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- [00:00]
A
It's the greatest bubble in the history of markets. And that's saying something because we've had some big bubbles. We had the 2000 tech bubble. And the tech bubble was the granddaddy of all bubbles. I mean, the Japan bubble was close, the Japan real estate bubble, but I think the tech bubble was actually just a bit bigger. And we all know how that ended. And so this bubble, which has been brewing for a while, finally pulled semiconductors in just like it did in 2000.
- [00:35]
B
We are back. We are back on the last trade. We are joined by the legendary Mark Yusko and my gracious co host, Michael Tanguma. Brian did not show up today. For those who. Mark, for loyal listeners of this show, I think many people are starting to pick up on that. Michael and Brian just they choose to show up to whatever episodes they want. I'm the only one who shows up consistently every week.
- [00:59]
C
So.
- [01:00]
A
Well, Jax is. Someone has to be the glue, right? Someone has to be the person there every week, you know, and it's nice. The other guy's got to do some work every now and then. So they go off and do that and let you have the fun times. Because I tell you what I love about this and I appreciate you guys having me back. What I love about these types of discussions is, you know, know when you learn so much just in dialogue and discourse, but also, you know, if you think about talking to different people in different areas over a course of time, you just get so many insights and then sharing that with, with your audience is, is a, is a true gift. So thanks for having me.
- [01:44]
D
I appreciate you saying that. And that that's a big thesis of this podcast was being operators day to day. We get to come back and talk about what we actually see in the market. It was really, I think where all in of its success is because they're all independent of people like them or think they're idiots or not or some of them. They're day to day practitioners and they've been investing in building for a very long time and so they bring a certain lens that pontificators don't necessarily bring.
- [02:09]
A
Look, I mean, you know, talking about building is easy, building is really hard. And you know, the old what is it? The a great idea without a plan is just a wish. I mean so execution really is the key to everything. Whether you're building a new company, whether you're building a new industry or whatever it is. But execution is rare and getting people together to talk about how they did it, what were the highs, what were the lows? What were the unforeseen surprises and challenges? But then to the point, Michael, that I love is it's also all inextricably linked to these things we call markets with one personal pet peeve. Now that I have that every ad I get on my phone now is for trading your predictions on FIFA and politics. No, that is gambling. It's the greatest rebranding in the history of rebranding to call gambling prediction markets and trades. It makes my blood boil. But anyway, I mean, so without going
- [03:33]
D
too far on that tangent, I'm actually. We talk about it here, and obviously it's a big kind of, like, heuristic of how crazy society and financialization has gotten that this rebranding has taken place. I've kind of, you know, building kids, family, all those things. You step away a little bit from sports and the Brennan Circus. But the spurs were back in this run, and I'm a native, you know, from San Antonio. So it was following along and had watched more TV the past, call it two months than I probably have in the past seven, eight years. And it was crazy to see the embedded nature of, like, the DraftKings, where it's part of, like, the game now, where they talk about in line and then they make it its content, right? So they're saying, these are the players or what are they going to do? It is just pretty crazy to, like, right out front of you.
- [04:17]
A
It was so insane. And I jumped on the spurs bandwagon just by accident. We went out to see my son who lives in San Francisco, and he and his wife are huge basketball fans, like, all in on Steph and the Warriors. And so we always try to go to an NBA game. And I probably, other than going to a game with them, I haven't watched an NBA game in 20 years. Um, but I went to the game with Wemby, and I just. I fell in love. I'm like, this guy is the greatest athlete I have ever seen. And I got to see MJ and. And all, many, many greats. And so I totally won the spurs. And I'm. I feel like they got totally robbed, which we won't talk about, but, you know, it is what it is. And anyway, so.
- [05:14]
B
Well, I think we're all lucky that Brian's not here because he's a Knicks fan. And so Michael and Brian had a lot of back and forth throughout the series.
- [05:21]
A
Well, and the funny thing is, Jackson is so. We have unique families. So we have two older kids, 37, 35, and then a caboose who's 15. And so we met my middle son and his wife in New York actually, for spring break a couple years ago. And there's huge basketball fans, so we went to Knicks game, and so there are these drunk guys behind us. I mean, and they weren't belligerent drunk, but they were happy drunk. But they were. I mean, they were. They'd had way too many. And they came crashing over my son to get a T shirt, right? And he turned around. He's 50, so he's not tiny. But he turned around kind of like, hey, what the hell? And they're like, oh, oh, sorry, here. And they gave him the T shirt. So he has this Knicks shirt. So he's now a total Knicks fan, even though that's his only experience. But I will say I didn't. And I'm embarrassed by this a little bit. I didn't know who Brunson was before that game two years ago. I mean, I literally had no idea. He scored, like, 40 points. They came back from 20 down. They won at the buzzer. It's like, wow. I mean. And then what he did in this series is incomprehensible. I mean, is. As it just. The things he can do with a basketball are. Are crazy. So hats off to him.
- [06:46]
B
Yeah. Well, I only know Brunson because of Villanova, and I'm from the Philadelphia area, so I. I can't say, Mark, that I have much of an edge on you when it comes to the NBA, but we'll just leave it at that. Brian didn't show up today because I think he's still a little bit hungover from all these celebrations that he had.
- [07:00]
A
I tell you what. And tomorrow is the big one. So he's. He's not going up for at least a week after tomorrow and parade.
- [07:06]
B
Exactly. Exactly.
- [07:07]
A
In fact, you know, it's funny you say that. So my two partners on the digital side, so we're based here in Chapel Hill, but my two partners on the digital side are in New York and New Jersey. All in. And. And the one who's in New York proper, like he says to us yesterday on. On the investment committee call. So is. Is this, like, the greatest thing in the history of sports? I. No, no. I mean, it's great, and it's great for you, and I understand why you think it is, because I am on such a high, and I just can't imagine anything better. Like, well, yeah, when the Seahawks won the football, you know, when it's won the Super Bowl, I was pretty happy Maybe not as happy as you right now, but. But it was kind of cute. I was like, it's. It's a big deal. I mean, and maybe because the Knicks were so bad for so long. Sorry, Br. I mean, they were really bad for a long time that now it does matter. But so what? Okay, one. One other little funny story. And Brian likes this one. So my daughter is other Echelon basketball fan, which again, I'm not. My wife's not. So I don't know how she came by it, but we're living in South Bend, which is not a basketball town at all, football town. And, you know, she's like nine years old, and it's a lazy Sunday. The TV's on, but I don't think anybody's watching it. And suddenly she jumps up off the floor and says, you can't do that to Patrick. And I'm like, I don't know what I was more surprised by. One, that she was actually watching the game, Two, that she knew who Patrick Ewing was, or three, that she knew that was a foul. And so. And when we moved down here to Chapel Hill, which is pretty big basketball town, she would actually lie to her little brother as to when the game was. So she could go. So she'd say, oh, you go make plans for Wednesday because the game's on Tuesday. I'm like, honey, the game's just dead. Dead.
- [09:11]
B
Yeah, they pick it up from somewhere, right? I mean, that's. That's pretty impressive. And so as much as we could continue on this thread, I do think there's stock markets, some notable things to talk about. There's some moon talk, and not the type that a lot of people in the bitcoin and digital asset space saw what happened. Instead, we're talking about SpaceX to kick things off here, to set the stage. Mark, there's obviously been a ton of euphoria around AI, around space, any sort of frontier technology. And of course, with the SpaceX IPO on Friday, that was well received by the retail investors. And then of course, we're monitoring things coming up with anthropic OpenAI, just to name a few others. And yet here in the bitcoin and digital asset space, the sentiment is quite poor. And we're going to get to that in terms of where you think things are on a cycle basis. But before doing that, I think since everyone is talking about these, notably SpaceX most recently, but everything being sucked into semiconductors, AI, I just want to get your read on. Like, what do you perceive as happening there I mean it's is two things.
- [10:20]
A
It's the greatest bubble in the history of markets. And that's saying something because we've had some big bubbles. Back to South Sea Company, I mean east, whatever it's called, the big trading company in the uk, South Sea Trading, anyway, I can't remember the name of it anyway, but we had that. We had, you know, the, the nifty 50 in the six in the late 60s. We had, you know, the, obviously the, the 2000 tech bubble. And the tech bubble was the granddaddy of all bubbles. I mean the Japan bubble was close, the Japan real estate bubble. But I think the tech bubble is actually just a little bit bigger. And, and we all know how that ended. And so this bubble which has been brewing for a while, finally pulled semiconductors in just like it did in 2000. And I'll try to do this in smaller chunk rather than where I will normally go with this. But 2000 was the biggest bubble because we had this thing called the Internet which people didn't really understand. And it was going to change the world. And what people forget, intel stock from 1990 to 2000 went up 20 times. Literally went up 20 times. It was second or third most valuable company in the world behind, you know, the, the worst one, which was Cisco and then Microsoft and, and the Pentium chip. It was good, but it, it wasn't going to change the world. And what's funny is even back then they were talking about how it was going to change AI, because we were going to progress from Clippy, that little thing in Microsoft from 30 years ago. And long story short, it didn't change AI and AI kind of went away for 20 years, no one talked about it. And the stock went down 87 +%. And Cisco, everything crashed. Well, why did everything crash? Well, because there was no there there. And in particular semiconductors went like this along with Intel. The problem with semiconductors, it's a cyclical business, right? There's only so much capacity, it takes a long time to build a fab to make semiconductors. So there's only so much capacity. So when there's an innovation, so ram, random access memory made out of, you know, microchips, semiconductors, Pentium chip comes along and suddenly computers needed more memory. So not enough memory. Lots of demand, lots of companies putting.com on the end, you know, pets.com and Webvan and all these things that were going to go to the moon. Literally none of them did actually, but they nor has anybody by the way. But anyway, so that Was an interesting time. So then this little thing called everyone knows dram, right? That that's what they make now. They put DRAM in these GPU clusters. Well, what's the D? Where the D come from? Innovation. Somebody said we can make it. Instead of just ram random access memory, we'll make it dynamic random access memory. And it'll be more efficient. Well, wait a minute. If it's more efficient and I don't need as much, well, what happens to the price? So, and here's the thing. There's never been a company in the market that goes like this, that doesn't go like this. I've said this all over Twitter, Find me one. And someone tweeted back at me, money supply. I'm like, okay, that is true. Money supply definitely only goes that way. But I'm talking about stocks or assets. They only go like this. And then they go like this. Called the Eiffel Tower pattern. And. And you need to. It can't be just a 45 degree line, because that can go on for a very long time. Look at, you know, fico. Although lately FICO has been going the other way. Fair, Isaac. Fair Isaac. But if you go parabolic, if you go parabolic, you will. You will go down the other side. And there are no exceptions. Zero. So now here we are again. And we went from CPUs to GPUs. Now, some people listening to this might be gamers. I happen to be a gamer. I guess I love to play video games. My son, my youngest son got me into it. And now I'm probably more addicted than he is. I'm super addicted to this game called Monster Hunter, which I don't even want to talk about how much I play it. But gaming is one of these things that I got so excited about it, I forgot my train of thought. So where was I going with that? Oh, no. GPUs. GPUs were used for video games, right? And then when crypto came along, somebody said, hey, CPUs aren't very good for mining crypto because they're not fast enough. But these GPUs, we could use that to mine Ethereum. Okay, cool. Now then you go to application specific integrated circuits, ASICs for Bitcoin and other things. But suddenly GPUs were a thing. And I remember 10 years ago, I was giving a speech to a bunch of people about the digital age and why I thought crypto was important and why bitcoin was important. I think at the time, price of bitcoin was like I don't know, $6,000 or something. And they said, well I can't buy Bitcoin in the stock market, so how do I play it? I said, well, there really aren't any company. There was no Coinbase yet, there was no Etoro yet. There really wasn't any way to play digital assets other than the digital assets in the markets. Except there were these two little companies, one called Nvidia and one called amd and their stocks were both in the toilet. I mean AMD at the time was 2 bucks. I think Nvidia was, I can't remember, maybe 8 or $10. I mean it was, it was low. And long story short, someone said what should we do? I said buy it. And usually what happens in these stories, I tell people something and I never do it myself. The cobbler's kids have no shoes. But this time I actually did. So I actually bought a little amd. I didn't buy Nvidia, I just bought AMD because it was cheaper and I'm a value guy, so I sometimes get bit by that predilection. But here's the story. Like anyone who gets in early to something when it went to 30, I'm like, yes, awesome, I'm out. Made 15 times my money. If you've looked lately, it was at 500 something. So the funny part of the end of the story. So my 15 year old who is into gaming and other things and so he got a little money when he graduated from eighth grade and he said, you can buy anything you want. He's like, all right, I'm going to buy Nvidia and an AMD. They're up so much. I don't. But he bought AMD at 100 and it went to 500. So good for him. And you know, maybe I should just retire and let him take over. But this is a really long answer to where we are today is now. GPUs are all the rage because there was innovation around. We can use GPUs to do computing with a few fudges and a little tricks and, and Software and this CUDA. But here's the thing. GPUs have a rate limiting factor. I'm a chemistry guy, so every transact, every chemical reaction can only go as fast the lowest amount of the other thing. So if there's NA and cl, if you don't have a lot of cl, you're not going to make a lot of salt. So no matter how much sodium you have. But the reality here is you need lots of Memory. And each iteration of chips requires more memory. There's only so many fabs, only so many microchips. So price goes like this. Well, what's going to happen? Do you think brute force is the only solution to a problem? No. Innovation. So guess what's going to happen? Just like Deep Seek, right? Which Deep Seq is breaking the Internet and I think is about to break the Internet bubble. I mean the, the, not the Internet bubble, the, the AI bubble. And we'll come back to that. What Deep Seq did is, you know, the Donald says no chips for you, like the Soup Nazi. I'm not calling him a Nazi. The Soup Nazi was this SNL skit. So maybe I shouldn't use that word. But anyway, so no chips for you. So they're like, well, if we can't have the chips, guess we just got to write code to do what we want. And Deepseek does what OpenAI and Anthropic do for about 5 cents on the dollar. I'll argue it's better because it's open weight, open source, which gets you a cleaner answer with less bias, which is why you should invest in something like Venice, which we could talk about. But full disclosure, we are invested in Venice. But, but I think people should. So now we've got this problem that everything has gotten to here. So what does this have to do with the moon and SpaceX? Literally in bubbles, people lose their mind. Like, like literally, it's the Emperor's New Clothes, the fairy tale. The guy's walking down the street naked. And now you will not be able to unsee Elon Musk naked. It's not a pretty picture, I'm telling you. Okay, he's, he's naked. He's literally. He has no clothes now he's telling you he has the finest fit imaginable. And we need a kid, we need a child to say, no, he's naked. Like, like literally everybody at the Knicks parade tomorrow. Think of them walking down the street with no clothes on. We need some young fan to say, no, go put your uniforms on. This is not good. So. And what do I mean by that? So SpaceX is a perfectly good company at what they do. They launch rockets really effectively. They built a really nice satellite system. They've monetized the satellite system. They still don't make a lot of money, but they make some money on the satellite system. They lose a lot of money on rockets, but that's a tough business. NASA's lost money since it's been inception, but we pay for it through taxes. And then he put this AI company in there, which also loses money, but they all lose money. Here's the crazy thing. If I give a dollar of revenue to Anthropic or OpenAI or. Or XAI, but it takes them three or four dollars to give me my answer. You don't make that up on volume, right? That, that is, that's the old Jeff Bezos joke. Oh yeah, we lose money on every book, but we make it up on volume. Well, no, they never made it up on volume. They just made it up by inventing Cloud, which was pretty good business. So. But Elon is other than P.T. barnum, right? He's the greatest storyteller maybe ever. And he has this ability to tell people things and people take him at his word. Like he told us that we'd get the Roadster. That was 13 years ago. 13 years ago we were going to get the roadster and then we were going to get the semi. That was 10 years ago. Then we were going to get hyperloops. Remember Hyperloops? We don't have any of those. And then we were going to get the two hour rocket trip from New York to Tokyo. Don't have that. And so he's able to say stuff and nobody seemed like. Tesla's a great example. Tesla's revenues have gone down for the last four years. Not up, not up. Slowly, actually gone down.
- [22:50]
D
Not a lot.
- [22:51]
A
But they're going down and their earnings are going down. So they're selling less cars and making less money. And yet the PE multiple went from 80 to 360.
- [23:05]
D
And now he's promising data centers on the moon. Was there.
- [23:09]
A
It's not the moon, but no. So, so Xai, he's like, well, I'm gonna put data centers in space. Okay? And even released a video of a mock up. And I loved it. A real rocket scientist came on the next day. This is what I love about Twitter, is you can find experts in everything because people exist that are experts. He's like, well, here's your problem. The surface area necessary to generate the amount of electricity from solar panels that you need to power a data center is X. The problem is the amount of space debris that would smash into those panels on a regular basis and render them mostly useless because you'd have to have somebody up in space all the time to replace them. But we can't do that. It's kind of like. So remember when, when OpenAI came out, like ChatGPT the first time came out, the first question I ever asked It. I was like, can we go to Mars? Because this one Elon was talking about, you know, colony on Mars. Like, can we go to Mars? Like, well, yes, of course. I said, well, okay. But based on these three things, there's not enough atmosphere to do propulsion, so you actually can't land. In order to take off again, you'd have to carry like 70 tons of fuel, which isn't possible. Right? So. And I can't remember what the third. Oh, and the radiation, because there's no atmosphere, would mostly burn up any sort of thing that you put there to take off again. So I said. And so. And I said, well, you're right. Technically, it's unlikely, but not impossible. Like, no, no, it's impossible. He said, well, you're right, but Elon's working on it. So, I mean, literally my head exploded. I'm like, no, it's. No one's ever going to Mars. It's just not ever. We're not going to have a colony of a million people on Mars. It's just not going to happen. But yet he can talk about it. So space data centers. It's not going to happen because technically that was the other problem is everyone said, well, it's so cold in space, we won't need to cool the data centers like we do here on Earth. Like, you understand how a vacuum works, right? Right. Because there's gravity. Okay. In the absence of gravity, the heat isn't going to dissipate. So you actually have to create a radiator process to radiate the heat away. And again, that require power. It. It's so frustrating. And so yet here's a company with 18 billion of revenue, losing 5 billion a year, and a valuation at one point almost $3 trillion. But it's, it's. So while it's also the greatest storytelling in the world, and I will argue fraud, because he said on Twitter two days ago that they would have a trillion dollars of revenue by 2030. He is the CEO of a public company who just gave forward guidance with no backing, with no spreadsheet. That's securities fraud. But he doesn't get in trouble for that. It's like the funding secured, quote, and funding was never secured and funding never happened. But no one seems to punish him. But the real problem is he is also the greatest financial engineer and short squeezer ever, because, well, no, no. Second, there was a couple in 2000 that was better than Elon, and I can't remember the name of the company. I wish I could. It was a consulting company. They floated 1%, not 4%. They floated 1%. And that 1% would trade three or four times a day because everyone was so desperate to get in to this hot tech company because they helped companies go.com and every day they would just sell, they would just feed the ducks. And eventually they sold all their shares and everybody went like this and went to zero. Like literally zero. Cause there was no company. And I'm not saying that there's no company here, but it's the narrative. Yeah, it's, it's the narrative.
- [27:45]
D
Maybe so. So jumping in these, you said a key theme that I wanted to highlight and part of what's fun getting on the pot is you're not afraid to theorize, speculate, and also potentially show where the, you know, conspiracy of the narrative. You said storytelling. We'll call it narrative. We could talk about it better.
- [28:04]
A
Elon.
- [28:04]
D
And you know, I think they put out like a 20 to 40 trillion dollar TAM just for the space stuff and these numbers that are thrown out. But I think that to your point, when you look at the fundamental narrative, they're not baked into whether it's just the cars. You said they've lost money. If you go look at, I forget, the Chinese company that produces them at a higher uid, at a lower cost, the subsidies that it goes to AI in general. And then just the notion of, like, to your point, of how they actually will be used in the future. When it comes to managing, owning your data, the notion of you don't necessarily need a frontier model. If you can provide your business context in an open source model, you can get better outputs. But that, that isn't what's talked about because this bubble is forming and there's a liquidity cycle happening. We're seeing other assets, particularly digital assets, like how do you think about just the liquidity cycle and what's going on right here?
- [28:52]
A
No, Michael, that, that is the, you know, $64 trillion question. It used to be million, then it was billion, now it's trillion. You know, pretty soon we're talking real money. So the thing that's hard for people, I think to understand, a trillion. One trillion. Forget 64 of them, but one trillion, we would have to stay on the pod for 31,710 years and we would have to spend a dollar every second, a dollar every second for 31,700. That's a trillion. So numbers start to lose their relevance or their meaning. And so this liquidity cycle that you talk about, 100% true. So all that's really been happening since 1913 is printing of fiat currency. This is called money illusion. The Fed calls it inflation. It's money illusion. So everything seems to go up. But I mean seems. Well, it is up. No, the, you know, the, the Dow is higher or the S and P is higher, or my house price is higher. Well, is, is because you denominate it in a currency that's being devalued. There are more dollars today than any time in human history. We've printed 50% of all the dollars in the history of our republic. So we're about to turn 250, right, in a couple weeks. Awesome. Yay America. 250. We're Republic, by the way. Remember that. We're a republic, not a democracy. We're a republic. It's an important distinction, the history of the Republic. 245 years to get half the money. 5 years to get the second half. Now think about that. If you had one of anything and you add another one, what just happened to the value? Well, it just went down in half. So what should happen to things? Well, things that store value, real assets, real estate, gold, precious metals, bitcoin, they should go up and they have, right? Because this is the thing that just seems to get lost on people. One ounce of gold is one ounce of gold. It's been that for thousands of years. And a single ounce of gold has bought the same amount of stuff relative to itself. One ounce for 5,000 plus years. One bitcoin is one bitcoin. Bitcoin doesn't change. There aren't more sats in a bitcoin tomorrow versus the next day. But what happens is the amount of currency you or I or anyone else needs to exchange for that bitcoin changes. So this liquidity cycle you talk about is about everything. And there's a finite, there's an infinite finite amount, meaning the governments can keep creating it, but once they create it, then there is a finite amount and it has to go somewhere. For example, for an index fund to buy SpaceX, which they will be forced to do 10 days from now, they must sell something. Right? Just mathematically, right. If there's a new stock added and it's market cap weighted, they have to sell. What are they gonna sell? They're gonna sell the Mag 7 because those are the biggest weights and their market cap will drop a little bit. So this liquidity, and you see it in, in digital assets and particularly in bitcoin. So we're in, I believe the four year cycle, it's not dead still alive and well, because humans are going to human. And we went above fair value of Bitcoin last October, about 50% above fair value. Then we went into correction. Liquidity flowed out at the same time. Elon and Anthropic and OpenAI and all these people promised these new, new things to hoover up some of that liquidity that was fleeing the asset that was declining. Because again, when I say humans are going to human, the reason that we have cycles in every asset, right, is greed and fear. When assets go up, people are drawn to them. When assets go down, people flee from them. Totally normal behavior. It's the antithesis of wealth creating behavior, right? I mean, if you want to create wealth, you should actually run into the store when prices go on sale. Like I talk about this all the time. Investing only business in the world. When things go on sale, people run out of the store. If they have a sale on cars, you run into the dealership. If they have a sale on wedding dresses, you run into Filene's basement. People are like, what the hell's Filene's basement? Google it. It's fun. There's a great sign of these women, like killing each other to get these wedding dresses. And every time you put a sale on Black Friday, people run into the store. In investing, things go on sale, people run. And the further it falls, the faster they run. Except people like Warren Buffett and Peter lynch and great value investors over the years, you know, they buy what's on sale. And the other problem with humans, humans do two things really, really well. We buy what we wish we would have bought. So here's a crazy stat. From 2009, right? The bottom of the financial crisis, till 2022, okay? So that that period of time from 2009, 2022, there was net outflow of tech stocks. And think about that. Tech stocks went down a lot. They were on sale. And so Everybody ran from 2022 to today, where tech stocks have gone up a ton. We keep setting new records for inflows into tech stocks. And that's happened at every bubble peak of every asset in history. In Japan, everybody went in at the top. And then it took 40 years to get even. In 2000, everybody bought Cisco, everybody bought Microsoft. In fact, there's this famous Fortune magazine story. The 10 can't miss stocks for the next decade were literally the who's who of the stocks that went down 80 to 90%. Now if you bought them down 80 to 90%, like when Amazon went down 94%, Amazon went down 94% went down to $6 from a hundred. How many people bought it? Almost nobody. It's just like how many people buy something at the IPO and hold it to forever. They just don't do that. Now the problem I have with the SpaceX thing is people are saying oh, if I just do that this time, if I just buy this ipo, it'll be like buying Apple or buying Nvidia or buying Microsoft. No, no it won't. Those companies went public 1, 2, 3, 4 years after they were created and very tiny market caps and actually on the road to making money because in the old days like three years ago, you actually had to have profits in order to get listed on an index. Now they just waived all those rules for Elon. So now except S and P. I give props to S and P. S and P was going to go along and then they said nope, you know what? We're not. S&P 500 is like nope. There are rules and if you want to be one of the big boys, you got to play by the rules. So that was good.
- [36:58]
B
But anyway, on ramp Finance is live and the Genesis program just launched. Over half the spots are already gone and once they are claimed they are gone for good. The first 210 signups get one year free of multi institution custody. Highest on Ramp rewards tier earn up to 5% 1 1/2% cash back on every swipe. A signed copy of Gradually then Suddenly by Parker Lewis 21,000 sats deposited into your account upon activation. Sign up in 5 minutes on ramp bitcoin.com use the code TLT and do not wait Once the sponsor claimed the Genesis program closes for good. Mark, I would love to pull on some of the threads that you mentioned there because one thing that stood out is you're mentioning how everything in the AI space, etcetera Is loved and in investing people run away from sales counterintuitively. But then bitcoin and digital assets are hated right now, which is typically a good thing for an investor to pay attention to. So that's one thing that we could reflect on. And then another aspect of this is one thing I'm trying to think through is Bitcoin and crypto digital assets have typically been the fastest horse, right? So if you think back prior cycles, that is where you've seen these blow off tops, that is where you've seen a lot of retail capital chase and that is typically what has led to these asset classes outperforming over time in addition to them just being, you know, in bitcoin's case and all their cases, starting from zero not too long ago and being able to monetize to whatever Bitcoin is trillion three today. And so I'm curious if you kind of find Bitcoin and digital assets in competition with the AI, with the space, with the frontier type of technologies from a capital allocation perspective, or do you,
- [38:40]
A
do you think 100%, even though, I mean, it's again a fantastic question, and 100%, even though they really shouldn't, because they are different assets and play a different role in your portfolio. Bitcoin has been pigeonholed or cornered or narrativized as this risk on speculative asset. It's exactly the opposite. It is a store of value savings technology. Right? It's the greatest savings technology in the history of all savings that had been gold, right? The way to protect your wealth historically from fiat devaluation and inflation was to own gold. Now you could own real estate and some other things and stocks actually, to some extent, because they actually do grow. Companies do grow, many of them, most of them, at least in the old days. So, like it used to not have companies that just incinerated money, get public because they weren't allowed. And even if they could get public and they started losing money, people would sell them or the short sellers would sell them and they'd go away. And companies go out of business. Like here's a crazy stat. Over 30 years, 85% of the companies in the S and P disappear. They get in, they go out. That's just life, life cycle. So, but I think what's really important about your question is investors have a certain amount of capital. Now you hope that capital's growing either from income or passive investments or other things that you have that augment your stack. But at the time, there's a limited supply. So you're making allocation decisions and you're in your brain trying to say, well, what's the best return per unit of risk? This concept of Sharpe ratio. And one of the things you mentioned is, is Bitcoin had been the fastest horse. Well, part of that is, I won't say accidental, but. But incidental. Incidental, not accidental, incidental. Because it started from nothing, right? And going from nothing to something, I mean, it's really an infinite return, but it's a really high return, right? And it's true of anything that starts from zero, right? If you were an early, early investor in Amazon, like on day one, you know, I say, how many people have bought Amazon on the IPO and held it to today, I joke, there are five people in the whole world. Jeff, mom, dad, ex wife, and Bill Miller. Bill Miller's cost is 6 cents. And he still owns it because. And yet every year, Amazon, including this year, has had a double digit drawdown on average, 31%. This is the crazy part, on average you lose a third of your money every year. But as long as you don't crystallize it, it just grows to infinity because it's good business. So bitcoin got put out of this store of value. One bitcoin's, one bitcoin, one ounce of gold. One ounce of gold. And had this adoption curve. Most people listen to your podcast, I'm sure know what the Metcalfe's Law curve looks like, right? It's a parabolic curve. It has steep slope and then as it goes up, it starts to make a parabola. And in maturity it gets, you know, it's still growing, but it's, it's pretty flat. Metcalf was this amazing mathematician, and it all comes from this idea of networks. Now, most people didn't understand networks years and years ago, because in the early days, right, tribes lived in different parts of the world and they never interacted. The average person never went more than 25 miles from where they were born. There wasn't any interaction in the early, early days other than smoke signals. There was no communication. There weren't telephones and telegraphs and the like. So there weren't really networks, there were communities. And maybe within the community you could have a little bit of network. But. And they were pretty small and it was tough to. Now as urbification happened, now you could have networks and you could have businesses built around networks. Well, when telecommunications were created, this guy Sarnoff said, well, wait a minute, like everyone listening to this podcast is one node, okay? So all those are, okay, a single node in the network. And so therefore the value of the podcast is N, right? It's the number of nodes and it's called Sarnoff's Law. And so if you looked at the value of networks, it was a linear relationship. More people, more nodes, more listeners, more participants, more value. Company gets more customers, more value. Awesome. Now, it didn't take into account things like maybe you get more efficient as you grow kind of economies of scale. Maybe there's some new technology that, that makes the listening experience better. But, but it's, you know, that was Sarnoff's Law. And then Metcalfe came along and said, well, yeah, that's true, but it's not linear, it's exponential. They're like, oh, what do you mean? Well, Mark and Jackson have a connection. Mark and Michael have a connection. Michael and Jackson have a connection. Michael and Brian have a connection. Jackson and Brian have Mark and Brian. So now it's not one over N, it's one over N squared. And that's why Tim Peterson, who you should have on the show sometime, Tim Peterson is amazing, runs a firm called N squared Value. And it's all about this idea of Metcalfe law. And I follow him religiously because his calculation of the Metcalfe's law value of Bitcoin is, is the best. And so long story short, Metcalf came along and said it's, it's not linear, it's exponential. Okay, that's cool. And that's why you see that parabolic shape. So in the early days, like from 09 to 13 straight up, now straight up and straight down, lots of volatility because there was, you know, Mount Gox and then there was other things. And then from 13 to 17 it starts to turn a little bit. But going from a thousand to ten thousand, that's big. But it's only 10x. That's why one of my personal pet peeves, and I bust people online all the time. You know, everyone shows the charts that go like this. If that's over a 12 month period, great, that's fine. But if it's over anything longer than five years, you have to use log scale because the difference of going from 1 to 10 is the same from 10 to 100. So when everyone shows these things that make parabolas, they're really just a 45 degree line when you put them on log scale. So this growth is real. And so there are two things happening. One is the Bitcoin blockchain network, right? The actual network, the physical network, the number of nodes, the number of computers, the amount of compute, the hash rate, all of that just continues to inexorably grow. Now it's growing at a slower rate. Just law of large numbers, you know, going from 1 to 200%, 2 to 3, 50%, you know, 3 to 4, 33%. So it's growing slower, but it's still growing. So that adoption is following the Metcalfe law curve. But then price is a liar. The price of any asset is not the value. The price is what two people agree to exchange. A small amount value is something else. So I will argue that, you know, the Metcalfe's law value of Bitcoin network, the sum Total of all the participants in the network is somewhere around 100, you know, 20, 125K right now according to the math. So at, you know, 60 something, we're materially below fair value. So investors, people who like to buy things below their fair value should be buying it. Problem is investors today, because of what we were talking about before we went on air, you watch any sporting event today, what's on more than the sport? Gambling. I mean like Kentucky Derby, right? It's a two minute race and they have a three hour show and most of it is the guy in khakis telling you how to bet on the trifecta or whatever. And you know, DraftKings and FanDuel and all this stuff, you know, you got to bet on, you know, is, is who is the flopper on, on Oklahoma City? Shay, Shia, whatever his name is, right? Is he going to score 38 points and flop 14 times or is he going to score 14 points and flop 38 times? Like you can bet on that. Now what makes me angry is they call that trading. Like those are not trades, those are bets, those are gamble. That's gambling. So investors are not that investors are people who like to buy things below fair value. The problem is that is the minority of participants in the market. Then you have traders and you know, look how many online trading companies we have now. There are a lot of traders. What are traders? Traders don't care about value, they just want movement, right. They just need the thing to be moving up or moving down. They go long, they go short. Trading super hard. Do you know what the percentage of accounts at the prediction markets make money?
- [48:25]
B
Less than a percent. It's like a half a percent.
- [48:27]
A
Half a percent? Yes, exactly. The 99.5% of people who are investing, trading, lose money. That's gambling. That's worse than going to Vegas, right? Like in Vegas, it's like 3% or 4%. So worse than going to Vegas. So. But trading is hard. I don't really do it very well and I try not to do it, but it's. I don't, I have anything against trading, but. And if you're good at it, knock yourself out. Well then there's speculators. So one of the things, I'm sure you guys talked about this Bitcoin has never, this is interesting. In the 16 years it's been alive, it's never traded below the electricity cost, which is logical, right? If I'm a miner and it costs me $10 of electricity, I'm probably not gonna sell for less than $10. Cause I need to pay my bills. So now people say but it trades below the total cost, right? Cause you gotta buy the asics and you gotta buy the land and pay for the power. But the cost of electricity, just that component, it never trades below. We got really close, right? I think cost of electricity is like 58K. We got to 59,900 or something. We got close but we didn't get there. So it's never traded below that. So if you're a miner, and as a miner of bitcoin, a producer of oil, a gold miner, if it costs you X to produce and you need to pay your bills, you will hedge your future production in the futures markets by selling the future. So you're a hedgerow. Well, you need the other side of that trade because for every sell there needs to be a buy. Those are called speculators. Again. Now when you call people a speculator, they think it's a pejorative term. It's really just the opposite side of hedgers because they don't really care about the asset, they just know that they can get paid. And particularly in the futures market because the spot futures price is higher. I'm sorry, the future futures price is higher than the spot futures price because we're optimistic. And then you roll down the curve over the course of the month. And so this is why you see these big numbers in Millennium and all these big jump, jump trading and Jane street, they're long 3 billion of ibit. No they're not. I mean they are, but they're also short 3 billion of futures and they're just scalping that. You know, sometimes it's 11% annualized, sometimes it's 7% annualized. And they do it with leverage. So they're making 40, 50 plus percent, but they're just rolling down the futures curve. So speculators are not evil, they just, they just like to make money. But then there's the gambling. And gamblers come in late and they buy what's hot. Because humans buy what they wish they would have bought and they sell what they're about to need. And we are spectacular at it as a race. And so that's why the average person loses money. Here's the craziest stat of all stats in investing over the last 20 years. If you just bought and held bonds, you made about five and a half percent. If you just bought and held an index fund of stocks and you made about 9%. Okay, so I do pick one, make five and a half or nine. Oh, maybe do 5050 and make eight. What the average investor make? 2.9. 2.9. That's hard, right? It's hard to be that bad. But they are, because they buy the peak and then they sell the bottom, and then they buy the peak and they sell bottom. So what's, what's happening? People sold bitcoin, right? So they bought Bitcoin 125, right? They came late to the party, they bought 125. They sold it in February at 60, and now they want to buy space. And then SpaceX is going to go down 80%, 90%, whatever the number is, and then they're going to sell it and they're going to buy Bitcoin in October. Because when bitcoin turns in October, it's going to double, maybe even treble over the next 24 months, maybe higher, depending on how crazy people get at the top. But that's just the math, right? By then, the Metcalfe's law number is going to go from 125 to 130 to 135 to 140 to 150. That's the fair value. And then what happens is when you start getting closer to fair value, remember, that's when the traders start coming back, not just the investors. And then as it goes above, the hedgers have got to sell, so you need speculators to come back. Well, then the price starts ripping. Then the gamblers are going to sell their SpaceX at losses and they'll be back to Bitcoin.
- [53:22]
B
I think, Mark, what you just described toward the tail end of that is really a testament to the conflation between investing and savings, right? So if you tied in a earlier point that you made about debasement and the Federal Reserve and 50% of dollars being created in the past five years or so compared to the first 4, 245, which is a remarkable stat. That dynamic has forced and has really made it challenging for people to understand what is actually savings. And so we've talked a lot about on the show that to your point, gold is a savings technology, Bitcoin is a savings technology. But. And most people are better off just focusing on whatever work that they do and figuring out a prudent way to save it versus trying to become an investor. Because when they try to become an investor, to your point, a lot of people are underperforming a 6040 portfolio. And so that's, you know, that, I think, is a challenge.
- [54:14]
A
Such an important point. So here's here's a couple of facts on that that are interesting. So Fidelity did a study. So Fidelity has hundreds of thousands, probably millions actually, of customers, right. And they did a study. What, who were the best investors? What were the best accounts? Deceased and inactive. Like literally people who had died and it was stuck in probate or whatever, or people lost their password and they just stopped trading and it wasn't close. Clearly outperformed. And investing is a funny thing. Or not investing, trading is a funny thing. You have about a 50, 50 chance until you think. And then your odds go down. And the harder you think, the lower the odds go. Because now. And it's made worse in the last two decades, really. Well, since 2014 with social media. So it's really a decade and a half. But it's, it's been made worse because now we're constantly fed things that reinforce our bad habits. So if, if you think about what you just said, Jackson, what you should do is set it and forget it, right? Have a disciplined strategy. I'm going to have 40% in low volatility strategies and 60% in high volatility strategies. And I'm going to rebalance once a year or I'm going to take 10% of money out, put 5% in gold and 5% in Bitcoin and have that be my savings technology. And actually, the younger you are, the higher those percentages should be. But that's because you have time on your side and you're really trying to protect your wealth. And so there's nothing wrong with investing or trading. I mean, I done it my whole career, right. That's what I chose to have. But, but to your point, if you don't spend time on it, I'll give you a great example. And this is not to say anything negative. I love my daughter. She is amazing. I mean, she's actually a saint. She works in oncology as a nurse. Nurse practitioner. But when she got her first job, she's working night shifts up at Presbyterian Hospital in New York and she gets her 401k. She says, dad, dad, what should I do? And I looked at it and it was horrible. She had three bond choices, four stock choices. That was it. No diversification? No real estate. No. No crypto? No. I mean just totally stocks and bonds. And here's the problem. She was working nights, so she's sleeping to catch up during the day. She didn't really. She didn't study to be an investor. She studied to be a nurse and a nurse practitioner. And so what happened is in 1986. They passed something called the Tax act of 86, which had nothing to do with taxes. It had everything to do with stealing from my daughter and everyone else that now has a 401k. And you're like, Mark, you can't say that that 401k was for our benefit. No, it wasn't. Before the tax act of 86, companies that you worked for had to provide a defined benefit. Every year of service, you got a certain benefit. They as professionals, had to manage the money in a diversified portfolio, hopefully, and provide you a benefit come hell or high water. And if the investments didn't make it, they had to pay for it out of profits. But it was expensive to have a team and to put all this money in the fund to have it be fully funded. So they said, well, hey, and here's the worst part. Two mutual fund companies wrote a bill like, well, wait a minute, don't congressmen write bills? Well, they do, except they pay people to write the bills based on who contributes the most to their campaign. So these two mutual fund companies paid a lot to the campaigns and said, hey, we have an idea. Create this thing and it'll be portable and you won't have to manage it. So you can fire that team and you'll be able to put in 30% less because we can do a present value calculation of what the money will be worth when they retire. And we fell for it. And so corporate profits went up 30%. Massive rip. Higher up until the crash in 87. Massive rip. Because 30% was going straight to the bottom line. But what happened is a whole generation of people were tasked now with doing something that they're not trained to do. And that doesn't. I'm not. That's not a criticism. I'm not trained to be a doctor or a nurse. I wouldn't operate on myself. I wouldn't, you know, so it doesn't make me a bad person that I can't do everything. And so the idea that everyone should be managing their own money is kind of silly. But we've now. And then. Michael's point earlier, now we've gamified it. Like, if you've ever been. And I shouldn't pick on Robinhood, but I will. If you've been on the Robinhood app. It's a casino. The app is a casino. Push this button and you get 10 times leverage. No disclaimer. No, no, no. No description of. Well, what happens if the price goes down 10%? I lose 100. Hold on a second. So we've gamified and turned gambling into trading. It's still gambling. And people are getting wrecked to, you know, steal a term from the young generation. They're getting wrecked badly. So the average 401k balance is a fraction of what you need to retire. Horrible. 99 and a half percent of people on these, you know, prediction markets are losing money. And, and part of it, this goes to a whole deeper sociological problem, which is my parents, generation. One person working, mom stayed home with the kids, two cars, nice house, nice retirement, life is good. My generation, both parents working, still got two cars, nice house, mortgage payments a little bigger, not quite as much savings, but not bad. Current generation, both people working, no house, average house now going in well into the 30s, no savings to speak of. And that I will argue, that's intentional. It's a whole different deeper sinister Saturday conversation we can do sometime. I believe it's intentional. I believe it's all designed to funnel the money to the top, right? The all seeing eye funnel the model at the top. Impoverish the masses and make them dependent. Because the thing you're going to hear about very soon, more is AGI, right? Why don't we just give people money and then they'll be happy. And you've seen the movie Wall E, right? That's not a life. Sitting on the lounger with the screen in front of you drinking a big gulp and your bones turn into mush. That is not a life. And I know that's because they were in outer space. Back to SpaceX, which by the way isn't going to happen. We're not going to have spaceships going to Mars.
- [61:55]
B
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- [62:48]
D
Yeah, I mean without going down that thread but just letting you know we're picking up what you're putting down and you look at the CapEx on data infrastructure and Larything came out said it's coming from your pensions and we've already talked about how this is a bubble so you're going to see more of that a lot of capital be destroyed. The thing that you mentioned I think is worth discussing is there's a sentiment from a market and then investor perspective because I'm sure you feel this like us, it's like we pinch ourselves in the opportunity right now because you have done the work and you understand Bitcoin digital assets like risk adjusted. There's never a better time to be allocating whether it's a spot bitcoin or building infrastructure because as that starts to revert and the capital flows and understanding especially when you reference like Metcalfe's law and I like to reference like AI and bitcoin as Metcalfe's law plus Moore's law squared. Because Metcalfe's and Moore's kind of like accelerated with the Internet on top of like AI. But you layer Bitcoin which is the connectivity for money and AI, it's the opposite to abundance. And we're so we thought we may be in this last site in 25 that this was going to come faster but just like everything, it takes longer. But when that like narrative changes and we already see like when I say risk adjusted, look at all the plumbing as you're. You see with Schwab and these different firms, I think BlackRock just turned on another ETF. How do you just think about the market from that perspective and what you're hearing from like colleagues, entrepreneurs building, you
- [64:12]
A
know, so here's the thing and, and this is why, you know, shameless plug that you're not paying me for nor did you ask me to do and I'm just doing. That's why firms like yours are so important. And even the name right onramp, which is the idea here is I was on CNBC in 2017 and literally while I'm on the show the price of Bitcoin went from like 10,000 to 8,000. It was at one of those flash crashes and Melissa Lee says what should we do? And like buy it. And she's like, oh my God, you'd always say that. Yeah, I would buy it today, buy it tomorrow, buy it next week, buy it next month, don't buy it all at once. And so you've seen the Bitcoin is dead website right now. 492 times since 2009, Bitcoin's been declared dead. If you bought $10 worth every single time, you'd have $86 million today. The key is, and you can't replicate that because those first five years don't really count when it was fractions of a penny and a dollar and then 20 cents. We're not going back there. But the concept, buy some today, some tomorrow, some next week. Set it and forget it. Dollar cost average. Buy the dips. Don't sit around and wait for the dip. Just have some money go into it. Now what's the one thing I will say about 401ks that is good? Every two weeks you're buying the dip. Every two weeks your money's going in. You can't change it. No one ever changed it. This is a crazy stat. When people set their asset allocation for their 401k on the first day of work. With advice from the HR person, who's not an investment person by the way. And their choice is one over N. If you have 10 choices, you put 10% in each. If you have five choices, you put 20% in each. That's the average asset allocation. It's never changed. No one ever rebalances. But at least every two weeks you are buying. Whether it's up, down, sideways doesn't really matter. And that's what you should be doing with bitcoin. So you should say I want, everyone has three buckets, the liquidity bucket to fund their lifestyle, spending, right? Gotta pay your bills, gotta travel, gotta. So you're like, you know, I say 10 to 15% could do it with less, do it more. But somewhere in that range, 10 to 15%, then you got your get rich bucket. This is for the friends condo deal, the brother in law's hot stock tip. I would say you're going to lose it. Also keep it small, you're probably not going to lose it all. But, but it's, it's usually not high return, but sometimes it hits and it can make you rich. So you got your get rich bucket, but in the middle is your stay rich bucket. And your stay rich bucket should do just that. It should keep you rich, right? Once you earn the money, either from an investment or from your income, you should diversify it and you should constantly be rebalancing and buying what's weak and selling what's dear. And so bitcoin plays a role in that stay rich bucket, right? It's not a get rich quick, it's a stay not poor Long term, Right? And that's not said very well, and someone says it better, but it's about preserving your wealth from the ravages of inflation. I mean, here's the reality. I went to lunch the other day by myself, and the tip that I was shamed into giving was larger than what I used to pay for lunch five years ago. That's cr. Now it's the same restaurant, exact same restaurant. Food's the same. It's actually decent food. But that's not. The food didn't get better, didn't grow, it didn't appreciate. It's. The money got worse. And so having a plan and having a team that helps you, because there are many who say I don't understand bitcoin keys and seed phrases and totally fine. I mean, actually, you asked Jackson what socks I'm wearing, so I'll show you. So. So I got the bitcoin. Chill, you know, go to the beach and chill.
- [68:41]
B
I don't think we've seen those ones before.
- [68:44]
A
Yeah, so put it in cold storage. So, yes, in a perfect world, you would put your bitcoin in cold storage and you'd hold your keys, and it would be your keys, your coins. And look, it's compounding is the eighth wonder of the world, right? There is no more powerful force in the world than compounding. And it is what creates wealth, is investing. Do it early and often. And. And again, you don't have to do a lot because a little seed starts to grow. And we all have seen the picture, right? If you start with a little circle and then you put ice on it, and then you put more ice on it, suddenly it's a lot of ice. As you get, you know, the circumference of the circle bigger and bigger, and I mean, the radius of the radius and the circumference. But it's when you take a technology like bitcoin, right, which is it's a technology for storing and exchanging value, and it's superior to all technology that came before it. And that doesn't mean that fractioners or banking is bad. It doesn't mean that barter was bad. It doesn't mean that, you know, paper ledgers were bad or electronic ledgers are bad. They serve their purpose. And now we have innovation. It's like, CPUs aren't bad. GPUs are a little bit better at certain things, not at everything, but certain things. And TPUs are even better than that. And then LPUs and VPUs and three PUs and all the things that are gonna come next. I'll tell you my favorite thing. So electron. You talk about Moore's law, electrons. It turns out electrons have a fixed size. And when you get down to 2 nanometer scale on chips, right, we used to be at 18 nanometers and then 10 or 12, and then 10 and then 7 and then 5 and then 3, and now the new ones are going to be 2 nanometers. You're starting to get to the point where the electrons can't move the right way. So what are we going to do? This young guy that we backed, he said, well, how about we use photons? How about we turn the electric current into photonic energy and we'll use photons? People are like, oh, you can't do that. Photons won't go through silicon. He's like, I don't want it to go through silicon. I'll put it through liquid crystal on top of the silicon. And, you know, he did it. We invested. Now Microsoft's investing. And maybe it's going to be a big deal, maybe change the world. But the greatest force other than compounding in the world is human creativity, and it is undefeated. When. When you're stuck on a problem, collective humanity will find a way to solve it, Whether it's like the greatest invention ever in the history of mankind. Indoor plumb. I mean, sewer. Sewers and plumbing. That's not the biggest invention, Mike. Yes, it is. Because without the ability to get all that waste away, we all would have died from bubonic plague or something. So there are a lot of things that we take for granted that are really big innovations that, you know, life would be less good. Electricity is another one, right? The fact that it doesn't come pouring out of my wall socket, I still have a hard time with that one. Like, it's just sitting there ready for me, and I plug in and it's instantly available. I mean, come on, if I put something in my. In my refrigerator and store it for a month, it goes bad. How come my electricity doesn't go bad? So there are things that defy the laws of normal understanding, but the collective intelligence of humanity can solve these problems. And, well, most of them, like, we can't solve how to land a ship on Mars because there's just not enough gravity. I mean, not enough gravity and not enough atmosphere. But. And teleportation is another one. We're not going to do that one anytime soon. As much as Star Trek was awesome as a television show, we're not going to have Beam me up, Scotty So there are things that can't be done, but generally speaking, we will evolve as a society and as a race. And the tools that we use, like I get in debate with people over this AI. Well, 1llms are not AI. They are large language models. They are a tool that is a form of AI, I guess, but. And they are artificial, but they're actually not intelligent. They fail all definitions of intelligence. But they are good tools and I use them now every day. I don't pay for them, I use the free ones. But. But they are good tools. But that doesn't make them anything other than tools. And does it make me more efficient? Yes. Does it make me more intelligent? Debatable. Debatable. I mean, part of the problem is they still make mistakes. So what if it gives me a piece of information and I internalize it and I make a decision on it and it's wrong, you know, danger. What if it tells me to cite a case in case law that they made up and then I get sued, but I'm not a lawyer, so I wouldn't have that problem. But they're tools and someone will invent other tools that do other things and get better. But. So to wrap it all back, investing, have a portion in your savings, Bitcoin, gold, whatever it is the thing that protects your wealth from fiat debasement. Those other things, money markets and GICs and guaranteed, you know, they, they sell them as risk free. No one, particularly young people, want risk free. You want lots of risk. Risk defined as volatility. You want lots of volatility in lots of things that are uncorrelated to one another. So some zigs when the other zags without volatility. And all volatility is disagreement about a future state. You can't get returns. And again, the younger you are, the more volatility you want, so the higher your return is. And so you should overweight. And it's my pinned tweet on Twitter is invest in innovation as an asset class. But the problem is to invest in innovation, you have to invest in things that you believe in before others even understand. It's very uncomfortable and you'll be ridiculed. But here's the thing. The more you are ridiculed for investment ideas, the better they are. And the more intelligent the people telling you you're an idiot, the better they are. Because if everyone's agreeing with you, like buying SpaceX, it's already in the price.
- [75:48]
B
Well, the good thing is we have several months between now and Thanksgiving where I'M sure we'll be back to the conversations of people saying that we're idiots for owning bitcoin, given where the price is today.
- [75:56]
A
No, no, by Thanksgiving, they're gonna be. They're gonna be again. This Thanksgiving will be back to, hey, you get two turkey legs this year because, wow, we bottom. We bottom October 5th. Whatever, I'll give you a date. We bought them October 5th. Maybe we've already bottomed, but October 5th is when we turn back up crypto spring will be here. You know, we don't go straight to 150, but you know, the next stop between crypto spring and crypto summer will be, you know, that 150 range and then next cycle peak, which is in 2020 havings in 28. So 29. So in 2029, the next cycle peak, you know, fours probably has a four handle on it. But, you know.
- [76:48]
B
All right, Mark, thank you. Very appreciative of your time today.
- [76:53]
A
Love these conversations. I apologize for talking too much. And you know the other one, I always apologize for this. So my, I say, my wife's only seen me speak one time. She came to Vegas. I was speaking at a conference and sat in the back and said, mark, you can't say things like that. Like, oh my God, what did I say? No, no, not what you said. How you say it. I said, what do you mean? She says, you say things so forcefully. Like, what's wrong with that? She said, well, people will believe you. Like, that's kind of the idea. She says, well, what if you're wrong? Like, oh my God, I'm wrong all the time. I just changed my mind. Next time. So until next time when I'll change my mind. Strong opinions loosely held. Except for diversification. Diversification always works. But the one thing to remember, concentration makes you rich. Diversification keeps you rich. So if you're still in the get rich game, it's okay to have some concentrated bets. But don't be unhappy if some of them go to zero. Because if you don't have zeros, you're not taking enough risk in that small portion of your get rich bucket. So, you know, for every zero, you maybe want to have a ten bag or a twenty bag or a hundred bagger. But for the bulk of your stay rich bucket, don't speculate, don't gamble. Just invest. Work with people like this and own some bitcoin.
- [78:09]
B
Yeah, and don't gamble either.
- [78:11]
A
Don't gamble. Please don't gamble. Well, now, again, take a small amount if you like to gamble. If that's fun for you, just take a small amount and knock yourself out. But man, don't convince yourself that it's trading. Gambling is not trading. Gambling is not investing. Gambling is gambling. And know that the odds are against you. They are against. No matter how smart you think you are, the odds are against you. Remember who's on the other side of the trade and think about how smart they are and why are they doing that. If you think it's a buy, why are they selling? And if you think it's a sell, why are they buying? And just to leave you this. So I don't know if you saw the picture yesterday. There's this guy, I can't remember his name. It's like Skiamonte or Skia Barrett. He was a Boston Celtic and he looked like, you know, Richie in Richie Cunningham from Happy Days. I mean, he looked like this normal Irish kid and he never played. I think he averaged three points in his NBA career. And people were jabbing online. Oh, I could. I could beat him. I could beat him in one on one. So he went to a court and he said, I'll take all comers. And he went 44, 0.
- [79:23]
D
Wow.
- [79:23]
B
I did not see that.
- [79:24]
A
Remember, the worst player on the Celtics would kick your ass in one on one. So the worst investor in the professional class is probably going to take your lunch money if you gamble it away.
- [79:37]
B
Wise. Those are wise words to end on. Thank you, Mark. Appreciate your time.
- [79:41]
A
See you.
- [79:42]
C
Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast. Appreciate it. All the links we discussed in today's show will be in the show Notes inside your podcast app. Before we finish, a quick reminder that On Ramp Media is for informational and entertainment purposes only and nothing should be construed as investment or legal advice. Regardless of where you are on your bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com contact to schedule a consultation with one of our private client advisors.