Latest / Simply Bitcoin / Sam Callahan | Bitcoin In The Macro Landscape | Simply Bitcoin IRL

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Sam Callahan | Bitcoin In The Macro Landscape | Simply Bitcoin IRL · Simply Bitcoin

• 0:00
  Yeah, welcome to another episode of Simply Bitcoin IRL streaming.
• 0:04
  I'm recording live from Las Vegas, NV at the Real World
• 0:08
  Suite, courtesy of Tone Vase. I'm here at Unconfiscatable Day
• 0:12
  2, and we have a very special guest for you guys today.
• 0:16
  We have Sam Callahan. Consider him a friend at this
• 0:20
  point. He's a Bitcoin analyst and he's
• 0:22
  the author of The News Block. So before we jump into the show,
• 0:26
  I do want to give a very special shout out to Simply Bitcoin's
• 0:29
  lead sponsor. It's what makes this show
• 0:31
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• 0:32
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  To get started, go to bitcoinwell.com today and use
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  promo code simply BTC. All right, everybody, no more
• 0:58
  delay. Let's bring Sam up on stage.
• 1:02
  How you doing, Sam? It's been it's been a minute.
• 1:05
  I, I think the last time we saw each other.
• 1:08
  Abti, do you want to do the switching or should I do the
• 1:10
  switching? Thanks.
• 1:13
  So I think the last time we saw each other was in Malaida.
• 1:18
  So how's life, bro? Yeah, in in Bitcoin world.
• 1:22
  How's how's life in general? I miss you too.
• 1:26
  You know, your beautiful smile. I haven't seen it in a long
• 1:29
  time. So I hope all is well with you.
• 1:32
  Same brother. Yeah, I think Madeira was the
• 1:34
  last time. And man, I missed that place.
• 1:37
  That place is gorgeous. I hope Bitcoin Atlantis happens
• 1:40
  again. That was a fun time.
• 1:42
  Yeah. But did you hear it?
• 1:42
  It's it's going to be every four years.
• 1:44
  Did you hear that about that? Oh really?
• 1:47
  Yeah. Oh wow.
• 1:48
  Yeah. That makes those experiences
• 1:50
  scarce. That's a scarce experience.
• 1:52
  It's a scarce experience. It's a scarce experience.
• 1:56
  Yeah, man, that. Place is fun and we went to
• 1:58
  Porto afterwards. I don't know if you've been
• 2:00
  there, but that just gorgeous like northern Portugal.
• 2:04
  Yeah. Good food, good wine, and so
• 2:08
  good Bitcoin too. Good Bitcoiners.
• 2:10
  Yeah, it's. Good.
• 2:12
  You know, I've been working on different projects, just
• 2:15
  continuing to track the market share, My analysis, it's been a
• 2:19
  crazy ride, crazy year. A lot's happened and also I, I
• 2:24
  call this the the great Sideways Chop of 2024.
• 2:27
  I think that's how we'll remember it when we're old and
• 2:30
  drinking beers talking about it. You know, it's just been a wild
• 2:34
  sideways chop action shaking newcomers out, but it's been
• 2:38
  pretty par for the course in my opinion.
• 2:40
  Yeah, it's we'll have we'll be in our citadels drinking the
• 2:43
  beers, talking about the in these moments.
• 2:45
  But yeah, I mean, it has been quite choppy, bro.
• 2:48
  Like six months of of just, you know, you can call it sideways,
• 2:54
  but it has been kind of a downtrend and it's been brutal.
• 3:00
  I mean, I've been Bitcoin eight years and these last six months
• 3:04
  we're still pretty bad. So I think the question on
• 3:08
  everyone's mind is like, when is this going to end?
• 3:11
  And then I'm going to connect that with the FOMC meeting that
• 3:16
  happened today where everyone was expecting, you know, a 25
• 3:21
  basis points drop, But Powell just came in there and he just
• 3:24
  came in swinging. He's like, you know what, we're
• 3:27
  going to drop at 50 basis points.
• 3:29
  So Sam, what, what are your thoughts on this?
• 3:31
  Is this going to be bullish for the Bitcoin price?
• 3:33
  When's this consolidation going to ever end?
• 3:36
  Are we or or are we stuck at 58 K till the end of time?
• 3:42
  No, I think I think these rate cuts are kind of notable, but
• 3:47
  really the rate cuts have started from other major central
• 3:50
  banks for the last couple months.
• 3:51
  You had the Bank of England, Bank of Canada, ECB all start
• 3:56
  cutting rates and now the Fed has finally followed.
• 3:59
  And, you know, people will say that it's because of the weak
• 4:02
  economic data that has come in, and they're getting scared and
• 4:05
  spooked about a recession. I think we all know what it's
• 4:08
  really about. And it's the fiscal situation.
• 4:10
  In August this year, the fiscal deficit increased 90 billion
• 4:16
  more than people expected. And over the last 12 months, we
• 4:19
  exceeded $2 trillion. And that's when the unemployment
• 4:23
  rate is still at historically low levels, and the economy is
• 4:27
  kind of like trucking along. It's.
• 4:29
  Yeah, there's some weak data points here and there, and it's
• 4:31
  scaring people. But nothing's terrible right
• 4:34
  now. And there's a lot of green
• 4:35
  shoots in the economic data as well.
• 4:36
  That doesn't get a lot of attention.
• 4:38
  So you got to ask yourself, why is Jerome Powell coming out now
• 4:41
  and cutting rates? Not 25 basis points, it's 50.
• 4:45
  And I think it's because the fiscal situation.
• 4:48
  I mean, look at the interest expense.
• 4:49
  It's getting ridiculous. And, you know, pretty soon Luke
• 4:53
  Roman shared a chart that interest expense is going to
• 4:56
  outpace defense spending. And if they refuse to cut
• 4:59
  entitlements because of political issues and just
• 5:02
  difficult to do right, as well as defense spending in a in a
• 5:06
  period where geopolitical tensions are rising, well, what
• 5:10
  can they control? Well, they can control the
• 5:12
  interest expense and they can do that by cutting rates, right?
• 5:15
  And so I think that's what this is really about.
• 5:18
  And it just points to the real driver of inflation as well,
• 5:22
  which is the government spending and the fiscal side of the
• 5:25
  equation. And what's interesting is that
• 5:28
  interest rates, I mean, come on, it's when, when the debt debt
• 5:33
  gets to these levels, this is the fiscal dominance where
• 5:36
  interest rate policy actually becomes pretty ineffective both
• 5:41
  at stopping inflation and then arguably at, at stimulating it.
• 5:44
  Because a lot of people locked in really low interest rates at
• 5:49
  fixed, you know, 30 year mortgages or corporations turned
• 5:52
  out their debt to 20/30/22 at low interest rates.
• 5:57
  So honestly, like I don't really see how cutting rates is really
• 6:00
  going to impact economic activity that much unless it
• 6:03
  gets to like, you know, below 3.5% or really maybe after a few
• 6:08
  rate cuts, maybe we start to see some stimulant stimulative
• 6:11
  activity to, to the economy. But just one cut here and there.
• 6:15
  Like I don't really see how that's going to stimulate things
• 6:18
  given how much people have these like long term fixed debt at
• 6:22
  really low rates from the last 10 years.
• 6:25
  Yeah, and you know, it, it, it's the what fascinates me the most,
• 6:31
  Sam. And you know, Lynn has done
• 6:33
  incredible work on this. You have done incredible work on
• 6:35
  this. James Lavish, I think coined the
• 6:38
  term the the, the debt spiral, something like that.
• 6:45
  It, it, it clearly this is unsustainable.
• 6:48
  But when do things break? Because it seems like, you know,
• 6:53
  us bitcoiners have been like, you know, this is this is
• 6:56
  absurd. They're printing records amount
• 6:58
  of money like this is ridiculous.
• 7:01
  There's no way they can keep this up.
• 7:03
  But it always just seems like, you know, they can keep kicking
• 7:06
  that can down the road. Like when will things get to a
• 7:10
  point where just the interest on the debt alone is it, it, it
• 7:16
  gets to levels where it just it, it, it causes instability
• 7:22
  politically, financially for the country?
• 7:24
  And then what are the implications for that for the
• 7:27
  world? Because, you know, the US is the
• 7:29
  leader really. So, you know, when's this going
• 7:32
  to end? And I mean, there's no way you
• 7:36
  know, the answer to that. But let's speculate, right?
• 7:40
  Because it just seems like they can just keep, you know, they
• 7:43
  can just keep doing this endlessly.
• 7:47
  Well, that's the, the privilege that you talk about being the
• 7:50
  global reserve currency. You can definitely do this for
• 7:54
  longer. When you are that and you ask
• 7:57
  like when this breaks, I think there's a couple of different
• 8:00
  ways that can happen. 1 is that countries in this global
• 8:04
  economy, in this global, you know, dollar reserve system
• 8:08
  basically say enough is enough and they start to ditch the
• 8:13
  dollar for alternatives, you know, and they stop buying our
• 8:17
  debt. You know, that could be really
• 8:19
  troublesome, right? Because we have to keep the
• 8:22
  charade going. We have to keep issuing more and
• 8:24
  more debt and we need to find buyers of that debt.
• 8:27
  And I guess that goes down to if we lose control of the, the, the
• 8:32
  longer end of the, the yield curve.
• 8:34
  So if we see interest rates on the long end start to really
• 8:38
  soar upwards because there's not enough demand for them and
• 8:41
  nobody's buying them, obviously that's going to increase a lot
• 8:44
  of interest expense as well. And so that's problematic
• 8:47
  because something the Fed can do if nobody's buying the treasury
• 8:51
  bonds. And then I, I.
• 8:52
  Mean, but isn't the Fed buying the treasury bonds themselves?
• 8:55
  I mean, I mean, technically they're.
• 8:57
  Well, then you become Argentina, right?
• 8:59
  So then you do the Argentina playbook where you just monetize
• 9:02
  debt with the central bank. And then when it breaks is when
• 9:06
  people lose faith in the currency completely.
• 9:09
  You know, that's the ultimate breaking point is when people
• 9:12
  just completely lose faith in the currency, which I mean, I'm
• 9:16
  not even going to try to guess when that would be.
• 9:19
  But you asked me when this all breaks.
• 9:21
  That would be the case now. Doesn't have to be a complete
• 9:25
  crash or a break. There are more optimistic paths
• 9:29
  out of these high debt levels, which one of them being
• 9:33
  productivity miracles brought about by, you know,
• 9:36
  technological advancements. Bitcoin might be part of that.
• 9:40
  And so that's the more optimistic view.
• 9:42
  They could also stop spending. That's not going to happen as
• 9:48
  the deficit just keeps going up. So you know that they did any
• 9:52
  kind of austerity at this point with the leverage in the system,
• 9:54
  it would be extremely painful, extremely painful.
• 9:57
  But that would kind of at least really slam the brakes on these
• 10:02
  things, these developments. Or they can let inflation run
• 10:06
  high and then it's like balancing act.
• 10:07
  So if they let inflation run, you know, how much can the
• 10:12
  public stomach that and for how high and for how long before
• 10:18
  there's more like civil unrest and things like that.
• 10:21
  So there's, there's, there's various outcomes here, different
• 10:25
  paths forward. I like to think Bitcoin is a
• 10:28
  part of the solution and perhaps it's it's ability to allow
• 10:33
  people to save in a money that can't be inflated, which leads
• 10:38
  to more investment and economic growth and more innovation.
• 10:43
  You know, having a monetary technology could help spur other
• 10:49
  innovations and inventions because we were able to save and
• 10:53
  invest for long term projects and innovations.
• 10:56
  That's kind of a long term outlook.
• 10:57
  It's definitely, when you look at the debt situation, it's
• 11:00
  definitely dire. It seems like it's baked in the
• 11:03
  cake. As Stan Stanley Druckenmiller
• 11:06
  says, you know, the time to, you know, look at the entitlements
• 11:12
  and start to restructure things was like yesterday, you know,
• 11:16
  and, and so it, it's definitely, there's a lot of issues on the
• 11:20
  horizon. And I think people are starting
• 11:22
  to gain, become more aware of it in the mainstream media, as well
• 11:25
  as even large financial institutions like the IMF, World
• 11:29
  Bank, You know, Jerome Powell himself, you got the Fed
• 11:34
  chairman himself saying it's unsustainable.
• 11:36
  I mean, that's extremely notable.
• 11:37
  Usually it was just Bitcoiners and gold bugs slamming the table
• 11:40
  about this like five years ago. And now after COVID and all the
• 11:44
  money printing that happened, now, now everybody's kind of
• 11:48
  aware, like, uh oh, this is this is a problem.
• 11:51
  Yeah. And, and you said something
• 11:53
  earlier that I, I kind of wanted to talk about because you said
• 11:57
  that Bitcoin could potentially present, could Bitcoin could
• 12:01
  potentially be one of these things to solve this problem, to
• 12:04
  solve this issue, which brings me to Bitcoin 2024 in Nashville.
• 12:11
  After the Trump speech, a lot of people felt different ways about
• 12:14
  it. I think the last thing that he
• 12:15
  said is like, have fun with your bitcoins.
• 12:18
  But shortly after Cynthia Lummis came on stage and she presented
• 12:22
  the bill and she was basically making the case that if the US,
• 12:27
  you know, adopts Bitcoin as a strategic reserve asset, that
• 12:32
  could potentially be one of the mechanisms that they could use
• 12:35
  to pay off some of the debt. What What are your thoughts on
• 12:38
  that? Yeah.
• 12:40
  I mean, I think about like how they're going to afford to buy
• 12:46
  all that Bitcoin. That's one thing.
• 12:48
  Because in the bill, the interesting part about the
• 12:50
  Bitcoin bill is it gives different ways to to buy it.
• 12:53
  One of them was like the revalue gold, their gold holdings, which
• 12:56
  is interesting. And then the other one was like
• 12:59
  to use the basically like the operating income from the
• 13:03
  Federal Reserve to buy the Bitcoin.
• 13:06
  But The funny thing is that the the Federal Reserve has been
• 13:10
  running at a negative operating income for the last couple years
• 13:13
  because it raised interest rates and all the bond it hold
• 13:17
  actually lost a bunch of value. And then they have to pay out
• 13:20
  the higher interest on all their reserves to the banks.
• 13:23
  And so they've been running basically they've been insolvent
• 13:26
  basically for the past couple years.
• 13:27
  And the Bitcoin bill said that that's where they're going to
• 13:29
  get some of the funds from the Fed.
• 13:32
  And I was like, that's not going to happen anytime soon.
• 13:36
  So that's the first thing I think about.
• 13:38
  But yeah, obviously holding Bitcoin could improve the
• 13:43
  balance sheet of any entity that adopts it, whether that's an
• 13:46
  individual or a corporation or a government or a nation state,
• 13:52
  right? And so obviously I would support
• 13:55
  that endeavor because when you hold the hardest money, money
• 13:59
  that appreciates in value, over time, I would want my country to
• 14:04
  own a lot of it. And I think that'll improve the
• 14:06
  financial outlook for the country.
• 14:09
  How do we get there? You know, that's another
• 14:11
  question. That's, but it's extremely
• 14:13
  surreal to see that I, I was actually front row at, at that
• 14:17
  Trump speech because I just thought it might be like, it was
• 14:19
  just an interesting development, right?
• 14:21
  Former president talking at a Bitcoin conference.
• 14:25
  It was so surreal to see see him sane.
• 14:28
  He was like, oh, these Bitcoiners have such high Iqs,
• 14:32
  these bitcoiners fun playing with your Bitcoin.
• 14:36
  Like I was just like, I don't even know what this is, but it's
• 14:38
  kind of funny and also really crazy to see.
• 14:42
  And then and then everyone left and then Lummus comes out and he
• 14:45
  says that Bill and I was like, wow, that's, that's a big,
• 14:47
  that's, that's crazy. Like I never thought I'd see
• 14:50
  that. It's curious.
• 14:52
  What did you think? Yeah, it it was curious the
• 14:55
  political maneuvering. So like RFK, I don't know if I
• 15:01
  could say this, let's just say that RFK spoke to very
• 15:06
  influential people in the community a couple days before
• 15:11
  he gave his speech. He set the bar so high that when
• 15:15
  Trump came on, you know it, it didn't even come close to RFK
• 15:21
  speech, right? And I think a lot of people were
• 15:25
  disappointed with Trump's speech.
• 15:27
  But if you break it down, like RFK has the ability to be a
• 15:33
  little bit more extreme because he's from an independent party
• 15:38
  versus Trump is coming from a mainstream, you know, party, the
• 15:42
  Republican Party. And he actually has a chance of
• 15:44
  of winning the presidency. And I was about to walk because
• 15:48
  I was also like kind of in the front row, too.
• 15:52
  I kind of regretted it as also Sam because I had a choice to
• 15:56
  either be at the news desk and that was like the highest amount
• 16:00
  of current live stream viewers. And Germano was like, hey, do
• 16:03
  you want to stay here? I'm like, no, no, I'm going to
• 16:05
  go watch Trump speak. And then I came to the
• 16:08
  realization after that that was like when there was like 50 or
• 16:11
  60,000 people watching live, I was like, I'm going to go watch
• 16:13
  Trump's speech. And I was quite disappointed.
• 16:15
  I was like, this isn't what RFK was doing.
• 16:19
  And I was about to walk out until he mentioned because 80%
• 16:23
  of the speech was political rhetoric shooting up Kamala
• 16:26
  Harris and Biden. And then 20%, he would jump
• 16:29
  little, he he would drop little Nuggets.
• 16:31
  So like the whole crowd, like, I'm going to fire Gary Gensler.
• 16:34
  And everyone's like, yeah. And he's like, oh, you guys
• 16:36
  really like that. I'm going to fire Gary Gensler,
• 16:38
  right? And the and the crowd went wild.
• 16:40
  But I was waiting for him to say, yes, this is going to be a
• 16:45
  strategic reserve asset. He said that I was like, in the
• 16:48
  grand scheme of things, that then it was successful.
• 16:50
  But I think it was very symbolic that it was Cynthia Lummis that
• 16:54
  came straight after the fact, and she was the one presenting
• 16:58
  the bill. Because where RFK fell short is
• 17:02
  that even if RFK implemented those policies via executive
• 17:06
  order, as soon as he left office, they'd be gone.
• 17:11
  So I think the correct way of approaching it is via
• 17:14
  legislation. And I think what they did with
• 17:18
  the Trump speech and then with Cynthia Lummis coming shortly
• 17:21
  after was very, very clever political maneuvering.
• 17:26
  That's my whole opinion on that. And I wanted to ask you about
• 17:30
  the the, this is a very, very important election.
• 17:35
  I just kind of want to show this earlier.
• 17:37
  Sam, I have literally tripped Trump at the pub key bar in New
• 17:43
  York. This is hilarious.
• 17:46
  I can just imagine his voice like these are the bitcoins.
• 17:50
  Anyways, can't do a good Trump impression, but you have two
• 17:57
  political part. You have two political
• 17:59
  candidates in front of us, right?
• 18:00
  You have Kamala Harris slash Biden that are anti Bitcoin, pro
• 18:06
  CBDC. And then on the other side you
• 18:09
  have Trump which is pro Bitcoin, anti CBDC.
• 18:13
  They've made it part of the official Republican Party
• 18:17
  platform and then the Democrats have not.
• 18:20
  So this election will have implications for the regulatory
• 18:25
  environment for the Bitcoin industry in the United States
• 18:29
  2024 onwards. And I think a lot of people
• 18:32
  don't fully appreciate that. But I want to get your thoughts
• 18:35
  on that, man, because there's a lot of things that were
• 18:37
  happening. Operation Choke .2 point O
• 18:39
  Caitlin Long's denial of the the federal banking charter for her
• 18:44
  bank. So do you bank the, you know,
• 18:46
  attack on self custody? You did an incredible job
• 18:51
  exposing the Elizabeth Warren Wall Street Journal.
• 18:56
  Yeah. Hamas raised, you know, millions
• 18:59
  of dollars, you know, using Bitcoin.
• 19:02
  It turned out to be bullshit. You did great work with that.
• 19:05
  So you get what I'm saying? Like there's been an onslaught
• 19:08
  on the industry by the current administration and you have
• 19:13
  another party essentially proposing an opposite stance on
• 19:18
  the industry. Yeah, I think it is an important
• 19:22
  election, unfortunately, because as we both know Bitcoin, I think
• 19:27
  it's a bipartisan issue. There's reasons why both parties
• 19:29
  should like this technology. It's just a technology, but but
• 19:34
  one side has really been hostile towards it over the last couple
• 19:38
  years. There's no doubt about it now, I
• 19:41
  think, I think, you know, Trump said that Bitcoiners have high
• 19:44
  Iqs. I can totally see that he's
• 19:48
  pandering to this base. I mean, I don't think he's like,
• 19:50
  I, I think RFK was less pandering and he actually better
• 19:54
  understands Bitcoin. But it does seem like the Trump
• 19:58
  administration and the Republican Party more broadly
• 20:02
  has been more pro Bitcoin. And it's a shame to see because
• 20:06
  like I said, both parties should be pro Bitcoin.
• 20:08
  There's really no reason to be anti Bitcoin.
• 20:11
  And so I think it is a meaningful election because we
• 20:14
  saw what could happen when the wrong people become the leaders
• 20:18
  and, and misunderstand this technology and how they can kind
• 20:21
  of create barriers to access and, and on ramps and off ramps
• 20:26
  and onerous regulations and who they appoint as the regulators.
• 20:30
  Now, there are some developments with like the Chevron case
• 20:36
  where, you know, these regulators, theoretically
• 20:39
  they're not going to be able to unilaterally create some of
• 20:42
  these like rules anymore. And you know, so that would be
• 20:45
  basically it takes power away from the executive branch to and
• 20:49
  gives power to the legislative branch, which is a positive,
• 20:52
  right. So if, if the Democrats do win
• 20:55
  and they are still very hostile to this industry, I hope that's
• 20:58
  not the case. But if it is the case, then
• 21:02
  because of this new ruling, then I don't think they're going to
• 21:06
  have as much power because the, the people they appoint as the
• 21:09
  regulators and put in those positions won't be able to like
• 21:12
  unilaterally just slap down these ridiculous rules such as
• 21:15
  like SAB 121. You know, that's a perfect
• 21:17
  example of one of these rules that bypass any kind of comment
• 21:22
  period or congressional hearing or anything.
• 21:25
  There's no input. And they just slapped down this
• 21:28
  rule, which basically prohibited banks from custody Bitcoin,
• 21:33
  right? And so I am kind of optimistic
• 21:36
  for that case because it kind of puts a cap on some of the
• 21:39
  executive branch's power. And but, yeah, I think you're
• 21:43
  right. I think this is kind of a
• 21:44
  meaningful election. I think, you know, I think we'll
• 21:49
  look back. And if the right people do get
• 21:53
  into certain positions, it could really accelerate things.
• 21:56
  And I think right now though, it's, it's kind of seems like
• 22:00
  the momentum on Bitcoin is just so crazy with like the
• 22:03
  institutional adoption and, and just the broader awareness of
• 22:10
  what Bitcoin is and as an investment as well as the
• 22:14
  technology. It seems like things are really
• 22:17
  hitting like its stride. And, and I don't even think that
• 22:21
  if, if we do get, you know, it would have to be like a sweep of
• 22:25
  the House and the Senate and the executive branch for me to
• 22:29
  actually get really worried about like stopping, you know,
• 22:32
  Bitcoin, not stopping Bitcoin, but like hindering it
• 22:34
  significantly. But, but Even so, I'm like, even
• 22:39
  if they do win, I don't think they would win the Senate and
• 22:41
  the House too. And then it's like, even then, I
• 22:46
  think Bitcoins going to keep just charging along.
• 22:49
  I think at this point things are going to accelerate.
• 22:52
  And when you have like the largest financial institutions
• 22:55
  and some of the smartest investors and and and
• 23:00
  politicians just keep new politicians just keep coming up
• 23:03
  that are probic on and really understand it.
• 23:07
  It's like toothpaste is out of the tube, you know?
• 23:12
  100% and no, you see that, right?
• 23:14
  It's of course BlackRock going into it.
• 23:16
  You have came out that Goldman Sachs had exposure to the ETF.
• 23:21
  It came out that Wells Fargo had exposure to the, the Wisconsin
• 23:24
  pension fund, the BNP Peribus, the French bank, the second
• 23:28
  largest bank in Europe, not to mention like things more than
• 23:32
  half of the largest hedge funds in the United States.
• 23:35
  They all have some type of exposure to Bitcoin.
• 23:39
  It came out that the, I think is the central Bank of Norway had
• 23:42
  exposure to Bitcoin via the, I think it was through
• 23:45
  MicroStrategy. It wasn't the the ETF, but
• 23:48
  you're absolutely right. It it's you, you have this
• 23:50
  massive institutional interest, but Sam, why isn't the price
• 23:56
  going up, bro? Like this doesn't make sense.
• 23:58
  Like you have all these institutions coming in, you
• 24:01
  know, like they're they're, they're gobbling up all this
• 24:04
  Bitcoin. They're buying more Bitcoin than
• 24:06
  is being mined and sold on the market on the daily basis.
• 24:10
  Like why are we chopping sideways?
• 24:12
  Is this the curse of 58 K into Infinity?
• 24:14
  What's going on? I mean, I don't know, you know,
• 24:21
  I just, I just think like Bitcoins, Bitcoins up like 125%
• 24:26
  over the last 12 months. It's pretty good, pretty good.
• 24:30
  I think people really get, you know, they sucked in and yes, it
• 24:34
  can feel choppy and sideways, but that was a pretty good run
• 24:37
  up. You know, it's it's, it's
• 24:38
  actually pretty healthy to have some consolidation, to take a
• 24:43
  breather for a long term bull market, you know, to kind of
• 24:47
  gather steam again and then charge upwards again.
• 24:50
  I and so I I think this is kind of normal.
• 24:53
  It's kind of par for the course. Now the length of this is a
• 24:56
  little bit different. It it hit a previous all time
• 24:59
  high and then it kind of dropped back down from that.
• 25:01
  Now it's been like hovering, you know, around that range.
• 25:05
  You saw that in previous cycles, but nothing as long as this one.
• 25:10
  And I think this is related to liquidity conditions going
• 25:14
  sideways around the same time. I think bitcoins very closely
• 25:19
  correlated to global liquidity and which is why like these rate
• 25:23
  cuts, I think are notable because when you have like a
• 25:28
  rate cuts, weaker dollar, you got some of these other dynamics
• 25:33
  with like the reverse repo draining.
• 25:37
  You know, these things are all like liquidity.
• 25:41
  It's like the Fed is getting ahead of like liquidity getting
• 25:43
  tight again. So they're trying to like ease
• 25:45
  it again. So it's I think this is good.
• 25:47
  I think you're seeing global liquidity start to like creep up
• 25:49
  again. And so yeah, I'm kind of
• 25:52
  bullish. I think these rate cuts and and
• 25:55
  if global liquidity does creep up, then it's like game on for
• 26:00
  Bitcoin. It is the fastest horse when it
• 26:02
  comes to its sensitivity to global liquidity. 100% So Sam,
• 26:08
  and you're an analyst, I'm sure that this popped up on your
• 26:10
  radar. BlackRock released a report
• 26:13
  today called Bitcoin a Unique Diversifier.
• 26:17
  Have you were you able to check it out?
• 26:19
  Yeah, a little bit. It was pretty crazy, dude.
• 26:23
  I might as well have been like, like, it's like.
• 26:26
  Written by Maxis, right? Quotes and then have like
• 26:30
  bitcoiner and then strike it out and put BlackRock underneath it
• 26:33
  because I mean I have one I have it in front of me here.
• 26:36
  This is like they say we believe that Bitcoin via via its nature
• 26:41
  as a global decentralized fixed supply non sovereign asset has
• 26:46
  risk and return drivers that are distinct from traditional asset
• 26:50
  classes and that are fundamentally uncorrelated on
• 26:53
  any long term basis. I'm just like, yeah, it's pretty
• 26:56
  good. I I think, I think you just said
• 26:58
  that we're winning that That's, that's what I that's what I got
• 27:02
  from from your statement. Yeah.
• 27:07
  I mean, it's wild to see Block Rock.
• 27:09
  I didn't see that. Thanks, Opti, for pulling that
• 27:13
  up. Oh my God, that's hilarious.
• 27:17
  Yeah, maybe they will, maybe they will.
• 27:19
  You know, I do find it curious if they dropped the whole ESG
• 27:22
  thing. Yes, they they pushed out the
• 27:25
  Bitcoin ETF. No, but I got some questions in
• 27:29
  in this regard related to to that report, Sam.
• 27:33
  So I mean because it is a huge deal, right.
• 27:35
  So a lot of the report comes to like my first question would to
• 27:40
  you would be it mentions Blake Bitcoins role as a portfolio
• 27:45
  diversifier. How do you see this changing
• 27:48
  traditional portfolio strategy specifically for institutional
• 27:51
  investors? Well, I think you got to
• 27:55
  understand how portfolios have been constructed over the last,
• 27:58
  say, 20 years, which is it's all based off this underlying
• 28:02
  relationship between bonds and stocks, right?
• 28:05
  So, and it's really related to the Fed and the central banks
• 28:09
  who come and intervene whenever markets drop.
• 28:11
  So when stocks fall, the Fed comes in and cuts rates, which
• 28:16
  is good for bond prices. So bonds have acted as this
• 28:19
  buffer for any time stocks have started to tumble.
• 28:23
  And so you combine them in a portfolio and that's how you,
• 28:26
  you know, reduce risk, but then you have good risk adjusted
• 28:31
  returns, right? So it provides that
• 28:33
  diversification because they move a little bit differently.
• 28:36
  Now the problem is that that relationship, that inverse
• 28:41
  relationship between bonds and stocks, it changes in
• 28:45
  inflationary environments because bonds don't do well in
• 28:49
  inflationary environments. And, and so historically, you
• 28:54
  see when inflation comes up, you start to see that correlation
• 28:58
  start to become positive. And that's a problem for the way
• 29:01
  portfolios are constructed. And So what you're seeing in
• 29:04
  like the institutional investor world looking at family offices
• 29:07
  or other investors is they're all seeking alternative assets,
• 29:11
  anything to provide that diversification that they're not
• 29:14
  going to get any more from bonds trying to hedge their equity
• 29:17
  positions with. It could be anything.
• 29:19
  It could be gold collectibles, you know, actual real estate.
• 29:25
  But then there's Bitcoin, and Bitcoin has been shown to be
• 29:28
  very low, has low correlation with basically every other
• 29:33
  traditional asset class. And that's what BlackRock is
• 29:35
  talking about here. And that's why, you know,
• 29:37
  they're speaking the institutional investor language.
• 29:39
  You know, this is what they want to hear.
• 29:41
  And they'll go, my gosh, an uncorrelated asset.
• 29:43
  This is like the Holy Grail of portfolio construction to find
• 29:46
  something that not only outperforms, has a really good
• 29:51
  return profile, but does it in an uncorrelated way that's
• 29:55
  really attractive. And so when you have a really
• 29:58
  high return profile, you can actually have a, a little goes a
• 30:01
  long way, which is also attractive for these people
• 30:04
  because it might be a little bit scary, but even if they own a
• 30:07
  little bit, it can really change the like return profile or the
• 30:15
  risk adjusted returns of the portfolio.
• 30:17
  So that's kind of what Blackrock's talking about and
• 30:20
  makes a lot of sense. It's why I like the Wisconsin
• 30:23
  pension funds going into it, right?
• 30:24
  They don't need to go into it a lot, but it's funny because when
• 30:29
  you actually run the numbers, the bigger the allocation, the
• 30:33
  better it gets actually in terms of risk adjusted returns.
• 30:37
  But right now we'll just, we'll, we'll be OK with like a little
• 30:40
  bit here and there for these big, big fishes.
• 30:44
  Absolutely. Do you believe that Bitcoins
• 30:46
  long term on correlation with traditional assets will continue
• 30:51
  or do you foresee like it aligning more closely with other
• 30:54
  risk assets moving forward? It's a good question.
• 30:59
  That's a really good question. You know what's interesting is
• 31:02
  if like what happens when a majority of the S&P 500
• 31:05
  companies own Bitcoin on their balance sheets, like micro
• 31:10
  strategy, you know what happens there?
• 31:14
  Or like even on over a long enough time frame, if we're
• 31:17
  right, then the companies who adopt A corporate treasury
• 31:20
  strategy before the other companies are going to
• 31:22
  outperform their competitors. They're going to get larger
• 31:24
  market caps. They're going to be able to
• 31:26
  they're going to have more of a robust balance sheet to make
• 31:29
  acquisitions, acquire their competitors.
• 31:32
  They're going to become most of the S&P 500 and then they're
• 31:35
  going to own a lot of Bitcoin. So you would think that their
• 31:40
  prices would start to track Bitcoin or at least become a
• 31:43
  little bit more correlated over time.
• 31:45
  I could see that happening. Yeah, I think, I think equities
• 31:50
  is the interesting one in terms of like gold and you know, I
• 31:53
  think gold, I think gold is kind of the low hanging fruit with
• 31:58
  Bitcoin where it really does improve on a lot of gold's
• 32:03
  shortcomings. And so it makes sense to me.
• 32:06
  And like there's a lot of overlap between the the
• 32:08
  narratives right between gold and Bitcoin right now.
• 32:12
  And I think I think a lot of gold investors might take a
• 32:14
  little bit chunk of gold and buy a little bit of Bitcoin with it.
• 32:17
  And so I don't really see how those would be that correlated
• 32:21
  and over time, over long periods of time bonds not so much bonds
• 32:28
  are just just would not own bonds.
• 32:31
  I don't know why anyone would. And then specifically now that
• 32:33
  Bitcoins a thing, right, like I think governments are going to
• 32:37
  have a very difficult, very difficult situation in the
• 32:42
  future trying to sell these things.
• 32:44
  This is just, it just doesn't make sense in my opinion.
• 32:46
  Then let's see how that happens. But anyway, I I didn't want to
• 32:49
  ask you a question. I didn't want to ask you a
• 32:51
  question, Sam, which is like, and forgive me for my Miami
• 32:55
  pronunciation of the company company's name, but you have
• 32:59
  Michael Saylor literally putting his graphics and MicroStrategy
• 33:05
  is outperforming the video. OK, like in what world would
• 33:10
  that happen? But it's what you were saying.
• 33:13
  It's the mere fact that MicroStrategy has adopted a
• 33:19
  Bitcoin strategy and has Bitcoin on its treasury.
• 33:22
  Now all of a sudden it's, you know, it's, it's, it's
• 33:25
  benefiting from it. And that doesn't require such an
• 33:28
  extreme, that doesn't require such an extreme measure from
• 33:33
  other companies. Like if you're Apple or if
• 33:36
  you're Google, you have a tremendous amount of cash or
• 33:39
  cash equivalents that are literally just sitting there
• 33:42
  like melting ice cubes. I think the first, you know,
• 33:47
  company that just goes in there and says, you know what, maybe
• 33:51
  we're not going to go as as ham as Michael Saylor.
• 33:53
  Maybe we put in 5% or 2% or 3%. Not only are they going to
• 34:00
  maintain their purchasing power, but also now they're going to
• 34:05
  have a major competitive advantage compared to any other
• 34:09
  company that doesn't. That doesn't do it.
• 34:11
  And what's really interesting as well is as much as people hate
• 34:15
  Elon cause the whole doge thing and whatever, both his
• 34:19
  companies, Tesla and SpaceX have about roughly a little bit less
• 34:26
  than 10,000 Bitcoin each. So I find that quite interesting
• 34:29
  because that isn't just a pure Bitcoin play.
• 34:33
  Like Tesla is a very successful car manufacturer and they do
• 34:37
  have a sizable holding in Bitcoin.
• 34:39
  So when do you think that's going to happen?
• 34:41
  Like who's the 1st domino to fall?
• 34:43
  Is it Apple, Is it Google? Is it Meta?
• 34:46
  Do you agree that it gives them a competitive advantage compared
• 34:49
  to companies that don't put Bitcoin or replace some of their
• 34:53
  cash reserves with Bitcoin? Yeah.
• 34:56
  I mean, just like an individual who adopts Bitcoin has a
• 34:59
  competitive advantage over somebody who doesn't over long
• 35:02
  periods of time, you know, life is getting cheaper for
• 35:05
  Bitcoiners. Life will get cheaper for
• 35:07
  Bitcoin companies as well. You know, it's like the, it's
• 35:11
  the age-old, you know, you can't protect yourself from somebody
• 35:15
  else adopting a harder form of money.
• 35:19
  So it's the same thing. And you know, I, I think River
• 35:23
  put out a great report. They said even at 3%, allocation
• 35:27
  to Bitcoin with 97% cash would protect them against inflation
• 35:33
  given bitcoins return profile. So like I said, a little bit
• 35:37
  goes a long way for these corporations.
• 35:39
  So it's kind of a no brainer, but I think it's a big paradigm
• 35:42
  shift in how these corporate treasurers think.
• 35:45
  I think we're still in the early days and I think it happens on
• 35:50
  the margins. I think it's kind of like what
• 35:51
  we've been seeing, which is smaller companies like the
• 35:55
  similar Scientifics 1. Mednet brought up Metaplanet.
• 36:01
  Yeah, I think that's what we're going to see these kind of like
• 36:04
  companies come out of nowhere, who are Bitcoiners, who are just
• 36:06
  like, yeah, this makes sense. We're going to do this.
• 36:09
  And then there will probably be like a white swan moment, you
• 36:13
  know, who knows, like a Michael Dell situation or, you know, one
• 36:16
  of these big companies that comes in and that's going to
• 36:19
  make headlines and that's going to be a really interesting
• 36:21
  moment. But yeah, it's it's just kind of
• 36:24
  a no brainer and it's really a function of the macro
• 36:28
  environment. It's like what we said, there's
• 36:30
  so many reasons to believe that we are entering a regime change
• 36:36
  in terms of the macroeconomic environment, where of the past
• 36:40
  30 years we've been in this deflationary environment where
• 36:43
  rates just continuously fall, inflation is low.
• 36:47
  And, and now, now it just seems like things are changing and
• 36:53
  we're entering the structural inflationary period where every
• 36:57
  single entity that has to deal with money, whether it's a
• 37:02
  corporation and investment firm, money managers, individuals are
• 37:08
  going to have to rethink how to preserve wealth and build wealth
• 37:13
  in this new environment. It's been decades and decades
• 37:16
  and decades of the same thing, and now it just seems like
• 37:19
  things are changing. And so, yeah, the companies that
• 37:24
  lead and who are forward thinking and who have the
• 37:29
  ability to adopt A Bitcoin treasury strategy before others,
• 37:33
  I think will absolutely have a competitive advantage.
• 37:36
  A. 100% and what, what how do you think the increase
• 37:41
  institutional adoption of Bitcoin will affect its price
• 37:44
  stability and long term value? Because it's it's, it's a little
• 37:48
  bit different now, right? It's not just a bunch of
• 37:51
  hardcore Bitcoin Maxis that are, you know, holding the majority.
• 37:55
  I think that is still the case. I saw a graphic by River that
• 37:58
  that showed that I think 11,000,000 out of the 21 million
• 38:02
  Bitcoin are still held by individuals, which I think is
• 38:05
  very positive. But how do you, how do you think
• 38:09
  it will affect the volatility now that you know that you have
• 38:12
  these large institutional players coming in?
• 38:15
  Is it, is it going to increase the volatility?
• 38:17
  Is it going to decrease it, is it going to stabilize it over a
• 38:20
  long period of time? I mean, I'm assuming what's
• 38:25
  going to happen is, you know, you have these portfolio
• 38:28
  allocations of one 2%, then Bitcoin performs very well,
• 38:33
  becomes 5% of the portfolio, then they have to reallocate the
• 38:36
  portfolio they have to, you know, that causes down downward
• 38:39
  sell pressure. So what's your take on that?
• 38:44
  Well, I think it could definitely suppress, not like
• 38:47
  just reduce volatility over the long term, but you got to
• 38:51
  understand that rebalancing effect happens on the way down
• 38:54
  as well. So if Bitcoin drops, then
• 38:57
  they'll actually come in and buy.
• 38:58
  So they'll kind of create that floor on the other side too.
• 39:02
  And usually these money managers understand, you know, not to
• 39:07
  panic sell. I guess you know, nothing
• 39:10
  against the retail investor. It's just, you know, I guess you
• 39:13
  could say they're more sophisticated investors or the
• 39:15
  investor base is different where you have like pension fund
• 39:18
  managers, it's very, very long time horizons who aren't going
• 39:22
  to panic and sell off their entire position.
• 39:26
  And they will be rebalancing on the way down to same with
• 39:30
  corporations. If you just like have a cash
• 39:32
  flow positive business that's like non cyclical durable cash
• 39:37
  flows profitable. They have a treasury strategy.
• 39:41
  They're going to put X percent of their net operating profits
• 39:44
  in every single quarter. It's like clockwork.
• 39:47
  It's like a price insensitive buyer DCA in at a massive level.
• 39:53
  You know, that's that's a good thing.
• 39:55
  And you know, we see it with Block and Tether right now where
• 39:59
  they're putting in a percentage of their operating profits into
• 40:02
  Bitcoin and that's. That's insane.
• 40:04
  That's it's, I mean, and think about if that happens on a much,
• 40:08
  much larger scale, the similar strategy starts to get adopted
• 40:12
  by all kinds of businesses and corporations.
• 40:17
  So I do think the volatility will decrease with adoption.
• 40:19
  I think that's actually what we've seen when you just look at
• 40:23
  intraday or intraday volatility, it has decreased over time and I
• 40:28
  think we'll continue to see that with adoption.
• 40:30
  I think I do believe in the law of large numbers.
• 40:35
  It just makes sense where we might not see these like crazy,
• 40:38
  crazy returns. But at the same time, we are so
• 40:42
  early that the opportunity is still incredible in my opinion,
• 40:47
  with how little adoption there actually is right now and how
• 40:52
  the institutions are just getting their toes wet here.
• 40:55
  I still think we have a, you know, step function upwards in
• 41:00
  price appreciation of ahead of us before we get into these more
• 41:03
  like modest returns. And then even then, I still
• 41:07
  think it like outperforms, you know, say the S&P 500 or
• 41:11
  something just because of its properties and its scarcity and,
• 41:15
  you know, all the things that we we know is Bitcoiners.
• 41:18
  But yeah, I think the volatility would drop.
• 41:20
  I think it's kind of natural as adoption grows, I think the
• 41:23
  institutions bring a different investor base into the game
• 41:27
  that's less like speculative in nature and and just, you know,
• 41:31
  more have long term thesises won't panic sell the bottoms.
• 41:38
  Yeah, I I think that makes sense, right.
• 41:41
  Do do you think that too? Absolutely, 100% makes sense.
• 41:44
  And you know, and that's actually one of the questions I
• 41:47
  had for you, which is the idea of diminishing returns.
• 41:49
  And the law of the law of large numbers goes into that, right?
• 41:53
  It's a lot harder for Bitcoin to go from 60K to 120K than it was
• 41:58
  for it to go from 1K to 2K requires a lot more, you know,
• 42:02
  kind of capital going in. But you said something that
• 42:05
  interested me, which is this idea that the, we're still
• 42:08
  early, there's still a tremendous amount of
• 42:09
  opportunity. So could you elaborate a little
• 42:13
  bit on that? Because I think a lot of people,
• 42:15
  especially specifically at these price levels, they might see it
• 42:20
  as, wow, we missed the ship, you know, like we, we missed this.
• 42:24
  What would you say to those people?
• 42:27
  I mean, I, it's, it's, it's just so early when it comes to the,
• 42:31
  like I said, the institutional adoption of Bitcoin.
• 42:34
  It's going to like think about the companies that have bought
• 42:38
  it. Now it's just been like this
• 42:40
  couple small companies micro strategy.
• 42:43
  You brought up Tesla, which I honestly, it's funny with Tesla
• 42:46
  and SpaceX because people are just a little side note, but
• 42:50
  people give Elon a lot of grief because he sold.
• 42:55
  But he said on his faces that he sold because he needed the money
• 42:59
  because of like, you know, his operations.
• 43:02
  And so he just needed the money. He didn't say he wanted to sell
• 43:05
  and he didn't sell 10,000 Bitcoin.
• 43:07
  He still hasn't sold 10,000 Bitcoin.
• 43:10
  So I think that's notable. I think he was just running a
• 43:12
  business and unfortunately, he had to sell his treasury reserve
• 43:16
  asset to fund his business. And so I just wanted to point
• 43:19
  that out. But anyway, we're so early
• 43:21
  because think about how many more companies have the same
• 43:24
  problem. Everyone has the same problem.
• 43:25
  We have US public companies have $3 trillion in cash and cash
• 43:29
  equivalents. When you bring that out to
• 43:32
  businesses, not just public companies, but businesses,
• 43:35
  that's $7 trillion in cash, all of the same problem, which is
• 43:39
  they suffer from currency debasement and they're all going
• 43:42
  to eventually find the solution, which is Bitcoin in my opinion.
• 43:48
  And that's just corporations. You think about nation states,
• 43:52
  obviously you can go to that level.
• 43:54
  Think about pension funds. We only have two state pension
• 43:57
  funds having very, very small allocations.
• 43:59
  You have Michigan and Wisconsin. All these pensions are really in
• 44:04
  trouble when you look at how underfunded they are because of
• 44:07
  the low interest rate environment over the last 10
• 44:10
  years. And they're going into leverage,
• 44:13
  they're going into hedge funds, they're going into private
• 44:15
  equity because they're all looking for outsized returns
• 44:18
  that are uncorrelated. Exactly what Black Rock's
• 44:20
  talking about. And they have a lot of money.
• 44:23
  They're trillions and trillions of dollars.
• 44:25
  Endowments. Endowments are a little bit more
• 44:28
  flexible than pension funds. There are endowments that have
• 44:30
  been in Bitcoin for a while, but not all of them.
• 44:34
  And they have a ton of money as well.
• 44:36
  Sovereign wealth funds, we don't even know if they're already
• 44:40
  allocated, but my guess is a majority or not ton of money
• 44:44
  there. And so it just goes on and on.
• 44:46
  And how early we are, we really are in this like retail phase or
• 44:49
  maybe exiting out of the retail phase into the institutional
• 44:54
  phase of Bitcoin. And so, yeah, there's a ton of
• 44:56
  opportunity ahead of us. Will the volatility go away?
• 45:00
  Absolutely not. It's it's going to be
• 45:02
  diminished, but not go away. People still love leverage and
• 45:06
  Wall Street definitely loves leverage.
• 45:08
  So expect the leverage to continue in these bull markets.
• 45:12
  You'll probably get some similar draw downs, maybe not as intense
• 45:18
  as before, but volatility will continue.
• 45:22
  But yeah, the opportunity's there and that's why the
• 45:24
  volatility's there. The opportunity wasn't there,
• 45:27
  then there wouldn't be as much volatility.
• 45:30
  So yeah, that's kind of how I see it.
• 45:31
  A. 100% I, I, I do agree with you.
• 45:34
  I think volatility is, is an opportunity.
• 45:37
  It's not, it's, it's, if it, Mahler's, I think puts it best.
• 45:39
  It's a, it's a feature, not a bug, right?
• 45:42
  What did you think of sailors? And, and you know, it's, it's so
• 45:47
  interesting because first of all, he's vindicated.
• 45:50
  You know, he, he paid his price of tuition.
• 45:53
  We, we were there together. I never forget him.
• 45:56
  Pacific Bitcoin 2021 and he was sitting in the front row and it
• 46:04
  was, it was we had a great time and the price of Bitcoin was at
• 46:08
  16,000. So and, and, and Microstrategy's
• 46:12
  average price was like A32K at that point.
• 46:15
  And he was not smiling in interviews, my friend, like, you
• 46:20
  know, and he was paying his price of tuition.
• 46:23
  He was, he was like the rest of us have to.
• 46:26
  And now he's been vindicated and he looks like an absolute
• 46:30
  superstar. So I guess.
• 46:35
  I don't think you ever lost faith in Bitcoin, though, You
• 46:37
  know, like I think like all of us, I think you.
• 46:39
  Know none of us have, but we the the pressure you get the
• 46:42
  messages from your parents, you know, like are you OK?
• 46:46
  You know like why is Bitcoin going down etcetera, etcetera.
• 46:52
  And Can you imagine just the shareholders and billions of
• 46:56
  dollars because it's like, yeah, OK, fine, Sam, you and I both
• 47:00
  got in earlier than Sailor. But we also didn't have billions
• 47:03
  of dollars of purchasing power to just, you know, acquire this
• 47:07
  massive amount of Bitcoin either, right?
• 47:09
  And. We don't have the heat.
• 47:11
  We don't have the heat on us like he does.
• 47:13
  Like he there's there's a time cover piece.
• 47:15
  Do you remember that at the bottom of the bear market?
• 47:18
  I I had what it said. But it was him and it, I forgot
• 47:22
  what the title was, but it was making fun of him for, for the
• 47:24
  Bitcoin strategy in 2022. And now that's gonna be a fun
• 47:30
  thing for him to look back on now.
• 47:32
  Yeah, I hope, I hope he frames that.
• 47:34
  But now he's smiling. Now he's wearing Bitcoin logos
• 47:38
  on TV interviews. You know, I, I feel like his
• 47:42
  beard has gotten slightly longer and you know, he he's been
• 47:47
  vindicated. He he did an interview.
• 47:49
  I'm sure you saw it, Sam squawk box.
• 47:52
  And you know, he was just he was, he was doing his victory
• 47:55
  lap. But anyways, this leads me to
• 47:56
  the question, which is he had a his Opti.
• 48:00
  How's it pulled up? Thanks, Opti.
• 48:01
  Wow. Coming in, coming in, coming in
• 48:04
  hot. Anyway, I got I got it was the
• 48:06
  Wall Street Journal in in August 2022, Michael Saylor bet
• 48:11
  billions on Bitcoin and lost, and it's a picture of him
• 48:17
  holding the Bitcoin symbol. Let's see, let's see if we can
• 48:21
  find that Opti. But but yeah, and I would say
• 48:25
  his prediction, you know, 'cause it always has to be like a one
• 48:30
  up right at the Bitcoin conference surprised the F out
• 48:34
  of me. It was just it was gnarly bear
• 48:38
  21 year, but here it is. Thanks, Opti.
• 48:43
  That that didn't age well for the Wall Street Journal.
• 48:45
  That did not age well at all. Wow, absolutely wrecked.
• 48:52
  OK, I feel bad for that author Paul.
• 48:57
  Oh, that's a that guy's been a long term hater.
• 49:00
  Bitcoin Bear. Yeah, he's been a hater.
• 49:03
  Oh man, he's got a whole. Chest of articles that haven't
• 49:06
  aged too well. He's got to eat his words now.
• 49:10
  But anyways, so Sailor at the Bitcoin conference in Nashville
• 49:15
  predicted his 21 year prediction.
• 49:18
  The base, the bear case was $3,000,000 Bitcoin.
• 49:23
  The sorry the bear case was 3 million.
• 49:25
  The bull case was 13 million, which is above Hal Finney's $10
• 49:30
  million prediction. But but what struck with me was
• 49:34
  the the bull case, which was $49 million Bitcoin, which was
• 49:40
  absolutely insane. What were your thoughts?
• 49:44
  And, and, and by the way, before 'cause it, it doesn't do it
• 49:47
  justice. Just saying the predictions, the
• 49:49
  way that he described Bitcoin as an asset prior to making the
• 49:56
  predictions. Thanks.
• 49:57
  Opti was superb, like the way that he described it.
• 50:02
  So what are your thoughts on this?
• 50:04
  Is, is this, is this, is this too bullish?
• 50:07
  Is it too conservative? He's saying that Bitcoin could
• 50:11
  reach 7% of total assets. Is that even possible?
• 50:15
  The the bear case is 2%. I would be quite disappointed if
• 50:19
  if Bitcoin were only at $3,000,000 twenty one years from
• 50:23
  now. So I think we would be in our
• 50:26
  60s, their 50s or 60s, Sam. So yeah, what?
• 50:31
  What's your take on this? Well, I think one of the cool
• 50:34
  things he did was he open sourced this model Bitcoin 24 so
• 50:40
  that you could play around with it and put in your own
• 50:42
  assumptions. And so I thought that was really
• 50:45
  cool because you can actually do that and and play around with
• 50:48
  how he got to this number. But it's really this idea like
• 50:51
  the total addressable market where bitcoins going to eat, you
• 50:54
  know, some of the value of these different stores of value and
• 50:57
  different assets that basically are being used as money right
• 51:00
  now. But his point was that they're
• 51:02
  not good forms of money. There's problems with that.
• 51:05
  And you use a really clever equation, which was the lifespan
• 51:09
  of the asset equals the value of the asset divided by the
• 51:13
  maintenance costs. And how there's different
• 51:16
  maintenance costs for all these different assets that are
• 51:18
  currently being used as stores of value that Bitcoin doesn't
• 51:22
  have because of its digital nature and because it's the best
• 51:25
  form of what he calls digital capital.
• 51:29
  And and that's, it's really a paradigm shift.
• 51:32
  And, and, and I love that framing because it's, you know,
• 51:36
  when he threw out those numbers of like, you know, a yacht has,
• 51:40
  you know, last six years because of all the maintenance costs.
• 51:44
  You know, I learned from some conversations that there was
• 51:46
  like real data behind every single number in that in that
• 51:49
  presentation. And so that wasn't just like
• 51:52
  throwing them out there. Like, they really looked at like
• 51:55
  the different lifespan of these assets.
• 51:58
  And the idea was like, yeah, you could do a mutual fund and it
• 52:02
  lasts like 100 years. And that was like one of the
• 52:05
  best ones, right? Best options.
• 52:07
  But then, like, fees eat it away.
• 52:09
  But Bitcoin could last thousands of years, right, because of all
• 52:13
  of its properties. And so it's hard, you know, when
• 52:16
  you try to predict out even even next year, in the next 5 years,
• 52:22
  it's difficult to project. But to try to project out in the
• 52:24
  next 21 years is very, very difficult, especially when
• 52:27
  you're dealing with a, a technology that can be adopted
• 52:32
  in exponential fashion because of like the network effects and
• 52:35
  things. So it's hard to tell.
• 52:37
  I don't, I think. I think the one that I would put
• 52:42
  the least odds to would be the 3,000,001.
• 52:45
  The bear case. Maybe just Polish.
• 52:48
  I'd be I'd be highly depressed if that were the case.
• 52:51
  Yeah, I'd be very surprised. I mean, at that point it would
• 52:53
  be, I'd be like, what happened a little bit 21 years and at 3
• 52:57
  million only. And I, I think it's hard for me
• 53:00
  to see that #2 because there's another side of this equation,
• 53:03
  which is the, the Fiat currencies and the how much
• 53:07
  debasement will happen. And you always got to think
• 53:09
  about that of, you know, what those values are being
• 53:12
  denominated in and how much 3,000,000 is going to be able to
• 53:15
  buy you in 21 years, given the rate of currency debasement.
• 53:20
  And people throw out that monetary supplies growing at on
• 53:24
  average 7% a year the M2. But I would actually, I wanted
• 53:29
  to run the numbers of what that was like over the last four
• 53:32
  years or 10 years in 20 years. My, my, I mean, I'm almost, my
• 53:37
  guess would be that it's much higher than 7% at least over the
• 53:42
  last four years. But ten years, ever since the
• 53:46
  central bank started to be more active in the markets, let's say
• 53:51
  the money supply has gone way, way up.
• 53:53
  And so if that continues where it becomes more and more, more
• 53:58
  and more money printing, more and more erratic money printing
• 54:02
  that is responsive to any kind of crash in the markets, well
• 54:07
  then the rate of the basement is going to go a lot higher than 7%
• 54:10
  at some point. And so at that point, then 3
• 54:14
  million in 21 years just seems a little bit unbelievable.
• 54:18
  But again, you could plug into your assumptions into this
• 54:20
  model. And if you, if I assume that,
• 54:22
  then I could, I could plug that in.
• 54:24
  And that's the beauty of it. That's why it's so cool because
• 54:26
  it's open source. So if I think the money supply
• 54:28
  is going to increase, plug it into the model and and see what
• 54:31
  my numbers would be. Love it, love it.
• 54:35
  So Sam, we are getting to the top of the hour and I guess I
• 54:40
  got a couple questions for you. First one is how much do you
• 54:45
  think someone our age right roughly in their 30s or or late
• 54:49
  20s, how much Bitcoin do you think they would need to retire?
• 54:56
  Oh depends that like when they want to retire I guess and.
• 55:01
  Let's say 10 years from now. 10 years, that's difficult.
• 55:09
  Or let's do you know what, let's do traditional retirement age,
• 55:13
  right? So let's say you want to retire
• 55:15
  in your late 50s, late 60s, you're in your, you know, mid
• 55:19
  20s, late 20s, early 30s, mid 30s right now.
• 55:23
  What would you say? What is that?
• 55:24
  What is that that number that people should strive for?
• 55:28
  I mean, if we're talking like 20-30 years, then we're talking
• 55:31
  about roughly what we just talked about with Sailors
• 55:34
  timeline, right? One Bitcoin so.
• 55:36
  If you have one Bitcoin that's worth $49 billion, you're going
• 55:43
  to be OK. Now the tricky part is holding
• 55:45
  on to it. This is what people and that's
• 55:48
  when it comes down to your own conviction as well as your own
• 55:52
  risk tolerance. Because I, I talk about how
• 55:56
  somebody who bought 10 Bitcoin versus somebody who bought 5 in
• 56:02
  five years, what's going to really matter is like, were you
• 56:05
  able to hold on to that 10 versus the person hold on to
• 56:08
  that five? Maybe 5 was actually the right
• 56:10
  allocation because it wasn't a huge percentage of their net
• 56:14
  worth. And they didn't freak out and
• 56:16
  sell the bottom because they saw their entire net worth decreased
• 56:20
  by 50%. Whatever it was, the person who
• 56:23
  owns 5 are actually going to outperform the person who owns
• 56:25
  10 because they just held on to it because it was the right
• 56:27
  position for them given their risk tolerance.
• 56:30
  And so it's really important to know yourself and understand
• 56:34
  that the most important thing in Bitcoin is to hold on to it no
• 56:38
  matter how much you have to benefit the price appreciation.
• 56:42
  And like I said, with everything else I just mentioned, like a
• 56:46
  little bit goes a long way, but that that idea gets amplified as
• 56:52
  Bitcoin adoption continues. So a little bit will go much
• 56:55
  longer way in 20 or 30 years. So keep that in mind.
• 57:00
  Good answer, good answer. All right, final answer for you,
• 57:03
  Sam, and it was an honor to have you honor and a pleasure to have
• 57:07
  you back on simply Bitcoin. Final question, what I'm going
• 57:11
  to put you in the hot seat. We are heading into 2025.
• 57:16
  Where are we peeking my friends this cycle?
• 57:19
  A lot of people, a lot of people are saying 100K Bitcoin, 150K
• 57:24
  Bitcoin. On the bullish side, people are
• 57:26
  saying 500K Bitcoin. What's, what would you say?
• 57:30
  What? What is your?
• 57:31
  What is your intuition, your instinct telling you about next
• 57:34
  year? Man next year?
• 57:45
  You mean like the top like in 2025?
• 57:48
  I'll go first. I'll go first if you want.
• 57:50
  All right. So I'll say 200K. 200 K Yep,
• 57:58
  I'll go 199, OK. It's like the price is right.
• 58:06
  I was telling somebody that's one question where like I
• 58:10
  literally would not be surprised if it was 80K or if it was 180
• 58:19
  or if it was 400. Like it's so difficult to
• 58:22
  understand what could happen in one year given the broader macro
• 58:28
  picture. If something happens in the
• 58:30
  liquidity spec, it's just going roaring.
• 58:33
  If a white swan event happens in Bitcoin, there's a nation state
• 58:37
  and it's so difficult to predict, but nothing would
• 58:40
  surprise me like absolutely nothing.
• 58:42
  And so that's, that's literally one of the hardest questions.
• 58:45
  Like looking out the next 12 to 24 months.
• 58:48
  I will say I, I think it's going to go higher and I think I, I
• 58:54
  personally believe like 6 digits is pretty conservative like in
• 58:59
  terms of breaking 100K. And then from there, I mean,
• 59:02
  you're just in price discovery and the amount of attention it's
• 59:05
  going to get and the major players this that cycle and
• 59:09
  who's going to be, you know, driving it, it's, it's going to
• 59:13
  get weird. And so there I mean, I just I
• 59:16
  would not be surprised about anything.
• 59:18
  And so it's higher and I'm prove proved to be a huge bear here.
• 59:21
  In a couple of years I'll be totally happy about that.
• 59:25
  Exactly. Yeah.
• 59:27
  Anyways, guys, thank you guys so much for tuning in our guest
• 59:30
  today, Sam Callahan. Sam, where can people find you?
• 59:35
  Yeah, so you can find me on X, So I'm at Sam Calla.
• 59:40
  I'm always posting things on there, and I also do a weekly
• 59:44
  newsletter. You can do that.
• 59:45
  The news block.subsec.com. And so that's just a market
• 59:49
  update every week. I kind of share great charts.
• 59:53
  I work with Natalie Brunel on that.
• 59:55
  She she voices it. It's amazingly talented.
• 59:59
  She can find it on audio under the coin stories umbrella.
• 1:00:02
  And then I think it's just personally, I just think it's,
• 1:00:04
  it's helpful for me because I basically I'm always reading
• 1:00:07
  things, reports, surveys. Articles and I just kind of put
• 1:00:11
  it in one's place. So I think it's pretty useful
• 1:00:13
  actually because I put a lot of work into it and all the links
• 1:00:15
  are right there. So if you ever just wanted a
• 1:00:18
  real quick and dirty update under 10 minutes, the news block
• 1:00:22
  with all the links there where you can kind of look into these
• 1:00:24
  resources yourself, check it out.
• 1:00:27
  Love that, love that. Well, Sam, thank you so much for
• 1:00:29
  joining me on the show. Hope to have you back on again
• 1:00:33
  and maybe a year from now and see where how our predictions
• 1:00:38
  ended up. Yeah.
• 1:00:39
  Yeah, thanks Nico, and have fun in Vegas.
• 1:00:44
  Always a pleasure to come out simply man, you guys are doing
• 1:00:46
  great. Appreciate it.
• 1:00:47
  Thank you, man. All right guys, that was a show.
• 1:00:49
  If you enjoyed the show, you know, to do smash the like
• 1:00:50
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• 1:00:53
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• 1:00:56
  Until then, take care everybody. Go outside, touch some grass, go
• 1:00:59
  in the sun, feels nice. Eat some steak.
• 1:01:03
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