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- [00:07]
Matthew
You've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitco. If you're not paying attention, you probably should be. Probably should be. Probably should be.
- [00:37]
Marty
Matthew is anxious. Our pets heads are falling off. Bitcoin down 6% today, sitting at $86,262. Is it over?
- [00:53]
Matthew
Marty, we've been through this before. We need to step back, congratulate everyone who's listening for still having diamond hands. If you traded a little bit, congratulations, even more. But bucket life is good when you hold Bitcoin. Spend time with your family. Don't think about this too much. Although I haven't done, you know, like I was telling you, I was even blissfully sleeping. Usually I'm blissfully sleeping during Twitter drama, you know, primetime US Twitter drama over here in Europe. But I did want to check, and I didn't even check it like this. This $5,000 drop has to be not necessarily in percentage terms, but in gross dollar terms. One of the biggest, you know, daily drops we've had.
- [01:40]
Marty
Really. We're right back.
- [01:43]
Matthew
I don't know.
- [01:43]
Marty
We're right back to where we were seven days ago. We're actually up, yeah. 37 basis points since this time last week.
- [01:53]
Matthew
Yeah.
- [01:54]
Marty
Depending on your time frame, it's either bullish or bearish. We did a nice little Bart formation here on the chart between.
- [02:00]
Matthew
Yeah, they get the old Simpsons.
- [02:02]
Marty
Yeah. People are very worried, though. People. People are looking out there. They're saying, hey, cycle theory is broken. There's a lot of. There's a lot of demand out there. There's a lot of buying a lot of ETF inflows, but the price isn't moving. JP Morgan is manipulating the price of microstrategies stock. There's Caitlin Longs out there saying there's price repression. What are you seeing, sir?
- [02:33]
Matthew
Well, you know, on my streams, I try to do some deep dives on the price relative to other assets over a longer period of time. And with the theory being that you can manipulate, if you want to use that word, manipulate or suppress markets, you can absolutely do that in the short term, maybe even the medium term, but it's very difficult to do that. Over the long term, I think that'd be most evidenced by gold. Right. There's a lot of bitcoin conspiracies don't hold a candle to gold conspiracies. You know, Alan GreenSpan said in 1996 or so Central banks stand ready to sell gold should the price rise. And yet here we are, gold, $4,000 an ounce. Now, a bitcoiner wouldn't like that. Bitcoiners expect bigger moves faster, and we are indeed on a much faster growth trajectory than the gold market. But I think the market eventually gets that price, that buyers and sellers accurately reflects their demand and supply and I think will eventually sort itself out. But yeah, I envisioned doing my daily streams here. You've seen all my percentiles and running against the power curve. And I envisioned during exactly this time talking about, okay, so how many days have we been above the 80th percentile, 90th percentile, just preparing people that we could run, trying to stay calm. I like the phrase my friend, he goes by apsk. He's a good power law. Does a lot of charts on Twitter. He's like you said all you said bitcoin would break all our models, but I didn't expect that to be to the downside. So we're going to have to see. But in general, we can look at the charts whenever you want. But I mean in general, we're still on a power trend. Nothing is broken there. And as long as you understand that bitcoin grows like a network, which obviously you talk to plenty of people who can reinforce that way different than any other traditional finance asset, I think you're going to be okay. And the best way to do that is we've been talking about now for I don't know how many years going on seven.
- [05:20]
Marty
It's crazy.
- [05:22]
Matthew
Yeah. But I was not going to say just about the base money stuff because that is true for the sort of the taxonomy of where we are. But rely on that power curve for some comfort. Because I still think, and I've said this before on your show, I still think that 95% of what Bitcoin does right now is relative to the power curve. Whether it's over under. This is a trajectory of network adoption. You put it on log, log scale. It's a beautiful straight line. This is how networks grow. We can talk about that in as much detail as you want, but nothing has changed from that thesis. And you can compare it with gold, compare with dollars, the stock market, they all have power relationships, which is wild. It is A wild thing because the rest of the world is run on credit and grows exponentially and often very in a non stable manner. So even with these big swings in bitcoin, you're still very much hugging this 96% r squared power trend, which is something to take comfort in. It's a sustainable trend. Unlike tradfi trends, which are not stable, often very volatile, often booms and busts. Bitcoin has a different trend. Yeah.
- [07:03]
Marty
And I'm not sure if you've been following it, but to your point, 95% of what we see in price action is driven by this network adoption. The other 5% by external variables. If we're looking at short term impact on price, I mean, I was a bit tongue in cheek with the suppression talk earlier, but I think what we're seeing now is Bitcoin's use case as a liquidity alarm bell. I'm not sure if you saw Japanese bond markets last night and over the course of the last month, looks like they're blowing out. BoJ came out. I don't know if it was the BoJ or just an official, but sort of signaling, hey, we may have to raise rates here to control this runaway yield curve that we have here.
- [07:56]
Matthew
Yeah, yeah. And it's funny because Japan, it's a story like Greece. I mean, they've been going at this for 30 years now. Excess of money printing, it sort of always seems to be this surprise that we have to deal with. But how long this carry trade will continue to go to anybody's guess. I don't know the yen, Unless you're really worried about Meta Planet, most people, it's just Japanese, Japanese investors that are usually the ones most affected are Japanese investors trying to get in and out of other currencies to get more yield than they used to get or typically get with their own currency. So I don't think about it too much. But yeah, it is a major currency.
- [08:57]
Marty
Yeah. Well, let's dive into the charts, give people some peace of mind.
- [09:04]
Matthew
Good. All right, so obviously you want to start with price first and foremost. Okay. This is the old power curve. If this was an exponential trend, as I often talk about, this would be a straight line, not this nice smooth sustainable line. And we're definitely low. All right. I got this little dip in 86,600 when I pulled in the model. And if you just go to the fun ones, let's go to say the 90th percentile. All right. I did quantiles now, which is a little bit different. I would have the sort of jagged lines in the past sometimes because that was a multiple overrun trend to keep a fixed multiple. Now this is a fixed percentile. In any event, it's very similar result. So I envisioned somewhere here bitcoin jumping above and then I'd just be talking to my viewers like, okay, so let's just expect how many days are we above it here? Here? Let's just think about how many days we've been above it, which usually is not more than two to three months. Right. But that has materialized other than a little bit at the end of last year after the election and then a little bit last summer. But again, when I show these charts, I always caution a lot of what the analysts, you know, the technical traders will do on trading view is they're usually thinking in straight line and log linear space or exponential growth, which is how typically stocks move. And bitcoin just doesn't do that. So I think whether you talk about these Elliott waves or ABCD corrections, all that stuff, Bitcoin, there's not an established method over the long term that is definitely going to do that because it just does not have a straight line exponential growth on log scale. So anyway, if we take it the median, the 50th percentile, it's a little bit below the trend 40th and then 30th is where we are. So another way of saying that is based on the power trend, which should give everybody a lot of comfort. The price right now has only been this low 30% of the time. Okay, so if 6,500 days of Bitcoin or whatever it is, 600 days will be 10%. So 1,800 days, something like that, you can just do the rough math. It's been at this level, of course it can go lower, can always go lower. But what this can tell us is just the relative risk of where the price is relative to its relationship to the trend in the past. And if we go to the lowest levels expected, all right, which would be levels like this back in 2022, all right, with the SBF puking and all the other defi scams of that time right now, that suggests the lowest, lowest level of $57,000 Bitcoin, by the end of the year, it'll be a little bit higher of 60, 59,000. The trend itself, the overall trend will be 125k. And then getting in the 90th percentile, which whether you do it a couple different metrics, I think you get like 200k or 250k now, I have been one of the few people to not fully discount four year cycles simply because we haven't been through it. I know a lot of people seem to be keen to make that call. I'm not saying it's definitely not going to be over, you know, so it's kind of wimpy call from that side. But I just, I don't know. The data, you know, the data is not all in yet. We haven't even finished the year. You never know, there could still be a pump and there's some other interesting little data that I could show you that shows at least something is happening on chain with some movement of coins. So we can look at that as well. But yeah, I'll stop there.
- [13:33]
Marty
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- [15:56]
Matthew
Yeah, and it moves fast. All right, like, if you want to know some numbers as far as how this thing goes, the trend itself goes up $100 a day. Still does. All right. By the end of the year, the trend will be growing at 42% a year. 42%. So you compare that to your stocks, bonds, gold, whatever you want to, JGBs, whatever you want to compare it with. The trick, the interesting thing, which, you know, a lot of people are trying to figure out, including myself, is there's this interesting as we have this thing, it's not a straight line, right. Like the stock market would be, the gold market, which I'll show you in a second, that actually means that the rate of growth is declining for bitcoin ever so slightly. You can find these calculations on my website. But. It's an interesting phenomenon. And, well, without getting too deep into it, I think it's possible that bitcoin could go exponential, which means it could turn into a straight line on long, which, by the way, is faster growth. If you just want to go sort of full bull case or, I don't know, you might like exponential growth. But the thing is wrapped inside of exponential growth. There's a lot of fiat interest. And that's just the nature of the math. Mortgages, your car mortgage, lines of credit. Everything in the world is exponential growth. And so if bitcoin starts to take on enough fiat credit behind it, maybe bitcoin itself will be pulled into this exponential growth. What I'm hoping though, because this is sort of an idea that I think it's like, okay, well maybe early investors will just have number go up, but the rest of us will be still laden with a lot of debt and there'll be debt, a lot of fiat interests swirling around the lower levels of the bitcoin system. I think a more interesting scenario could be as the world continues to go through these debt crises, however they may play out. There's a lot of theories there, but however these sort of sovereign debt crises or situations may play out, whether there's excessive inflation or some deflationary crashes, which as you know, you and I are both inflationists, they're usually going to print to, they're always going to print to paper over that. But in any event, how this might play out is if the world starts to understand that bitcoin really is that risk free asset. And there's, no matter how you want to phrase it, you cannot print satoshis like you can print dollars. There's a possibility the credit could completely change the name of like the whole game of credit could change. And so that's what I'm trying to think about right now a lot. I do, I talk about this a lot because then you might be in a situation where this nice beautiful sustainable power curve of bitcoin changes the entire tradfi system, where the entire tradfi system doesn't go into these unsustainable booms and busts, but it more becomes into the sort of gentle growth that mirrors the growth of bitcoin that you can see with the hash rate or address growth or the growth of the price and market cap itself. So that's a little bit, that's a lot for the start of the episode. But that's one of the things that I'm thinking about. Sort of will bitcoin change the system or will bitcoin be changed by the system?
- [19:36]
Marty
Yeah, and this is a thread we've been pulling on all year. Essentially when the power trend slope and the exponential slope intersect, what takes over.
- [19:47]
Matthew
What.
- [19:51]
Marty
I hope it's the bitcoinization of finance and the sort of curbing of excess risk taking and credit creation. I'm hopeful that can happen too.
- [20:02]
Matthew
Yeah, but it's going to be a fight. I mean we talk about this all the time in crypto Twitter, right? Bitcoin, Twitter, crypto Twitter, it's like, okay, well we have all these, you have these Ethereum ETFs you have a lot of Wall street chasing a lot of garbage as they usually do.
- [20:21]
Marty
Zcash. Zcash right now.
- [20:25]
Matthew
Zcash, yes. Unfortunately I don't have any of those saved to hawk into bitcoin. But win some, you lose some. The idea that Wall street can just sort of come in and overtake the bitcoin industry, like it's overtaken any sort of nascent industry is of course strong. You started out at the top of the show talking about what Caitlin Long's saying, what a lot of people in Wall street are saying. And I think still a lot of people in Wall street don't even buy into bitcoin. Right. They're more interested in AI not at all asking about the energy consumption of AI versus bitcoin, but that's another story and. The jury's still out on that. Obviously bitcoin is a global thing. It's just not. Even though it might be very nicely tailored for some collateralized bitcoin instruments where you can draw on it sort of like you can draw on Manhattan real estate and all that stuff. Bitcoin is a global system that's really outside the purview of any central bank. And as long as it doesn't get co opted by central banks like the gold, the gold market has done in the last 100 years, I think at least that short to midterm manipulation, to use that word, would be very difficult and probably not even the long term, as we said. I don't think the long term you can manipulate this stuff over the long term, but they're going to give it a big fight, man. They're going to give it a big fight. And all these people were talking about a year ago how the Trump administration. I'm curious to hear your thoughts about this. The Trump administration's going to legitimize bitcoin and crypto. It's hard for me to see them legitimizing anything at the moment, Marty, but I'd be curious what you think about how. I do not think that the nation state threat to bitcoin is over yet. A lot of people thought it was a year ago.
- [22:43]
Marty
No, I don't think it is either. I think we have some recent actions that would prove the fight is not over, particularly the samurai plea deal and then sentencing which was incredibly egregious in terms of the attack on open source developers building non custodial wallet software, being punished.
- [23:14]
Matthew
Right.
- [23:15]
Marty
That's not a good sign that's happening in Trump's America. And then as it Pertains like Trump and his crypto policy. I think obviously the two of us are of a certain purview that bitcoin is a thing worth focusing on if we're just being objective of the first 10 months, 11 months of 10 months of this administration, it's been unfocused on bitcoin and more focused on stablecoins market structure and potentially creating the foundation to co op bitcoin by putting strict laws and regulations around it and sort of ordaining particular companies as those are the ones that you're allowed to interact with with bitcoin. And again going back to the samurai thing, the sort of punishment of those using bitcoin in the self sovereign fashion and building tools to enable people to do that. So. But yeah, I think, I think we're in a weird spot and actually I think the way you set that up in terms of is bitcoin going to get co opted like gold or is it going to break free? Considering the fact that it is this unique beast, this unique tool that gives you the ability to do both. I think the last six months specifically have been, if you're not paying attention, you probably should be because we've seen this sort of conflict coming, coming to be whether it's microstrategy strategy, launching all these preferred offerings, trying to put bitcoin into these wrappers and provide yield on top of it. Obviously strategy stock has not been doing well. We can get into the theories around JP Morgan and their attempts to co opt products like that because they, they deem them as a threat. But I think if you juxtapose sort of those actions with what we've seen from companies like Block and their square point of sale roll out to really in their, their aggressive campaign to make bitcoin everyday money. I think if you look at public markets and two of the behemoths in public markets as it pertains to bitcoin strategy in Block, we're seeing those two visions sort of duke it out at that level right now as well. Maybe not even duke it out, just simply present two different paths for Bitcoin's future.
- [26:00]
Matthew
Yeah. And it's going to be interesting to see how strong the US really can be in some of these things with this global asset. Because I was on a panel in Helsinki with Peter, Todd and Adam back over the summer and it always revolves back to this political nature versus the economic force that bitcoin is. And Peter was, he said this a lot. You've probably seen him write, he's referenced the cypherpunks in the 90s and the code of speech and the national security issues that were surrounding code crossing borders in the 90s, the US as the sole hegemon at the time, that was a huge deal, and it was one. That issue was won in the courts of the U.S. that code was speech to some extent, and it's not these national security issues. Like you could take code across borders and the cypherpunks did that. On the other hand, so I think there's a lot of. So what Peter was saying basically is at some point it is going to have to be political. You're going to have to win politically. But then on the other hand, I think about this a lot in that it seems almost bizarre that bitcoin would have to be deemed legitimate. At the end of the day, what's it going to come down to, a Supreme Court ruling over something specific? It's like five guys in black robes or ladies in black robes deciding that this sum bitcoin, you know, ruling is really going to sort of set the policy for bitcoin in the next 50 years. I think that that's actually less likely, especially based on the way that the rest of the geopolitical world is kind of going at the moment. China's trying to be big in gold, and obviously Russia's a basket case, which we are dealing with over here. And the U.S. you know, is having its own new approaches to geopolitical issues in the Americas, north and south. So it's just. It seems less likely to me that a Supreme Court ruling would be sort of like the final arbiter of where we go with some of this. But anyway, starting to philosophize a lot on that, so we can, we can bring it back to the charts. So Anyway, point is, 70% of the time, we've been higher than this relative to the trend. So with some statistical accuracy, you can say there's a 70% probability that we'll be higher than this into next year. Especially if you don't consider, or if you consider that we have not had really a blow off top, which would make it more likely that we shoot below these levels. Anything can happen, but that's sort of how I'm looking at it. If you look at gold now, all right, so here's gold over the last 50 years on a weekly basis. And its trend is not as good, but it's an exponential trend, straight line. See, bitcoin has this nice curve, right, which everybody should know now by now in log space, log Linear gold is a straight line. So it's exponential growth. And obviously we're super, super high. If you do these quantile regressions which sort of just take every individual level as their own thing and try to run their own trend lines. The worst was in the early 2000s and the best is indeed now it's relative to the 1980 top and you know, relative to the 2011 top. We're at. We're creating new highs basically every, you know, almost every day. Whether this is some real long term resistance, I have no idea. But I can tell you one thing. The Peter, like some Peter, I've, I've drawn these different trends on my stream, like this line right here. If you just like imagine here, like the price, my mouse is over the B here, which it shouldn't be a B actually. I just realized with this chart because it's a gold price, but over the B, it is obviously going super fast from the end of 2023 and. Or the end of. Yeah, the end of 2023. That's like a 40% trend line growth a year. 40%. It's matching Bitcoin, basically. That's like a Peter Schiff trend. I just do not imagine that continuing. In fact, you can run all the numbers. It's not going to continue. Could it go for another year too? Yeah. Could we get to a $10,000 gold? Sure. But gold just is not on any sort of a Trend to reflect $100,000 gold or $200,000 gold. Yeah.
- [31:19]
Marty
Does this chart speak to you in terms of the thread we've been pulling on in terms of bitcoin power trend, meeting the exponential growth trend of credit at some point in the future. And what happens like with this? So we're looking at gold over the last 50 years. Obviously gold. I would imagine in the early days, millennia ago, it had a power trend adoption as it was being monetized. And obviously it's been fully monetized for millennia now at this point and now that it's on this exponential growth trend. Is that what happened to gold? It sort of ran into the exponential trend of credit growth long before bitcoin and this was the end product.
- [32:12]
Matthew
That's a interesting question. I've never been asked that or thought about that. I have no idea if gold would have followed a power trend at the beginning, but I imagine that if gold was the general unit of account and silver as well, and we had credit, which as Sidney Homer has said from the history of interest rates, credit, which I agree with, credit is long before Gold, it can be in primitive societies, advanced societies, you don't need barter, you don't need money. You can promise your uncle the proceeds from the yield from the crop next season if he lets you use his plow or something. I mean you can make credit out of anything and credit itself by nature has interest. I would imagine that there would still be some sort of an exponential function always, which again makes bitcoin really, really unique. Weird. Like I've never seen an asset grow in power. So that's what I would say there. As far as bitcoin's or sorry gold's growth, it's really not that exciting which is another funny thing, right? It's been, you know, a lot of people say this number like 8%, 9%. But that's if you're over the long term of gold. That's if you cherry pick down here the $35 price and now $4,000 price then you can get up to 89%. But that's a cherry picked present future value as I always try to do. If you take the long term trend measure the slope of that, you're at five and a quarter, 5%. So it's actually not even been a great hedge if we consider that the global money supply, which I always measure, sorry I also measure and have always measured every quarter for the last eight years has been growing at 10 to 12%. 12% if you think about it more in native terms, 10% in USD terms it means the USD accretes 2% over other currencies or other currencies lose 2% relative to the dollar on average. It shows the dollar's supr. If you think about those rates of growth then yeah, gold is actually not even that great there. So I would say it doesn't apply. I would say gold just it's so wrapped around credit. Here's the thing with bitcoin, bottom line, if satoshis are so rare, as rare as we know that they're going to be, you can look at the supply schedule that how many satoshis are going to be minted 50 years from now and it's like such a small amount, Credit's going to become, you know, it's going to be in my view very difficult to have credit markets because holding on to those satoshis, passing them down to your family is going to be much more valuable endeavor than just you know, going after a few extra percentage points on some short term corporate loan which might fail. So that's the one thing then the other thing is it's just how long can this fiat game keep going? I think it can actually keep going for a long, long time. And I can show you lots of charts that will reflect that. But I have a hard time unless it's full. This is where, unless we lose the legislative or the political battle, like unless everyone is literally sort of in a financial panopticon at the point of a gun, forced to use fiat currency for the next 80 years. And again, that's going to happen for a while, but next 10, 20 years, that's going to start to be a question mark. When bitcoin starts to become so huge, I think it's going to be hard. Everything that you've always talked about on your show is basically what I'm describing here in mathematical terms. It's going to be hard to issue more and more debt to raise money for your armies and militaries. It's going to be hard to issue in more and more debt for your welfare programs. Bitcoin is what you're going to be fighting for. Everybody's going to be fighting for. And bitcoin doesn't mix well with exponential growth. It's a limited sustainable growth pattern. It just doesn't. It's hard to wrap your mind around this idea. But if credit, if debt, if interest represents something that can take off, can gallop exponentially and cause a lot of these booms and busts. Bitcoin by its nature, and we've seen this in the math, does not do that even in dollar terms, which is wild. So I have a hard time seeing that it might do that in the future. I can show charts on this as well to make it more concrete. As far as bitcoin continue to grow as power versus maybe growing exponential, we can look at those. But the general idea is yeah, I think a more just and exciting future for everybody would be if we're not all forced to use these fiat units. And then the powers that be understand that they need to accumulate bitcoin for their war chests and their treasury chests more than having the right to print money. So it's going to be, it's going to be crazy. Next next 20 years is when you're going to start to really, the rubber is going to hit the road. That's where bitcoin is going to be large enough to meet the level of the US debt or the monetary base or a lot of these other things in the TradFi system.
- [38:15]
Marty
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- [40:45]
Matthew
There's some HODL waves. This is a great site by the way. It's research Bitcoin people don't know about it. You can get most of the data for free a little bit for some of the extra data. But these are all the different HODL waves, right? So generally as people hodl, you'll see longer and longer, more darker, purpley blue colored waves here. Every once in a while though, you see those waves shrink like we did here. July 4th, someone sent like 84,000 bitcoins to Gemini, right? So actually this deep 10 year hodling wave shrank. Anyway, if you take out the longer term waves and you just, you cap it at a year, we are seeing some little bit of short term UTXOs growing which typically have been around booms, right? That takes time, could take a year. But there's a, you know, you see it happen here, see it happen here, you see it happen here. And of course we've had this long boom, right, with the three distinct tops here since the ETFs were approved. But there was an interesting notable jump here over the last couple days. Again, I'm not saying bet the farm on it, but as the UTXOs are destroyed on the longer side and created on the shorter side, that sometimes means some excess hype in the markets for price. Well, in fact all the times means that when we go really extended and we're, you know, you can see we had three sort of two booms in the last one. And even during this last price. Can you hear me? Yeah. All right, sorry. And even during this last price spike In August of 2025, we did not have as much of a sort of a boom in the short term UTXOs. But now we are, which is interesting with this deep discount where we got down to, you know, 80, 85K intraday. I think intraday was even 80.
- [43:07]
Marty
Right.
- [43:07]
Matthew
I don't think I picked it up on the Daily 85, but so there's something.
- [43:16]
Marty
So we're going to pump in the end going straight to the 90th percentile.
- [43:24]
Matthew
It's probably too early to tell. I was talking to James Chuck Matey a couple weeks ago and he was trying to, he's very good at reading the on chain data. He's like, probably shouldn't say it, but it kind of looks like a dip and it turned out to be a deep dip. If it still is just a dip, you know, to be seen. But there is a noticeable jump in short term UTXOs. And if that, if that spike in short term UTXOs gets sort of proportionately high relative to the other UTXOs, then you always see the price pump. Look, do I have to give my Midwest caveat of not financial advice? I'm never going to give you that. I'm never, never going to say bet the farm. We're pumping to the 90th percentile. But it's fun to look at, right? It's fun to look at this data.
- [44:28]
Marty
It's fun to look at all of it, you know. Well, and that's the other thing I think I've been trying to really wrap my head around too is like what's going on in the incumbent fiat system. Like what's your read on what's going on here in the United States? What's happening broadly, these geopolitical tensions increasing. Obviously we talked about the Japanese bond yield blowing out earlier. It seems like we're at this points and I don't know if you've been following the tea leaves of like deep economic prognostic, not prognosticating but people trying to read what Besent and Trump are doing at the treasury and what they're trying to do at the Fed. And there's a lot of talk about this needle threading that they're attempting to do with tariffs, reshoring, manufacturing, weakening the dollar and trying to make sure that we can get on the other side and still have a sense of dominance, particularly in the realm of monetary economics. And I think we're just in a really weird inflection point as it pertains to geopolitics and its effects on macroeconomics.
- [45:44]
Matthew
Yeah, two things I would say two things come to mind. The first one to be a little bit redundant on purpose. What I just talked about at the top of the show, take comfort in the fact that we have a very unique trend for bitcoin that look, I've been on this trend, the bleeding edge of this trend since the beginning. There's a lot of wacky characters in this space, in bitcoin in general. But the people talking about different trends and we've had stock to flow projections and all this stuff. I've been following this for seven years. The power curve itself, what's the year? 2025. Yeah. End 2018. I first did it. So the Giovanni character, he's big into it. He was a little bit ahead of me. But no matter how you follow people in this space, everybody's very passionate, let's say. And what I can tell you, trying to be mostly understated with some disclaimers as I usually do, I'm highly confident that the power curve itself is. It's like one of the main drivers of growth. And it's the reason I was on Danny's show recently, talked about it. The reason is this is how networks grow. There's a lot of. This is, you know, there's a lot of research to suggest that organisms grow this way. You know, I talked about this on my talk sort of my summer circuit when we're talking about growth rates and stuff like this might have been a Jeffrey west book as well. Scale, which is a great read. Like something like Godzilla. That would be an exponential growth type animal. All right. It would like, it's a massive thing. It would need like a mountain of food. And by the way, it would just collapse on itself. It's just not possible sort of in nature. But what we see in nature is you have this nice relationship with proportional relationship with the way organisms grow. Like pretty much all mammals, sometimes people take it to the whale size and take it to an elephant size, but they need actually a proportionately less food as they get older, bigger. But they also, they don't grow to Godzilla size. This is proportionate growth. And if you charted that sort of calories and size on log, log scale, you'd see a nice beautiful straight line. You see it with networks, right? You see a few large nodes take a ton of connections and a bunch of small nodes take few connections. This sort of 80, it's a 80, 20 rules, basically. It's power law. There's power curves everywhere. But to see it in bitcoin is really, really wild. And so again, take comfort in that because you don't see it in the growth of gold. You don't see it in the growth of the S and P. You don't see it in the growth of stocks. Let me show you this. This is the top eight tech stocks in the world. Same thing. Now this is a very fast R Squared, by the way. And you know, big drops it can go from. This is, you know, this is all the big. This is Apple, Microsoft, Google, top eight stocks, got Broadcom in there as well, is now a big one with the chip, chip race. But you know, they were $11 trillion. The top eight tech stocks in the US in 2021 fell down to 6.8 by 2023. Then the AI boom started. Just like gold. They've had 40% growth, by the way, with like a huge 30. Well, not 30, 15% drop. Yeah, during, during Liberation Day. Liberation Day, my favorite day of the year. Now it's hilarious. 13 goes down to 13.9 trillion. Now all of a sudden back up to 22.8 trillion. That's volatility. That's volatility. And this is a, this is an exponential curve. Actually one of the best performing if you just track these eight stocks. So sometimes exponential growth can help you, sometimes it can hurt you with inflation. But it's a very volatile, volatile thing. But the fact that Bitcoin is not growing that way is very important, very interesting. The next thing that I would show you is this chart. Remember this one I always show this guy?
- [50:17]
Marty
Yes, yes, yes.
- [50:19]
Matthew
This is long term debt of the United States. And again, having in mind what I just said about how the nature of Bitcoin is something to take comfort in itself, here's the nature of debt in the history of the United States itself. It grows, grows at 7% or so, doubles every 10 years. It's actually growing even slower in recent years, surprisingly compared to where it's growing, say just after the Bush years. But anyway, we have overlaid with this is the central bank holdings of US debt. You see, it peaked in like 18% at the end of the Vietnam War. And it went down, but it was actually going down because debt was growing faster than central bank holdings. Then you had the crisis. This big dip was a Wall street bailout. They swapped corporate bonds for treasury bonds on the balance sheet for a time. Then they gave everybody guarantees and they went back and they had QE123 drop. Big taper tantrum repo spike in September 2019, before the madness of 2020, then the madness of 2020 and now we're down. So where does that leave us today? November 2025, the Federal Reserve hold $6.2 trillion in treasuries. 38.3 trillion have been issued. All right, so that's 16%. Where have they been at the max? Well, during the crazy season, November 2021, they max it out at 28.3%. So by my count, that's over 12 points, 12 percentage points that they could go. All right, it's not a full double, but basically the Fed could double what they have held in the past and still proportionately not be bigger than the, you know, the, the highest inflation they've ever had on their balance sheet. Now would they want to do that? Probably not. Probably. Certainly not all at once. But we know that we're going to get a dovish, a very dovish Federal Reserve chairman in soon. And anyway, anybody who casually follows economics knows that the Federal Reserve, no matter how much they say it's independent to not independent, the President will always get the interest rates that they want eventually, no matter the President, Democrat, Republican. So it's par for the course as far as I'm concerned. And look, they have a lot of room to go higher if they want to go higher. No matter all the noise, all the talk, all you just look at this chart. I'm not saying it's a good thing, by the way, I'm not defending the actions, but they have a lot of room to, to inflate.
- [53:08]
Marty
I mean, at the very least it would not be unprecedented if they did inflate and go back to all time highs from here. Just like eyeballing the chart pre 2008, like well before that dip pre 2008.
- [53:23]
Matthew
They were 10%, 9%.
- [53:27]
Marty
We're hovering at 16 now.
- [53:31]
Matthew
It's an interesting history of the United States right here, all in one chart. Federal Reserve was not really involved in the funding of World War I. You see, they had less than 1% of government bonds. It was more like J.P. morgan Private bankers were doing that. They did become involved after the Great Depression or during the Great Depression and as well during World War II and much more during Vietnam actually, and then much more after the crisis. But there's no start date or end date to this stuff. They're just going to continue to print and to try to hold on to their power. That's what we can expect.
- [54:18]
Marty
Can you overlay the percentage of holdings of foreigners?
- [54:23]
Matthew
Sure. This one hasn't been up to this might not be exactly correct in the last couple months, but basically it goes down. Yeah, and that's a problem for Besant. He wants more foreigners for sure. And it's going down. Okay. Foreigners used to hold maybe 35% of the debt at the peak and now they're down somewhere to 20, 22, 23. This might even be a little bit lower. I haven't Updated this in a couple months. It's something like this.
- [55:00]
Marty
Do you buy into the theory that the genius act. There's a way to get this. Like would tether be considered a far holder?
- [55:09]
Matthew
I don't buy into the theory of any of that at all. Yeah, it's. What's the market cap of stablecoins?
- [55:17]
Marty
180 billion I think right now.
- [55:19]
Matthew
Yeah. The repo market itself is by my count 7 trillion. I've heard higher. It's not very clearly stated but I can show you the old. Yeah, tether US money supply chart.
- [55:33]
Marty
Tether's 184.6 billion USDC 76.5 billion.
- [55:41]
Matthew
Right. Growing, growing. But here's the old total money supply of the United States, all right. Calculated by yours truly. Federal Reserve has not calculated M3 since 2006. So you actually have to go back into the numbers. Most of the data is still there, but it's hard to sort of parse through. And Euro dollars are not there. So this is even bigger than it shows. So it's a little bit conservative here. But the most analogous buckets of money that will fit into stablecoins are these buckets right here, which is part of M2 and M3. By the way. What's the difference between M2 and M3, Marty, lay it on me.
- [56:27]
Marty
M2 and M3. M3 gets into credit, right?
- [56:33]
Matthew
It's a common. How many Twitter charts have you seen a bitcoin lagging? M2's money production.
- [56:41]
Marty
Too many.
- [56:41]
Matthew
Clairvoyant. Yeah, first of all, bitcoin is not comparable to M2 folks. The difference between M2 and M3 is M2 is less regulated retail deposits. M3 is less regulated institutional deposits.
- [56:57]
Marty
Okay, there we go.
- [56:58]
Matthew
And by the way, what's the hottest money institutional? So why in the hell would bitcoin be Anything related to M2? M2 is a retail, that's a retail type money supply. It's not, it does not include the hot money. It's basic stuff but like, and again I, I, I can forgive plenty of people for being confused on this because the Federal Reserve themselves have not published M3 since 2006. So you got to go through these numbers, you got to sort of figure it out. But my, my account, the hottest money right now is 7 trillion in all out repurchase agreements on the bank and shadow bank side. 5.3 trillion in money market funds for institutional and 2.1 trillion in retail money market funds. You put those two together, obviously it's 7. So 7 and 7 $14 trillion. $14 trillion. Probably not most. This is the instrument itself, but probably 14.2point trillion is US and some foreign holders mixed in there. It's not just. But this is, that's the biggest holders of Treasuries right there, these instruments. And so I don't see any tomorrow fix for sort of a lack in demand for Treasuries, if there is one coming from stable coins. I mean, it's a drop in the bucket compared to these markets. It's $14 trillion compared to 200 billion in stablecoins.
- [58:34]
Marty
Hey, 250 billion. Okay, they're cooking up.
- [58:36]
Matthew
Yes, yes. Look, it's going to grow. It's going to grow, no doubt. But none of this stuff is, you know, Trump, Trump wants a. Trump definitely wants a bite of Lutnick's Cantor earnings. Right. I mean everybody knows tether's a great business. Don't get me wrong. It's all great stuff for them. You know, clean, just collect that interest and you know, issue the token. But that's a, that's a money market fund. It's going to take a long time for that stuff to revolve into stablecoins. And it probably is going to come, but it's just not. Structurally, it's not even there. It's like when I show you the chart of Fedwire versus Bitcoin. Right. Remember that? I can pull that up if you want to see it.
- [59:16]
Marty
Yeah, well, that's one of my favorite charts. And so I was, I guess I was loosely correct when I said M3 is when you get into credit instruments. It's when you have all these repo money market funds, retail market funds, buying bonds, which are credit instruments.
- [59:31]
Matthew
Sure, yeah. But to be strict on what I'm counting here, it's actually you're just counting liabilities of financial institutions and banks. That's how you count money. Yeah, so it's just liabilities and what they buy on the other side is not specifically stated in the money supply. That's why I said it's probably mostly Treasuries, but not always. But if you want to talk about the hottest, fastest money that's chasing US government bonds, it's here. And this is not part of M2. Well, retail money market funds are, but institutional money market funds and repurchase agreements are in M3. So again, it's kind of a nitpicky thing, but that's important for people to think about. All right, this one. When have I. I haven't actually. It doesn't really matter. I haven't updated this one since August. But here's the old Fed wire. This is again why, you know, just relax. Bitcoin's gonna, it's got some time. Here we have $1.1 quadrillion that goes through Fedwire a year and Bitcoin as of August4. And actually that actually looks even wrong. I think something happened on my back end. I think it's seven but it doesn't really matter. One of those is close enough. It's just orders of magnitude difference actually. Yeah, something happened on my back end. That's why I don't have this up on my site yet. It's, it's, it's like 7. 7 trillion. I don't know why this is showing 4 now. So the black line would be slightly better down a little bit. Yeah, black line will be down better but it doesn't really matter for the, it illustrates the point, I mean in.
- [61:14]
Marty
The black line for people both watching the video and listening at home that can't see the black line, it is on a consistent trend down into the right as time goes on. And what it's measuring is the sort of ratio of Fedwire transfers to bitcoin network transfers. That means that bitcoin is growing prominence. Yeah.
- [61:40]
Matthew
When that gets to one then bitcoin will be competing apples to apples with Fedwire.
- [61:47]
Marty
Yeah. So we're not I think starting like 2010 on the black line.
- [61:54]
Matthew
Yeah, I could just take this off. Something happened on my back end. This is partly right but I don't know what happened just here. But anyway it doesn't really matter. The best. We're actually not even at the best. Say it's seven right now the best that bitcoin did on a trailing twelve month basis was 18 trillion. 18 trillion which would have been at the time 57 times smaller. Or more appropriately stated, Fed wire would have been 57 times larger than bitcoin which is good. I mean that's a great run by bitcoin but still if you just look at this simply with your eyes and you just see how huge the dollar network is, it's massive. And you got to think about how day to day, block to block how much time this is going to take to, to accrete. Right. For bitcoin to accrete in value, it's going to take time. It's not going to take forever. But we're on the sort of 10 to 20 year track when we're going to meet a lot of these levels both in terms of volume and in terms of Value.
- [63:04]
Marty
Yeah. I mean, if you put the black line too, just to put it in context, in 2010, 2011 Fedwire was more than a million times, Or excuse me, more than 250,000 times.
- [63:19]
Matthew
Yeah, we get no 2011 May, which was very close to a peak in bitcoin. Right. I can probably zoom into June. June was a peak, 420,000. The month before, 5 million. So, and these are correct, by the way. So it can be growing very fast at times for sure. But this is a massive network with a lot of guns behind it and it's going to take time. God. Let me show you this one. So we talked about bitcoin, we talked about tech stocks. Let's look at bitcoin market cap in terms of tech stocks. This is another interesting thing. So this is also a power curve. Nice beautiful curved line on log scale. But what is sort of interesting is bitcoin has fallen off it since it's been coming down in 2022 because AI has been growing so massively, specifically during this time. So if we draw some percentiles, you will see we are putting in new lows basically every day, which is wild. So again, depending on how you want to look at this, depending on how an investor might look at this, especially if they are in, if they are coming at this from the lens of being a tech AI investor, which there are a lot of those for bitcoin, Bitcoin is getting cheaper every day compared to the top eight tech stocks. Now again, you could argue some of that's justified. AI is an amazing tool. It's going to take the cost down for a lot of things and the market cap up for certain companies. But bitcoin itself is a more amazing tool as we know. So it's getting very cheap for tech investors looking at bitcoin. Right. If you had all eight stocks and you were just sort of looking at maybe rebalancing, getting very, very cheap, it's basically putting in new lows every day, Which is wild. Now let's look at bitcoin in terms of gold. Same thing. The power curve dominates. It's still a 95% R squared. But similarly, this run since gold has also had just like tech stocks from 2023, 40% growth since 2023, you know, very. If you're a gold investor now looking at bitcoin, you are at almost as far as a quantile model goes, all time lows.
- [66:12]
Marty
Bitcoin's relatively cheap right now. It's relatively cheap right now.
- [66:16]
Matthew
20 ounces of gold per bitcoin And I would also caution here, which I think is very wild. So 20 ounces of gold per bitcoin, that's like setting a new low on the quantile model. But go back even here where bitcoin didn't get in terms of gold was not at the zero with percentile, but it was definitely under the tenth. It's probably around the fifth or something of all time. The price of bitcoin at the time was 9 ounces of gold. So three years ago, Bitcoin was still cheaper. Or in other words, bitcoin. Right now, even with its extremely poor performance against a booming gold asset, bitcoin is still double what it was three years ago. That's a wild thought. That is wild. And to think if we have this saying right, at least I, the investors I used to work with would joke about it a lot, like, you can be a pig but don't be a hog. I am very curious how good gold bugs might have it at this point. Is it going to go back to 9? I have a very hard time believing that. I mean, literally, again, just like the tech thing, the tech analysis, we're setting new lows on this trend every day. So statistically, bitcoin is as cheap as it's ever been relative to the trend of gold. BTC gold.
- [67:58]
Marty
Well, if we go down to the zero percentile of the power trend, that would be nine times. That's when we would go back, right? Be around 56.
- [68:07]
Matthew
You mean the 52 power trend in dollars? Yeah.
- [68:11]
Marty
I mean, if gold stays at 4,000, bitcoin goes to 56. That's nine times, right?
- [68:17]
Matthew
Yeah. Or if another way to think about it is the power trend of bitcoin, right now in gold ounces, the trend is 64 ounces, right. So we're at 20. So 3x staying at current gold prices would take us back to Trend for gold. So 3x in dollar terms, meaning, you know, close to, I mean, definitely, definitely close to 200,000, if not more.
- [68:48]
Marty
Yeah.
- [68:50]
Matthew
Doesn't mean it's going to happen. Doesn't mean it's going to happen in this cycle. Doesn't mean the cycles are not over. But we're at wild extremes globally on a macro level from where bitcoin has been and certainly at levels that Wall street, you know, like Wall street knows about the power curve by now. Like, they love this fear. They love it. So they would love to exacerbate this more, accumulate more bitcoin. No question about it.
- [69:22]
Marty
How long do you think they could exacerbate it. I know you said short to medium term.
- [69:26]
Matthew
No idea. Yeah, your guess is as good as mine. Yeah, there's a lot of fiat dollars and fiat interest running around paying people salaries. They could go a long time pushing this price down. But of course, bitcoin has a very specifically in the gold analogy. Bitcoin, as we know, balances its budget every 10 minutes. And Bitcoin, due to the difficulty adjustment is not susceptible to the same supply, demand relationships of gold. Right. So gold miners are just loving life right now. I mean they are. I'll show you this one.
- [70:11]
Marty
How hard are they digging right now?
- [70:14]
Matthew
Very hard. And I mean, you got projects, no doubt, that are just absolute duds that are now being, you know, revived and. Just, you know, pie in the sky projections, I'm sure, scaling up slowly. And you know, some of those projects are going to work out fine. Other projects are going to remain complete duds. And there's probably a lot of jokers that are coming into this business just like jokers come into the bitcoin business. But the difference is this, you know, as they say, the cure for high prices is often high prices if you're a buyer. And the cure for low prices is often low prices if you're a seller. So the idea that bitcoin is, you know, or sorry, that gold is just like I said at the beginning, looking at the gold trend just going to continue to 10, 20, 30K per ounce. Again, it might go a little bit on the short term, but supply and demand is going to start to rear its ugly head and people are just going to like wonder literally in the jewelry shop, like, why am I paying this much for gold? And they might go into platinum or whatever. Let me show you this chart which will show you a little bit what I mean here about how crazy this is for some of these people right now. Again, I'm missing something here, but I'll zoom in from this point. All right, this is similar. Hold on. It's a little bit outdated, but it'll do the job. This is a similar chart. Kind of like the transaction throughput, but this is mining revenue. Okay. This is through June. Actually, this is through September. Close enough. All right. To today, 16 billion. By the way, not even a top on a trailing twelve month basis. This just assumes all miners sell their bitcoin in terms of their block reward and their fees every 10 minutes at whatever prevailing price there is. It's this academic calculation. A lot of miners hodl. A lot of miners don't even pay fiat. They take Credit, you know, they don't pay out of pocket. So it's crazy business as you know. But this is generally how the mining business is. It's a $16 billion business right now. This is gold. Now over the same gold is getting. There's about 100 million ounces of gold that are mined a year. Gold is becoming a $400 billion industry. It's massive. I mean this Christmas is just going to be amazing for gold bucks. They're just going to be. I don't know how. I used to curse more on your show but feel less inclined to now. I mean they're. There's just. It's going to blow off. There's no question this is not going to sustain but it's going to, you know, it's going to be a fun ride for a lot of people in that business right now. And it's just like even from say January of 2021, they were making record revenues for this business at 200 billion. Now it's getting close to a $400 billion industry. But just so you see how small bitcoin and gold are compared to oil. This is the oil markets, right? Trillions of dollars a year. So again doing the math on where we are in bitcoin. Back out. Don't freak out. Block the block day to day. Not financial advice but maybe take advantage of some of these cheap prices. There's just a lot more to the whole structure of all of this than I think can be. Than one needs to stress about over one morning waking up and seeing Bitcoin crash 5K.
- [74:38]
Marty
And I think another thing to put into context too is this is not abnormal for bull markets either. It's 30% corrections which is what we've seen over the last month.
- [74:51]
Matthew
And look, I mean it's going to go on for a while. I mean look at the oil markets. They can crash a trillion dollars in annual revenue. It's part of the game. Still going back to what we talked about. Bitcoin being the sort of pristine asset, risk free asset. I believe all of those things. I do believe that we could have all of these markets eventually priced in btc, something like that. But it's going to take a long, long time.
- [75:19]
Marty
We need trillions and trillions and trillions, tens of trillions of dollars to come in before that happens.
- [75:24]
Matthew
Right.
- [75:24]
Marty
What do you, what do you think about silver and its blow off top right now? What does that stand historically? Sort of lagging silver blow off top to gold?
- [75:33]
Matthew
Yeah, it's high. I don't think I have one charted but it's obvious it's the same deal. I mean you're at hundredth percentile, right? I mean it's, it's could not have been higher. Let me see if I have one on the 10th, see where is it?
- [75:51]
Marty
Right now silver is trading at 57 new all time high.
- [75:59]
Matthew
Yeah, this is all time high. And as far as, if you would measure that as far as minor revenue, even more of an all time high because there's more bullion, silver bullion being mined now than there was 15 years or not 15, 12, 13 years ago when silver was lasted 55 bucks. So yeah, these guys, metals investors are having a good Christmas, no doubt. But maybe I didn't completely finish the thought about the supply demand though. So at some point a lot of these jokers, particularly I believe in the gold industry, which is obviously a very analogous asset to bitcoin, high prices will become the cure, right? To high prices. There will just be too many speculators, investors, miners in the business chasing too many projects. Too many jokers will start to come in and supply is just going to outstrip demand. And once that happens, price falls. All right, as we know, Bitcoin is not susceptible to that problem because of the difficulty adjustment because its budget balance is every 10 minutes. It's just a completely different beast. That's why we have number go up technology, we have just a, however you want to define it, the only fixed asset in the universe. It's a completely different thing. I'm very much looking forward to how Bitcoin will react in the future to some of those supply demand dynamics because there's just simply a cap on the amount of coins that can come out every 10 minutes due to the difficulty adjustment. And you just don't have that in the gold industry. You don't have in the silver industry, you don't even have it in the oil industry. So that's the again backing out, trying to be more calm about what's happening. We can, we can expect that's going to happen, you know, do I, you know this could go another year or two. These gangbuster prices for gold and for tech with AI, they're growing at 40% a year right now on a trend. It's massive. But bitcoin actually is also growing at 40% a year on a trend. So have that in mind as well.
- [78:30]
Marty
Yeah, it's interesting to bring up bitcoin mining too because did. I don't know for. We're still over zeta hash. We sort of crescendoed a couple of weeks ago. We've had two downward difficulty adjustments in a row. But there was a point where we passed an extra hash with authority on a trailing average in the middle of September. And then between the middle of September and the end of October, we added 100x a hash in that six week period. And I think putting things in perspective, like it took, I think my memory serves me correctly, it took us until 2020 to get to 100 exahash. So the network. Yeah, took us like April 2020 to get to 100x a hash with authority. And so it took 11 years to go from zero to 100x a hash. And that were added in six weeks between September, middle of September and end of October this year.
- [79:38]
Matthew
Yep, precisely that perspective.
- [79:41]
Marty
Like when I sat back and looked at the chart and put that in perspective, I was like, holy crap, that's an insane amount of hash rate coming on the network. Now granted, the ASICS are way more efficient, Bitcoin's been industrialized to an extent. But I still think there is some signal there in the hash rate markets.
- [80:04]
Matthew
Yep, I would really like to chart that actually. That's a nice, that's a very nice, Nice stat. Basically, let me show you what we've done in terms of market cap. This is going to go a little slow. Hold on hash rate, by the way, another screaming power curve when it comes to bitcoin. Right. And. We can show you how the hash rate relative to the market cap or ie the network value has trended. So this is literally dollars per hash of value. So you get extremely small numbers, even smaller as we go up because hash is so outstripping market cap. But nonetheless you would assume that during the booms you would have, you know, these busts or, sorry, you would have these peaks in market cap versus the trend. And. It's interesting. It's not, it's not. I mean it's not growing as fast right as it used to at the beginning, but it is kind of stabilizing. I don't know. It's another. This is one of the other ones that I would say is more for a more stable sort of bitcoin future with not as much volatility relative to the trend. But this is, with my multiple around the trend, it's a little bit different. Might need to run this on the percentile or the percentile quantile analysis. But in any event, yeah, it's not like as one would expect, prices booming relative to the hash rate at the moment. And it's just sort of stabilizing at this number. But regardless, it's just incredible how much bitcoin security has grown relative to the value of the system. Yeah.
- [82:28]
Marty
What does that say to you?
- [82:32]
Matthew
Just maturing. It's maturing.
- [82:35]
Marty
Do you think there's more price insensitive hashers in the market?
- [82:43]
Matthew
You would be able to probably answer that question better than me. I don't, I don't know. But I would say like looking at the revenue, which is another way to back into this question. If I could find the damn chart here, here, here. So here. Okay. This is a little bit more refined. This is 30 day miner revenue. It's not even at a, you know, it's not even at a all time or a 30 day all time high. Right. Miners would make 2 billion a month back in March 2024. Now they're making 1.6, 1.7. And hash is what it is. Right. Growing, growing, growing. So again, like super secure network, competitive. At some point you would expect these numbers to be much, much higher. But you know, predicting that is difficult.
- [83:55]
Marty
Yeah.
- [83:58]
Matthew
Well this is definitely a number go up chart. Right. I mean it's going to be more profitable in the future to mine this very scarce asset. One can argue about the reasons why it's not so high or whatever, but it's undoubtable to me that this is going to be a huge number in the future. Something that compares with the gold markets or even the oil market.
- [84:25]
Marty
Certainly looks to be trending in the right direction.
- [84:30]
Matthew
Yeah, but you know, one would think it'd be much higher. Yeah, one would think. Well, but you're the mining guy.
- [84:39]
Marty
Yeah, I think there's more price insensitive hashers in the market. And I think, I also think the market's got, like I said, obviously the machines are more efficient and I think there's been enough time that the industry is sort of wised up to. Okay, we need to really focus on cheap energy, cheap electricity. And there's a ton of people going out there and finding stranded, wasted, isolated energy to mine bitcoin with. Then obviously you have the industrialization of the mining industry on the demand response side, which is becoming critical to grid systems. And so I think you're going to have, I don't think they're there yet, but I think you will have somewhat price insensitive or less sensitive grid operators that really need it for demand response. Yeah, but let's bring this back. I know we got less than 30 minutes here really focusing on the topic.
- [85:44]
Matthew
Of.
- [85:47]
Marty
The soul of bitcoin and what is it? Is it this capital asset? Is it digital capital that is to be used as a collateral asset only to have structured credit products built on top of it? Or is it peer to peer digital cash to be used in everyday transactions? I think I'm a believer it can be both, can get both out of it. But I do think there is again this year particularly I think the, the fight over the soul of bitcoin's future. Or maybe it's like a perceived fight because I don't think it really is a fight. Like I said, I think it can and will be used as both. And I actually think it's very productive that this conversation's been, for lack of a better term, hashed out this year. And going back to the juxtaposition of block versus strategy, I think that's actually extremely healthy for the long term. And I've been more focused on how do we make sure that bitcoin becomes peer to peer cash more recently. Because I do think it's important. I do think the meme of it's only going to be digital capital, never sell your bitcoin, never spend your Bitcoin is completely shortsighted and asinine.
- [87:11]
Matthew
And I.
- [87:12]
Marty
Am really interested to see what the data looks like a year, two, three years from now post square opening up bitcoin capabilities in their point of sale systems. I think the product that they release with the highest signal is probably the automatic conversion of daily revenues to bitcoin. You can sort of choose the percentage that's the bitcoin treasury play. I want to see small medium sized businesses sweeping some cash flows in the bitcoins and holding it on the balance sheet.
- [87:52]
Matthew
Is that a question?
- [87:54]
Marty
This is a thought, a jumping off point to jump.
- [87:59]
Matthew
It's a great thought. I have all the thoughts here because. Like we've talked about, I personally have a hard time chalking all this up like the future of bitcoin only to be what the Supreme Court of the United States says. I have a lot of like, I can understand the sympathy for us being the largest economy, largest capital markets, largest military, that there's a lot of reason to believe that sort of whatever the US says to enforce the moneyness of bitcoin, like that could be the future of it, but due to the fact that it is unlike gold where it's not easily confiscatable. And remember during the first year of World War II, 1940, 80% of the world's gold found its way into the United States or somewhere around the United States. Like Canada into their coffers because this is actually the biggest nail in the coffin of the international gold standard was not roosevelt during the 1930s, it was Hitler and Stalin during World War II. And by the way, we're going back to, as you well know, very unstable geopolitical times, which is a topic for another conversation. But the nature of holding Bitcoin, I think is way outside of their hands at this point. ETFs still large amounts are getting there. Anybody can hop on bitcoin treasuries and see it pretty closely how all of that stuff is tracked. But this is still a cypherpunk retail decentralized phenomenon and we all want to see it stay that way. So I would say hold on to that vision. No matter all the news that comes out with the economy and interest rates and Wall street and this and that, we have this power curve. It's the way the networks grow. It's censorship resistant cash with many use cases that you have studied with your guests throughout the years. And as long as I would say, particularly as long as that decentralized nature holds, we're going to be fine. We're going to be fine. But how that would play out as a pricing mechanism, I think that is most interesting. And I really would say that I hope that it continues on this power curve because the power curve would show you something sustainable. So here, I don't know if I've shown you this before, but this is same thing, got the old power curve and we also have an exponential curve. So I've shoehorned in what Bitcoin would look like if it was on an exponential trend. You can clearly see it's not an exponential trend, right? Like so at the beginning it wasn't here. And then when it went through the whole mid cycle of its life, it barely hit this trend line a little bit here. And then we've been off it since 2022, not even close. So it's not an exponential trend. The R squared is worse. It's just clearly not. It fits this nice trend. And if Bitcoin would do what a lot of the people that have been clamoring for, I guess in Wall street, and if it would just be this sort of base asset where you could collateralize against it and then draw on it, and we just have a bunch of fiat interest around Bitcoin, this trend would not hold. It could not hold it. Actually this is where it would have to be something where all your models sort of break, but presumably it would break to the upside. But it Might not be the world that we want. So to have the world that we want, it would need to be on this sort of a trend line. And we'd have to have just a different credit market surrounding this. But if we do have Wall street take over for whatever reason, you might see something like this where it turns exponential. Like here if it happened at the end of the year, it'd be more like this trend. Or here if it happened after 10 years, it'd be more like this. So this is where you could get it, maybe go on a straight line and you get something like this. So still could be crazy numbers. Like if it started to go exponential by the end of this year and then we go out 15 years, that's $22 million Bitcoin by 2040 exceeds everybody's expectations. Well, higher than the power curve, by the way. But what's behind that $22 million bitcoin probably loads mountains and mountains and mountains of fiat interest and government bonds and stablecoins and all the rest. That's not really a future that people would envision. Right. And for you, the statement that you just made about it's only this sort of hodling or investible technology where it's not used in peer to peer transactions, that would be more likely under this scenario. Does that make sense?
- [93:43]
Marty
Yeah.
- [93:44]
Matthew
When it goes exponential, it's going to look more like a Wall street asset. And that would be, in my opinion, not an ideal scenario. It may still be great for investors. Right. Like on that number go up sort of not even on the number go up ethos. Just on paper it looks good, right? But that's the same thing like Manhattan real estate. It looks good on paper. You have, you can pull out whatever you pull out a year for your expenses and everything, but you still get rolled over. More accumulative debt, debt debt each year. And at some point that's harder for anybody that's there. Unless you have some major business that can keep ahead of. Lots of inflation and economic growth. At some point that debt for personal balance sheets becomes very difficult, especially in rising interest rate environments. That's where I sit basically mathematically kind of looking at what you said, you could see 15, 20 million dollars bitcoin in the next 15 years. But in my opinion that would be too high, actually you would want a little bit more sustainable, something along this curve. And compound interest does not work on a power curve. Just doesn't work. So that's the thing that I'm sort of trying to figure out with this, how our Time our work is valued and how people are going to value bitcoins. But I would be very personally, very careful. I know this is like a booming industry and everybody's loving it, and Saylor himself has accumulated a boatload of bitcoins doing this. But I would just say on a personal level, one should be very careful about accumulating too much debt behind their stack of bitcoin because you don't want Wall street to take it or whoever you're posting the collateral to. Especially if you got to liquidate in a day or less than a day, and all of a sudden your bitcoin's gone because you were margin called. Yeah. So in other words, if you want to see that decentralized future, I think it's. It's got to come from around the world, you know, it's got to come from other currencies. Well, I think too, the.
- [96:16]
Marty
Sailors specifically say, never sell your bitcoin. I'm going to burn my keys when I die. I mean, here's this. I don't know if it's intentional or naive or ignorant, but I mean, the tech around the payments use case is only getting better. I was thinking of today, right before we hopped on, it's December 1st. Ran Bitcoin payroll for the employees here at TFTC accept Bitcoin for part of their salary. And it's always a beautiful experience. It's like, hey, you wake up, I get a zap right invoice. Obviously there's some UX and automation that can be built around this particular use case. I know there's companies working on there, but the way it works here, I get the zap right invoice, I pay it, and that person gets that part of their paycheck in bitcoin within an hour.
- [97:14]
Matthew
And is that monthly or bi weekly?
- [97:18]
Marty
It depends on the particular employee. Some are bi weekly.
- [97:22]
Matthew
It's a good day for. For that. For them.
- [97:24]
Marty
Yeah.
- [97:24]
Matthew
In terms of sets.
- [97:25]
Marty
Bad day for the business. Good day for them. No, it's a good day for the business they're getting. They're happy.
- [97:30]
Matthew
Yeah.
- [97:31]
Marty
But no, it's always. And we've got contractors who do some. Some miscellaneous work. And that's one of the stats or anecdotal data points that has really encouraged me this year is the amount of contractors that know that we're a bitcoin company and just send us invoices in bitcoin. It's like, okay, this is cool. So your point about it's going to take sort of retail adoption. I Think it's happening. I think it's only going to accelerate. I'm not sure if you've been paying attention to developments around Ark and Spark and what's happening with the Xiaomi. Immense. But the payments UX and as it pertains to speed and cost and then on top of that privacy benefits. It's only getting better. And if AI really is taking over, which I think not taking over but is a thing, I think it's real. I think there was a there there. We were talking about it before we started recording using Claude pretty extensively in our businesses and it is making us more efficient and allowing us to do more than we could by ourselves and without having to hire full time employees if the agentic future materializes. When it materializes, these agents are going to need money and it doesn't make sense for them to use Fiat Rails.
- [99:04]
Matthew
Yep, not at all. This is a chart of Japanese yen. We talked about JGBS at the top of the show. This is Japanese yen in bitcoin. This is not from an exchange, just triangulated from the dollar with the official exchange rates, but also a power curve. 97% R squared and 13 million yen for Bitcoin even a little bit below trend now four years ago, you know, 5.9 million yen at the peak. All right, so that is a higher multiple ahead for the Japanese four years ago holding bitcoin than it is for us or Those who are dollar oriented, say 85k versus 60k four years ago. Right. So any way you slice this, it's going to be better to hold bitcoin and also to transact in bitcoin, get paid in bitcoin. You know this is the old message from Andreas. Right. So yeah, I mean anything that, that, that can bolster that story, I'm, I'm like 100% behind. I know Wall Street's like very exciting in price and everything, but you got to think about what's going to be behind that story if you really want Wall street to be there and that's the main driver and everything. The only thing that's going to be behind that story is a lot of fiat interest. A lot. And. This chart is basically, you know, telling that story. It's like. At some point we're going to start thinking in terms of satoshis. I know. But basically without showing you too many charts in 20 years. In 20 years for sure we're going to be at the level of the monetary base which I haven't even talked about this show yet, but that's probably when this drops, there'll be another update for people to see. The third quarter of base money, which is really basically flat even, all things considered, still about $26 trillion. So Bitcoin is less than 10% right now, just like it is. It's actually about the same level of those top eight tech stocks, by the way. But anyway, The world will certainly understand bitcoin a lot more in five years, a lot more than that in 10 years, 15, 20. Like it is a compounding technology. But if you want to think about this in terms of like the old traditional tradfi model and sort of model it out a straight line on log scale and do all these ABC Elliott Wave stuff, I'm just telling you, I've been following this for a long time. It does not follow that pattern. It follows a nice sustainable growth rate. And if you want it to follow those sort of old school Wall street models with a lot of interest baked in, right there's going to be consequences of that and probably more booms and busts. So I would say that's not, it's still okay. I mean if you're holding bitcoin, Bitcoin is going to do well in either scenario. But it's one of these things like you know, gold bugs, right. And how many gold newsletters I've read, I just can't tell you. But, but, and I talk about this on my show all the time. It's like they sell fear, they sell doom, they sell gloom, they don't really sell hope and gold miners don't hold the gold. We just talked about this, you know, how it's just going to be a golden Christmas for these guys. They don't care about the gold. They want to get it off their books as quick as they can, you know, sell it, lock in the profits, move on to the next thing. It's not a, it's not part of their underlying, you know, worldview, but that's not the case for bitcoin. So there's just so many different things in bitcoin that are going to affect the relative growth of the network. You know, so many political things, geopolitical things, technological things, privacy, things that just no other asset can compete with. I really think people got to be, you know, thinking about those things more. And yeah, it all comes back to the sort of as you were talking about using this on a day to day basis, if you're only about number go up or thinking about this as like some exponential asset that's going to do better than you know, whatever. There's going to be a lot. There's going to be a real big consequence to that if like Wall street comes in and just loads up a ton of debt and fiat interest behind it. It's just that's exponential growth for bitcoin would be based on the numbers, it would start to look rough, it would start to look unsustainable. And so that's what I'm trying to show with these charts is bitcoin by its nature, very interestingly is not following the growth trajectory of any other asset. And that's a good thing. People should try to understand that, pay attention to that and you know, take comfort in that because you know, 20 years up, 10 years up for a gold bear, then 20 years down, then 10 years sideways. That's not a.
- [104:33]
Marty
It's no way to go through life.
- [104:35]
Matthew
It's no way to go through life. And you know, just it's so fascinating to go back and read some of these gold newsletters like these old ones and then don't get me started about some of the types of people that some of these people are. And there's just some crazies out there in a lot of this speculative political space and hard asset space and a lot of them have just been wrong about gold. Completely wrong. So don't hit your wagon to Wall street or I don't know, just a lot of the hype around that. Yeah, it's going to drive demand, sure. But I would highly caution about too much debt for you personally around your bitcoin or in anything but bitcoin. If it all goes according to the power curve, debt is going to look completely different in the future. It's just not. There's just two. This is an oxymoron sort of. There is so little satoshis to back more and more and more fiat interest. You'll just have to have a different concept of future value and giving up those satoshis for rates of interest which probably aren't going to pay.
- [106:01]
Marty
Yeah, bitcoin, it's a better way to go through life. That is funny thinking about the sad. That's again not blowing smoke up your ass. I always love catching up with you quarterly because as you mentioned, I find much more comfort in where we are. I think it's inevitable to succumb to the animal spirits and the sentiment that is fire hosed your way via social media. And if you look YouTube thumbnails, YouTube thumbnails. You gotta play the game. It's all ending. We'll have a good One for this, it'll be a burning background and.
- [106:45]
Matthew
The Elmo.
- [106:47]
Marty
But honestly, if you're out there, relatively new or seasoned and haven't yet internalized, that bitcoin is exhibiting power trend adoption. It's riding this power curve. And if you just look at the data, the back tested data going back to Bitcoin's inception, we are lower, we're below trend, but we've been at this, this point for 30% of Bitcoin's life in relation to where the trend actually is.
- [107:23]
Matthew
So yeah, and we're closer than other relationships just quickly as we close it, you know, here's Plan B's 2019 model. This might look kind of close, but on log space if you actually look at the numbers right, so he's at 770,000 right now. Power curves 120 is a 770. His 2020 model, more absurd, 6 million. And then you can do a power trend. So but again, bottom line, without going through the math, these are incorrect because they assume exponential. There's an exponential component to this. He's using gold, silver, all sorts of other nonsensical things. There's an exponential component which bitcoin doesn't do. So they're wrong. Bitcoin is a power curve you can sort of shoehorn in a little bit. A better one like I do not using these exponential components. Again, not to be too long winded, it's a little bit better, but there's no predictability to it or let's say stability comfort to it. So for example, if I, you see my number here, the sort of lighter green shaded one power trend on stock to flow 350k. That would be if you didn't assume any other weird things like plan B did and they just leave it at that. But still, if I had only taken the 2016 data and projected out on that way, whoops, I would have got this red line. Let's look at the difference. 350 between 584. Again, you're still 200,000 off. So the 2016, the dotted line showed no predictive. And when I say predictive, I don't mean like I can predict the future. It means it's statistical, it's showing. You know, it's like is this medicine going to work? There's no sort of prescriptive predictive in a statistical turn sort of relationship. There's. But now let's look at, here's the power curve 120k. What if we took the power curve from 2016 projected forward and didn't do anything else from 2017. 18, 19, 20, 21, 22, 23, 24, 25. That is the 2016 number, 128,000. So if you don't like, if you're not on board with this again, I don't even care. I'm not a, like, I don't care for the, you know, if I found it first or if I didn't. It's just a formula, it's not a big deal. But the, you need to look into what this actually means, how it's displaying the growth of bitcoin. And no other market looks like this. Other markets are these straight line on log scale or bastardized stock to flow things which are they just not, they're not jiving with the way that bitcoin grows. And so we can see power curves on address growth, hash rate, growth nodes, a lot of different things. With bitcoin it makes sense, it's a network, so it makes sense that it's growing this way. So to understand how the thing grows, which it does in fact slow down a little bit every year, grows sustainably, that's going to give you more comfort in my opinion, over the end. And if it just becomes this savings asset like you said, which is in some level naive or not good, yeah, it might look good on a price level, but there's going to be a lot, a lot, a lot of fiat units that are baked into this number eight here. And even though it might look really, really good after 20 years, maybe $30 million bitcoin, you're going to have like $10,000 gasoline or whatever. I mean it's just going to be absurd. It's not going to be a future that anybody's going to want. So that's the fight. That's the fight. And to do that you need to keep it decentralized, you need to use it, spend it like you said, all the things we talked about. So I'll leave it there with that. My friend.
- [111:05]
Marty
Thank you for comforting us during these trying times.
- [111:10]
Matthew
I do what I can.
- [111:12]
Marty
It's always a.
- [111:13]
Matthew
We have bigger, we have bigger issues over here. I abstained from bringing those up during your show. So I'm sure you'll listeners will appreciate that.
- [111:24]
Marty
We'll catch up on it next time.
- [111:26]
Matthew
Yeah, I'm happy to.
- [111:27]
Marty
Beginning in February next year. It's actually a timely turnaround.
- [111:33]
Matthew
Nah, it's about, it's about time to two months after. Yeah, but it's like you said, there's more stuff happening behind the scenes and I'm hoping to not just be quarterly after the end of this year, but maybe we'll get some more rolling, better updates. Not that you and I have to do it every month, but, but money supply is just, it's a backward looking thing. Do not look at M2 retail money supply in the United States and think it's going to predict the price of Bitcoin 11 weeks from now. It's just not doing that.
- [112:01]
Marty
No, not a good way to have.
- [112:04]
Matthew
Comfort in the power curve, the network effect and spend time with your family.
- [112:09]
Marty
Yeah, spend time with your family. And if you're really worried about it, do your part to expand the network effect by educating people about bitcoin, helping them download a bitcoin wallet, and teaching them how to receive bitcoin. Do your part. Matthew Nice. Enjoy tonight. Enjoy your Christmas and the New Year and we'll catch up in 2026.
- [112:32]
Matthew
Thank you my friend. Always a pleasure.
- [112:34]
Marty
Peace of Love Freaks thank you for listening to this episode of tftc. If you made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month gets you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time.