THE Bitcoin Podcast — “AI Bubble, Fed Pivot, Liquidity Cycles, & Bitcoin’s Next Move”

Host: Walker America
Guest: Preston Pysh
Date: December 9, 2025

Episode Overview

This episode of THE Bitcoin Podcast, hosted by Walker America with returning guest Preston Pysh, dives deep into the current “weird vibes” in the Bitcoin and macro markets. Preston and Walker analyze the disconnect between Bitcoin price action and broader asset performance, the role of liquidity and Federal Reserve policy, the shifting significance of Bitcoin’s four-year cycles, the explosive (and possibly bubbly) AI sector, the mechanics and attacks on MicroStrategy and Tether, and the ongoing evolution of Bitcoin business infrastructure. The episode is a must-listen for anyone trying to make sense of recent Bitcoin price languishing, apparent bearish trends, and the impact of broader market dynamics.

Key Discussion Points & Insights

1. Market Vibes & Sentiment: “It’s Weird”

Timestamp: [05:14]–[09:07]

• Walker sets the stage, noting that even Bitcoin diehards appear unusually bearish, or at least confused, about price action and market sentiment.
• Preston Pysh admits confusion, citing unexplained divergence between Bitcoin’s 30% drawdown and S&P highs, with no corresponding “liquidity crunch” that would usually explain such moves (see full quote below).
• Pysh’s Principle for Uncertainty:
  “Anytime [Bitcoin] offers you a decent price or a sell-off, volatility… just keep dollar cost averaging it. Don’t overthink it… Volatility is your friend when it’s bouncing around.”
  — Preston Pysh [07:56]

2. Four-Year Cycle, Macro Environment, & Evolving Market Drivers

Timestamp: [09:07]–[15:25]

• Shift in Market Structure: Early cycles were more “protocol-driven” (i.e., impacted by block reward halving and difficulty), now broader macroeconomic/liquidity factors dominate.

• Satoshi’s Writings: Satoshi himself anticipated Bitcoin’s valuation would eventually become more macro-driven as adoption widens.

• Preston suspects the famed four-year cycle’s predictive power is fading:

  “If we end 2026 up significantly, like, I’m not surprised. And that would be in complete contrast to this four-year cycle theory... I think we’re kind of moving beyond that and I think just the overall liquidity... is also a huge factor nowadays.”
  — Preston Pysh [14:40]

3. The Fed, Liquidity, and the Political Economy

Timestamp: [15:25]–[25:52]

• Walker probes for insights into the FOMC, monetary easing/tightening, and Trump’s influence.

• Fed’s Recent Policy: December 2025 marked the end of quantitative tightening; focus is now on transition to easing.

• Preston on Trump & Fed Politics:

  “I think Trump’s putting [Hassett] in there for a reason... probably to win midterms... He wants control of it and he doesn’t have it...”
  — Preston Pysh [22:48]

• No End to Money Printing:
  Politicians can’t and won’t enact austerity; “fiscal dominance” (government spending trumps central bank restraint) is the unspoken law.

• The market’s expectation: perpetual debasement remains the default due to inescapable incentives.

4. Geopolitics, Multipolarity & the Dollar

Timestamp: [25:52]–[29:43]

• Discussion on the difficulty of global “austerity” when incentives are to debase/print; cites the post-Russia-sanctions world as an inflection point in global trust in US Treasuries and the dollar system.
• Preston:
  “You have to convince all the other players in the game, all the other countries to do the exact same thing and... as soon as you start playing by the rules and then China’s over there debasing... the incentives are forcing everybody to debase...”
  — [29:43]

5. The AI Bubble: Is It a Liquidity Suck?

Timestamp: [29:43]–[34:27]

• Walker asks if the mammoth flow into AI is crowding out Bitcoin investment.

• Preston’s View:
  “You have a lot of capital that’s chasing the AI stuff too... it’s a giant liquidity suck on other places where it could go.”

• Both agree AI is a fundamental technology, but the current capital influx likely exceeds what is sustainable short-term:

  “Is it a bubble? It feels like a bubble, but that doesn’t necessarily mean that it is...”
  — Preston Pysh [34:27]

6. MicroStrategy Moves, Treasury Companies, and Levered Bitcoin

Timestamp: [34:27]–[43:22]

• MicroStrategy’s recent buy brings holdings to 650,000 BTC—a “mind-blowing number.”
• Accumulating Cash: Some controversy over why MSTR is stockpiling $1.4 billion fiat. Preston views it as prudent, covering two years of coupon/dividend payments; criticisms are “laughable.”
• Levered Bitcoin Exposure: MicroStrategy is “effectively a bank... over-collateralized to a point that offsets the volatility risk of bitcoin.”
• Saylor’s Tactics: Saylor buys the top and holds, accepting volatility and maximizing upside; the leverage works if Bitcoin returns exceed coupon outflows.
• Risk: If BTC fell 80% and stayed there, they might be forced sellers, but Pysh views this as highly unlikely.

7. Tether—FUD or Fair?

Timestamp: [43:22]–[55:41]

• Tether is now a $500B private company—almost J.P. Morgan scale. It’s the most profitable company almost nobody outside crypto knows.
• Resilience: Despite being targeted for years ('Tether FUD'), it’s held up through multiple bear markets and liquidity crunches, suggesting robustness.
• Profits & Audits:

  “Not only are tokens backed, they’re kicking off profits... what are they doing with the profits? Buying bitcoin, owning gold, up tremendously.”
  — [49:07]

• Private Company Ambiguity: More opacity than banks like JPM; less regulatory clarity, but incentives align for solvency.
• Thought Experiment: Would you have rather held $5M in Silicon Valley Bank or USDT the weekend SVB collapsed? Pysh’s point: Tether’s structure may be preferable to traditional banks in some systemic crises.
• Key Difference: Stablecoins can be frozen; Bitcoin’s decentralization is unique:

  “Bitcoin is not, by the way. You can store the private key in your head, in your brain... no government can stop that.”
  — Preston Pysh [55:41]

8. Bitcoin “Treasury Companies” & the Coming Wave

Timestamp: [56:44]–[68:27]

• Rise of 21 Co, Mara, etc.: New companies amassing major Bitcoin treasuries, but Pysh sees MicroStrategy’s role as unique.
• Bank Analogy: MicroStrategy acts like a “bitcoin bank,” over-collateralized by 5:1 to hedge volatility.
• Room for Others? Maybe three such “treasury” companies in the US, given trust and collateral demands; likely a winner-take-most market in advanced economies.
• Future: More firms will put free cash into Bitcoin, but few will be “pure” treasury businesses in MSTR’s mold.

9. Disconnect Between Bitcoin Fundamentals, News, and Price

Timestamp: [68:27]–[74:57]

• “No change in the fundamentals”—hashrate, adoption, integration (e.g. Block/Square accepting Bitcoin), ETF acceptance growing.
• Major news no longer moves price like in 2020; signals market maturity.
• Preston’s Market Law:

  “So much comes down to the whims of central bankers and how much liquidity they’re putting in the system... the whims and flows... can change so abruptly.”
  — [71:41]

• On pessimism:

  “Anytime I’ve gotten super bearish... it’s usually involved me making a bad decision or just losing out on opportunity. So I just remain positive, remain, you know, an optimist in all of it.”
  — [74:29]

10. Bitcoin Builder Ecosystem & Lightning

Timestamp: [77:55]–[81:22]

• Despite cyclical market funk, urgency and inventiveness are high in the builder community.
• Lightning & Layer 2s: Jack Dorsey’s Square now enables BTC at 4M businesses; Lightning quietly eating into payments; ARK (new L2) makes immediate Bitcoin payments possible without liquidity channels.
• Stablecoins: Companies integrating BTC and stablecoins may win in emerging markets, even if some Bitcoiners resist stablecoins ideologically.
• Global Impact:

  “It’s straight up highway robbery, the corruption, the robbery that occurs for most people around the world... the money is so broke in most parts of the world is changing and no government can stop that.”
  — Preston Pysh [80:37]

Notable Quotes & Memorable Moments

• “Volatility is your friend when it’s bouncing around. If you’re not trying to overthink it... volatility is actually advantageous to you...”
  — Preston Pysh [08:20]

• “The incentives are forcing everybody to debase. The incentives are forcing everybody to want to print real fast, put that money into the hands of their elite and then go buy the profitable cash flow generating things on everybody else’s board.”
  — Preston Pysh [29:43]

• “He’s effectively a bank that is over-collateralized to a point that offsets the volatility risk of bitcoin.”
  — Preston Pysh [59:40]

• “Bitcoin is not [centralized]. You can store the private key in your head, in your brain and you can go anywhere you want in the world and you can still access that. No government can stop that.”
  — Preston Pysh [55:41]

• “I just remain positive, remain, you know, an optimist in all of it. And... if the market goes chasing the shiny object and they’re not really valuing this thing that I think has tremendous value, which is Bitcoin, it’s just an opportunity.”
  — Preston Pysh [74:29]

Timestamps for Important Segments

• [05:14] The weirdness of current market sentiment and disconnects
• [09:07] How to approach confusion: voluntary, fundamental re-evaluation, and dollar cost averaging
• [13:00] Four-year cycle theory and its decline in predictive power
• [19:37] End of quantitative tightening; implications for markets and Bitcoin
• [29:43] The global incentive to debase and the impossibility of “austerity”
• [34:27] AI sector as potentially the largest “liquidity suck” in recent memory
• [35:25] MicroStrategy levered Bitcoin strategy, market confusion, and recent attacks
• [46:13] The persistent Tether FUD, market resilience, and comparing stablecoins vs. banks
• [59:40] MicroStrategy & “Bitcoin banks”: mechanics of over-collateralization
• [77:55] Lightning and the builder ecosystem; why Bitcoin infrastructure is stronger than ever

Tone and Takeaways

The conversation is honest, humble, and consistently focused on first principles, incentives, and long-term thinking. Preston admits “I don’t know” more than once but grounds his perspective in deep experience and logic. Both he and Walker encourage dollar cost averaging, emphasize self-custody, and observe that Bitcoin’s protocol, fundamentals, and builder culture remain unshaken—even if price doesn't currently reflect abundant positive developments.

Resources & Further Listening

• Preston Pysh on Twitter/X and Nostr
• Bitcoin Fundamentals / Infinite Tech Podcasts
• Ego Death Capital—Bitcoin Venture Investing
• Walker America & THE Bitcoin Podcast on Podcast Platforms & Nostr

Summary prepared for Bitcoiners, macro-watchers, and curious skeptics alike.