← Coin Stories with Natalie Brunell
Coin Stories with Natalie Brunell
Mike Alfred: Spotting Winning Stocks and the Path to $1 Million Bitcoin
01:00:28
Loading summary
Transcript84 lines
- [00:00]
A
I actually am extremely bullish. I think bitcoin is the most important asset maybe in all of human history to own. It's probably the most de risked large scale asset in history. It's the asset that my mother owns, my father in law owns. They don't own Iron, they don't own cypher, they don't own mstr, but they own Bitcoin long. Bitcoin long AI. Easiest trades of your lifetime. You just hold them in large size for a decade.
- [00:28]
B
Hey everyone, welcome back to the show. Joining me this week in studio is Mike Alfred. He's an investor, entrepreneur and board member at Iron and Bakkt and he's been picking stocks lately that have just shot up. Every time I see you tweet it's like, oh my gosh, retail comes in and buys everything that you're talking about. So Mike, it's great to have you.
- [00:46]
A
Yeah, great to be here. Thanks Natalie.
- [00:48]
B
Well, first of all, for people who are maybe listening to you for the first time, because this is the first time we've recorded together, can you give us a little bit of your backstory?
- [00:55]
A
Sure, yeah. I'm an investor by trade. It's kind of an interesting story how I got there. Right. It wasn't sort of a direct path. It's been 25 years in the making. Started trading stocks in my Stanford dorm room as like an 18 year old kid and learned a lot about how markets go up and markets go down and of course in the dot com bubble things collapsed and so I learned that hey, you can make a lot of money quite quickly, you can lose it all back. I sort of made me into a value investor organically. As I said, hey, I want to learn about what margin of safety means. I want to learn how to not lose money. It was my view that as long as you could avoid losing large amounts of money, you would ultimately make a lot of money over time. And so, you know, on the path to getting to where I am today, right, I started a couple of software businesses, sold those, invested in some other private companies, joined a bunch of boards, and then more recently started a liquid hedge fund called Alpine Fox lp, which is my primary investing vehicle now. But I like to do the full lifecycle of companies. So everything from whiteboarding a seed stage company, you know, first round of capital type of situation, all the way up to a post ipo, you know, sitting on a public board, serving on the audit committee. Right. The nominations committee, the. Right. Any of the things that you need to do to sort of manage a publicly traded entity. So I like the whole thing. And that kind of makes me a bit of a mutant, right? Because most investors like to focus, right? So they like to just focus on publicly traded biotech stocks, right? Or just on Bitcoin or just on seed stage or series A companies. And I try to find comfort across the full life cycle. I think it gives you an edge over other investors who are much more specialized.
- [02:33]
B
How did you build this powerful retail investor following?
- [02:37]
A
I mean, it kind of happened organically, right? So I. I had a Twitter account for years, and starting around Covid, I sort of ramped up my posting a little bit because anytime there's sort of markets in turmoil, as CNBC would describe it, moment, that's usually an opportunity to connect with more people, because people are sort of starving for more information, right? They're afraid, like they're worried or they think there's opportunity and they want to listen to smart people tell them, like, what they're investing in. So that's what I was doing in, like, March of 2020. I was laying out a whole long list of names that I was buying when most of crypto, Twitter, and most of the Internet was losing its mind and, and sort of acting like the sky was falling and we never come back. And I felt very certain that the US Government was going to backstop, you know, the market and backstop the economy. It's more or less what happened. But that was a sort of unpopular view at the time. Like, most people were calling for lower prices in equities, lower prices on Bitcoin. And in retrospect, that was a wonderful opportunity. So I kind of started to speak more. But it wasn't until around, I think, 2021, the summer of 21, when spaces was coming out. I think it was June, July time frame that I started to, like, open up the lid a little bit more and use X more actively. And, you know, I think I probably had 4 or 5,000 followers at that moment. And today it's whatever it is, 300 something thousand, and again, all organic. It was never really intentional. I didn't sit down and say, I want to become a bigger voice on the Internet. I just candidly had nothing to do for about a year and a half, right? And so I was just kind of, in addition to being on the board of Iron, I was just kind of tweeting a lot. And it turns out people like the content, so I just kept doing it. And to this day, I'm still doing it, right? And again, there's no particular purpose. Most days. I just enjoy being on there.
- [04:19]
B
Coinstories is proudly brought to you by Gemini. Start your bitcoin savings account today. Plus investing in bitcoin has never been easier than with Gemini's orange bitcoin credit card. Earn up to 4% back in bitcoin on everyday purchases like gas, dining, groceries and more with no annual fee, no foreign transaction fees and no exchange fees on your rewards. Plus sign up today and get a $200 Bitcoin bonus when you spend 3,000 in your first 90 days. Apply now@gemini.com Natalie if you want to stay on top of Bitcoin without getting lost in all the noise, check out the Weekly CIO Memo from Bitwise Asset Management CIO Matt Hogan puts together a quick five minute memo that breaks the biggest stories in digital assets each week. Bitwise has been around since 2017 and manages more than $10 billion across 30 plus strategies. The weekly CIO Memo is bold, sharp and totally free. Just go to bitwiseinvestments.com cio memo and always, of course, carefully consider the extreme risks associated with crypto. Coinstories is also brought to you by Bitdyr, a global leader in disruptive technology for Bitcoin mining and high performance computing for AI. Bit Deer trades under the stock ticker BTDR and is working on advanced technologies to dramatically improve Bitcoin min efficiency. Bitdeer also boasts a massive 2.7 gigawatts of electrical capacity across four continents, positioning bit Deer as one of the most diversified and power dense computing companies in the world. Learn more@bitdear.com and finally, make sure to get your copy of my upcoming Bitcoin 101 book, Bitcoin is for Everyone. The book explains why money is broken and how Bitcoin can help you build lasting wealth and freedom. It makes the perfect gift for those new to bitcoin. Just visit the link in my show notes. The book comes out November 18th. You were one of the early investors to look at the Bitcoin miners and identify an opportunity with pivoting to AI and the ones that you invested in Iron Cypher. A lot of them have done that and man have their stocks outperformed. Can you talk about how you saw that and is that still a sector that has good opportunities for the average investor?
- [06:22]
A
Yeah, so I mean I think that's one of the most interesting kind of 20 year stories. When I was underwriting them three, four years ago I focused on the balance sheet side which is kind of a common theme. I try to always underwrite from the balance sheet first. Because I think if you deeply understand the balance sheet, it's a lot harder to lose money long term. Again, back to my original point, if you don't lose money frequently and you don't lose a lot of money, then over a long period of time you'll actually make quite a bit of money. The upside takes care of itself. So when you're underwriting these miners, particularly in Q4 of 2022, at the bottom of the last bear market, if you looked at them closely, they were trading for less than the value of the power and infrastructure and land, right, and data centers they'd already built and the power they already controlled in the land that they already owned. Now not everybody saw that clearly at that time, but it was self evident to me. Now I had a huge edge, right, because I was on the board of Iris Energy, which is of course iron at the time. And I was able to use that sort of lens to understand how Cipher and others might be well positioned. So I started from that and I said look, if I, let's say took over the, took over the board and decided to liquidate all the assets, there was a moment in late December of 22 where I could have sold all of the land, all the power and all the infrastructure for probably 2, 3, 4x over the next 12 or 18 months what the market caps of the companies were trading at. So my downside scenario was a 2 or 3x and my upside scenario was like a 50 to 100x. And that actually has come to pass because Iron was a $1 and 2 stock, $1.02 in December, I think it was late December of 22. Cipher was a 39 cent stock, Cypher was recently a $25 stock and Iron was recently a $76 stock at the highs. So that's more or less played. The upsides more or less played up. The interesting thing now is like Cantor just put out a research piece just an hour or two ago saying that they value ciphers, just two outstanding deals, right? Just two of their many sites and assets they value. Those two deals they've signed with Amazon influence that Google at approximately the current share price. So you're effectively even now getting all the upside optionality, additional sites, additional deals for free again if you believe that analysis. And so things have changed quite a bit. But the, but the sort of thesis for me from the beginning was this land and power is going to only become more and more valuable and more and more scarce. There just isn't enough power for all the compute Categories, including AI. We were talking about AI at Iron four or five years ago, right? So most people only really became accustomed to AI with the launch of ChatGPT in 2022, but we were talking about it before. And in fact, iron had an MOU with Dell, I think, way back in 2019. So some people were paying attention to this earlier. And so just understanding that the power was going to be fought over by people, and then also understanding in the meantime that Bitcoin's a wonderful customer, right? Because it's permissionless, you can come on, you can come off, you can curtail, Right. It's actually a really nice sort of offtake for the energy that you don't use for other compute categories and allows you to sort of scale the infrastructure organically as Iron's done. So, look, I, I was a big believer. I bought really large positions. I think at one point in 2023, I was the second largest holder of Cipher, when nobody was talking about Cipher, right? It was very quiet. There was no trading volume. There were months in April, May, time frame, March, April, May of 2023, where there's like a million or 2 million shares a day traded. And I was like half those shares, right? Because that was how I got up to 7 million shares at the peak. But of course, you know, that's what you have to do. You have to be willing to sort of take a risk on something that most people don't see. And you have to be willing to dive into situations where it could be a trap, right? Because if you pile in with that many shares for stock that only trades a million or 2 million shares a day, how do you get out? So I had to be very careful in terms of understanding the thesis, making sure I was right. But once I, I knew that I was right, I had to size that position up quite a bit. Iron's a little bit different because I'm on the board. So there's all these SEC related restrictions, blackout windows, general counsel approval, right. If I were to sell even one chair right now, the Internet would lose its mind.
- [10:23]
B
Well, and even what you tweet about it, you have to be careful.
- [10:26]
A
I do. And, and look, I, I go right up to the line. I don't really hold back. I, I say this all the time, but I basically don't censor myself in the moment. And that's one of the reasons why people like my tweets. Like, I just say whatever I'm thinking, which means I have to go back later and curate it a little bit because I'M saying stuff that sometimes is completely off the cuff. A lot of other folks in my position, they either don't tweet at all or they have some compliance person looking over their shoulder and pre approving everything. And the market knows when people are authentic or not. So my view is like social media is quite binary, right? Because if you use it the way I do it, then people will know you're authentic, but you're going to take more risk and you'll aggregate more attention if you use it like some of these sort of sanitized corporatized people do. Like you can tell that they're just following somebody else's guidelines and then people will largely be uninterested. But you know, you take risk when you do that. But all of life is about risk and all markets is about risk. So I'm pretty familiar with that.
- [11:21]
B
When you have strong conviction, do you also ever buy call options or maybe use leverage in order to optimize your returns?
- [11:28]
A
I do. Look, I use, I try to use the simplest way to express any idea because I think over long periods of time there are a lot of things that sound sexy, that sound smart, that actually don't really make money. So I'm trying to express a view. I don't get too cute with it. I advise the kid analysts and the chart squigglers not to do that. But they never listen. Everybody wants to like find this sort of market neutral way to express something or they get too cute with options, right? I tell people 1 to 2% sort of my personal rule of capital, max exposure to sort of calls that are just long. You know, if you're using puts to hedge or something, it's, it's, it's a little bit different, right? Because you can maybe go a little bit bigger because you're just, you're sort of creating, you know, more protection on the portfolio. But I'll use them especially at stages of the market where I think it's highly asymmetric. So like with cipher and iron, for example, for most of 23, 24 I was really certain that those equities would be worth 5 or 10x what they were trading at for most of those years. And so I never sold calls against those positions, right? Because I never bought puts because I had no interest in protecting against downside. If anything, I wanted a little bit more convexity if they were to run in a certain time frame. That's what I did. I layered in calls every quarter or two. Sort of the reverse Austrian economics way of you'd buy puts two or three months out. Like if you've ever read the Dow of Capital by Spitznagle, he talks a lot about ensuring a portfolio using puts that are sort of two years out, maybe 20% out of the money. And so any sort of cataclysmic decline you can kind of capture, you can capture that via the puts and it sort of insures against the rest of the portfolio and allows you to once the market bottoms out to buy back in at lower prices. I think of buying calls on things like miners that are highly asymmetric as like the opposite of that. Where there are some months where these stocks go up 70 or 80%. So if you consistently buy puts that or calls that are 20 or 30% out of the money across the early stages of a bull cycle, eventually you'll catch one of those quarters or one of those months where the stocks really rip and you can make a little bit of extra money and add a little bit of additional sort of leverage and convexity of the portfolio. But again, it's a really small piece of what I do. A lot of what I'm doing is more like 10, 15, 20 year ideas. Megatrends like AI and Bitcoin, which I think are really long duration.
- [13:45]
B
Yeah, well I've noticed you talk about time horizon like you have to have a longer time horizon especially with some of these narratives. And I've seen the charts that people have put on social media where it's like this stock and and here's where Mike Alfred bought and then boom. Hockey stick. And even just a couple months ago you started tweeting about Bakkt and you're on the board and boom went like 40% up. Right. I don't know what it's doing now. And then recently strive. Can you talk about what goes into your decision to say okay, I'm actually, I'm not going to just invest, I am going to start tweeting about it. I'm going to tweet my position. And do you feel a sense of pressure like that you could potentially move the market?
- [14:22]
A
Look, I feel pressure because my kids are going to want stuff over the next 20 years. They're going to want to go to college and they're going to want to go to private school or whatever. But I don't feel pressure because of external things like that. If I did, I would just stop using it. I try to be thoughtful that most people don't have my level of knowledge about markets. They don't have 25 years of experience trading stocks. But again, there's only so much you can do. You can provide all of the disclaimers, all the caveats. I can tell people do not do more than 1% of your portfolio or 2% of your portfolio in calls. And they're going to go out and put 100% of their portfolio in calls. I can't control what other people do. I tell people this all the time in spaces. Like I'm going to talk about what I do and what I'm interested in. Most people should not try to do what I do. The way I kind of think about it is imagine you're a stunt person in the movies, right? And you ride motorcycles off cliffs with a parachute for a living. It looks cool on TV and you see the person going off the cliff and then their parachute goes up. Most people shouldn't do that. But the guy who does it professionally, he could do it a hundred times and nothing's going to happen. And in fact, he might even find it fun. I do high volatility, high conviction, highly concentrated long duration value investing, which means a lot of times my portfolio doesn't look like anyone else's. There's stuff in there that people don't understand. There's position sizes that seem irresponsible and yet it works because it's highly unconventional. Right. It doesn't follow anybody else's, anybody else's rules. Right. So that's how I invest. I say that, I remind people of that. People are still interested in it. They still want to follow, they still want to join spaces with companies like Bakkt. Right. Like that's a different sort of example. Right. Because that's a turnaround, that's a company that needs to be fixed. Where, you know, I have some experience doing that in both public and private context and I think we can turn that around and turn into a much bigger company. But it needs a lot of work. So like anybody who doesn't understand that when you join a public board it could be a three, four or five year process to get it to the promised land. Like they're not really my audience and they're certainly not aligned with me. So if someone's trading any of these stocks that like it took. I joined the board of Iron four years ago.
- [16:36]
B
Right, Right.
- [16:37]
A
It's, it's the hero the last few months. But there are many, many quarters over the last four years where, where it wasn't, it was a dog and nobody liked it.
- [16:44]
B
Well, I'm sure that there's two sides to that, to the coin of being so influential with retail investors. Right? Because on the positive side, it's like you've helped people increase their wealth and they, they love you when everything's flying high. But when things are very volatile to the downside, which they can be, people could probably get very upset with you. Right? I'm sure you've been reached out to saying like, hey dude, I put my, whatever, my life savings into this and it's crashed and they blame you. Does that happen?
- [17:11]
A
Yeah, of course. There are a lot of so called adults that are not really that mature and maybe not that responsible. It's just the human condition. People would prefer to blame someone else instead of looking inside and saying, I'm the one who did this. Right. I made a joke on Twitter the other day, I was like, look, contrary to popular opinion, if you have not given me actual control of your trading account, I am not the one who lost you money. Right? Just like own it, you traded. I just talked about what I do. Those are two different things. I have empathy for people who mess up, just like I do with heroin addicts and people who gamble too much and lose their life savings in poker or whatever. Right. Like there's infinite examples of human greed, human hubris and human fallibility. Right. In markets and gambling, etc. It's not my job. I'm not a counselor, right. I'm not a, I'm not an addiction counselor. Right. I'm not a psychologist, I'm not a therapist. I don't provide counseling sessions. I don't manage anybody's. Any retail investors money. Right. It's actually my structure is intentionally very, it's, it's sophisticated and so it's intentionally designed to not have any of those impact. So it is sort of an interesting juxtaposition because on one hand I'm sort of very institutionally oriented, very long duration. The other hand, I'm, I'm tweeting like a kid analyst. Right? And you know, sitting in my home office and you know, it brings up a good, a good point and a good thought, which is like, in the long run, does this really serve me or does it serve the audience? And so far so good. Like the vast majority of the feedback is positive, right? Like it's like probably 90 plus percent.
- [18:47]
B
Yeah.
- [18:47]
A
Of people are like, I made a ton of money off these stocks. Like I told, I didn't tell them to buy them, but they heard me saying I was buying them and they went, bought them and they did well with them. And I'm very happy about that. But I don't spend a lot of time on the, on the haters. In fact, I probably blocked more people on X than maybe any other user. Just because if somebody is being hateful or attacking, like other people are like, oh, I'm just going to allow them to do that. I understand that, that philosophy, but I don't have time to re. I can't even go through the replies to find the good ones if I allow the haters to dominate stuff. So it's sort of an instant block. Like anytime someone's in bad faith, consistently attacking or showing that they're not taking ownership of their own actions or blaming me for something, I just don't have time for it. I don't even really care anymore. It's more a time management thing.
- [19:33]
B
Well, I'm sure you do get a lot of feedback. Do you think that in the retail investor community there is a lot of that speculative mindset, the gambling mentality of maybe a sense of even desperation, like, God, I cannot make ends meet and I'm looking for that lottery ticket that's going to go 2100x and then maybe I can relax a little bit about my financial situation.
- [19:54]
A
Yeah, I think there's ton of ton of this is related to monetary debasement. Something that we're all very familiar in sort of the bitcoin community with. And then some of it is the gamification of society like sports betting, social media, hacking our dopamine receptors, right? Like there's this weird kind of paradox where like X can be extremely valuable and useful for investing and for understanding things about the world and learning facts and news and stuff like that quickly. The other side of it is sort of dumbed us down as a society. It's made us less critical and thinking, less able to do deep, thoughtful thinking. Like when was the last time you sat down and read a thousand pages in a physical book? If you ask Most people, like 20 years ago, they were more likely to do that and now we're mostly reading and listening to sound bites, watching videos. Right. Like on various social media platforms. And so I think a lot of these things that appear to be good and are probably better than the alternative of not having them when overused can actually cause your brain to sort of be warped in a negative way that actually makes you less successful, less able to hold a thought, less able to focus, makes people sort of organically more add over time. And so yeah, that's definitely happening and I'm in a sense contributing to it by being someone who uses X. A lot. But I remind people in spaces all the time, like be very careful who you listen to, be very careful who you follow. There are a lot of people who are polluting their minds with really low quality content and then it's no surprise that they get really poor results in life.
- [21:27]
B
Yeah. You recently took a large position in Strive. So I want to know a little bit more about why you saw so much opportunity there and your thoughts on the greater Bitcoin treasury space.
- [21:36]
A
Sure, yeah. I mean look, first off, Strive, I think I have 1.66 million shares. So whatever it is today, like 1.8 million or something at the current price, like that's a big position for most retail investors. But the time I took it originally it was about 1% of my fund. So just to be clear, it's not particularly large on a relative basis, but it is, at least in the fund context. It's the only treasury company investment that I have and the only other treasury company pure play treasury company that I've owned in my own personal account IRA is mstr which I purchased. My cost basis on my current position is just over 30 bucks split adjusted. And I did, and I disclosed this repeatedly on X. I did sell a lot of it last fall leading up to the peak at whatever it was, 541. I think I literally sold some pre market the week before. I sold 5 or 7% of my position at 535 pre pre market. So I caught within 5, 6 bucks for just a small percentage. I had sold at 500, 450, 400, 350 like all the way up. I just did it in tranches sort of automatically. It's a good rule for investors by the way, if you need to leg in or leg out, you're never going to catch tops, you're never going to catch bottoms. You just need to understand sort of approximately where value is. So all that is context. I've been more bearish than most people on the treasury company idea over the last year. Not because I'm bearish on bitcoin. I actually am extremely bullish. I think bitcoin's the most important asset maybe in all of human history. To own is probably the most de risked large scale asset in history. It's the asset that my mother owns, my father in law owns. They don't own iron, they don't own cypher, they don't own mstr, but they own bitcoin. And I think most people as a sort of foundational element of their portfolio should own bitcoin. First, that said, because I have a lot of bitcoin and because a lot of this for me is actually sport, not just right, it's not just to pay the bills. It's more when you're trying to build a legacy, at some point it's like you're going to do, like I said earlier, guy who's going to ride the motorcycle off the cliff with a parachute and know they're going to do it successfully. A lot of this is can you find the most interesting asymmetric investment? So I think the correctly structured a really well run treasury company, which I think strive is, can achieve excess performance over bitcoin, particularly in scenarios where for some reason it's temporarily depressed because of market sentiment or because of sentiment on the whole space or sentiment on that particular business model. I think Stripe probably has the best management team and board in the space, at least from what I can tell from the outside. I did have a couple of conversations with those guys that led me to believe they're significantly more sophisticated around the structure of the securities that they're going to be layering. Remember, if you, if you structure a lot of securities on a, on a cap structure, right, For a company, all those things sit on top of the bitcoin, right? So the heavier the weight of those things, the less this whole idea of bitcoin per share really matters. So a lot of people are saying bitcoin per share, that doesn't really mean anything at the common equity level. If you have different tranches of debt, you've got convertibles, et cetera on top of it. I just don't think a lot of retail understood that. And this idea of M Nav to me is sort of like a fairy in the forest where it comes out and sprinkles fairy dust on you. There's some people who think it exists, there's some that are swore they've seen it once and there are others that don't think it exists at all. And I personally have always thought of it as a fairy. A lot of other people thought of it as a hard thing that like had some realness to it, some hardness to it and, and I've always viewed it as a fairy. All that said, like, if done correctly and at the right prices, which I think approximately the price I was paying when I originally invested around 95 cents, the upside is something like 5, 10x in the next 12 months. And the downside is probably, I don't know, 15 or 20% because again, with no exploding debt, with no sort of liquidation possibility and they're the only treasury company that I can tell that is structured this way, then it's just a matter of time, if I'm right, that bitcoin's going to 150 or 200,000 before that equity actually goes up. And it could potentially like a bitcoin miner, go up in an exponential fashion over some period of time.
- [25:44]
B
Are you investing in the preferreds that MSTR is issuing and if not, why?
- [25:49]
A
I haven't invested in any of the preferreds. Some of those products may be quite good. It just doesn't fit my strategy. I'm an equity focused investor and I'm comfortable with volatility. I don't need like a 5 or 8 or 10 or 12% kind of fixed style return for the cash side.
- [26:08]
B
Of your portfolio, like a fixed income.
- [26:10]
A
I would rather own something that has zero exposure to the rest of the bitcoin ecosystem. I don't want to have these sort of codependencies where my entire portfolio is predicated on bitcoin winning. Right. I actually think that's the safest bet in the world. But also I don't need to bet everything on one idea. So what I'll do is I'll, I'll take the piece that's more like cash and I'll put it in what I consider to be a bond proxy in an industry that has nothing to do with technology, nothing to do with Bitcoin, where stuff like alcohol companies where they're completely non correlated, they're negatively correlated, they have no connection whatsoever. That way you have something that provides ballast when the whole market tanks. The problem with some of these preferreds is where's that cash going to come from if bitcoin drops a lot? It's always when everything is sort of depressed at the same time that, that everything becomes increasingly more depressed because sentiment declines, capital markets freeze up and all of a sudden you can't get liquidity. When that happens, alcohol stocks will be up, right? When that happens, certain consumer staples and healthcare and utilities will be up. And so I always try to have things like that in my portfolio because I'd want to be able to buy more Bitcoin if it were to go to 60 or 70K. I think that's highly unlikely in the short term. But if it does do that, I don't want to be selling STRC because I don't know what happens to MSTR at those different prices. I'm not saying anything necessarily bad is going to happen, but the worst things that you can imagine tend to happen all at the same time.
- [27:38]
B
Coin Stories is brought to you by Speed Wallet. Want to win one million sats just by answering Bitcoin trivia? The top 50 players win free sats every week and one lucky winner gets a million sats at the end of the month. Speed Wallet makes Bitcoin simple. It is the first, fastest growing, most loved wallet that allows you to send and receive instantly, swap to stablecoins, shop gift cards, play games to earn and explore mini apps to pay with Bitcoin or Stablecoins. Speed is also driving real adoption. Steak and Shake now accepts Bitcoin nationwide via Speed Payments, earn, cash back and rewards. When you pay with Speed Wallet, head to Speed app Coinstories or download the app via the QR code on the screen and use code coin storage stories 10 for 5000 free sats. BitKey is a Bitcoin hardware wallet with multi 6 security, inheritance and a recovery system designed for real life. No complex setup and no seed phrases, just true self custody without the stress. It was named one of Time's Best Inventions in 2024. Use code STORIES for 20% off at BitKey World. Up next, the Bitcoin way. There's only one way to protect your Bitcoin from government, politicians and third party risk and that is 100% self custody. My friends at the Bitcoin Way will train you how to do this the right way the first time. No compromises. Go to the Bitcoin way.com Natalie to speak with the experts about making sure your Bitcoin is secure and private. And finally, Coinstories is brought to you by Genius Group, a Bitcoin treasury company listed on the NYSE, American undertaker GNS. Genius is building a 10,000 Bitcoin treasury and just launched the Genius Academy featuring free free courses from Safedina, Moose, myself and more. Start learning today at Genius Academy. AI Genius Group Genius isn't measured in iq, it's measured in Bitcoin. And again, don't forget to pre order my upcoming book Bitcoin Is for Everyone. Back to the show. The analysts I've interviewed have said that the reason the price is so depressed right now with Bitcoin is that the OGs are selling. Is that also how you see the narrative or do you think that there's something else putting pressure on Bitcoin? Because it seems to me, especially following accounts like yours, that the retail interest is really outside of Bitcoin, that they're speculating on stocks, they're speculating on AI and they really want more return than.
- [29:52]
A
Bitcoin's offered them look, I think everybody's looking for narratives, and so people tend to latch onto a narrative and apply it sort of retroactively to what's happening. These are highly complex systems that are impossible for any one person to know. So anyone who claims they know exactly why X, Y, Z price action is happening in any asset, they're usually full of it. I speculate like anyone else. I'm pretty good at speculation relative to the average person. But I also will candidly admit when I don't know something or I haven't studied it. In the Bitcoin case, just look at Ethereum. It's down 7, 6, 7% for the year. Solana is down 25% or something for the year. The entire crypto ecosystem has been starved. I think you can look back now and say this has actually been a really tough liquidity environment. Bitcoin's gone from 16,000 at the lows to 126 in an environment that was somewhat difficult, with the fed having raised rates 500 basis points in a very short period and sort of crushing a lot of markets temporarily in 22. And I still think monetary policy is sort of restrictive. I still think global liquidity is somewhat restricted. I think Trump's policies candidly have created a lot of confusion. I voted for them, so I didn't vote for him last time and I voted for him this time. I'm an independent voter, so I reserve the right to change my mind. In fact, I don't think you can actually be a great investor if you're overly political and you invest around that. So I intentionally try to change my mind as it relates to politics and don't get sucked into it. But I think the tariffs, the immigration policy, right, some of the stuff that's happening with the Fed, I think all that is contributing. And the thing to remember about Bitcoin is the supply side. We always know. So as long as the protocol continues to work, the supply is going to asymptotically, right? The new supply issuance is going to asymptotically approach zero over the next hundred plus years. And so the only thing that really drives things is demand. And so if demand is restricted for some reason because of liquidity or because of alternatives, that could be a temporary drag on the price. But at some point, if Bitcoin's actually the best money and it's the thing that people should accumulate and it's the best risk adjusted asset, I lose zero sleep about whether or not that's gonna Happen. I just ask the question of when. And I continue to think it's probably somewhat imminent. Like everyone's flipped really bearish right now and everybody has a narrative for why. And I think it could just wake up and absolutely rip in the next six weeks or the next eight weeks. And hey, I might be wrong. I'm not positioning my whole life on that thesis, but anyone who says it can't do that doesn't know bitcoin. They haven't been around very long because it does do this quite a bit. It makes you think it's dead, right? It post a death cross on the chart and everyone's screaming that it's over and this is the end of bitcoin. And then it bounces and just rips people's faces off in like two, three months.
- [32:36]
B
Well, what's the turnaround? What do you think we most need in order to get that momentum going?
- [32:41]
A
I mean, in retrospect, it'll be easy to point out that XYZ company bought it and the US government did. X I think the, the government reopening historically has been pretty nice. Nicely correlated with up movements in bitcoin that just happened. It takes a couple weeks to get the liquidity spigot flowing. I posted a tweet about this and people are like, oh, it didn't go up the day after the. Right. Yesterday was the first day and bitcoin went down. You must be wrong. And I'm like, oh my God, you guys have the attention spans of a three year old. Like, my daughter has a higher attention span than some of these people, right? Like, give it at least a week or two to get the paychecks going again. He's going to launch some stimulus, right? We're, we're going into a lower rate, high fiscal stimulus environment with high fiscal deficits. And people don't think bitcoin's going to go up. Like, yeah, it's, it's scary and annoying to some people with a short attention span that bitcoin has not behaved exactly as people expected at the bottom of the cycle. But everything's changed with the ETF and with the treasury companies, right? And the current liquidity backdrop and the macro. So we just are in an elongated cycle. So we may still see parabolic price movement this cycle. It just may not happen until 3, 4, 5, 6 months from now or even this time next year. I see a scenario where this bull market, if you overlay it with the AI Capex spend cycle, which I'm extremely bullish on, there's A lot of every six months they turn bearish on this and then they bounce right back. Because AI is a 20 year theme. It's sort of like being bearish on the Internet. There were people who are bearish on the Internet for the last 25 years, but they all made less money than people who were long. Right. Long Bitcoin, long AI. Easiest trades of your lifetime. You just hold them in large size for a decade and we're at year two or three of a major uptick in AI capex. You're not going to see a huge recession with the biggest companies, the largest companies in human history with the highest cash flow pouring money into AI. And remember, AI overlaps with Bitcoin both in terms of agents, AI agents wanting to use some sort of algorithmic asset and also in terms of the energy layer. AI and Bitcoin are competing for power right at the data center level. So if AI is can continue to rip, and I think it will, then Bitcoin is going to struggle to go down for very long. It can go down for a few more weeks or something, but it's probably not going to stay down that long.
- [34:55]
B
Well, looking at Bitcoin and AI, I mean you can buy spot Bitcoin. If you want to simplify your investment strategy, you could just buy Bitcoin. But with AI, I feel like there's more of a sense of where do I invest in AI? Do you invest in the energy sector? Do you invest in specific companies, chip makers? Do you put it all into Nvidia? Like how do you evaluate AI and where to, where to actually allocate? Because a lot of people are calling it a bubble.
- [35:16]
A
Yeah, I mean like anyone calling it a bubble doesn't really understand AI. I mean this is the first large scale technology stack in human history that can improve itself. Right. And approach human level intelligence. It's not, it's not just like a small innovation step forward, it's an entire paradigm shift in the way human life on this planet will operate. It's a new operating system for all of human life. And so there's no bubble. Right. There's just a tremendous amount of, we're like 1% of the way through of the investment cycle. It may take 20 years or 30 years to make that leap, but it will be made over that period. And so I lose zero sleep. Anyone who says that they just don't understand, they don't understand AI as a technology and they probably also are bearish and, or short or sold their stocks too low. And remember a Lot of this commentary is coming from people who are out of position. So it's in their best interest to sort of talk other people out of their positions to get them to sell so they come back down so they can buy them. The only right decision in my opinion for both Bitcoin AI is to accumulate every dip for the next 20 years. So not worried about that. I don't think that's a real, a real thing. But in terms of like how to invest in AI personally my strategy has been to focus on picks and shovels. I don't think I'm the guide who can choose whether OpenAI or anthropic or Perplexity or Gemini is going to be the leading AI application developer. That's a, that's. I'll leave that to Sequoia and Andreessen Horowitz and some of these tech hedge funds. Where I think for sure you win is if you're the person selling the power to all these application developers who have to get the power in order to compete with each other. Right. So it's selling, it's selling the shovels and the pickaxes and the Levi's to the, to the gold miners, rather be in that business. It's much more, it's much more predictable. You're much more likely to have success and you're much less likely to lose large amounts of money. Which is why I'm sort of confident placing these really large bets on these AI data center companies. Because effectively the only way those companies lose is if you don't need power to do AI or if AI turns out to be less than we think it is. I'm pretty convinced, like the Internet 25 years ago, because I've seen this cycle play out before, that AI is significantly larger than most people think it is. I think, funny enough though, I think AI is drowning out Bitcoin a little bit in the short term. In terms of mindshare, I don't think they're competitive technologies directly. Right. But in terms of investor dollars attracting flows and capital, AI winning in the short term is actually sort of caused an issue for Bitcoin. I think you look out five years, they're both going to be a lot bigger.
- [37:47]
B
Our mutual friend Lyn Alden always says nothing stops this train. And it looks like they're going to be running multi trillion dollar deficits to finance industrial policy as one of the things they need to spend on. And we're seeing the government taking a stake in companies, rare earth minerals, you know, companies that are hopefully going to produce things that we will need in order to reshore our industrial base. What do you think about that? Just in general, but also do you look for opportunities there of companies that potentially could have an equity, equity stake by the administration?
- [38:19]
A
Look, in this environment anything's possible. And if you invest in companies that are absolutely critical for US long term competitiveness or security, you may find yourself with a new shareholder on the cap table. I, I don't think that's a thesis that anyone should invest around necessarily. And I'm sort of of two minds of it. On one hand it's like China does this type of stuff how to, to make sure we're successful. They, they can, they can make a 20 year plan, right? They can force people to do something. They can get everyone to sort of march in the same line. And the US is a capitalist free market, at least ostensibly, you know, that's what it's supposed to be. And we're sort of veering now into this world where we're going to start to pick winners. So I sort of, I sort of look at it from both sides. Like I can understand why, you know, somebody, a strong leader might believe that that's the right thing. But I also think long term, what makes the US so amazing and competitive and will continue to ensure our success for the long run is that we let free markets do their job. I think the lesson from history is that free markets and capitalism, as inefficient in some ways as it is, it's far more efficient than any sort of official government allocated approach. Whenever you do mandates or whenever you tell people here's how much you consume or whatever, it tends to create inefficiency, shortages and ultimately death and destruction. Right. So I would prefer to sort of let the free market do its thing. But to the extent the government can step in to ensure that there's no policies that are preventing the free market from functioning, like for example, I don't think they need to solve the AI power problem. They just need to go in there and like wherever there are regulations that are counterproductive to allowing companies to exploit the opportunity, remove them so those companies can, can go do it. I think those companies will do it better than the government can do it 100%.
- [40:07]
B
Do you think that the government would ever take a stake in a bitcoin company in order to gain an advantage?
- [40:12]
A
I mean that's a popular sort of conspiracy theory with bitcoiners right now. Keep seeing people saying that the government's going to take over MSTR, the government's going to nationalize the I bet BlackRock ETF. Anything is possible. I think it's much more unlikely probably than a lot of the folks think today. I mean, look, if, if Trump's not going to do it, who's going to do it, right? So I think it gets less likely. I think Trump's a once in a generation politician. He's been allowed a lot of latitude by the Republicans. I know a lot of them probably don't like, they won't admit it, they don't really like him, but he's a force of nature and there's nothing they can do to stop him. So they just sort of get in line with him. And it's wild to me also. I'll just say as a sort of less political person than a lot of, a lot of other folks in Bitcoin, that for whatever reason, as long as Trump does it, it's like, okay, right? So if Trump buys companies, right, it's like, oh, that's fine. If Biden were to do that, they'd be screaming, these liberals, they're like preventing the free market from working. If, if Biden ran the same deficit that Trump's about to run every year for the next three years, they'd say, oh, look at these liberals, they're spending so much money. It's just wild to me how people are sort of willing to suspend disbelief and ignore facts as long as it supports their worldview. And as I said earlier, I think that's a really bad way to invest. So anybody who can't see the intellectual dishonesty of something just because their side likes it, they're probably not going to be very good investing. Like, they may not admit how bad their investing is, but anyone who thinks like that, that I notice repeatedly saying that they're also tend to like, be the person you want to fade in markets, right? They tend to squeal the loudest. But how bad things are right at the bottom that you want to buy, and they tend to get really excited and clap and cheer and overly exuberant right at the top that you probably want to trim out. And I think again, some of that is just like an emotional makeup. Like if you're the type of person, you can't see flaws in your own argument or in your own sides position on something, you probably also can't see how flawed you're thinking it is relative to investing.
- [42:13]
B
Totally. I wish people were more willing to criticize these heroes that they've made and put on pedestals because everyone makes Mistakes, and certainly we've seen it on both administrations. But we did create a strategic bitcoin reserve. Trump did. And so some people are hoping that the United States might eventually accumulate bitcoin. Do you think that that's going to happen? I mean, you called bitcoin the most important asset that we have as humans. When are the governments actually going to step in? And when will the game theory set in of actually having bitcoin in the reserves of central banks? It seems like that's pretty far away.
- [42:45]
A
I mean, it seemed impossible that the government would even acknowledge Bitcoin before Trump. Right. And now I think we've made quite a bit of progress in a short period of time. It's not as much as some of the Maxis would have wanted. We're not buying bitcoin in the open market quite yet. But my suspicion is that'll happen when there's enough pressure externally, meaning once the US Government recognizes that others are taking action before them, that'll probably catalyze additional action in the future. Predicting that is sort of a fool's errand, in my opinion. It's, like, really hard to get that correct. But what I am confident in saying is when Bitcoin is a million dollars, a coin, which I think is coming by, even though it seems unlikely right now, given the current price action, I think it's still coming by, say, 2033 or so in that timeframe. So within the next 10 years, I think by the time that happens, almost every government will have some direct or indirect exposure to the asset, and it will be viewed as a common, you know, strategic reserve type of asset across the world.
- [43:50]
B
So can you expand on that a little more? Like, what market cap do you see bitcoin reaching and what risk role will it play within the global financial system?
- [43:57]
A
I mean, I think it could reach 50 or 100 trillion. And what's it at right now? Two. Two trillion?
- [44:02]
B
Yeah. Over what time frame?
- [44:05]
A
Over the next 10 or 15 years, maybe 20 years max. I mean, I think it'll be viewed as the most pristine neutral reserve asset where if you want to hold an asset that can't be easily seized. Right. Like, if you think, forget about what you believe about Russia, Ukraine, but when Russia invaded Ukraine, you know, US and the allies just sort of seized as many of the Russian dollar deposits in Europe as they could. And so, again, irrespective of what your view is on, on the right, the rightness or wrongness of that decision from a political standpoint, the interesting thing is, like it. That was A signal to all governments that they need to have more assets. And by the way, they've been buying a lot of gold.
- [44:46]
B
Yeah.
- [44:46]
A
Right. So gold's up substantially this year. Gold is the closest thing to bitcoin. Bitcoin sort of the closest thing to gold. But I think bitcoin has tremendous long term advantages over gold. Again, the supply issuance for, for bitcoin is completely algorithmic. The supply issuance for gold is largely predicated on how profitable it is to mine gold.
- [45:05]
B
Yeah.
- [45:05]
A
And so as the gold price goes up, they mine more, more gold. And so the cure for higher gold prices is higher gold prices. Right. Whereas there's no cure for higher bitcoin prices because there's no way to accelerate the amount of bitcoin mining you can do just based on your desire to mine more bitcoin. There's no other asset, in my view, in human history that looks quite like that. So, yeah, over 10, 15, 20 years, I have zero concern about bitcoin's monetization pathway. I just think people are in a rush and everybody claims that they're really a hodler and they're really long term in orientation, but people also want to put food on the table and they want to buy a new car. And it turns out that not everybody wants to have one chair and one mattress right in their, in their rental apartment. Like, some people have kids and some people want to take a trip and some people want to retire from their job. And you know, there's a lot of shaming about that for whatever reason in the bitcoin community. But I'm more of a realist. Like, I know people are going to do that. So I always advise people, buy the amount of bitcoin that you can hold forever. So whatever that is, don't, don't get cute and put 100% of your portfolio in bitcoin and then try to decide when to sell to pay bills. I think that's wrong. It presents a timing challenge. You have to become a hedge fund manager. If you are a hedge fund manager, that's fine. But most people aren't. It's not what they do for a living. And you're asking them to become a hedge fund manager like you. You're going to have to decide which week, which month to trim your bitcoin position to pay your bills. And I look at it differently, which is create enough fiat income with whatever else you do, own a business, own dividend stocks, bonds, whatever, and buy an amount of bitcoin that you can sort of put in the vault and never sell it. You can choose to sell it if it goes to a million or 2 million or whatever. You can choose to sell some in the future. But if you have, if you're forced to sell it because you overallocated, then you're going to get yourself in a bad position. A lot of bitcoiners disagree with that view. And I'm okay being sort of in the minority and being contrarian, but I'm pretty certain I'm right about that. I've seen way better outcomes if you remove the emotional side and the decision of having to sell.
- [47:04]
B
Do you invest in gold as well?
- [47:05]
A
I don't currently. I have in the past, but don't have it now just because I think it's fully valued at the current price. And any amount of money I'd want to put in like a neutral reserve asset or sort of a hard money is going to be in bitcoin.
- [47:18]
B
And have you shared publicly what percentage of your net worth is in bitcoin?
- [47:22]
A
I've said a few times that like between 30 and 50%.
- [47:25]
B
Okay.
- [47:26]
A
Of my overall net worth is like bitcoin and bitcoin related assets. But keep in mind it's really hard to do an analysis on private assets. I have significant exposure to private companies. Those companies, their last mark might be X, but I know the value to be Y. In one case, I'm selling a company right now. The last time we had a mark on it was like 20x ago. Right. So when that actually sells, that'll be the real valuation and I'll take my cash back and I'll reinvest it somewhere else. And so because of the level of private exposure I have, it's really hard to like give an exact number at any given moment in time because I have to make assumptions about values that don't exist.
- [48:01]
B
What's the most amount of money you've ever earned in one single year?
- [48:05]
A
Oh, I'm not going to say that on, on, on camera.
- [48:07]
B
What? There's like that, that kid that goes around and talks to very successful people and they all share this. Mike?
- [48:13]
A
Yeah, let's just, let's just say that. Let's just say that a normal year is in the middle, single digit millions and a good year's in the tens.
- [48:23]
B
Okay, well that's awesome. For people watching this, they're earning fiat. They're earning a currency that's debasing and they want to invest. Do you think that they should just buy bitcoin if they want to keep it simple? Or do you think that everyone should take the time to maybe look at various companies and invest in the equities markets and maybe perhaps try to outperform Bitcoin in any given year?
- [48:45]
A
I think at a high level, my view at this point is sort of similar to Buffett, which is that if you really want to spend your life becoming an expert at markets, it's possible you could beat the market, right? Just like it's possible if you grow up dreaming about basketball, it's possible you could play in the NBA. Most people will not make it to the NBA. And candidly, becoming a world class professional investor is the same level of difficulty. It's just most people think it's easy because it's accessible, right? Sort of like if someone stakes, you can go sit down in a high stakes poker game with six or seven other pros that all have a million dollars in front of them and maybe you'll survive that session. But the odds are over a long period of time you're going to lose money relative to somebody who has more skills than you. So all that said, I love equity investing, right? I love company building, I love sitting on the boards, I love working with the CEOs, I love M and A transactions, right? It's just something I enjoy, right? Like some people like surfing, right? I used to surf a lot. Some people like to go running, some people like to go camping, some people like to go sailing, right? Some people like to travel and drink wine. I like all those things to some degree. But I truly love, and I think I was put on the planet to be an investor. So for me, the idea that I would just hold bitcoin and then cease to be an investor at that moment is sort of counterproductive to who I am. It's like a abdication of my dharma. Like my dharma is to do investing. And even though the game theory, optimal allocation might be 80% Bitcoin or something, that doesn't allow me to fulfill my dharma. So everybody has to. It's a deeply personal question. Every individual has to think about their own objectives, their own. They got to be honest about their own skill level. Remember, more than 50% of people think they're above average drivers, right? So, like, we know mathematically a lot of this stuff doesn't pencil. I think more than 50% of people think they're above average investors too. And the numbers say that like 95% of people aren't going to beat index funds over even three or four years, right? And 99% of people probably won't beat index funds over 20 years if they're active investors. And so, you know, people should be aware of the odds. It's sort of like you go to the casino, like you can go in there right now and you can drop a million dollars on black. You maybe have 48 or 40, 47, 48% of hitting. And if you hit twice in a row now, you've got $4 million and you can walk out of the casino and say, look, he just made $3 million on 1 million in five minutes. Sure, that was one iteration. It's like one Monte Carlo simulation. If you run that Monte Carlo simulation 10,000 times, the more simulations that you run, the more the math starts to approach reality, right? So you could essentially arb the difference between that one sort of like edge case where the person wildly outperformed expectations and then what actually happens if you run enough simulations of the future. And so I try to think of it individually, right. And idiosyncratically. And I also try to think of it in terms of the aggregate math. And so like one exceptional person sure can outperform bitcoin. The vast majority of people are not going to do that. And so the optimal thing for the vast majority of people is a well constructed portfolio of assets that they can hold. And that's the key thing. It's not in a perfect world what you think you can hold. It's what you'll actually hold when shit hits the fan. Like there's a, like just the last couple of days, for example, a lot of people thought they could hold iron and it went from 76 to 42 or something. This morning I felt almost nothing. I mean, it's annoying, but I felt almost nothing because I have a view that iron eventually is going to be worth multiples more than that if the company continues to execute. But there are a lot of people who don't think in their mind that they can afford to hold through a mark to market loss of x percent. I don't think those prices are the real value of the company. And I'm very close to the company and I only care about what the price is going to be over the next three, four, five, six, seven years. But it is of course very tempting for most people when they see a price on the screen to go, oh, I just want to make the pain go away, let me dump this now. And I don't have to look at the red anymore. And of course, that's what markets do. They systematically exploit people whose time horizon is too short or their Conviction is too small. Right. Or their skill levels too low.
- [52:48]
B
When you've pointed out that you don't get the massive upside volatility without the downside volatility. And maybe people that are getting really stressed out don't have the appropriate amount of knowledge or the right allocation because it's like getting them so frustrated. But I do think it speaks to why people like you have such a big following. Because if you see a track record of such success, people think, oh, that's a sure thing. I'm gonna follow exactly what this guy does. But again, that kind of goes back to, there's a lot of pressure on you because if you now you're not making the right decision just for you. It's like you have this army behind you that's God knows what, how much money they're investing in this, but maybe their family's life savings. And if something tanks, all of a sudden they get upset. But do you ever, like, come to a point where you're like, you know what? Maybe I made a mistake. Mistake. I'm going to pull back and I. I'm reevaluating this and I'm willing to adapt and I'm willing to change and I'm going to pull out of an investment.
- [53:43]
A
I mean, look, we. We make mistakes. We're. We're all human, you know, My goal is to. To get 55 or 60% of the ideas correct, but maybe more importantly, when I do get it correct, to size them appropriately. So it's the difference between batting average and slugging percentage. A lot of novice investors want to do gotchas. And they're like, oh, you bought a stock that didn't go up right away? And it's like, okay, like, that's not really where the money is made. The money's made when you do get it correct, making sure you have a high slugging percentage, make sure you allocated enough to fully capture the alpha or fully capture the opportunity that was there. And so I focus more on that. I, look, I didn't sign up contractually to advise anybody on their portfolio or like I said, I don't hold anyone's hand other than my daughter. Like when she's.
- [54:28]
B
Yeah.
- [54:28]
A
Crossing the street, I hold her hand, she says, daddy, Daddy, Daddy. Like, look at that. Look at that clown over there, right? And I'm like, oh, that's so fun. And I squeeze her hand a little bit tighter. I don't hold adult men's hands who are on ax when they're having a rough day in the market. If they signed up for that, they signed up with the wrong guy. Right. So I'm aware that some people misbehave. I'm aware that some people do things that are irresponsible. It's not unfortunately, like I can't take ownership. There's not enough time in the day and there's not enough responsibility in the universe for me to take responsibility for every person who buys stocks.
- [55:00]
B
Right.
- [55:01]
A
I make it very clear that everything I do, I do with my own funds. Right. And I take, I do this at my own risk. And if you follow me into anything, like that's your decision, like I hope it works out and I applaud when people make money and when people lose money and say, hey, I lost money but I, I had fun or I, you know, I did what I could or whatever I said, great. The only the people who lose money and then get super angry at me that I just don't have that much time for. Because again, I think if you're old enough to use X, that means you should not need parental supervision. So if you're old enough to be on the platform, then you should be aware of the consequences of taking responsibility for your personal investment portfolio. If you're not able to do that or don't think you should do it, then as I recommend many, many times, hire a financial advisor, pay 1%, put all your money in index funds and hope to retire by 65.
- [55:58]
B
Okay, so my next question needs a disclaimer, not financial advice, but I think that you'll like this one fun one. Someone hands you a million dollars, just free money. You just want a million dollars and you only can invest it in five stocks. You can allocate it how you want, but I want you to give me the five stocks and the percentage you would do.
- [56:17]
A
Yeah, I mean at current prices. The great thing is iron and cipher came back down to levels like I said, based on the canter analysis. It's not even my analysis, I have my own analysis. But based on their numbers, you're basically getting a lot of Cypress Cyphers upside optionality for free at 15 bucks. So I mean if you can get around 15 bucks, I'd probably go right back to 20% or so in those names for 20.
- [56:42]
B
20.
- [56:42]
A
Yeah. And then I'd pair it, I'd pair those because those names are. So I put, I'd put probably 40% in Bitcoin again. Yeah, I mean look, it depends on the time horizon, right? If your time horizon is 10 years, I would go with stuff that I really think can outperform. If the stopping point is a year or two from now, then I can't do any of those. So just to be clear, like these are long duration ideas and then I'd probably do some safer kind of value oriented stuff that pays a yield where I can see a path to getting like a 10 or 12% return just to balance out the volatility of the, of the other stuff. And I'd probably put one alcohol stock in there and one healthcare stock in there.
- [57:24]
B
And alcohol and healthcare. Well it sounds like the 10 you could get from Stretch. I'm liking Stretch. So do you worry at all about Quantum? Because that's the thing that I hear a lot. I mentioned it on my interview with Preston and Larry that people are scared that Quantum will have an impact on bitcoin security ultimately changing some investment theses. What about for you?
- [57:44]
A
I mean from what I've read and what I understand, like there's more risk to sort of old wallets from, from years ago than there is to the protocol itself. I tend to subscribe to the view that like the protocol can be upgraded in some fashion to make it more quantum resistant. And I'd like to believe, and this is part of my thesis for Bitcoin that it's anti fragile enough as a protocol that it can evolve and adapt in order to address it. So maybe that's too sort of passive. And again I'm not a protocol developer. Right. I'm not losing any sleep over it.
- [58:24]
B
Okay.
- [58:25]
A
But as of right now I, I just don't spend a lot of time worrying about end of the world type of things because the reality is like 99.999% of end of the world thesis is for most things like never pan out and in the meantime people lose a lot of money being afraid. Like I talked to pretty big influencer. I won't mention their name in bitcoin that comes across as a long term maxi. Whatever. He's like, I sold a bunch of bitcoin recently because I'm so worried about this quantum thing and I'm like what? Like, like stop reading the news, right? Like yeah, there's some risk, but there's some risk to everything in life. And most of the money made in markets is made while other people are afraid of risk that never happen again. Not to poo poo every risk but simply to say that that's not a risk that, that I'm particularly worried about.
- [59:13]
B
Fair enough. Anything that we didn't cover that you want to talk about or share.
- [59:17]
A
I mean, did we cover enough?
- [59:19]
B
So I felt like we covered a lot of ground. Although I didn't ask you what is your your favorite bottle of wine since you're such a connoisseur?
- [59:25]
A
There's no such thing as a favorite single favorite. There are great white Burgundies and there are great Napa cult wines, and those are the two categories where I've been spending the most time.
- [59:35]
B
Yeah, you introduced me to white Burgundy with our Dinner with Eric Jackson. Your tweet went crazy. So nice to finally get together in person. Mike, it's been great to follow you and to have you as a friend. Thank you so, so much and hope to have you back on so soon.
- [59:49]
A
Thank you.
- [59:50]
B
We'll be watching what stocks you're picking.
- [59:52]
A
Great. Awesome.
- [59:53]
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 shows 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@infoalkingbitcoin.com I'll see you next time.