so then we can
• 1:02:51
  get into more complex financial engineering, but then we do
• 1:02:54
  laddering of bonds. So then you start laddering
• 1:02:56
  them. So they all come due at
• 1:02:57
  different times. Like there's all types of
• 1:02:59
  strategies and I need all these different tools and, and then
• 1:03:03
  there's different products and there's insurance products and
• 1:03:05
  there's, and then there's there's like insurance companies
• 1:03:08
  sell income products. They're called annuities, but
• 1:03:10
  that's different than a bond yield like like proud.
• 1:03:15
  I mean, I think you answered it perfectly and the the first
• 1:03:21
  part, you hit the nail on the head.
• 1:03:23
  It's just, look, MicroStrategy is a form of leverage.
• 1:03:26
  It's a leverage on Bitcoin, and leverage on Bitcoin means that
• 1:03:31
  when price of Bitcoin goes up, everyone's celebrating, but when
• 1:03:34
  the price of Bitcoin goes down, it's going to be twice as
• 1:03:37
  painful. Leverage cuts both ways.
• 1:03:39
  And the explanation on why there has to be so much, so many
• 1:03:44
  Bitcoin treasury company, because everyone has a different
• 1:03:46
  risk profile, everyone wants a different flavor, and there's
• 1:03:50
  different opportunities in every single Bitcoin treasury company.
• 1:03:54
  And not only that, there's the jurisdictional aspect of it,
• 1:03:57
  right? If you live in the UK, if you
• 1:03:58
  live in Brazil, you might not have access to American capital
• 1:04:02
  markets, right? And not only that, the free
• 1:04:05
  markets are going to do what free markets do best.
• 1:04:07
  And the Bitcoin treasury companies that aren't run
• 1:04:09
  properly are just going to go out of business.
• 1:04:11
  But those are the ones that probably have bigger risks if
• 1:04:14
  you want to buy them, right? So I think you answered that
• 1:04:17
  question perfectly. And I think again, the clash
• 1:04:20
  here, and This is why the that podcast was, I think it was like
• 1:04:25
  a pivotal moment in Bitcoin's history because it was a reality
• 1:04:29
  check. It was kind of like a reality
• 1:04:31
  check of like what's going on and how Bitcoin has matured and
• 1:04:35
  how Bitcoin has changed and how Bitcoin is becoming part of the
• 1:04:38
  traditional financial markets. And again, for Bitcoiners that
• 1:04:42
  have been used to living outside of that for most of the careers,
• 1:04:47
  my, myself included, a lot of the stuff we just, we didn't
• 1:04:51
  even, we didn't even realize it, it existed, nor did we realize
• 1:04:56
  should we use this right? I've gotten to a point where
• 1:04:59
  again, I have a business, I have to make payroll.
• 1:05:03
  So barring against your Bitcoin that, that that's obvious,
• 1:05:07
  right? It's, it's, it's an obvious
• 1:05:08
  thing Bitcoin appreciates as time goes by, the amount of
• 1:05:13
  collateral that you that you need in order to fund that loan.
• 1:05:16
  Over time, you're going to be able to pull that collateral
• 1:05:19
  out, right. So for me, it's, it's, it's
• 1:05:23
  become obvious in that sense, but I think you're much deeper
• 1:05:26
  down the rabbit hole in terms of the, the system that you've
• 1:05:30
  built and for, for basically for you to accumulate more Bitcoin,
• 1:05:36
  for you not to have to sell your Bitcoin.
• 1:05:38
  And that to me is fascinating. And when I asked you the
• 1:05:41
  question, like, what do people need to do to get started, you
• 1:05:44
  basically said like, look, you just borrow against your
• 1:05:46
  Bitcoin. But it's not as simple as that.
• 1:05:48
  I said. I said use credit to offset your
• 1:05:50
  taxes first. So could you if, if one O 1
• 1:05:55
  they're tuning into this podcast like Mark Moss is literally
• 1:05:59
  talking about a perpetual Bitcoin machine, what the F is
• 1:06:02
  he talking about? Could you break it down?
• 1:06:04
  Like what is step number one? Then what is step #2?
• 1:06:07
  Then what is step #3, etcetera, etcetera.
• 1:06:10
  So I'm going to give you step by step from the beginner level,
• 1:06:13
  but what I want to do is tell you where the end goal is first.
• 1:06:16
  So I'll give you the goal and then I'm going to build the map.
• 1:06:17
  So the end goal is get to a point where 100% of my income
• 1:06:21
  buys Bitcoin, 100% of my income buys Bitcoin tax free, so I'm
• 1:06:26
  not leaking 40% to taxes, 100% goes into Bitcoin, which means I
• 1:06:29
  can buy more Bitcoin. And then what I'm doing is I'm
• 1:06:33
  using debt off of my income to live off of and that way I don't
• 1:06:37
  pay tax on that money either all right so that's the end goal IA
• 1:06:42
  100% of my money goes into assets and my assets pay for my
• 1:06:44
  life. All right so that's the end
• 1:06:47
  goal. How do we get there?
• 1:06:48
  Step #1 Because I'm staying humble, I'm only able to stack
• 1:06:53
  sets because, right, that's kind of funny.
• 1:06:56
  Because I'm staying humble, I can only stack sets.
• 1:06:59
  If we get a little more aggressive, we can stack
• 1:07:00
  Bitcoin. So what?
• 1:07:01
  Step number one is I have some credit available to me from
• 1:07:05
  somewhere, whether I borrow against my existing Bitcoin or I
• 1:07:07
  go get a credit line or credit card or whatever.
• 1:07:09
  I borrow from a friend or family, I get a home equity
• 1:07:11
  line, whatever, I get credit. First thing I do is I buy
• 1:07:14
  something for tax depreciation. It could be a piece of real
• 1:07:18
  estate, it could be a solar credit deal, it could be an oil
• 1:07:23
  and gas deal, or it could be a Bitcoin miner.
• 1:07:25
  OK, so first thing I'm going to do is I'm going to borrow a
• 1:07:28
  little bit of money off a credit card or credit line.
• 1:07:30
  I'm going to buy some Bitcoin miners or some sort of
• 1:07:31
  depreciation and I'm going to offset some of my income,
• 1:07:34
  whatever I can afford. If I can get 20,000 of credit,
• 1:07:36
  I'm going to offset $20,000 and then let's say so $100,000
• 1:07:41
  paying 40,000 to tax. I have 60,000 leftover.
• 1:07:44
  Now instead of paying 40,000 tax, I only pay 20,000 tax.
• 1:07:48
  So I, I made an extra 20 grand that was normally going to go to
• 1:07:51
  the government. Now I got to keep.
• 1:07:52
  So step number one credit to get depreciation.
• 1:07:54
  I end up with more money. I take that more money and I buy
• 1:07:58
  more Bitcoin. I buy more assets.
• 1:08:01
  Now I rinse and repeat on that until the asset base gets a
• 1:08:06
  little bit bigger, that now I can continue to borrow against
• 1:08:10
  my credit lines and my asset base to offset my income and
• 1:08:14
  also to start augmenting my lifestyle spending.
• 1:08:17
  So now it's offsetting my my taxable income and it's also
• 1:08:21
  paying part of my bills. And I continue in that hamster
• 1:08:25
  wheel in that rinse and repeat flywheel until the asset base
• 1:08:28
  gets big enough to now buy depreciation to offset 100% of
• 1:08:34
  my income and offset 100% of my living expenses.
• 1:08:38
  And at that point, I've broken free of the system.
• 1:08:40
  I'm out of the rat race because remember, my income cannot keep
• 1:08:43
  up with the pace of inflation, but Bitcoin is beating the pace
• 1:08:47
  of inflation. So once I start with the
• 1:08:50
  depreciation to get more money right now, and I continue doing
• 1:08:54
  that until I've broken free reach escape velocity and at
• 1:08:57
  that point my wealth will compound faster than the rate of
• 1:09:01
  appreciation, faster than my rate of spending and I will
• 1:09:05
  never run out of Bitcoin. And then back to the first
• 1:09:07
  question you asked me. So now that I've created this
• 1:09:10
  system where every year gets me depreciation and then
• 1:09:14
  depreciation allows me to put more cash into the assets and
• 1:09:16
  the assets pay for my life. Once I've built that system out
• 1:09:20
  and it's working, it's functioning, it's mapped out,
• 1:09:23
  it's written on paper, the accounts are up, that's the
• 1:09:26
  system I passed to my kids. If I died today, if you died
• 1:09:31
  today, heaven forbid, I hate to say that if I died today, my
• 1:09:36
  wife, or if my wife and I died, my kids would get my assets,
• 1:09:40
  what would they do Now? We have like a trust and we have
• 1:09:44
  a will. So like they can call the
• 1:09:45
  attorney and whatever. So the attorneys like, cool, you
• 1:09:47
  got all this money, but what do they do with all that money,
• 1:09:50
  which is why they go broke. And sure, I could.
• 1:09:53
  Well, I want to teach my kids about business and I went, I can
• 1:09:56
  do that. But why not just pass the system
• 1:09:58
  down that just automatically runs for them?
• 1:10:01
  Absolutely. So all of this system requires a
• 1:10:05
  form of leverage, right? You're leveraging because and
• 1:10:10
  you've said that the real enemy isn't leverage, it's for
• 1:10:14
  selling. What actually causes for selling
• 1:10:17
  in practice? Yeah, Warren Buffett said that
• 1:10:19
  number one rule of investing is don't lose money.
• 1:10:22
  He said #2 rules don't forget number one.
• 1:10:24
  I think it's different. I think number one rule
• 1:10:26
  investing is never be a force seller.
• 1:10:29
  So a force seller means right. So because assets are volatile,
• 1:10:34
  what happens is let's say like in in the year 2008, I had sold
• 1:10:37
  a couple businesses I had, I bought, I put everything into
• 1:10:39
  real estate in Southern California.
• 1:10:41
  Real estate dropped 60%. I couldn't afford to cover the
• 1:10:45
  payment on those and I had to give some of those properties
• 1:10:47
  back. Short sale, I'm giving back to
• 1:10:48
  the bank or whatever, right? So I was a force seller at the
• 1:10:51
  bottom of the market. If I could have waited a couple
• 1:10:54
  years, the property values came back up.
• 1:10:56
  If I could have just waited a couple more years, I would have
• 1:11:00
  kept was $20 million in real estate.
• 1:11:02
  I would still had that now have been worth even more, but I
• 1:11:04
  couldn't. I was a forced seller at the
• 1:11:06
  bottom because I didn't have the liquidity available to ride the
• 1:11:11
  volatility. So we understand that Bitcoin is
• 1:11:14
  a volatile asset, which is what we want.
• 1:11:16
  I want Bitcoin to go volatile to the upside, but I understand
• 1:11:20
  that it ebbs and flows. So I need to have enough
• 1:11:23
  liquidity to ride the volatility without being a for seller.
• 1:11:27
  Back to Sailor as an example. You see all the pundits on
• 1:11:30
  Twitter that don't want to talk about, oh, if Bitcoin drops to
• 1:11:32
  this price, he's going to be a for seller.
• 1:11:34
  He's like, no, I'm not. There's nothing that's going to
• 1:11:36
  force me to sell. So that's what I mean by being a
• 1:11:39
  for seller. So what mental framework do
• 1:11:42
  listeners need to adopt if they want Bitcoin to fund their life
• 1:11:46
  without killing the compounding? That's a good question.
• 1:11:53
  Unfortunately, identity politics and just the education system
• 1:11:56
  today has got us thinking in just like victim mentality
• 1:11:59
  mindset. So I think a lot of people will
• 1:12:02
  go, that sounds too risky, that sounds too dangerous, I could
• 1:12:05
  get it wrong. I don't need to do that.
• 1:12:07
  I couldn't do that. It sounds too complex.
• 1:12:09
  And so it's sort of like victim mentality.
• 1:12:11
  So what I would probably urge people to do is think of the
• 1:12:14
  four minute mile. The very fact that other people
• 1:12:17
  are doing it means that you can do the very fact of that.
• 1:12:21
  And so all we have to do is find other people that we can see a
• 1:12:23
  model of, and then we just model those things.
• 1:12:26
  And so that would be the mindset.
• 1:12:27
  The other mindset, I would say, is that whether you take action
• 1:12:31
  and do this or not, either way you've taken action.
• 1:12:34
  You've taken action to not do it or do it.
• 1:12:37
  And there is no absence of risk. If I do it, it's risky.
• 1:12:41
  And if I don't do it, it's also risky.
• 1:12:44
  And so really it's about which risk do I choose and how do I
• 1:12:46
  mitigate either of those. And so I would just say you
• 1:12:49
  don't have to be risky. You can use little bits of
• 1:12:53
  leverage. I don't have to go surf 30 foot
• 1:12:55
  pipeline. I can just go out to 1 foot
• 1:12:57
  waves here on Miami Beach and that's way less risky and I'm
• 1:13:00
  getting a little bit of leverage, a little bit.
• 1:13:02
  The chance of me drowning in knee deep water in Miami Beach
• 1:13:05
  is very low. If I go into 30 foot waves in
• 1:13:07
  pipeline, it's higher. And so then you can choose the
• 1:13:09
  level of risk that you want. It's not like an all or nothing
• 1:13:12
  thing. It's like sailors goal is a 30%
• 1:13:15
  leverage. Maybe you target A5?
• 1:13:18
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• 1:14:16
  This was what I call the year of victory for Peter Schiff.
• 1:14:22
  You know, this was like one of the only Thanksgivings I can
• 1:14:25
  remember where you know that you know that great uncle that you
• 1:14:29
  have that grandfather, you know, is coming to you and said, ha,
• 1:14:33
  you know, the SNP gold silver took Bitcoin to school.
• 1:14:39
  Everybody was expecting this, this this amazing year.
• 1:14:43
  The Trump administration coming in the first pro Bitcoin
• 1:14:46
  president, a more positive regulatory environment.
• 1:14:50
  What the hell happened? Yeah, good question.
• 1:14:55
  So what I would say, and actually this is the opening
• 1:14:58
  that Danny started with with Michael Saylor and I think
• 1:15:00
  that's what put set the tone for the whole interview.
• 1:15:03
  And he answered, he opened with almost the same question, but he
• 1:15:06
  framed it different. He said, so 2025 was a pretty
• 1:15:09
  disappointing year for Bitcoin. And Michael say it was like
• 1:15:12
  disappointing what? So Warren Buffett would say that
• 1:15:16
  price is what you pay, value is what you get.
• 1:15:18
  Warren Buffett would say that I've never bought a stock.
• 1:15:21
  I buy companies, the companies happened to trade public, but I
• 1:15:24
  didn't buy the stock. He says don't ever buy one thing
• 1:15:27
  for a day that you wouldn't hold for 10 years.
• 1:15:28
  So what does all that mean? And, and to answer your
• 1:15:31
  question, he doesn't buy this, he doesn't buy the the stock, he
• 1:15:34
  buys the company. So I don't look at the the the
• 1:15:37
  price of the stock. I'm not looking at the daily
• 1:15:39
  mark to market price. I'm looking at what the company
• 1:15:41
  is doing. I want to understand the value
• 1:15:43
  of the company because I believe that the company is creating
• 1:15:45
  value over the long term, the stock price will adjust.
• 1:15:48
  So when we look at Bitcoin price, maybe you're a little
• 1:15:51
  disappointed partly because you brought your own preconceived
• 1:15:53
  notions into that of where you think that price target would
• 1:15:55
  be. Now, as Sailor pointed out on
• 1:15:57
  Danny, so I'm not, you know, I'm repeating for what he said, but
• 1:16:00
  it's true. Obviously we made a new all time
• 1:16:02
  high in quarter 4. That's pretty much the end of
• 1:16:05
  the year. Yes, we ended December down, but
• 1:16:08
  in quarter four we made a new all time high.
• 1:16:10
  So like, come on guys. Like really number one.
• 1:16:13
  But #2 back to the Warren Buffett lens.
• 1:16:15
  If we look at the value, the underlying value, we saw a
• 1:16:19
  massive change in hands of Bitcoin ownership, which I don't
• 1:16:22
  like, but it's unfortunate. It's an important necessary, we,
• 1:16:26
  we shifted massive from weak retail hands to cold storage
• 1:16:31
  institutional hands. And I want Bitcoin for the
• 1:16:34
  people. So I'm not happy about it, but
• 1:16:36
  it's also part of the process of this.
• 1:16:37
  And So what we saw was this consolidation and a transfer
• 1:16:41
  from weak hands to strong hands. So that's positive number one.
• 1:16:44
  Number two, you mentioned we saw a 180° shift in the political
• 1:16:49
  winds 100 we went from the Biden administration Operation Choke
• 1:16:51
  .2 point O or three-point O or wherever on at this point right
• 1:16:54
  now. Elizabeth Warren.
• 1:16:56
  I mean, if Kamala would have won, who knows what would have
• 1:16:58
  happened. And now we have a pro Bitcoin
• 1:17:01
  administration, the Trump, I mean Trump who has controlling
• 1:17:04
  interests of DJDJT media has been buying billions of dollars
• 1:17:09
  of Bitcoin. His sons are not following in
• 1:17:11
  his footsteps and building a real estate empire.
• 1:17:12
  His sons are building Bitcoin empires.
• 1:17:14
  Like we couldn't have a different shift.
• 1:17:16
  So that is massively bullish. If you look at the number of or
• 1:17:22
  let's talk about mining, if you look at the hash power of the
• 1:17:24
  network, it's never been higher. It's never been more secure.
• 1:17:29
  I mean, so from so many benchmarks, we can see that the
• 1:17:32
  that Bitcoin itself, the value has never been better.
• 1:17:36
  It was a massive year. Maybe the rice should have got
• 1:17:39
  150, maybe it maybe at 1:26 it was a little low.
• 1:17:42
  I mean, maybe it should be at 176.
• 1:17:44
  I don't know what number you had in your mind.
• 1:17:45
  So maybe the price should have been a little bit higher.
• 1:17:47
  But I think when I look at the underlying fundamentals, they've
• 1:17:50
  never been better. Not to bounce back, but just for
• 1:17:52
  a second with the Bitcoin treasury companies, Metaplanet
• 1:17:55
  is way down, but it's a way better company today than it was
• 1:17:58
  at its peak. Micro strategies price is way
• 1:18:00
  down, but it's a way better company today.
• 1:18:02
  And so that's the way I'd look at Bitcoin as well.
• 1:18:04
  Yeah. And and I agree with that.
• 1:18:06
  And I think it was, it was, it was a it was a humbling year and
• 1:18:09
  you buried the lead there, which is the aspect of expectations
• 1:18:15
  and expectations in Bitcoin. Bitcoin has a way of taking your
• 1:18:20
  expectations and literally grinding it into atoms.
• 1:18:24
  Humbling you? Yeah, absolutely.
• 1:18:26
  And I think a lot of people heading into the year, because
• 1:18:30
  Trump was elected, had very high expectations of what Bitcoin
• 1:18:35
  would do and then also previous cycle performances as well.
• 1:18:39
  And then if you take that combination together, right,
• 1:18:43
  you, you end up where, where we are today, right?
• 1:18:46
  You end up with interviews like with Danny and Sailor.
• 1:18:50
  And, but I think it was healthy. I think this is good for the
• 1:18:53
  community because once Bitcoin truly bounces back, all these
• 1:18:58
  treasury companies are going to bounce back or not all of them,
• 1:19:01
  but most, a lot of them are going to bounce back 2 * 3 times
• 1:19:06
  as hard. And I think that this cycle.
• 1:19:08
  And I want to get your thoughts on this, Mark.
• 1:19:10
  I think that last cycle, Michael Saylor and the country of El
• 1:19:14
  Salvador paid their dues. So for the first time, a nation
• 1:19:18
  state bought bitcoins somewhat at the top.
• 1:19:21
  It went down. Michael Saylor, a big, you know,
• 1:19:24
  publicly traded company bought Bitcoin, went down.
• 1:19:28
  Both wrecked. You know, they survived the 2222
• 1:19:32
  bear market, and then they got rewarded.
• 1:19:34
  This is a story that all of us Bitcoiners go through.
• 1:19:37
  We call it paying the price of tuition.
• 1:19:40
  I think this cycle is where Wall Street is paying their price of
• 1:19:45
  tuition. I think once we get over the
• 1:19:47
  hump and Bitcoin starts to pick up again, I think it's just a
• 1:19:52
  matter of time before the mag 7, you know, start to say, hey,
• 1:19:56
  listen, this could be detrimental to our to our
• 1:20:00
  shareholders if, if we don't have Bitcoin.
• 1:20:03
  Yeah, I would agree with that. I think to your point, the the
• 1:20:07
  cycles are brutal and I I started buying Bitcoin in 2015.
• 1:20:10
  So I've been through a few of them.
• 1:20:14
  It gets a little easier, but it's not easy where I've made
• 1:20:18
  the mistakes paying my dues. When I look back to the 2018
• 1:20:23
  bear marker, 2022 was I never sold.
• 1:20:26
  I never sold the bottom. I never sold it all, but I
• 1:20:29
  didn't buy with conviction in the dips because even me, I'm
• 1:20:33
  like, Oh my God, I remember in 2018, right, a Bitcoin dropped
• 1:20:36
  from 20,000 down to whatever was like $3000 and it's like, Oh my
• 1:20:39
  God, is it ever going to come back?
• 1:20:41
  I had all this money and now it's this much.
• 1:20:43
  What did I do? Right?
• 1:20:46
  I'm not going to sell it. But like, I don't know, I kind
• 1:20:49
  of have enough. I don't need if I need to buy
• 1:20:50
  anymore, right? And and and each cycle and now
• 1:20:53
  it's only down 30%, but the sentiment is so low.
• 1:20:55
  It's like, man, I don't know if it's going to come back and may
• 1:20:57
  keep dropping. So it's like the same thing, but
• 1:21:01
  I would I would agree with you, right?
• 1:21:02
  Like I said that the network has never been stronger.
• 1:21:04
  The hash power is continuing going up.
• 1:21:06
  The institutional adoption is stronger.
• 1:21:07
  The institutional rotation has been stronger.
• 1:21:10
  I think gold took some of the shine.
• 1:21:11
  I think that the Bitcoin four year cycle became like a self
• 1:21:17
  fulfilling prophecy. So many people expected it when
• 1:21:20
  the price dropped a little bit. And you know, it's a confluence
• 1:21:23
  of factors. Trump tweeted on October 10th
• 1:21:24
  that that he was going to put 100% tariffs on China that
• 1:21:28
  caused the market to stumble. Then you had a cascading
• 1:21:30
  effective of of leverage get wiped out across the crypto
• 1:21:33
  exchanges. You also had JP Morgan start the
• 1:21:36
  attack on micro strategy all on the same time frame.
• 1:21:40
  And then you had the four year cycle people going, oh, this is
• 1:21:43
  it, this is it, this is it. We should sell right now.
• 1:21:45
  And I think it became a self fulfilling prophecy.
• 1:21:48
  But shoot, if all we have is a 30% drawdown, that's not so bad.
• 1:21:51
  If you look from the bear market, 2022, as you said, this
• 1:21:53
  is the third drawdown of 30% we've had and it held and it
• 1:21:57
  held. So, you know, I think next year
• 1:22:01
  shows that that four year cycle is over. 2026 kind of shows that
• 1:22:05
  and yeah, yeah, all these people have vindicated the treasury
• 1:22:07
  companies will be the one that will come out on their side of
• 1:22:09
  having paid their dues. I.
• 1:22:11
  Have 100% agree now, Mark, you made this amazing presentation
• 1:22:16
  Bitcoin Mina, last time you came on the show, you were talking
• 1:22:19
  about it, but you were basically laying out, you know, the
• 1:22:25
  future, you know, decade or two and Bitcoin and what the
• 1:22:28
  potential is. And the reason I want to bring
• 1:22:31
  that up is I think this cycle because Bitcoin didn't perform
• 1:22:36
  to the expectation that people performed it to again, keyword
• 1:22:40
  expectation. I think perhaps people still
• 1:22:45
  believe that, you know, listen, they missed the boat.
• 1:22:49
  There's no opportunity here. The diminishing returns are are
• 1:22:52
  just too big, you know, So they start to gamble a little bit,
• 1:22:56
  they start to buy whatever mean coin is the current thing.
• 1:23:00
  They get absolutely wrecked. NYC coin or whatever.
• 1:23:02
  Yeah, they, they, they, they buy the, the latest and greatest
• 1:23:05
  whatever mean coin, right? The, the, the, the, you know,
• 1:23:07
  'cause they feel like they, they, they missed the boat, like
• 1:23:09
  it Bitcoins not going to give them the financial freedom that
• 1:23:13
  they have hoped for. I think they're wrong.
• 1:23:16
  I think the only difference is the time scales have changed,
• 1:23:21
  but I think the opportunity is still there.
• 1:23:23
  This is a subject that you've talked about at length.
• 1:23:26
  Could you break it down? Could you give the people a
• 1:23:29
  little bit of hope so? First of all, I think, I think
• 1:23:33
  just that overall sentiment is very strange of I am too late, I
• 1:23:39
  missed the boat. I, I, I don't understand how
• 1:23:41
  people come with that mindset. And the reason why is back to
• 1:23:44
  the financial system. The entire financial system is
• 1:23:47
  about discounted future cash flows.
• 1:23:50
  You're buying stocks on APE ratio.
• 1:23:53
  I'm buying the MAG 7 at a 30 to 50 times PE ratio, meaning I'm
• 1:23:57
  paying a price today. It's going to take 30 to 50
• 1:23:59
  years for them to make enough cash flow to be worth that.
• 1:24:01
  So I'm buying Tesla, Apple, Google, whatever because I think
• 1:24:05
  it's going to be worth more in the future.
• 1:24:08
  Nobody goes. Oh, well, Google used to be
• 1:24:10
  cheaper, so it's too late. Like, dude, you buy Google, she
• 1:24:14
  has to be worth more in the future.
• 1:24:14
  I buy gold because it has to be worth more in the future.
• 1:24:17
  So like, I look at all financial assets as how much it will be
• 1:24:20
  trying to guess, trying to speculate, trying to put some
• 1:24:23
  model into what I think it'll be worth in the future.
• 1:24:25
  If Apple, Tesla, Google makes this cash flow, it will be worth
• 1:24:28
  this in the future. But when they come to Bitcoin,
• 1:24:30
  they go, oh, but in the past, like, no, I don't understand why
• 1:24:35
  they would bring that number one.
• 1:24:36
  OK, So what we want to do is think about where does Bitcoin
• 1:24:38
  go in the future? So we need to come up with some
• 1:24:40
  sort of valuation models of where we think it can be now to
• 1:24:44
  the presentation. I gave a Bitcoin mean and I sort
• 1:24:45
  of gave where I think it'll be 203020402050.
• 1:24:49
  And the way that I did it was using economic models, but also
• 1:24:54
  I use like a venture capital lens.
• 1:24:56
  So the way a venture capitalist thinks, I have a shout out to my
• 1:24:59
  Bitcoin partners, a Bitcoin opportunity fund James lavish
• 1:25:02
  layer of the par David Foley and we deploy venture capital into
• 1:25:05
  the into the Bitcoin space and help Bitcoin companies grow.
• 1:25:07
  And the way we do it is we go, OK, this company's starting up,
• 1:25:10
  but this is the market they're going into.
• 1:25:13
  These are the markets that it's disrupting.
• 1:25:15
  How much do we think it can get from those markets?
• 1:25:18
  So for example, if we were investing into Uber in the early
• 1:25:21
  days, do you want to invest in this app where you can get a
• 1:25:24
  ride? You mean like a taxi?
• 1:25:27
  Well, it's sort of like a taxi, but you can get like a black
• 1:25:29
  car, but it's easy because your credit card is in there.
• 1:25:31
  It's like, but can't we do that now?
• 1:25:33
  Well, it's different. And how much is worth 100
• 1:25:35
  million, a 100 million? What are you talking about?
• 1:25:37
  Well, the taxi is this big, the limos is this big, the van.
• 1:25:39
  So if I get 5% of that, right, so then I come up with some sort
• 1:25:42
  of future valuation. So with Bitcoin, we could do the
• 1:25:44
  same thing. What are the markets Bitcoin is
• 1:25:46
  disrupting? How big are those markets and
• 1:25:48
  what percentage of those markets do we think we can capture?
• 1:25:52
  So there's two things that I used for this.
• 1:25:54
  Number one, how big will the overall market or the pie get?
• 1:25:59
  And then two, we speculate as to what percentage we think Bitcoin
• 1:26:03
  can acquire. So that's how we do it from a
• 1:26:04
  venture capital lens. So what do we do is we
• 1:26:06
  understand that when we look at assets, there's different types
• 1:26:10
  of assets. I mentioned that earlier, I like
• 1:26:12
  to break assets into four different categories.
• 1:26:14
  But these assets are what we call store value assets.
• 1:26:16
  So unlike a car, RVA, boat, that's an asset on your balance
• 1:26:20
  sheet, but it's not a store of value asset.
• 1:26:22
  A store value asset is where money goes and sits.
• 1:26:24
  So that's typically real estate is the biggest, but it's
• 1:26:27
  equities, it's stocks, it's bonds, it's gold, it's
• 1:26:31
  collectibles, it's fine art. Those are things people put
• 1:26:33
  their money into. And then Bitcoin fits into that.
• 1:26:35
  And so that bucket, that pie is growing at the rate of monetary
• 1:26:40
  debasement or liquidity increase.
• 1:26:42
  So as more dollar units are created, they buy less and then
• 1:26:45
  the valuation of that store value bucket goes up.
• 1:26:48
  So number one, we realize that that's not a static pie.
• 1:26:51
  That pie is getting bigger or more valuable or, or in nominal
• 1:26:54
  terms anyway. So if I remember correctly, in
• 1:26:57
  2010, that store value bucket was like about 300 trillion.
• 1:27:02
  Today it's about a quadrillion and at the rate of monetary
• 1:27:07
  increase. So the the CBO, Congressional
• 1:27:09
  Budget Office of the United States, they project out the
• 1:27:12
  spending, the deficit, the budget, the debt through 2054
• 1:27:16
  for 30 years. So they tell us how much money
• 1:27:20
  will be printed in the next 30 years.
• 1:27:22
  And they're going to undershoot. That is going to be way more
• 1:27:24
  than they're saying. But let's just if, if we just
• 1:27:27
  use the numbers they give us and we're not going to talk about
• 1:27:30
  what AI could do to that and all that, but just using the numbers
• 1:27:33
  that they give us. So we apply that the rate of
• 1:27:36
  monetary and debt increase to that store value buckets.
• 1:27:39
  And so we're 300 trillion, we're at a quadrillion today.
• 1:27:41
  That's about it should be about 1.6 quadrillion by 20-30.
• 1:27:45
  I believe it's like 3 1/2 quadrillion by 2040 and it was
• 1:27:49
  like 88. It's been a while since I looked
• 1:27:52
  at numbers. It was like 88 quadrillion by
• 1:27:54
  2050. OK.
• 1:27:55
  So then now that we know that how big that pie is getting,
• 1:27:59
  what percentage of that pie do we think Bitcoin can acquire?
• 1:28:03
  Now from a venture capital lens they potential, you know
• 1:28:09
  investment says we think we can get 5% of the market in five
• 1:28:13
  years. OK, sounds reasonable.
• 1:28:16
  Someone else says I think I can get 80% of the market in one
• 1:28:18
  year. OK, that's probably not
• 1:28:19
  reasonable. So we try to come up with what
• 1:28:21
  we think is reasonable to make this a little bit easier to
• 1:28:24
  understand. Uber and Airbnb were both able
• 1:28:28
  to acquire 10% of their markets in less than 10 years.
• 1:28:33
  OK, so how much of that pie do we think Bitcoin can get now?
• 1:28:37
  It's certainly better, right? It's, it's more portable than
• 1:28:39
  gold, right? It's more secure, it's more
• 1:28:41
  stable. We, we, we compared it to real
• 1:28:43
  estate, which is the biggest bucket.
• 1:28:44
  There's no maintenance, no tenants.
• 1:28:46
  So, so it's, it's like a, there's, there's 30 to 40
• 1:28:49
  trillion in offshore bank accounts.
• 1:28:50
  It's certainly better than offshore bank accounts, right?
• 1:28:51
  So how much can we get from offshore bank accounts, for
• 1:28:53
  example? So if Bitcoin can get to just
• 1:28:59
  1.25% by 2030, 1.25% and that would be what would that be?
• 1:29:09
  20 years of Bitcoin? 22 years of Bitcoin, not 1022
• 1:29:14
  years. It gets to 1 and a 1 1/4%.
• 1:29:16
  Now Airbnb and Uber got 10% in 10 years.
• 1:29:18
  I'm talking 1 1/4%. That would be $21 trillion or $1
• 1:29:23
  million per Bitcoin by 20-30. Base case.
• 1:29:27
  I mean, yeah, obviously we have no crystal ball, but I'm using
• 1:29:30
  the venture capital lens and I think that's more than
• 1:29:32
  realistic. I absolutely agree with you.
• 1:29:35
  Yeah. Then we project that out.
• 1:29:36
  So by 2040, so now we're at over 30 years, if it can get to 8% of
• 1:29:43
  the bucket, that would bring it to $14 million per Bitcoin.
• 1:29:48
  And I believe by 2050 I had to get into like 15 or 20% of the
• 1:29:53
  bucket, and that puts it at like $40 million per Bitcoin.
• 1:29:58
  Holy cow. Yeah, but again, it's not the
• 1:30:02
  the reason it doesn't sound unreasonable, Mark, is your
• 1:30:05
  logic behind it, right? The logic behind it, if you
• 1:30:09
  break it down like that, because I see a lot of people do this,
• 1:30:12
  it's like, oh, these, this price prediction, the this and this
• 1:30:15
  and that. But it's, if you apply that VC
• 1:30:19
  logic towards this type of thinking and it's like, what
• 1:30:23
  percentage of, you know, I, I love the way that you broke it
• 1:30:25
  down. It's like, what percentage of
• 1:30:26
  the market could you get right? Like 1% is not, it's not crazy,
• 1:30:31
  it's not unreasonable, but look at where the price would be if
• 1:30:36
  it gets to 1%. And then you compare Bitcoin
• 1:30:40
  with all these other assets. Like the question is, is Bitcoin
• 1:30:43
  better than gold? Absolutely, 100%.
• 1:30:45
  I can break it down. It's like, look, the physical
• 1:30:47
  characteristics you can, you can transport anywhere around the
• 1:30:50
  world. It's censorship resistant.
• 1:30:52
  There's absolute scarcity. Gold doesn't have any of those
• 1:30:55
  things. Just for Bitcoin to reach the
• 1:30:57
  market cap, just for Bitcoin to reach the market cap of gold
• 1:30:59
  would put Bitcoin at $1.5 million per coin, right?
• 1:31:04
  That base case is not unreasonable.
• 1:31:07
  But I think because we got so chewed up because of the
• 1:31:11
  expectations that we had heading into 2025, I think that it it's
• 1:31:15
  it, it seems like an impossible mountain to climb, I would say.
• 1:31:19
  There's a, there's a few other metrics that I would have put
• 1:31:22
  over the top of it to really try to drive this home.
• 1:31:25
  So when you look at technology, I've started, I started two tech
• 1:31:28
  companies that had big exits. I've been investing in tech for
• 1:31:30
  a long time. And so some other models we
• 1:31:31
  would look at is you would use something called the diffusion
• 1:31:34
  of innovation, which is like a bell curve.
• 1:31:37
  And then we'd use like an S curve.
• 1:31:38
  And an S curve helps us understand how much market
• 1:31:42
  penetration we can get over a period of time.
• 1:31:44
  And so the way an S curve works is it it's like a sideways S,
• 1:31:49
  the time it takes to go from zero to 10% is the same time it
• 1:31:51
  takes to go from 10 to 90%. Typically about 80% penetration
• 1:31:55
  is considered full market penetration.
• 1:31:57
  There's still people today who don't have like Internet and and
• 1:32:01
  you know, cable TV. Did you want to say that?
• 1:32:03
  Where do you think we are in the S?
• 1:32:05
  Group Yeah. So there was a there was an
• 1:32:06
  article that just came out about a week ago.
• 1:32:07
  I was going to make a video on it, but I haven't got a chance
• 1:32:09
  to write it out yet. But it showed a whole bunch of
• 1:32:12
  data and they believe we've now just hit 10%.
• 1:32:17
  Of Bitcoin adoption. Of it was crypto adoption, so I
• 1:32:20
  haven't really got through the weeds to understand the exact
• 1:32:22
  details, but about 10% of Bitcoin adoption, yes.
• 1:32:25
  And so we've just hit that now in the USI think we've gone past
• 1:32:29
  that quite a while ago, but this is like globally.
• 1:32:32
  And So what that means is that now we are I guess what, 17
• 1:32:36
  years into it. So now it could take another, I
• 1:32:39
  don't know, 15 years to get to 90%.
• 1:32:41
  But what that really means is the S curve, it turns parabolic
• 1:32:46
  and then it so it's, it goes up slow, it turns parabolic and
• 1:32:49
  then it evens out again. So we're entering the parabolic
• 1:32:52
  phase. And so, and the reason why is in
• 1:32:55
  the beginning you had, you had small retail money people
• 1:32:58
  bringing 10s of dollars or hundreds of dollars and then
• 1:33:01
  thousands of dollars and then 10s of thousands.
• 1:33:03
  But today you have hundreds of billions coming in.
• 1:33:06
  So we enter this parabolic phase.
• 1:33:07
  And so while most people Sailor talks about the law of law of
• 1:33:10
  large numbers, the larger the asset gets, the lower the
• 1:33:14
  volatility drops because it's harder to move the basket.
• 1:33:17
  While that sure is the law of large numbers.
• 1:33:19
  And of course that is the law. It's the bigger it gets, the
• 1:33:22
  harder to move, of course. But when you think about when
• 1:33:27
  you have a technological revolution cycle and you overlay
• 1:33:31
  financial capital onto that and you look at the way investors
• 1:33:34
  come into these cycles, phase two, which we're going into the
• 1:33:37
  parabolic phase is what's known as the frenzy phase.
• 1:33:40
  That's where the institutions come in.
• 1:33:41
  That's where the sovereigns come in.
• 1:33:43
  So we, we went from retail bringing small checks to
• 1:33:46
  sovereigns bringing in massive checks in the S curve, parabolic
• 1:33:50
  part of the adoption cycle of the technology.
• 1:33:54
  We, while I do believe obviously it's the law of large numbers,
• 1:33:58
  of course that makes sense, but we could potentially see Kagar
• 1:34:01
  turn back up for a while. I would agree with that.
• 1:34:04
  And I was actually talking to someone who worked in like the
• 1:34:09
  corporate world. And the way that he, he told me
• 1:34:11
  and the way that he described it to me is like, look, Nico,
• 1:34:14
  there's one catalyst that if this catalyst happens, like
• 1:34:18
  we're going to $1,000,000 tomorrow.
• 1:34:20
  And I said, what is that? He's like, look, the moment the
• 1:34:23
  United States government announces that they are actively
• 1:34:27
  buying Bitcoin, you're going to see a frenzy the likes of which
• 1:34:30
  you've never seen before. And again, that would be the
• 1:34:34
  ultimate because right now it's like, look, they've established
• 1:34:37
  the, they've established the, you know, the, the, the Bitcoin
• 1:34:41
  strategic reserve, but it's via executive order.
• 1:34:45
  It's not via, you know, it's, it's so it's, it's, it's
• 1:34:48
  fragile, so to speak. But the moment the United States
• 1:34:52
  government announces, hey, we're actually accumulating Bitcoin,
• 1:34:57
  it's going to start a frenzy worldwide.
• 1:34:58
  I think Max Kaiser calls it the global hash war or something
• 1:35:01
  like that. So I want to get your take on
• 1:35:03
  that because I, I do agree with your theory.
• 1:35:06
  And, and, and, and, and, and it is ultimately a technology.
• 1:35:09
  So the S curve adoption applies, but you need that catalyst, I
• 1:35:13
  would say. And I think that Catalyst would
• 1:35:15
  be, you know, the most powerful country on the on the face of
• 1:35:19
  the planet with the most powerful money printer basically
• 1:35:22
  saying, OK, we're going to use the money printer to buy
• 1:35:25
  something that has absolute scarcity.
• 1:35:28
  Yeah, I think, I think there's other catalysts as well, but
• 1:35:31
  we'll talk about that for a second, I think.
• 1:35:33
  Yes, obviously, right. So when you have a country like
• 1:35:36
  El Salvador start buying Bitcoin, they're not really an
• 1:35:38
  influential nation. They're like one of the poorest
• 1:35:40
  countries in the world. And so because they bought it
• 1:35:42
  doesn't make other countries want to go buy it.
• 1:35:44
  Although he did start meeting with other heads of smaller
• 1:35:47
  countries, right? I think he met with 40 other
• 1:35:49
  country leaders, like shortly after them.
• 1:35:52
  But the United States, which is kind of funny because in my
• 1:35:55
  opinion, it would always be the last move because it's got the
• 1:35:57
  most to lose, right? It's got the reserve currency of
• 1:35:59
  the world. So you'd think everybody would
• 1:36:00
  move before the US. But if the US moves, which is
• 1:36:03
  the top of the heap with the reserve currency, then of
• 1:36:05
  course, yes, it's the most fun to a nation.
• 1:36:06
  Everybody would be forced to buy.
• 1:36:08
  So that would certainly be a catalyst to your point, right?
• 1:36:11
  We got an executive order. I mean, what we just found out
• 1:36:14
  they're selling going on by I mean, so like who knows where
• 1:36:17
  that's at. We probably are quite a way from
• 1:36:19
  from buying happening. But I think the, the, the other
• 1:36:21
  catalyst that's there is you mentioned gold.
• 1:36:25
  I mean, holy crap, 4600 bucks an ounce silver hit $99.00.
• 1:36:28
  I mean, that is absolutely insane.
• 1:36:30
  And it's been smashing Bitcoin in the last year.
• 1:36:33
  But what's happening on the gold front is what's going on in
• 1:36:39
  China, in Hong Kong. And yesterday Trump announced
• 1:36:44
  25% tariffs against Iran. All of that is the story.
• 1:36:49
  So what what's happening is the US dollar is the reserve
• 1:36:52
  currency of the world. It's the reserve asset of the
• 1:36:56
  world. So what does that mean?
• 1:36:57
  That means that that's what central banks hold, an FX
• 1:37:01
  currency holds. They hold in their reserves.
• 1:37:03
  That's what they hold in their, in their bank grant.
• 1:37:06
  But what we've seen is that's dropped from about 60% down to
• 1:37:09
  about 40% in the last 10 years. But that's what they hold in
• 1:37:12
  reserves. But it, but the dollar isn't
• 1:37:14
  just the reserve currency. The dollar is also the payment
• 1:37:17
  network of the world. So it's the Visa like you can go
• 1:37:20
  anywhere and use Visa. That's what they, they have the
• 1:37:22
  benefit of that. So you have the dollar payment
• 1:37:23
  network. And so the US is able to slap
• 1:37:25
  sanctions on people like, hey, no, no network for you.
• 1:37:29
  Well, what China's been doing is they've been actively working on
• 1:37:31
  setting up a parallel financial system, a whole new set of rails
• 1:37:34
  that are on gold. And they've been doing it
• 1:37:36
  through Hong Kong with the Shanghai Gold Exchange.
• 1:37:39
  And what they're using is their own currency, the RMB, which
• 1:37:42
  nobody would ever use or trust that money.
• 1:37:44
  No one would ever reserve that money, But they're not relying
• 1:37:46
  on that. They're using the RMB for the
• 1:37:49
  liquidity piece, but they're settling in gold.
• 1:37:51
  People trust gold. And not only have they done
• 1:37:55
  that, it's pretty much up and operational in Hong out of Hong
• 1:37:57
  Kong. They've already opened up swap
• 1:38:00
  lines with I think 32 countries, pretty much every country but
• 1:38:03
  the US and So what that means is that now all these countries can
• 1:38:07
  do business with each other, settle in gold and completely
• 1:38:11
  bypass It's like instead of using the the Fiat rails like
• 1:38:14
  swift, I'm going to send you Bitcoin.
• 1:38:15
  That's basically what we're talking about here, right?
• 1:38:17
  So when the US continues to sanction, sanction, sanction now
• 1:38:21
  another 25% sanctions on Iran is state, which by the way, what's
• 1:38:24
  happening in Iran is terrible. And I'm, I wish we could do
• 1:38:28
  something. I'm just not sure the tariffs
• 1:38:30
  are, are the sanctions are a way to do that.
• 1:38:32
  Because what happens is every time we kick more people out of
• 1:38:35
  the party, they just go have a party somewhere else.
• 1:38:38
  And they're not coming back. You saw this with with Russia,
• 1:38:42
  right? The moment the United States
• 1:38:43
  build Russia, the whole theory was like, OK, this country's
• 1:38:45
  going to collapse, the government's going to go.
• 1:38:47
  That's not what happened. They just built around that,
• 1:38:49
  right? Like, I saw crazy videos of like
• 1:38:51
  shopping malls where like, they literally just changed the
• 1:38:54
  logos. But the products inside are
• 1:38:56
  exactly the same, same, right? So it it didn't work.
• 1:38:59
  And and again, do you think that Russia, even if the US drops the
• 1:39:03
  sanctions, do you think the United States is just going to
• 1:39:06
  go back and say, I mean, Russia is going to go back and say, oh,
• 1:39:09
  you know what, let's just use the suicide.
• 1:39:10
  They're never going to do that again.
• 1:39:12
  Not if there's an alternative, of course, which there is.
• 1:39:14
  So if there's no other party to go to, I'm just kind of mingling
• 1:39:17
  outside, but oh, there's another party right here, I'll go over
• 1:39:19
  there and I'm not going to go back to that party because these
• 1:39:21
  people let me do what I want to do.
• 1:39:23
  So where that where that ties back to Bitcoin, the other
• 1:39:25
  catalysts I'm talking about is that's obviously causing gold to
• 1:39:29
  catch a big bid. And gold's going to continue to
• 1:39:31
  pump really hard because central banks are now adding gold.
• 1:39:34
  So, so the US Treasuries in the reserve have dropped from 60 to
• 1:39:37
  40 and gold's gone up to 30. Like this is a big shift, right?
• 1:39:41
  But while gold is going to continue to catch a bid because
• 1:39:44
  that's happening from a sovereign level, we the people,
• 1:39:48
  the individuals, institutions are going to be running the
• 1:39:50
  Bitcoin. We're going to be ahead of the
• 1:39:52
  curve. We understand Bitcoin is a
• 1:39:53
  higher beta than gold is. And I think, I think, you know,
• 1:39:57
  JP Morgan called the debasement trade was gold and Bitcoin
• 1:40:01
  together. And I think we'll see the more
• 1:40:03
  institutional adoption of gold for now, but I think Bitcoin is
• 1:40:06
  also going to be catching a bit with that.
• 1:40:08
  Fantastic, ladies and gentlemen, Mark Moss in the Simply Studio.
• 1:40:12
  First interview in the Simply Studio.
• 1:40:14
  Guys, go check out the Mark Moss YouTube channel.
• 1:40:17
  One of my favorite creators. A man is so talented.
• 1:40:20
  The personal inspiration for me. Mark, thank you so much for
• 1:40:24
  joining me. Really appreciate it.
• 1:40:26
  I'll see you guys in the next Simply Bitcoin IRL.
• 1:40:28
  Take care, everybody.