← Coin Stories with Natalie Brunell
Coin Stories with Natalie Brunell
Matthew McClintock: Will 1 Bitcoin Mean Generational Wealth? Price Drivers and Legacy Planning with Purpose
00:57:23
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- [00:00]
A
I think that we are just at the very beginning of seeing the financial markets mature around bitcoin. And Natalie, I don't remember when you've got into this, when you got into this game, but I've been in it since 2017, same year. I mean, that's like going from black and white TV to holograms in the span of eight years. I cannot imagine what the next eight years or 20 years will be.
- [00:27]
B
Hey, everyone. Welcome back to the show. Joining me this week is Matt McClintock. He is the founder and CEO of Bespoke Group. He's an estate planning attorney turned wealth strategist. We're going to be talking about estate planning, trusts, wealth strategies, and why OGs are selling Bitcoin. Matt, thanks so much for joining me. It's nice to see you.
- [00:46]
A
Yeah. Good to see you again. Thank you for having me.
- [00:48]
B
I feel like there's so many topics to cover, I hardly know where to start. So maybe let's actually just introduce you to folks that maybe haven't heard you at the conferences. I first learned of you and met you at Jackson Hole and heard you speak and fascinating what you covered. So give us your. Your background and how you got into bitcoin.
- [01:04]
A
Yeah. And when you and I met, I think it was still pretty early in my bitcoin journey to some degree. So, yeah, I'm. I've been an estate Planning attorney since 2000. It's a long time.
- [01:14]
B
Okay.
- [01:15]
A
And my practice has always been in estate planning. Trust in estates planning and structuring family's wealth, especially for families with a lot of wealth. So over the course of 25 years or so, I just was working with clients with more and more wealth, just doing really innovative, creative strategies all across the US all around the world, being opportunistic about strategies, opportunistic about jurisdictions, all that kind of stuff. And along the way, I had taught a lot of continuing education to other attorneys and had built a network of just a lot of attorneys who would. Would look to me or look to my law partner for help on complex strategies. And so In November of 2017, I got a call from a friend of mine who's an estate planning attorney, and she said, hey, I've got this. I've got this client opportunity. They've got about $150 million worth of total wealth. Will you help me design their estate planning strategies and walk those through with me? Sure. That's great. That's what we do. She said, well, before you jump at it, I mean, most of the wealth is in Bitcoin. So $150 million worth of Bitcoin in 2017 is a lot of bitcoin.
- [02:27]
B
Wow.
- [02:28]
A
And so I said, well, I don't know anything about bitcoin, but I'm kind of curious. Let's see what this is all about. And I drove up to where this attorney was meeting with his client, and I just was fascinated by their story. I had done a little bit of light Google searching to figure out what is bitcoin, and I was coming across things like the Mount Gox hack and the Silk Road and all the bad stuff that bitcoin has long been associated with. And so I went into that meeting really skeptical about am I dealing with, like, an arms trafficker or. I mean, what are we dealing with here?
- [03:03]
B
Or they just mining it early.
- [03:06]
A
They were actually early serial entrepreneurs in the space. So not really from a mining perspective, but they. They bought bitcoin. They bought $10,000 worth of bitcoin back in 2011. 2010, 2011. So again, a lot of bitcoin. And then bitcoin did what bitcoin does. And so now they're sitting on tremendous amount of wealth and deeply ingrained in the bitcoin space. Hardcore on the bitcoin ethos, but needing to have some structure to their planning because they have a family. And so, you know, this, this wealth is meaningful. And I've got tax concerns, I've got family legacy concerns. How do I. How do I protect my wealth when it's bitcoin? And that was the question that sat with me after that meeting. And on the way back to my office, I was thinking, you know, there's. I don't. At that point, I didn't know anything about bitcoin, but here's a family who has a tremendous amount of wealth in this unusual asset. Nobody is taking them seriously. Nobody is going to help them if we don't help them. Nobody's going to do this. And then the capitalist side of me said, there's probably a huge opportunity here. If we are the first people to really do meaningful wealth structuring around this new asset, that could be a really interesting journey. And so from 2017 forward, that altered the trajectory of my practice. And in 2018, the idea for Bespoke was born because we were. We were truly making a solution that didn't otherwise exist. We were creating the terminology that I've since learned about this is we were creating a family office around this bitcoin OG who'd been in the space. And the more I. Again, bitcoin has this like this tractor beam and once you're in it, you just can't escape it. It's got like this gravitational pull. The more I learned, the more fascinated I became. And then I started teaching other attorneys about bitcoin, how it's taxed, how do you structure for it from an estate planning perspective? Thinking that I was going to create this groundswell of movement within the estate planning space to, oh yeah, let's, let's now take bitcoin seriously. And it didn't have that effect, but it had a surprising and very positive effect. And that just created this massive referral engine for us. And so then all these attorneys who would, who had attended those presentation said, oh yeah, I've got a really big opportunity for a client with bitcoin. Why don't you guys just take them.
- [05:34]
B
Because you're meeting all the OGs.
- [05:37]
A
I'm meeting some of the OGs.
- [05:39]
B
Can you break down simply what makes bitcoin more challenging in terms of things like estate planning, inheritance tax structures?
- [05:48]
A
There are a few things once, you know, we all talk about just the bare nature of bitcoin and there's not a title on bitcoin, just like there's not a title on a bar of gold or a bag of rubies or whatever. So it's like possession is considered to be ownership even though there's not a title on it. So then establishing title ownership for this bearer asset is, is challenging, it's not impossible, is one of the first things we solved for. But it's, it's different than if you've got like an equities account or something like that. So the bare nature of it, it's a complicated asset. And so when you're dealing with somebody who is the bitcoin OG in the family, whether they're like a og, OG or whether they're just the ones in the family who understand bitcoin and have a high level of conviction, and then they're planning on passing that asset on to a spouse, a partner, kid, somebody else. Those other people probably don't have the same level of sophistication around this complicated asset. And so just the technical nuance of dealing with bitcoin, that adds to the challenge. And I'd say probably the third thing is that what we see in our practice is that people who have been in bitcoin for a long time, this is who our clients are, they got into bitcoin ideologically as a peer to peer form of electronic cash. That's the white paper and they say, okay, this is great, it's this medium of exchange type of asset. But then because of Satoshi's design, Bitcoin can't help but go up in value precipitously against a fiat currency like we've got. And so what started as a probably inconsequential portion of their wealth in dollar terms or as a percentage of their wealth now becomes a highly concentrated position. So when you're dealing with it could be the same with closely held stock in a family company or closely held stock in a public company. But when you have a high concentration of wealth in any particular asset, that causes you to think a little bit differently about how do you design the structures that will hold those assets so that you get the tax outcomes that you want, you get the legal outcomes that you want, and the beneficiaries who will ultimately receive the benefit of that wealth are prepared just for what the wealth does to them.
- [08:07]
B
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- [09:56]
A
Yeah, that's a big question and it's a. I think the answer has to be kind of nuanced because sovereignty, you know, I've been in the bitcoin space long enough to have learned at the feet of guys like Andreas Antonopoulos and people like that who. No, it was pounded in my brain. Not your keys, not your coins. This is what Trace Mayer talked about. And so that is drilled into my core as a bitcoiner. And I think to the extent that bitcoin remains transactional, if we're using bitcoin as peer to peer cash, then sovereignty probably does kind of begin and end with unilateral or at least very low friction control over the key material. Because if, you know, if you and I are going to go to a bar and buy a round of beers or a glass of wine or whatever and we're going to buy that with bitcoin, I don't want that in some type of high friction, tax, optimized, custodial, custodian controlled structure. That's just, that's not useful for something that I would otherwise use cash for or swipe my debit card for. But when bitcoin, when somebody's bitcoin position becomes economically consequential, especially when it has generational consequences, when we're dealing with an asset that the value of which I will not consume during my lifetime, most likely that is going to become the bedrock of my family wealth, then we think that sovereignty has to go beyond this transactional nature of sovereignty and then say, okay, well to us then sovereignty means bringing in the totality of the options that are available through the right legal structures, the right jurisdictions. And back to this, the complication of having a bearer asset establishing title ownership in a fiduciary underneath a structure that is recognized by law, you have to go through. That's what sovereignty means, is bringing the totality of those solutions in to manage this family's wealth. I think part of the challenge becomes, you know, hardcore bitcoiners, libertarian minded people like myself think that it's, it's tempting to think that I don't want anybody else involved in My business, I get that. I don't want anybody else involved in my business either. But if I want, if I want the kind of outcomes that are available in the fiat world, if I want asset protection, if I want structured wealth for my spouse, my kids, other people, if I want tax benefits, I have to apply the fiat rules that are recognized in the fiat world to this asset that otherwise defies fiat debasement. And so it's like, you know, we kind of sit in this sometimes awkward zone between the bitcoin world, as it should be, fully disintermediated, fully peer to peer, and the fact that we still live in a fiat world dominated by fiat rules. We still have tax codes, we still have legal consequences if we don't structure our things right, doesn't matter if it's equities, doesn't matter if it's real estate, doesn't matter if it's artwork, doesn't matter if it's bitcoin, if we want fiat, if we want like fiat enabled benefits, we have to use fiat enabled structures.
- [13:19]
B
So let's say someone is watching or listening to this and they own one bitcoin or less. Because at the end of the day, I mean, there aren't even enough bitcoin for all the millionaires to have one, right? So what if they're saying, do I need to even worry about this?
- [13:33]
A
Probably not. Probably not. If you're a whole coiner or less and Bitcoin's around 100,000 bucks right now, I mean, odds are it is not. You're not looking for consequential tax outcomes. Probably not generationally relevant, at least not at this point. It's probably going to be the kind of thing that you say, yeah, this is my little world of freedom that I can have unilateral control over. And that's great. There are parts of my own bitcoin stack that I've got unilateral, sole sovereign control over. The part of the calculus that you have to go through is, okay, well, then you become the single point of failure. And if you're okay with that, great. This goes into wallet choice, hot wallet versus cold storage, unilateral versus multisig, that's great. But if you're not looking for tax outcomes, if you're not looking for legally secured outcomes, don't bother. But once you've got, you know, a couple dozen coins, hundreds of coins, thousands of coins, okay, that now you're, you're playing a different game. When you're dealing, you know, in quantities.
- [14:45]
B
Like that, well, Michael Saylor's predicting $13 million or something by 2045. Right. So even having a fraction of a bitcoin could be a significant amount of money in fiat someday. Right. So let's say, you know, bitcoin goes to a million dollars a coin and should you have a trust, like, what's the first step? If someone's watching this going, what do I actually do? I haven't set anything up. I've just got my bitcoin in cold storage. What are the steps?
- [15:12]
A
So I think again, it depends on the magnitude of what we're solving for. If you don't have. We're going to get into kind of some wonky lawyer talk for a second, but hopefully we'll kind of make it decent here. But if you don't have, if the level of your wealth is below the federal gift and estate tax threshold, then you probably don't need really elaborate structures.
- [15:37]
B
Which varies by state.
- [15:38]
A
No, it's set by federal law. Now there are some state qualifiers that we'll get into, but that's set by federal law. And under this new tax act that takes effect in January, the federal gift and estate tax exemption will be $15 million per taxpayer. So you have a 15. So in January of 2026, you will have a $15 million exemption from federal estate tax. Wonderful. You're married, you and your spouse each have that. So that means a married couple can pass up to $30 million without ever having to worry about federal gift or estate tax. So this, there's a lot of like pearl clutching about, oh, the, the estate tax. This death tax is so terrible. It's like the estate tax has long been repealed for the vast majority of people. We're dealing with people who have hundreds of millions of dollars worth of wealth. So the estate tax still is very relevant for them. Once you are above the federal estate tax exemption, the tax rate is 40%. So it's a flat 40%. So if you have, if you and your spouse have $31 million worth of Bitcoin or whatever, first 30 million, no problem. That next million, you're going to write a check to the IRS for $400,000. Wow. So that's when it starts to become relevant from a federal perspective. So that's so really when we start thinking about tax optimized planning, depending on what kind of tax we're solving for, that's a big threshold that most people will never even come close to. Now when we're dealing with income tax related things, especially if you've had your one bitcoin since 2017, 2018, 2012, whatever. And you said, hey, this bitcoin thing is really interesting. I'm going to get one, call it quits and just ride it. Now you're going to have all of this unrecognized capital gain that's sitting inside there. When you sell that bitcoin, you're going to have a capital gains tax recognition event is a technical term for it. So then you're going to have to figure out what your capital gains tax liability is on that differential. And then once you know what that number is, then you can say, well, would I rather apply some of that savings to structured planning or what should or will I just pay the tax and move on? So really complex custodian controlled, especially qualified custodian controlled ownership regimes are irrelevant for the vast majority of people. But for the, but what I want to, what I want to make sure that we zero in on is for people who have again, maybe 10 coins or more probably makes sense to start thinking about this stuff.
- [18:19]
B
Well, and a lot of people do hold their Bitcoin on exchanges. Hopefully they have multisig. But when it comes to inheritance, I think no matter how much Bitcoin you have, you have to think about if something happens to you, how are your loved ones going to access your bitcoin? Right. I mean, can you talk about how serious that is and maybe some of the mistakes you've seen people make?
- [18:40]
A
Yeah, And I would say as like a base, like a base setting expectation here. I think that probably regard bitcoin notwithstanding, I think everybody should have a trust of some sort. Everyone, I think everybody, if you've got two sats, you should have, you should have a trust because the there are. You have three options. You do nothing, you have a will or you have a trust. Those are your choices, whether you're dealing with real estate or bitcoin or whatever. So if you do nothing, then wherever you happen to live when you die, if I have no planning at all, then the law will decide who gets my stuff. And so that means that my spouse, or if my spouse is gone, one of my kids has to go in front of the judge at the county courthouse where I happen to live when I died and say, you, Honor, Matt's dead, here's his stuff. What can we do with his stuff? That's a public proceeding.
- [19:38]
B
Probate.
- [19:39]
A
Right, that's probate. That's the probate process. That's a public proceeding that my family has no control over. And they're at the mercy of the court from a timing perspective. And so, I mean, the rules are the rules, but a judge is the one who has to enforce those rules in a public proceeding. I have never met a bitcoiner who wants to go through a public legal proceeding like, full stop. So then what happens if you have a will? A will gets you to the same place. All a will does is provide legally enforceable instructions to the judge. So then my spouse or my kid shows up and says, you, Honor, Matt's dead. Here's his will. Was it done properly? The judge reviews it. Yes, it was executed properly. Therefore, these are the rules that govern these proceedings. Still a public proceeding, still subject to the court's timeline, the family has no control. And so you're dealing with potentially sensitive and certainly what should be private family financial decisions in a public venue. So then your third option is you have a revocable trust. It's revocable, meaning that you can change anytime you want to. You can be in complete control over this trust. You have no asset protection inside that trust, because you have complete control. You're still the beneficiary of this trust. You're still the trustee of this trust. You can change your mind anytime you want. So you've not really fundamentally changed your relationship with your property, but what the trust does is it serves as a proxy for the probate process. And so long as your assets are inside that trust, and we'll get to Bitcoin specifically here in a second. But if your assets are titled in that trust, your home, your vehicles, your fiat accounts, it's title in the name of that trust, there's nothing for the probate court to do because the trust didn't die. The person who created it died. And so then my spouse or my kid as the backup trustee, the successor trustee, they just do what the trust says, and it's private. They can have those conversations at the dinner table instead of in front of the judge at the courthouse. So then when you're dealing with Bitcoin, I would say that in a revocable trust type of setting, I would not keep it on an exchange. I would use one of the great multisig solutions that are out there. The thing you have to bear in mind is that in order for assets to be legally recognized as owned by the trust, the signatories on the bitcoin wallet have to also be the fiduciaries inside the trust. So if in the case of my revocable trust, I mean, I've got a revocable trust, and I've got some bitcoin inside that revocable trust. Mine is actually in that case, my revocable trust is on board with a qualified custodian that I'm sure you know very well. But that qualified custodian has a vault that is titled in the name of my revocable trust. And the signatories in this, in this particular trust, the signatories are the trustees of that trust. So that way if I get run over on the streets of Manhattan, then the successor trustees are also the signatories and they can marshall control the assets of inside that bitcoin vault, just like they can control the title of my house. And then I've got some bitcoin that is my forever bitcoin. Again, I'm long bitcoin forever. But I also still like to spend my bitcoin every once in a while. I have certain shopping proclivities that sometimes bitcoin is the right venue for it, the right medium of that medium exchange for that. I've bought cars with bitcoin, for example.
- [23:10]
B
Really?
- [23:11]
A
Yeah, on chain. But the bitcoin that I plan to spend or gift to my children or whatever, that's in one of those revocable trust vaults, no tax benefit for me, but there's a succession mechanism in place if I get run over by a bus. But the forever bitcoin that I think this will, I'm not going to consume this bitcoin. Probably the bitcoin I will never sell. I want this to be the last thing my kids ever have to sell or maybe my grandkids or great grandkids someday. That is in an irrevocable trust. The value is outside of my estate because I created this trust years ago and put the bulk of my bitcoin in there. And so then as bitcoin has gone from 3,000 to 30,000 to 90,000 to 125,000 to 100,000, all of that activity is taking place outside of my taxable estate. So if Michael's right and we end up with million dollar bitcoin, then all of that appreciation will never be subject to estate tax, no matter what it is. So I could have hundreds of millions of dollars in that trust because all of that growth has taken place outside of my taxable estate. So that when I, when I ultimately die, if I have, I could have hundreds of millions of dollars in there and the IRS will not get a penny, will not get a penny of that bitcoin. They won't get a single sat because all of the Growth is taking place outside of my estate. Wow.
- [24:39]
B
Oh, wow. I had no idea. Well, so. But how do you. How does key ownership work within that? Because Bitcoin's so unique in that. I mean, someone could technically start signing if they have the keys. Right?
- [24:51]
A
It's. It is unique, and it's. It's unique, and it's not unique. I mean, it's. It's. I'd say it's not unique. It's unusual. It's like any other bearer asset. It's like. Okay, so, Natalie, what if we had. What if it's not bitcoin? What if it's a bag of diamonds? I mean, what if. What if I'm a diamond miner and I've got this bag of diamonds? And recent technology that devalues diamonds notwithstanding, let's say that they're still worth something.
- [25:16]
B
Yeah. And they're sitting in a vault somewhere.
- [25:18]
A
They're sitting in a vault somewhere.
- [25:18]
B
And you want to will it to your kids.
- [25:19]
A
I can't control that vault if I want the value to be outside of my estate, and if I want a fiat outcome such that I don't want to pay taxes on that, if I want a fiat outcome in that I don't want my children to have to go through some protracted legal proceeding, I have to establish the right, a legally recognized structure. I have to have a legally recognized fiduciary relationship with a trustee, and I have to swallow hard, and I have to hand my bag of diamonds to the trustee and say, you are duty bound by the terms of this trust agreement and by the terms of the law, with severe consequences if you breach.
- [25:58]
B
Oh, wow.
- [25:59]
A
You. The only way you can spend this bag of diamonds is for the benefit of my family, as designed by this trust. And if you breach, you get sued, you go to prison. I can't stop them. I can't physically stop them from then going down here to the diamond district and negotiating my bag of diamonds. I can't technically stop them from doing that because it's a bare asset, just like if I had done this with artwork or bars of gold or anything else. Bitcoin is no different in that respect.
- [26:27]
B
Got it. So you're. You're giving them a key.
- [26:30]
A
You have to. You have to not only give them a key, you have to give them control of the quorum, which is a big pill for bitcoiners to swallow. And this is that sovereignty paradox.
- [26:39]
B
Yeah.
- [26:39]
A
It's like this idea that. Okay, well, if. You know, if. If I only. If I just want to clutch my keys as tightly as I can, that's fine. Understand the trade off. Understand that I am now the weak link in this chain. Understand that I don't get any fiat outcomes, which I may be fine with that, but I'm not going to get legally recognized tax benefits. I'm not going to have legal assurance that a fiduciary is going to control this for the benefit of my children. And if Michael's right, and if bitcoin goes to a million dollars a coin, even if bitcoin gets halfway there and we're dealing with $500,000 Bitcoin, I have never met an 18 year old or a 25 year old who is ready to receive hundreds of thousands or tens of millions of dollars of unconstrained wealth. And that's true if it's bitcoin or diamonds or equities or real estate or whatever, they're just not ready. I've never seen that go well. And so one of the questions that you asked is when do these strategies go wrong? It's when people have consequential wealth and that is purely in the eye of the beholder. If it's consequential to you, it's consequential. If they don't think through how that wealth is going to pass on to somebody in the future, that's how they fail. Because I've been at this game long enough to see, I had a personal experience in my own life on this. When an inheritance is given outright, you have no control over the outcomes and that's an absolute surrender of sovereignty. If I gave you a gift outright, let's say that you're my beneficiary and I say Natalie is a successful, professional, intelligent, sound woman, I'm going to just, there's no reason to put constraints on an inheritance for Natalie and I just give you 10 bitcoin outright. Wonderful. What happens if you get hit crossing the street? Right. I haven't thought through, I haven't thought about that. And what if you're not dead, but what if now you're disabled and nobody can manage that for you? Or what happens if you get sued? Or what happens if you're not the person I thought you were? And you, and you're a spin thrift, I've surrendered my sovereignty over that. But on the other hand, I could say I trust you. I think that you exercise great judgment. But it's like I trust you, but I don't trust the world. What if instead of saying I'm just going to give this to you outright. I say I'm going to create a trust for you. I'm going to put Bitcoin, bag of diamonds, equities, whatever, in trust for you and you're the trustee. You can effectively do whatever you want to. But I have defaulted you into a protected wrapper. So then if something happens to you, if you become a spendthrift, if you get hit by a car, if you get divorced or sued for some other reason, all you have to do is resign as trustee and then another trustee steps in and now they're administering the trust only for your benefit because you're the beneficiary of this trust. If everything's great, you can be your own trustee. If something goes sideways, you simply resign and you appoint a new trustee.
- [30:05]
B
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- [31:55]
A
I think the paradox is this notion that. The more valuable your position in Bitcoin becomes, the harder it is to actually secure it in meaningful ways. Because, again, back to the top of the conversation, Sovereignty. For me, early on, and I think still pervasively throughout the bitcoin space, sovereignty kind of begins and ends with unilateral key control and, or the ability to control a quorum on a multisig. We think of that as transactional sovereignty. The paradox is that that works great for transactional Bitcoin, that works great for the whole coiner or below. That works great to the extent you plan to consume, spend, buy cars or whatever with your Bitcoin. That breaks down when the equation changes and you say, wait a second, I'm not going to consume all this bitcoin. I actually want some fiat benefits from structure. I want tax optimization, I want wealth preservation, I want to structure inheritances for my kids. And I want to do it in a way that I have a high conviction. I mean, the law of trusts goes back to 2000 years BC in Mesopotamia under the code of Hammurabi. So it's like fiduciary relationships are as old as humanity. That's pretty good track. That's a pretty good track record. So I think part of the paradox is kind of coming to the realization that, you know, we who have been in bitcoin, we've already won. We've already won, but we have won in a fiat world.
- [33:39]
B
Yeah.
- [33:40]
A
And so the fiat world is still here. And so long as it is here, which I think is probably fairly indefinite, then we can use the fiat rules to benefit us in Bitcoin. And this is how part of the mind virus that is bitcoin really continues to permeate the Fiat space.
- [34:01]
B
In 2021, there was this meme. I don't know if you saw it, but it was like a citadel and it was tiered. Right. Of how much bitcoin. And I think. I think even at the bottom, where it was like one bitcoin or something, that was generational wealth.
- [34:15]
A
Yeah.
- [34:15]
B
And I've talked to bitcoiners who say eventually, when bitcoin reaches its destiny of many million a coin, that they're going to want to pledge it as collateral and somehow extract passive income and live their lives. Right. Do you see that future? And do you think that we're going to see it in our lifetimes?
- [34:34]
A
I see a variation of that future. I mean, I've seen the meme. I mean, memes are fun and they're cute when you're sitting around watching that stuff. Whether we get to Million dollar Bitcoin or whatever, I think we probably do. I think we probably get to that in my lifetime. I'm not as bullish as Michael is or others in the space. I think there's some variables in play that we'll see. I mean, I hope he's right.
- [35:04]
B
Yeah, I hope they're right.
- [35:05]
A
I really hope he's right. But even still, I mean, I've been at this long enough that my bitcoin having gone from a few thousand to now 100,000, it's now economically material for my family. And that's happened in the course of eight years.
- [35:19]
B
Right.
- [35:20]
A
So if past is prologue at all, then yeah, I think bitcoin will become the type of asset that serves as the bedrock of family wealth. And as we see it increasingly, some would say adopted, some would say co opted by the traditional fiat space, we will see more attractive lending options, collateralization options open up. One of the things that we do believe very strongly at Bespoke though is that bitcoin is a very special asset. It's not the kind of asset that should be trifled with. And people who have built significant wealth in bitcoin have done so by acquiring it, holding it through all of the headlines that you've long since reported on and still with Diamond Hand just held onto that. It's like, okay, that's a high level of conviction. We don't think that that should be treated capriciously and leveraged into like collared option structures and whatever. It's like, because you're now putting this pristine asset at risk that you've already won with. It's like, why would you be gambling with the, the family precious jewels? It's like, why would you do that now? I think that there will be some interesting things open up. I think that we will see lending become more attractive for. I guess it's difficult for me to kind of come to a concise answer on this because the clients that we see are the clients that they have so much wealth in this asset. They would rather be owners than borrowers and they'd rather be owners than lenders. And so if we're going to hold the asset, we're going to hold the asset. If we're going to divest from the asset, we're going to do it intelligently and then we're going to redeploy in other things that have some of the same qualities that bitcoin has. The same resilience of Bitcoin, especially against debasing fiat currencies, but in ways that are not correlated to Bitcoin's price action. And so we can kind of smooth some of the volatility for them. Those are the games that we help clients navigate. But yeah, I think that we are just at the very beginning of seeing the financial markets mature around Bitcoin and we will see. And Natalie, you know, I don't remember when you've got into this, when you got into this game, but I've been in it since 2017. Just so it's, I mean, same year. I mean, that's like going from black and white TV to holograms, you know, in the span of eight years, I cannot imagine what the next eight years or 20 years will be.
- [38:03]
B
Well, it is, it's really interesting that you even said that you're maybe less bullish on some of the big price predictions, at least in the near term, because I am too. I mean, we were at all time high in 2021, November, so 69 or so thousand. We've pretty much doubled in four years. And we've got people predicting seven figures in the next three and a half, four years. I'm like, that's a bit of a stretch. I mean, I want to believe it, but it's a bit of a stretch.
- [38:28]
A
Yeah, I, I just don't think it works that way. I mean, I think that there, there are just a lot of variables in play. I mean, and I made this point in the white paper and I believe that this is absolutely true, and this is more true about Bitcoin than any other asset. But when you have an asset that is scarce against an asset that is limitless, you can't help but see the scarce asset climb in value as the bottom falls out of the limitless asset. Bitcoin isn't just scarce, it's fixed, it's finite. We've got a fixed daily supply. There's that. We know what the issuance rate is of Bitcoin. 450 bitcoins a day. You can't make them any faster. You can't make any more today than you did yesterday. And that asymptotically gets closer to zero with every halving. And so it's like, okay, well, you have not just a scarce supply, but a fixed and finite supply. We have the Federal Reserve. During COVID Neel Kashkari from the Minnesota Fed said there is Infinite money at the Fed, it's like, okay, and we have the whole. Back to the memes. We have the whole money printer Geber with Jerome Powell just cranking it. Okay? That is a stated policy of the United States Treasury Department. Okay, well, if bitcoin, this fixed and finite and increasingly scarce asset, as that gets priced in US Dollars and US Dollars have infinite supply, it's not just that the price of bitcoin is going up. The price of bitcoin, the value of bitcoin is going up while the value of the dollar is going down. And so it's not just the price, denomination, value of bitcoin, it's the gulf between the value of bitcoin and the value of the dollar. So we will see that do nothing but accelerate. So the question is, is bitcoin a million dollars per coin in 20, $25, or is Bitcoin a million dollars in 2035 or $2045? I think that is a more interesting question, and that's probably the question that Michael is answering when he says a million dollars a coin. I think he is adjusting not just for the value of the purchasing power of the dollar today, but anticipating what the purchasing power of the dollar is 20 years down the road, then his argument becomes more compelling to me.
- [40:49]
B
That is a good point. Well, we know that some OGs are loosening their diamond hands. I wanted to get your take on that because I find some of the chain analysis really interesting that those are. That are moving. But supposedly it's not unusual. We've seen this at previous cycle tops. But what, what do you make of it? Because if I was. If I had a ton of bitcoin, I guess I would want to maybe sell some and enjoy my life, maybe purchase some things. Is that what they're doing?
- [41:12]
A
Yeah, absolutely. I mean, again, they've already won. They realize that they've won, and they see now a very deep demand market for it. And so now the market can absorb a lot more coins than it's ever.
- [41:23]
B
Been able to absorb before and barely move the price.
- [41:25]
A
And barely move the price. I mean, it just. It might move it inside of a day, but the selling pressure is just not that. That great. So when we, you know, our clients are some of the clients that are selling, but it's because they are selling for strategic purposes and they're. And they're selling in strategic ways because again, these are people who have accumulated a lot of bitcoin.
- [41:48]
B
What's a lot? Like a thousand?
- [41:49]
A
Yeah, yeah. I would say to mid hundreds to mid thousands.
- [41:53]
B
Wow.
- [41:55]
A
But be so nice. Well, I mean, yes. But also be careful what you wish for, because money doesn't solve problems, it changes them. And it makes people like me more relevant when you've got those kinds of problems, because those problems manifest not just in tax ways, but especially in the bitcoin space. It's not unlike the startup space. If you've had a successful startup and you go from 0 to 100 million inside of a decade, that is a shocking trajectory. And everything in your life changes. Your relationships change. Sometimes your relationship with your faith or spiritual perspective that changes. Your relationship with your community changes. Your politics often change. And your kids have seen you go from scrappy startup person or early, like hardcore bitcoiner, you know, geeking out, mining, whatever, to now they realize, wait, I get to go to the most exclusive private school in town. And we take these crazy vacations. We live in this beautiful house. Like, it wasn't always like this. And so now these families, it is like having a successful exit after you've worked really, really hard for a decade. And it's like, that's. That is a disorienting experience. And so then you want to take those winnings and you want to do something different with it. You want to realize the economic benefit of the sacrifice, the conviction of diamond hands through the FTXs and all the other bad news that we've had through the years. It's like, now it's time for me to actually enjoy the fiat benefit of this bitcoin, because there are some things that bitcoin just can't buy. And so how do I do that in ways that are intelligent? How do I not only structure this from a tax perspective, but then how do I demonstrate a sense of stewardship and responsibility to my kids? What kind of people are we when we have this type of wealth? What does this wealth mean? In my relationship with the higher power, what does this wealth mean? The relationship, in the context of my relationship with my community that I care about? And so for the clients that we get to talk to, nobody's ever asked them these questions before, and they don't. And they've. And because they came into this wealth usually so suddenly, they often. There's often an imposter syndrome that creeps in. It's like I, you know, I was just, you know, I was a guy in rural Texas or Colorado or wherever I was, and now all of a sudden, it's like I have wealth beyond anything my parents could have ever dreamed or imagined.
- [44:39]
B
Wow.
- [44:39]
A
And now I Want my kids to grow up to be responsible people. How do I do that when there's no sense of striving? How do I give them something to reach for when they know that economically, they've got everything that they want? And so a lot of what we do, kind of in the broader family office, part of what we do, we've got a full investment advisory company when people want to invest in things that aren't bitcoin. But I would say that some of the most meaningful work we do is around this discovery about, congratulations, you won. What's it all about?
- [45:13]
B
It's like winning the lottery, almost.
- [45:15]
A
Yeah. I had a conversation with somebody else about this. It is and it's not. And I want to kind of disabuse the notion that winning with bitcoin is like winning the lottery because it doesn't happen overnight. And for you to have won with bitcoin, it took a lot of conviction. You were the weirdo in the family. You were the person who was just so. Just boorish. Nobody wanted to talk to you because you're going to try to orange pill them at every cocktail party. And now all of a sudden, great, you won. You didn't just go buy a scratch ticket and all of a sudden you win the Powerball. It's like, no, you've been through the ups and downs. You've been in this for a decade, maybe a little bit more. People. You had people telling you you're crazy. This is snake oil squared. This is for money launderers. This is for bad actors. This is nothing but a scam. It's nothing but a Ponzi scheme. We've all heard it. And you put up with that stuff forever. And everybody thought you're just crazy. And all of a sudden. Not all of a sudden, but within the course of a few years.
- [46:15]
B
Yeah, proven right.
- [46:17]
A
See? Told you so. So it's a high level of conviction. And they feel. They often feel isolated. They feel like they don't really have anybody they can talk to. And part of the problem that we're trying to solve for is that in the traditional, call it fiat normie world of estate planning, wealth management, that kind of stuff, nobody else takes it seriously. And this is what we built for. This is what we built. And so we, for a lot of the people, for the people that we get to talk to, we are just like an oasis for just meaningful conversations about wealth.
- [46:57]
B
Well, if you come into that much money, especially unexpectedly, you probably want to be very private about it. You don't want People knowing. Just out of curiosity, have you found that when people do have this type of net worth, I mean, they have hundreds of bitcoin, thousands of bitcoin, and they start to have those types of conversations and think about their spirituality more and what type of legacy they want to leave behind, how they want their children to be raised. Do you feel like more of it comes from a really good place of searching for meaning and purpose? Or have you also seen it kind of go the other way where people get very crazy, spend all the money and become a maybe a negative sort of version of themselves?
- [47:39]
A
I mean, we don't, we don't see the, we don't see the Lambros. You know, we don't, we don't see the people who are just going bananas with their wealth. And I'm sure it's just because the vibe that we're putting out there in the space, that just, that doesn't impress.
- [47:50]
B
That's not very bespoke.
- [47:51]
A
And that's not us. I mean, it's just that, that doesn't mean we want people who we, you know, we resonate with people who are on, who are on a quest for meaning and a quest for purpose and that they want to, they want to use their wealth to express that in really positive ways. And. But anonymity, privacy is a huge, huge part of it. And we've got some clients who are deeply, deeply philanthropic. And I think this is part of the low time preference that bitcoin has too. I think that bitcoiners can be specifically wired towards philanthropy and specifically wired towards multi generational wealth because of our low time preference that bitcoin provides. And a lot of the work that we get to do with these clients is that they see that part of the inheritance that they're gonna leave their kids and future generations isn't just part of the legacy that they're going to leave. Is a better world, however, that whatever that means to them. For some it's like religious expressions. For others it's social causes or environmental causes or whatever, but we get to take them on that journey. And to a person, all of our, you know, if you want to classify them whales or whatever, but all of our, every one of our clients, that would be what you might think near the top of the citadel in your heuristic there. They are deeply, deeply philanthropic. And one of the clients is giving 100% of her wealth away during her lifetime to philanthropic causes around the world. And to the extent there's anything left when she dies, it's Going into charitable trusts. When she goes another one, she's giving away probably 85% of her total wealth to charitable causes during her lifetime. Another is a family. They're giving away probably at least 60 to 70% of their total wealth.
- [49:44]
B
That's incredible.
- [49:44]
A
To charitable causes during their lifetime. And to a person, every single one says, I don't want my name associated with this at all. I don't want anybody to be able to search who's the giver behind these gifts. And so a lot of what we do is set up completely opaque, anonymous charitable structures for clients who want to execute on their philanthropy.
- [50:04]
B
Wow.
- [50:05]
A
But they're not doing it for self aggrandizement, and they're not doing it for notoriety. They're doing it from a place that says this. You know, I feel a sense of, in their case, maybe obligation or stewardship or whatever the word is that you want to use for that, to express their wealth that way. And for us and for the team that we've built, that is the most energizing part of what we do. Because if, you know, if you're just, you know, if you tell me, Matt, I've got $100 million balance sheet, whether it's bitcoin, whatever. It's like, I've got $100 million balance sheet, and I want you to make it 200 million. It's like, we can but go talk to somebody else, because that's. I don't care. It's like, that's not the. That's not the mission that we are on at bespoke. You know, we are on a mission to help people rethink their relationship with money. And we're doing wealth in a very different way. And so that's. That's why I get up out of bed in the morning. Because if you were to say, hey, you know, I've got 100 bitcoins today, and I want to just squeeze every SAT I can out of the tax system. And all I want to do is go live in my citadel with serfs around me and say, go talk to somebody else. It's like, I don't need that in my life. I just, you know, I want. I'm on a quest for meaning.
- [51:24]
B
Yeah.
- [51:25]
A
My team is on a quest for meaning, and we want to take clients on that journey too.
- [51:28]
B
It's not surprising to me that a lot of bitcoiners feel that way and want to give back. Do you have any clients who are like Michael Saylor and they say, my keys die with me and I'm actually going to make the bitcoin more valuable because no one will have my keys.
- [51:41]
A
I would say, no, I don't. But it's just because we haven't had that profile client and that's, you know, and I've heard Michael say that. And as much as I admire him and as, as much as I like to get to know him, I just don't think he would be a good client because he knows exactly what he wants. I mean, Michael is on his own quest, Michael is on his own mission. He knows his mission and he is on it and he's committed to that. And I have high conviction, knowing what I know about him, that he's going to execute on that to his satisfaction if his perspective changes on that. And he says, you know what, maybe there is more to it than just my bitcoin being absorbed into the system, like Satoshi's may have been, or Mercia's may have been. If the bitcoin just gets contributed back to the system effectively, it's almost like it burns because nobody can get to it. And so yours is more valuable, mine's more valuable. If that perspective changes, I'd like to have that conversation because there's some really compelling things that can be done that can make the world a better place more broadly than just burning supply of bitcoin. If that's, if that's the mission that he's on, great. If that mission changes and it becomes something different, that's when I'd like to have the conversation.
- [52:57]
B
So when you see whales selling, what percentage are they divesting? And are they doing it for philanthropic reasons or are they doing it to buy houses? Like what are they actually selling?
- [53:07]
A
It's a whole mix of things. It's a whole mix of things, as I said earlier, I mean, there are some things that bitcoin just doesn't buy. Um, it's hard to buy a house with bitcoin. You can do it, but it's hard. And it's also not very tax efficient. So. Yeah, but most of the bitcoin that we see moving for our clients is either opportunistic, selling through tax optimized structures to then reinvest in something else. We've got clients who are still serial entrepreneurs that are building companies and they've got a lot of wealth in bitcoin, but they need fiat dollars because they're starting a non bitcoin business. They might be starting something in robotics or they may be starting something in the next big thing. We've Got some clients that are involved in the medical discovery space. We've got clients that are involved in robotics and aerospace. It's like it takes dollars to do that kind of stuff. And so we help them think through, okay, how do you, how do you, and when do you enter the market? How do you structure for this? And then once you harvest your dollars from your bitcoin sales, what do you do with that? And whether it goes into your startup, whether that goes into currencies like, you know, like equities, like Swiss companies that are yielding in the Swiss franc instead of the dollar, you want to buy a house or whatever, we also then help them think through, okay, well, whatever it is that you're buying next, what is the most intelligent way to buy that? What's the right structure that makes sense from an asset protection perspective, from a privacy perspective, from a long term family wealth perspective? Because if you're, if you're starting a robotics company or an AI company or whatever it is that you're, that you're doing now, you're probably doing that because you think it's going to grow in value. You may or may not have some liability exposure to that. If you're going to harvest your bitcoin gains into dollars, then you're going to plow those dollars into something else. You still have to think through, as this value builds outside my bitcoin world, how have I structured for that? What are the right structures, what are the right jurisdictions that should govern this? And then how do I think about this in the broader context of my wealth?
- [55:10]
B
Yeah, and. Well, you have to think about that when it comes to sovereignty. Where are you structuring things? We're seeing a lot of companies, for example, moving from Delaware to Texas all of a sudden because, you know, they want to maintain that sovereignty and it makes sense. And the broken monetary system just exerts more and more control. Well, Matt, this has been great. Any final takeaways or anything you want to leave the audience with?
- [55:30]
A
I mean, I just really want to double click on what you just said there about this idea of sovereignty being jurisdiction selection. It is. I mean, this is part of the nuanced conversation around sovereignty that I was really wanting to get into. Because we believe that sovereignty isn't just unilateral control. It is that to a point, but it's also deciding how you're going to own your assets, whether the right structures, the right trust or other entities, the right jurisdictions, whether it's Delaware or Texas or Nevis or the Cook Islands or Switzerland. A sovereignty mindset needs to be global and needs to be multi generational. And so yeah, that's. You really landed on the core theme, I think.
- [56:11]
B
Well, and I think that bitcoiners do stand to inherit the world's wealth in many ways and they will be empowered to do so many things. Political advocacy, philanthropy, create businesses that they once dreamed of but didn't know how to make it possible until they had the the economic power to do so. So I can't wait for that world. I think it's going to be an.
- [56:32]
A
Exciting one and we will see that. You and I will see that in our lifetimes. Bitcoin is repricing everything.
- [56:38]
B
That's right. And don't stress out because all of us, you know, shrimps and minnows or whatever they call them, if you don't have a lot of bitcoin, don't worry. I'm in your boat. We'll be okay.
- [56:48]
A
You'll be okay.
- [56:49]
B
Thank you so much for checking out this episode of Coin Stories. Make sure you're subscribed to the show so you don't miss any new episodes. And if you can, turn on those notifications and leave us a positive review, they really help the show grow organically with new listeners. We have a free weekly newsletter. You can sign up@the newsblock.substack.com this show is for educational and entertainment purposes only. Nothing should constitute as official investment advice, and you should always do your own research. I'm always open to feedback and guest suggestions, so please feel free to reach out@infoalking bitcoin.com I'll see you next time.