← The Wolf Of All Streets
The Wolf Of All Streets
BTC ETFs See $3B Weekly Inflow, Historic Bull Signal? | Crypto Town Hall
00:58:11
Loading summary
Transcript90 lines
- [00:01]
Dave
Can anybody out there hear me speak?
- [00:04]
Simon
Yeah.
- [00:04]
Carlo
What's up, Dave? How you doing?
- [00:06]
Dave
Okay, cool. Well, I don't know. I just gave a whole long soliloquy and I think it all was completely, completely done. So, you know.
- [00:13]
Carlo
Yeah, this is the first time I'm hearing you speak, so I haven't heard anything before.
- [00:16]
Dave
Okay, well, so I talked a lot to myself. I guess that's not all that surprising, isn't it? So, whatever. But anyway, you know, there's. There's two. Two stories that I think are worth touching on this week, in any particular order, could be the inflows into bitcoin. Bitcoin looking like it's delinking, looking like it is poised for moving higher as long as the market doesn't crash. And even then, who knows what it will do? At the same time, we had a crypto roundtable last week on Friday that I thought was fascinating for a bunch of reasons. I mean, watching, you know, a panel where people from DTC are on the same panel as people from Anchorage and Bitco, to me, is. Is really interesting because it feels like there's a disconnect in the old guard versus the new. You know, it's, it's. And when the chairman of the SEC basically is telling people we want to go and worry about innovation and we want to think about new business models, I think that. That there are people in the institutional space in crypto who don't, real or not, in crypto in financial services, who don't really know what's coming for them. And so I'm curious. I mean, Carlo, I was actually asking you back when I thought you could hear me, what your thoughts were on that, because to me, it was a really interesting juxtaposition and I think really bullish for builders in the crypto space.
- [01:41]
Douglas
100%. I've been saying it. I have never been more bullish about the prospects for the future of this sector. And I think it is finally going to be startup season in crypto in the United States. And I foresee there's a lot of money on the sidelines, especially overseas, that was driven overseas due to lack of regulatory clarity that I think wants to come back and seize upon this new era. Paul Atkins comments on Friday at the roundtable make me incredibly bullish for the future of this. And I'm excited. I'm very excited, Dave.
- [02:19]
Dave
Yeah. At the same time, at the slightest hint of delinking, which we saw in the beginning of the week, to see three plus billion dollars of inflows into the Bitcoin ETFs. I would imagine that that more than anything else is showing the kind of floor there is to the market. Doesn't talk about the ceiling, but in terms of the kind of buying interest it is. I thought that it was a very big deal in a market where, yeah, the stock market at the end of the day had an up week. But that kind of up and that kind of demand I think is illustrative.
- [02:54]
Douglas
And you add to that the new projections that we're seeing. I don't know if you saw what Cathie Wood and Ark came out with as far as their predictions, but through the roof and you know, the floor is very strong. I have to agree. I don't know where the ceiling will be, but I think the floor is starting to really find its bottom and stabilize. On bitcoin.
- [03:15]
Dave
Yeah. I mean, look, I'll, I'll be, I'll be a little bit critical. I mean, I get pretty. I don't want to say I'm ignoring Cathie Wood, but her track record has been pretty bad recently. I think that she's very much like the way I consider myself, which is right on the general direction, but wrong on timing. I think that the general direction that she says, that Saylor says other people. I mean, I don't want to look beyond. It's funny, I almost even feel weird saying it, but I don't want to look beyond the 10x in Bitcoin and worry about what's going to happen then. I just want to see that. I think the probability of that 10x of Bitcoin becoming digital gold and having. And being a poise for a springboard for more is a worthy enough goal that it's pointless to talk about more. Although I think there are people out there who really care a lot about the, the, the right tail, you know, the, the. The extraordinary potential beyond that. But so I look at some of those things and I wonder if it turns people off. You know, certainly in the institutional world these people are crazy and devalues opinions. I mean, maybe. No, I mean, I'm curious. Anybody else think the same way? I guess not. I guess I'm on an island with that one. But it wouldn't be the first time, that's for sure. Just like me talking without anybody being able to hear.
- [04:39]
Carlo
So I can't see anyone else up here. So we may be having issues too, with connections. I just see yourself and me. No, everyone else is a listener.
- [04:48]
Dave
Yeah, that's it. I see you and Carlo as a speaker and I've said, yeah, look, there's.
- [04:53]
Douglas
Some weird stuff going on. Massive power outages across Portugal, Spain. I understand UK has got some issues. I don't know if that's having any kind of impact on connectivity, but Europe is definitely part of. Europe is in the dark right now, and that's really concerning, really.
- [05:14]
Dave
Well, that's really interesting, but that I hadn't seen. But then again, you know, I was just doing macro Monday a few seconds ago, so, you know what? Wasn't really paying attention. But, yeah, I mean, you know, Douglas, I mean, what are your thoughts about last week? And are we going to look back in six months and say, you know what, the second to last week of April was really a turning point? Or are we just. Is this our basic. Yeah, whatever. I mean, you know, it doesn't really matter because the price didn't move that much and who really cares?
- [05:47]
Mateo
So, Dave, on that last question you had, I think that what we have is the benefit of hindsight in this generation. And I think that if we think of bitcoin as being sort of real estate on Manhattan at the time when we traded essentially beads for Manhattan, if the traders then looked at it and looked forward the next couple of hundred years, they'd have probably thought, you know what? We're going to get more than a 10 times, 100 times, 1,000 times on our investment. I think that if you think of bitcoin as being essentially real estate, it's a store of wealth, but it's real estate without having to pay taxes on it on an annual basis and without having to take care of maintenance, then I think that you can sort of look ahead and say, you know what, over time, this is going to have significant movement to the top side, but you have to be patient. And what's unfortunate in these sort of daily or weekly calls is everyone wants to know what's going to happen over the next 24 hours as opposed to what's going to happen over the next thousand years? Because obviously that's kind of the time horizon that we're looking at. But I think that certainly last week did show as a bottom, and it's also shown as a lot more corporations, I think, sort of coming out of the woodwork and getting involved in the Saylor trade. Not only did Saylor obviously make some large purchases last week, but we're also seeing now, obviously the new Cantor company that that's coming in. That's going to be essentially a bitcoin bank. And we're seeing more and more of this happening across, across the spectrum. And this is just corporations getting involved. You know, obviously I think we've got a vote this week. For what? For Arizona, maybe a couple of other states where they're going to start getting involved in it. And then you obviously have the nation states that are quietly doing it out of the Middle east and the US that's sort of in a rush to get some in themselves. So we're all in this sort of front running stage right now, knowing what's inevitable and that there's going to be purchases from lots of different places, specifically in bitcoin, not in all the other things, but just in bitcoin. And so I think that you can have comfort at these levels, but again you've got to be, it's sort of, I think that you really need to have that 10,000 foot viewpoint or 30,000 foot macro viewpoint in that this is something that's going to move higher, there's going to be volatility on a day to day basis, but who cares because it's going to go a lot higher and it's sort of like, obviously don't risk more than you can afford to. But I think that this is one of these opportunities where I look at it and I think I may as well put two boots in the water here as opposed to a toe.
- [08:25]
Dave
Yeah, look, I look at things. I was mentioning last hour that one of my favorite indicators of what's going on in the greater crypto verse, not just bitcoin but including bitcoin, is the fact that last week we flipped tether to a slight premium versus a discount. And when that is true for a sustained period of time, that's generally an indicator that market, that the market is getting more money in than is coming out. I mean, keep in mind, from the peak in 1st of March till about two weeks ago, tether was trading at a persistent small discount. I mean it's always very small, like 2, 3, 4 basis points. But it matters. And people in crypto Twitter often mistake this for the spot premium or the spot whatever, because what they're looking at is coinbases or Krakens or Bitstamps, US dollar price of bitcoin and comparing it to the bitcoin tether price or the bitcoin tether perpetuals or whatever. And the reality is tether's premium means when you trade it this way, that the price of bitcoin in dollars is higher. I mean it's just, it's pure math and it's pure arbit. Plenty of market makers and Arbitrageurs to keep that in line. But what it does signify is people willing to pay a little bit more to be able to get money into the cryptos first, because that's essentially what Tether is used for. So to me it feels like were there to be a risk asset rally, that crypto would have a significantly bigger push higher. I mean, I don't know what anybody else thinks. Douglas, what do you think about that?
- [10:05]
Mateo
Tether's had a little bit of a turnaround, I think in terms of public opinion in the United States over the last couple of months. Almost like XRP actually, you know, XRP was seen as a criminal, neither seen as being a savior. Tether kind of is being, I think changed in a similar type of way specifically because the US Needs buyers of treasury bills. And obviously Tether is what, the seventh largest holder of US Treasuries. They've got more Treasuries, they're holding more Treasuries than Canada is. So that's a very important customer given all of the changes that we're making with tariffs and that sort of thing. So I think that tariffs that Tether sort of has moved from sort of the red headed stepchild to maybe being a favorite cousin in the market. And that's obviously, I think, another reason why you're seeing maybe a little bit of a bit to the tether.
- [10:55]
Dave
Yeah, I'm not so sure I agree with that. I mean, I agree with the sentiment. I don't think it drives the pricing. The price is just supply and demand. But Carly, you raise your hand. Yeah.
- [11:05]
Douglas
You know, an interesting thing I've been thinking about is a potential stealth QE maneuver that could work here if the stablecoin act passes, is for the government to, let's say, encourage or prioritize that stablecoin should be backed by Treasuries, which I think would give some relief to what's happening with Treasuries and wouldn't would increase some dollar dominance and liquidity. So I'm just curious how that's going to play out because there are all kinds of things that the Fed can do that are not necessarily traditional qe and one of those could be a kind of stablecoin arbitrage.
- [11:43]
Dave
Well, I mean, considering I don't think they have to do anything to encourage it. I think that if you're a stablecoin issuer and you're dumb enough to put your money in bank deposits, then I think may God have mercy on their souls. I mean, you're getting paid Dramatically higher yield with Treasuries and at much less risk. So you know, we'll see what happens. But I mean if you remember Citigroup came out with a thing I'm looking for the actual story. I think it was 3.7 trillion they think is the size of the stablecoin market. You know I personally think they're wrong, but I think that they're, they're in the right direction. So I'm curious what people think but I believe that what will happen for the first year you'll see steady growth in stablecoins. You will eventually see stablecoins become the plumbing underneath Zelle Cash app, Venmo, et cetera because it's way cheaper and more efficient. And as that happens you're going to also see competitors through traditional banking come into the sector being able to be part of those networks offering, sweeping from stablecoins into yield bearing assets as a, a enhanced UI experience so you don't have to actually do it yourself. That it will, it will do that. At which point the total amount of digital money markets will dramatically eclipse total checking account balances and stablecoins will, will not, you know, stable coins will grow as much and checking account balances will, will dry up. I don't think there's any stopping that train. I mean you and I talked about that before Carlo, but the very fact that Citigroup is talking about $3.7 trillion into the online digital blockchain economy is a very big deal that I don't think is priced in, into the market.
- [13:27]
Douglas
Yeah, I have to agree and I take it one step further. We had defi summer. I think we're looking at stablecoin summer. I think that's going to be the meta of this cycle because everyone's going to want to uniquely build some kind of a stable coin into their financial ecosystem. So I think there's, there's a lot of room here for growth.
- [13:46]
Dave
Amateo.
- [13:48]
Gary
Yeah, I agree with that sentiment. I think that what we're going to have is just a barrage of news and headlines around stablecoin integrations across multiple companies, multiple countries, multiple providers. I think stablecoins will ultimately represent the way that the US fortifies itself against brics and some of these other kind of denomination tools that are being used geopolitically. And I just think it's going to continue and I think that we're, you know, maybe the cycle top is when we see the real small businesses start embracing these as the big corporations. But I think essentially the, the stablecoin experience is, is all about to be abstracted and simplified. Meaning that anyone can transfer stablecoins, process payments, et cetera. The wallet complexity is about to go away and that's going to be a really big deal for the stablecoin economy. And I think that the rising tide will lift boats because when you see those crypto based headlines and a narrative forming in a really big way, it's very significant. Dave, I'm kind of curious about your opinion on this. Like tether news, just running the math on it, assuming that it's legit, I mean that's like $82 billion worth of gold. It's an astronomical amount. 1. I just have a hard time seeing that there's that much demand for a gold back token and I just wanted to see what your thoughts were there.
- [15:17]
Dave
I, I don't. I, I wasn't commenting on a gold back to what, what, what token are you talking about? I was just talking about usdt just plain old.
- [15:25]
Gary
It's been to the, the top of the. The spaces here. It's a breaking story that that tether purchased 7.7 tons of gold. The back it's Xaut token.
- [15:36]
Dave
Oh, well that's interesting. That is actually interesting. I hadn't seen that because I'm looking on my phone. I don't see. Oh, there it is. Yeah, that is a fascinating one. Effectively having a backed token for gold is one of those things that will take advantage of the gold bull market. Of course there's a difference between velocity and acceleration in physics. We all understand the difference. Velocity is how fast something is moving. Acceleration is how fast it's changing. Gold products do really, really well when gold is rising because there's velocity. And once it hits a stable point, all of a sudden the storage costs and verification costs and all of those things tend to go higher. So we'll see how it does in the long run. But clearly there's demand. I mean the demand for gold is high. It's the same thing as driving bitcoin, which is actually a really interesting topic. I mean Gary, you joined, you did like two or three spaces this weekend. You know, I'm curious, what, what was the general tone of the bitcoiners you're talking to in terms of bitcoin vis a vis gold and, and where things are going and what happened last week? Because I think this is relevant there. Are you there, Gary?
- [16:51]
Ben
Hey, I need to come back to you guys. Dave, let me get. Give me a second, please.
- [16:54]
Dave
Okay, cool. Well, Simon, you were on as well this Weekend. I know this is a topic near and dear to your heart.
- [17:00]
Simon
Yeah. So there's no doubt about it that stable coins are an integral part of the U.S. strategy. You know, the ability for anyone to be able. It kind of gets rid of the point of sale terminal. It's global, it doesn't have massive infrastructure behind it. It turns banking into a tech play. Even having a gold back stable coin, it's a bit, people find that a bit tricky because unit of account wise is kind of the same problem as Bitcoin where you can't, your head can't get around how you measure the price of milk in Bitcoin. When it's 0.01278, you just can't get around it. And it's kind of the same with, with gold. So that's always been the thing that's had less adoption. But in an environment where you're trying to store your value outside of the banking system, if you've got significant wealth and you're trying to go into cash, what are your options? Right, you're either going to hold it as a bank deposit, which is risky, you're going to purchase treasuries or you're going to hold it in a stable coin. And now you can hold it in a gold backed stable coin. Obviously you've got all the risks that come with that because there's still counterparty risk, there's still a trust based system and then you have Bitcoin to seamlessly go in and out of a trustless system. And so all to say that yeah, there's no doubt that this is a future strategy and I think it just needs to be done in a controlled way. And the reason that they said we could kill Tether or we could just take over Tether. So to me I see Tether slowly becoming part of the US apparatus and the fact that it's now working with Canter and Cantor is a, you know, a dealer for Fed bonds.
- [19:17]
Dave
Well, let's pull down that, go down that before we go into the geopolitical side. I mean a really simple thing. I mean Carlo, I assume you're going to agree with this. A really simple thing. Imagine a world where we get the stablecoin bill and fairly quickly some stablecoins probably USDC will start, but it doesn't really matter are integrated into Zelle and Venmo and Cash app. Now think about what that means all of a sudden because right now, anyone, if you're outside the US and you don't know what these stupid things are so in Zelle. Zelle is a banking network and it's only banks. Venmo, if you want to, you know, you want to move money from you to someone else, you know, PayPal being similar, you use something called plaid to link your bank account to which is, I mean it doesn't feel clunky when you're using it, but it's very expensive in the back end and there's all sorts of. And it doesn't clear it takes three days. We all understand a lot of the issues with it. If that gets replaced with stablecoins, then all of a sudden non banks have the ability to offer the same sort of products to compete with banks and in particular brokerage firms or even crypto firms. I mean, I think there's a reason people are afraid that you're going to need banking licenses, which is why Kraken, you know, I have a trust bank and they've applied, Coinbase has applied for banking licenses, etc. I mean the implications of this I think are very wide ranging in terms of the way the financial system is structured. I mean, I think that's what you were talking about.
- [20:49]
Douglas
You're simultaneously 100% agree, Dave, because you're simultaneously eliminating all of the friction in the banking sector when it comes to off ramp and on ramp. I threw thumb thumbs down. I'm not a fan of Plaid. Very intrusive as far as what you've got to do to link up your account. And you're also eliminating a lot of friction in crypto, which is what we need for bigger onboarding of the consumer. The moment that this becomes just as easy as an Apple wallet, I think sky's the limit, Mateo.
- [21:20]
Gary
Yeah, Plaid is very intrusive actually. So is Zell. I knew one of the engineers who worked on Zelle and essentially you didn't even have to have Zelle enabled via bank for them to actually register. Phone ID is it's very intrusive technology in terms of how it's able to track devices and send funds accordingly. So I mean I think the other thing with stablecoins is like obviously X Payments is coming, the ability to send and transfer. They want to build a whole financial layer into X which is the most engaged social platform on the planet. So and I think stablecoins are just going to drive that. There's no way that Elon's going to tokenize X. So when you see stablecoins be embedded not only on like the financial layer, but on the social layer and people are just interacting with them and getting so familiar with using them. I think that that really creates a pretty big critical mask. And to your point, Dave, it does create, you know, there's been challenges and challenger products to these banks for a very long time, products like Chime and all these NEO banks that came into the market. The issue with NEO banks that I got to experience firsthand is just the amount of fraud and the difficulty that they have managing these products in a really safe and guaranteed way. They take millions of dollars in losses every quarter and, and stablecoins are going to help resolve that fraud. That alone is going to be enough for, for them to adopt it because of how much they take a loss due to fraud.
- [22:56]
Dave
Simon?
- [22:58]
Simon
Yeah. Just wanted to say as well, if at the end of this whole thing, you know, you end up with stablecoin legislation, clear regulations on how to regulate stable coins and the yield just stays within the, and goes to the issuer and then you don't get a bitcoin strategic reserve for the country and you don't issue a bit bond, then it's somewhat of a rug pull. All you've done is move the profits from banks over to technology companies and the main beneficiary were essentially all the people in the Trump administration and the banks that are going to be issuing the stable coins. So if that's the end result, I mean, it's great, but it's somewhat of a rug pull in terms of actually, you know, what, what could actually be a monetary change. You kind of just shifted the profits and that's all you've done.
- [24:00]
Dave
Well, but yeah, that's two dimensional. That's too two dimensional for me. I think that, look, here's what's going to happen. This is virtually certain you're going to get a stablecoin bill. It's going to ban yield on stable coins themselves. But what does that mean? That means that the actual plumbing that's underneath the new zelle, the new PayPal, the new Venmo and within every, all the, all the money transfers that go on in the system, money transmitters will use these things but you know, will be, will be much, much less friction, will allow much better competition. But there's nothing in that bill that stops other assets from providing yield that can now be exchanged seamlessly for those stable coins on the platforms of companies that want to offer it. So what you're going to see if I'm right, and I'm pretty confident that I am, what you're going to see is the actual number of assets held in stablecoins, you know, permanently will be much less than people expect, but it will become a conduit that will replace the five plus trillion dollars that are sitting in checking accounts which make no sense. You'll be able to go fly much closer to the sun, as it were, be able to hold lower balances because you don't worry about the thing of moving people. It's really hard for people outside the US to understand this, but you hold money in a checking account. You almost always hold more money in the checking account than you think you're going to need because of the, the punitive nature of what happens if you don't have enough and how long it takes to move money in. Right. In certain circumstances, particularly from outside banks, if you're on a money center bank which pays nothing in their savings account either, even inside the money center banks, try moving money from the quote, investment accounts unquote into the savings or checking account. And it takes time. And so I think that that's going to all become much, much less. Yes, Simon?
- [25:58]
Simon
Yeah, so trying to square a few like macro questions and I'm interested in your perspective, Dave. If, if the goal is to, you know, you know, the whole, what Robert always talks about with the triffins dilemma, that you have to have a large deficit, twin deficit, both trade and fiscal, in order to have a world reserve currency. And so if the strategic goal is to lower the deficit and the trade imbalance as the macro policy, and then at the same time you use Bitcoin or stablecoins in order to actually penetrate global demand for dollars backed by Treasuries. Is this like a conflict in goals where one goal, stablecoins, helps penetrate world reserve currency, but at the same time the macro goal is meant to be to reduce the trade deficit. I can't quite plug the two together.
- [27:03]
Dave
Well, well, think of it this way. Here's how I think about it. I think it's certainly true, but it's much more true when it takes a lot. The longer and the more friction it is to move dollars from one place to another. The more Triffin's Dilemma is true, the faster and more efficient you can move it, the more flexibility you have with it. And the reason is obvious. Right? It's a question of how do you get the dollars to clear and settle your trades. You know, your I bought oil, I bought this, I bought that. The faster and more efficient that that is, the less actual dollars are necessary, doesn't decrease its use as a reserve currency, but it means you don't need as many dollars, you don't need to run as big of a deficit. That's how I've looked at it. I've heard other people say similar things. Don't know if it's true, but you.
- [27:52]
Simon
Have to weaken it to get the rebuild of the manufacturing base so the exports are cheaper.
- [27:58]
Dave
Well, that's an interesting question. I actually disagree with that. I've heard you say that many times and now we're getting very theoretical. But I think that there's. People always think about the goal of what Trump and Besant and team want to do in terms of employing American workers. I don't think that's it at all. I mean, yeah, I think that's what they say politically, but what I think they really care about is rebuilding our productive capacity so that we don't find ourselves beholden to countries that are potentially antagonistic to us and that requires use of AI and roboticized factories. And so we know that it's going to be, it's not politically palatable to take the US labor force and pay them what people are paid overseas. Although people would argue that China, while they pay a lot less, have a lower cost of living, so it wouldn't be as big of a deal. But that's theoretical. What is certain is in today's factories, on average, labor cost is 20%. So if you roboticize and bring in AI, you might be able to bring that down to 5 or 10%, at which point paying people, the ones who do have jobs, will not be a problem. But you could rebuild our productive capacity. That's the way I look at it. This is a leapfrog moment. It's sort of like I founded a company eight years ago called Coin Routes and there are two in the world of algo trading for people who want to buy and sell Bitcoin and buy and sell whatever you, There's Talos and there's Coin Routes, who are both built from, you know, understanding crypto from the ground up. And they perform dramatically better than those who tried to use old, you know, legacy technologies. Well, manufacturing is no different. You try to build a plant, it's going to use AI robotics to be able to be better and more efficient than the old plants.
- [29:50]
Simon
Yeah. So then, then projecting all this forward and it's a very useful exercise because I think people need to prepare for what if that world happens, then it means that the goal is to have humanness manufacturing. And that means what can a stable COIN do? Well, it can do a universal basic income. And so if we're moving to that world where Robots are doing all the manufacturing and that's the goal of this whole exercise. Then it makes sense. While Elon and Visa and everyone want AI stablecoins social data, and that to me implies social credit score and a universal basic income. That's the end result.
- [30:45]
Dave
It could be. I mean, I'm not going to. I'm less dystopian than you in my general outlook. I think that a 90% reduction in number of humans doesn't mean nobody has jobs, particularly if you're bringing back industries that we don't have at all. And we are mostly a service economy now. I mean, I have direct personal experience with this. I mean, I was once nicknamed, literally nicknamed the angel of Death at Solomon Smith Barney because I was the one driving automation and trading. And we went from 95 traders, you know, to basically between 5 and 10 on the trading force. I saw this, but didn't mean zero. And it didn't get rid of all the other jobs around, around it, the sales jobs, the support jobs, the investigation, you know, quality control, yada yada.
- [31:30]
Simon
AI takes all of those as well.
- [31:32]
Dave
Well, eventually, eventually, you know what?
- [31:34]
Simon
All very close.
- [31:36]
Dave
The rate growth. Well, that's. Look, we can get.
- [31:39]
Simon
We've automated our whole sales team on agents now.
- [31:42]
Dave
Yeah, no, I. Well, okay, I'd love to hear about how that could work because, you know, a lot of decisions are still made by people and so. But whatever. But in any case, there's. There's many steps to this. And each. And right now we could barely think through one or two steps. And you're talking about like 10 steps in the future. Right now it's a question of just how to restore our productive capacity. Right. You know that, that's what that is. But if we want to bring it back to Bitcoin and the cryptoverse. Bitcoin dominance is certainly a trend that we see that's pretty strong. And there's been a lot of conversations about last week. And I'm just curious, does anybody here have an opinion of whether or not what we're seeing with 3 billion in ETF inflows at a time when the market was just basically recovering and we saw, you know, effectively dramatic outperformance of Bitcoin to the stock market? Does anyone think that this is relevant?
- [32:41]
Simon
David? I'll just close off that conversation and someone can answer that. But closing off that conversation, it's still a bitcoin story. If that's the world that we're headed to, then money, you can own money that has a fixed supply Money you can control, money that has no social credit score and money that has a fixed supply is where everyone's going to want to go. All roads lead to bitcoin.
- [33:02]
Dave
You and I agree on that one. And, and have for some time. I mean, Gary, you're back up, and I. I back up here. I was just curious, Sarah, because I know you did like two or three spaces this weekend. I'm curious what. What you guys were hearing, or is it still. Still too soon?
- [33:18]
Ben
Well, and hearing what? You know, regarding people being wanting to ape in or feeling late or.
- [33:24]
Dave
Well, just in general, you know, look, the vibe a few weeks ago was. Was downtrodden. Right? You know, I was. I was bullish and you were bullish. But, you know, look, I was more obvious. I was more bullish at 78,000. I am at 94. But, you know, but I'm curious because sometimes it seems to take a while for people to, you know, kind of figure out what the hell is going on. But I think that the story here is most of the people with money, right, that you talk to, they're not buying bitcoin for a $3,000 chop. They're buying it because they think it's going to 10x or more. Right?
- [33:59]
Ben
Correct.
- [34:00]
Dave
Right. So when, when you. When you understand that and understand that that's a significant amount of the demand and that the supply is coming from people who are chopping around, that sets up for a pretty explosive potential move at some point, depending on what the conditions are. I mean, am I crazy in looking at it that way?
- [34:20]
Ben
No, no, I think that it sets up for an explode. I mean, look, this is the beauty of Bitcoin. 22 days ago, you could have bought Bitcoin for $20,000 cheaper. Like, think about that. That's a lot of movement for somebody that wanted to get in. They missed 75. Now they're looking at 95. And you're like, wow, is this a bargain now or do I get in? I mean, like, you're going to be your reflection. Your. Your response is going to be, okay, I need to wait. I need to wait. Now, this is, this market is going to absolutely rip people's face off if they're not really committed to acquiring bitcoin and not worrying about the number, the. The volume, the. The dollar value which they're doing that at. So I really hope we see some. Look, I've got bids placed for close to a million dollars of bitcoin in the high 70s. I don't think I may get hit, dude. And I think there's a lot of people that are like, okay, if I could get back to 82, we'll set bids there freaking tail.
- [35:34]
Dave
Hey guys, you guys think this is.
- [35:37]
DB
Another opportunity coming up to buying bitcoin low as well?
- [35:41]
Ben
Like, sir, maybe you're not hearing me, but Sailor bought what, 1450 units of Bitcoin and, and it did nothing, man. So, hey guys, over. You guys, I can't predict what tomorrow or next week's gonna do, but to me there is much more upside here than there is downside. If I have $10,000 of downside, you know, that might, might be true. That would be what, 85, maybe 20 grand of a downside. But I can't think of any more. What would have to happen, Dave, for that to occur.
- [36:18]
Dave
Well, market. I mean the stock, by the way.
- [36:22]
Ben
By the way, it, you know, this thing that's going on in Spain and Portugal, this is a big thing, okay? You have come countries, entire countries who went on this don't do fossil fuel and they are in blackness right now. What happens when people start if this lasts three or four or five hours? Portugal, Spain and part of France. This is chaos now, okay? Like this is chaos at the wrong time, by the way. We don't need two countries blacked out right now. This is extremely coincidental. I'm not trying to be a manufacturer of drama and chaos, but I would be paying attention to everything that's going on. Like why did, why did India and pal and Pakistan, 10 years, dude, they've been quiet. Like nobody's been with anybody over there. All of a sudden this morning, hey, we're gonna go, you know, we're at war now. Like, this feels exactly like Ukraine. It feels exactly like COVID 19. It's just, you know, let's move over and focus on another part of the planet. It's, it's, it's a little concerning. So I'm pretty comfortable with my bitcoin position. I'm very comfortable with it actually. And I think everybody else is going to get behind it quite quickly. But these moves are giving people more front running opportunities. This is going to scare very wealthy people, right, Dave? Well, they're just going to look at it and go, wow, man.
- [37:54]
Dave
What is it a grid problem? Because I haven't seen the news about, about what's going on in Europe. I mean, is it, is the grid is an issue or is there a supply?
- [38:02]
Ben
They don't know. They, they don't know. There was a, there was a 12 gigabyte, a 12 gigawatt decline in demand. So something happened, okay, you literally had 12 gigs just disappear in demand. Well, that fractures the entire power system now. That's what they're saying right now. But how would you take off that much demand at 1? I mean we're talking about that much demand going off the system in seconds.
- [38:33]
Dave
Yeah.
- [38:33]
Ben
Okay, so you have all this power running through a grid, through a wire and then over half the volume of demand just goes off, goes black. That really the whole grid system up. See this is really important because all this deglobalization we're doing now, like where's all this energy flowing? You have volumes of energy flowing across countries that are now in conflict with each other. And if you don't think this is real, I have literally seen the state of Vega, state of Nevada steal electricity and natural gas that was going to California, that was contracted to California. So energy. And we've seen this before in the Ukraine having pipeline stop. So I would pay attention to all this. Dude, these are really big moves here.
- [39:23]
Dave
Yeah, I'm looking at, you know, the X. I mean there's some funny, there's some funny memes about the power stuff, but you know, I guess. Well, I don't want to jump on, you know, on, on grid outages because we know our grid. Basically the electrical grids in the United States as well is definitely needs to be upgraded. There was a story this weekend, I can't remember who was it? Was it, was it Sergey Brin? It was someone very. I think, I think it was him from Google basically talking about how our complete.
- [39:50]
Ben
I think it was Eric.
- [39:51]
Dave
Oh, Eric schmidt. I was 50. 50. Okay. I got it wrong. That's always. But the point that our power grid is just dramatically not capable of supporting what's going to happen with AI that the amount of electricity demand is going up and our grid can't even handle it, much less our production capabilities. All of these things kind of lead you to the same place. Significant need for building productive capacity. Significant need. Need frankly in our. The way things are here in terms of prioritizing capital. All of these are very long term bullish for our favorite asset here. So Ben, what do you have to say?
- [40:31]
DB
Yeah, I just wanted to add how more and more people are learning from the retail investor all the way up to the biggest institutions on earth that Bitcoin is the hedge against all uncertainty, whether it be financial uncertainty or even things like energy grid stability like we're seeing right now. It seems like every single place you look, there's just chaos. Going on. And nobody knows how to plan for the future because there's these just black swan events going off everywhere. And there is an educational gap where people still see bitcoin and their first thought is, oh, it's super volatile. It's like, it's crazy. It goes up and down all the time. But they, they don't know that it's. That's because it's measured in fiat.
- [41:15]
Simon
It's.
- [41:15]
DB
It's in a fiat price. And the fiat is the thing that's crazy because there's no measuring stick that stays stable. It's constantly fluctuating all over the place. And once they learn about bitcoin, they read the bitcoin standard, listen to enough of these spaces, and finally fill in those gaps. They realize this is the most certain thing there is. It has the unmanipulable 20 million hard cap. It has a new block every single 10 minutes that chugs away. No matter what, no matter how crazy the world is, it just continues plugging away every 10 minutes. And it's really like this, this clock that just keeps ticking, keeps ticking through all of this. And that's why education is so important. It's just helping people realize in a massively uncertain, chaotic world, Bitcoin is this beacon of stability. And that's just going to bring so much more money into it and more understanding and more awareness, and that's just going to continue raising the floor of the foundation of it and how, how its understanding is portrayed. And that will show the price as well.
- [42:16]
Dave
And by the way, just before you go to DB, if you look at the market, it is 100% not retail. It's. The buying interest has been from people who do understand what you were just saying, Ben. And it's, you know, from the larger side, the. Actually I saw this morning, the search, Google search for Bitcoin is way down. More indicative of bear markets. So understanding, if you overlay those two things, it starts getting very, very interesting.
- [42:45]
Carlo
Anyway, DB Yeah, we had an interesting space about this last week, kind of taking it in a further direction of what Gary was kind of just talking about. What happens if the grid that allows for BTC usage even goes out. And this came up because just a few weeks ago, my Internet and cellular service both went down at the same time. And I couldn't do anything. Couldn't send a text, couldn't call, couldn't check email, nothing. So what if. And bitcoin still relies on data and it relies on a grid. What happens if something more catastrophic were to happen?
- [43:21]
Dave
Well, actually, so I was going to make two points. First, I love X because someone in our audience went to the BBC and posted it right back at us and said that it was temperature variations in Spain contributed to the outage. It's something to do with anomalous oscillations, very high voltage lines phenomenon, notice, whatever. I mean, anyone can read it, it's there. But it's fascinating. We know that the grids are vulnerable. The good news about bitcoin is, however, it's completely global. And as Simon is fond of saying, it doesn't matter if one country or one region goes down. It is the most fault tolerant, overly redundant network in human history. I think. Is that, is that anyone think I'm hyperbolic by saying that? I think that's true. Is there anybody would disagree with that?
- [44:14]
Simon
No, that's the point. The point, the point of it is it's a fundamental real importance of geographical diversification. And we got that when the China mining ban, it was one of the most important tests of the bitcoin network. It corrected the price significantly. And then within a period of three to four months, mining equipment went from 60% in China to 20% in China and 40% in US and a whole industry emerged in US with the public companies. And so if anything were to happen with the grid in us, you'd expect a correction in price, whatever, new test, a new lesson, bitcoin has to learn. And it will just carry on because other countries will be mining. There'll be a correction in the difficulty rate. For two weeks you'd get blocks that don't clear at the same pace as what you're used to just for confirmations. And some people in America would just hang tight and not be able to spend their bitcoin and they'd start asking, hey, maybe I need to set up my own node and maybe I need to figure out how that node connects to a satellite. And so every single time, it just gets, every disaster has made bitcoin significantly stronger than.
- [45:37]
Dave
Well, but think about it this way. But isn't the other big point that bitcoin is, and we saw this in Texas and you have political leaders in Texas and business leaders in Texas all know this and talk about it to the point where even Elizabeth Warren doesn't mention it anymore, even though she'll lie about it in the next couple of years anyway, just because that's what she is, but that bitcoin has been stabilizing grids. And if you're worried about grid stability, then bitcoin is One of those perfect demand users because it's one of the only ones that can scale up and down as grid demand is necessary. So to me, grid issues is going to highlight another reason to for the importance of Bitcoin, its utility. Right. You agree, I assume, Ben?
- [46:22]
DB
Yeah, absolutely. And another point I just wanted to put out for the original question, which is, you know, what if the Internet goes down? I want to make sure that we have the proper lens that we look at that question. Because the fiat system, the dollar and all these fiat currencies also are running on the same Internet in the banking system. So both of them would theoretically, if this, you know, doomsday scenario were to be happened where the Internet goes down, all of those would be wiped out too. The difference is with Bitcoin is you don't actually need that to do it. Theoretically you can mine Bitcoin with a pen and paper and it's obviously, you know, far more primitive and slower and not very, I mean we have these computers doing bazillions of blocks a second or resilience of calculations a second that are much more effective. But Bitcoin has a way where you could always downgrade to more hands on physical methods of mining if you need to. And I also put in the nest this really cool project that's happening in Africa where they're finding ways to use Bitcoin just through their flip phones and just these cell phones that don't even use smartphone data. So, so there's always ways that you can like adjust how the Bitcoin network is used and operated. If there were to be some big event like that, it's much more shiftable than the fiat system.
- [47:52]
Simon
I'd add to that as well that if you're, if your bank was out for that long at the other side of that, you could end up with a bank run and a systemic risk event. And then you would need, you know, FDIC style event and we've seen what types of things happens in the Silicon Valley scenario. So. But at the other side of this, you, you know, you may not because you just didn't get the right setup and you need to learn something new. But your Bitcoin will still be there. And on the other side of it, you know, wherever you go in the world, you'll be able to access those Bitcoin and there'll be no counterparty risk, there's no country risk, those Bitcoin will be there. You would just need to get connected or get another setup. But you can just chill and access those Bitcoin, knowing that there's no key person or company or counterparty or fed risk or anything in the middle.
- [48:54]
DB
Yeah, that's an amazing point. I mean, if you're holding bank digits on a bank account and that bank goes down, that's gone in Bitcoin, all you have to do is basically just remember those 12 words, write them down on a piece of paper, remember them in your head, and just kick back and go relax for a few months in the Bahamas. And then when you get back, and hopefully the Internet's back, you're good to go, you get your Bitcoin, which to.
- [49:18]
Simon
Your original point is when you are really into bitcoin and it's a journey because initially you'll just be focused on price and you'll be thinking, oh, have I bought the top? Was I the last idiot to buy it? And, you know, it takes a few years to psychologically realize how relaxed you can be. But once you get there in bitcoin and there is a massive community of people that don't see price volatility as a thing. They see it as mental and psychological stability. And I can tell you for a fact, with all that's going on in the world, I actually genuinely believe if it wasn't for bitcoin, I think I'd be a bit more mentally unstable and I'd be a bit. A lot more uncertain about my future. And so that is a real source of stability for people once they really get into the bitcoin community, once they get beyond the price volatility.
- [50:16]
DB
And a whole extra component of this that you sort of lead nicely into there is the community of people that bitcoin is made up of. Because the people in bitcoin, the more of them you meet at meetups and conferences, you realize these are the ultimate problem solvers or the ultimate sovereign individuals. They're constantly saying everyone needs to read the sovereign individual. And these books that are about increasing your sovereignty. And these are the people you want to surround yourself with as we go into a more chaotic world, because they just solve shit. They figure shit out. And I know you and I are both on nostr. Simon, I really recommend everyone out here go check out nostr because that's a perfect example of another problem that bitcoiners just found. They said we need a decentralized social media protocol that doesn't have a CEO, and they just made it and it works super well. And people are sending bitcoin on there already. And this is a couple years old, so very powerful network to be a part of and to understand that these are the people that will figure things out if things do really get hairy in the future, which unfortunately it's pretty high likelihood of happening.
- [51:22]
Dave
So. But the interesting thing is that I find because I'm the token, you know, I spent, you know, close to 40 years on Wall street before I moved into crypto eight years ago. And what I'm, what I've seen over the last few months is more people who look and feel like I used to getting into bitcoin and buying it and holding it and sticking it someplace without leverage, without fear, and more people in the crypto world on the edges letting leverage wipe themselves out, liquidated every day and a great washing machine of moving from original crypto folks back. Now, I'm not talking. These aren't bitcoiners because in fact, they're probably, you know, what, what the bitcoin maxis will call shitcoiners that are doing this. But we've seen this move. And the real question is when this move is over or at least there's not enough supply from people like that, that's when the next move comes. And metaphysics and the philosophy to the downside. And by the way, I agree with the philosophical points you guys are both making, but practically speaking, this market will move, like seriously move when we get some certainty in capital markets and that supply stops because the demand is, is, is just not stopping. I mean, this is a, this is a we are now rolling a snowball down a hill. And I know it's felt that it's been up the hill for the last five years, but the, the ball's rolling downhill now and I don't think there's much argument there. I mean, D.B. i mean, I assume you agree with that.
- [52:54]
Carlo
Oh, for sure.
- [52:55]
DB
Yeah.
- [52:56]
Carlo
It's just everything's primed to keep moving. Like Gary was mentioning earlier, it's. The people that are buying now aren't looking for a quick flip. They're looking for to hold a 10x plus. And it's. When it does happen, it's going to be, I think, to use his words again, face melting.
- [53:15]
Dave
Well, I mean, it feels like that, like that that will happen. I mean, look, I don't like History doesn't repeat, okay? Everyone who thinks it does, it's wrong and markets, they. But it does rhyme. So there are shadows. I mean, 2017 was a really interesting year. You should go back and look at it. But the rally was, what is it, 8x off the bottom and in 3 and a half x off the top of where it was before the major rally happened at the end of the year. And I'm not saying that can happen again, although it could. We all make our predictions, we all talk about these things. But the most important point is if the supply is moving towards holders who are holding for a 10x then that's going to smooth out volatility, at least the downside volatility. And, and that seems to be the case. I mean that's why, you know, I thought that the high 70s were a tradable bottom because it just felt like the demand was, was there. It doesn't mean that it would it going to people. The smart money doesn't put a wall underneath it. Everyone who looks at the order books, and God knows I build a company that's based upon looking at real time order books, doesn't understand that most liquidity in most financial assets has been trained to be out of the market instantaneously. But being able to quickly rush into the market when they see an opportunity and that is the dynamic that we live in in capital markets today. And Bitcoin is no different. And so I always laugh when people talk about oh, the supply shock is going to happen because of all the money moved off exchanges. It's a bunch of nonsense. And the wall is going to prevent the market from moving in a certain place. Well that's a bunch of nonsense because most of the real liquidity is sitting both sides sitting on the sideline. I'm curious if anybody cares about any of this stuff, but otherwise it's just me musing.
- [55:11]
Carlo
So yeah, actually I believe that the cycles are kind of dead at this point. And don't you think we're possibly almost at that curve where we're going to hit that tipping point with the adoption and the recognition and everything just seems like we're so close to that tipping point.
- [55:28]
Dave
Well, I mean look, the four year cycles were designed to become less important over time, right? Because the amount of, the actual raw amount of supply difference at each having from now on is progressively less and less than what one new corporate treasury would be demanding, right? So it's one of those things that it was designed to become less relevant. So putting recency bias and saying, well look what happened the last three times, it's not so much that the price movement or the volatility movement is going to decrease, although that has to happen as well, but just the raw amount of supply differential in each having is getting less and less. And so therefore to expect that a four year cycle is Going to go into the future when it was based off of a supply shock just doesn't. Just the math doesn't work.
- [56:22]
Carlo
Yeah, for sure. Especially with the number of eyeballs that are hitting it growing exponentially. That's where I think is really going to set it off. Not the lowering supply, but the parabolic growth that we're soon to have, I believe in the entire space with the innovation right now across the entire web3 is pretty impressive and with the regulations, with the US everything going on, it seems like we're just so close to something that's going to set a fire under it all.
- [56:53]
Dave
It could be. Well, we'll see. We could talk again tomorrow morning. Unless anybody has anything else. I think we're kind of at time. So we're going to wrap here. Any final comments? No. Well, thanks everyone for. So Ben, you wanted a final comment that's full?
- [57:09]
DB
Oh, I was just going to throw in there. I mean, basically a way to wrap all the things you guys were just saying was Michael Saylor came out and said several years ago like it only takes a handful of billionaires all decide to buy bitcoin and every single model gets broken. And that's the nature of the first truly scarce asset with rising demand and truly cap supply is that it's eventually everything just blows up and it just turns into a God candle. And we're going to see that soon. I think we all agree. Just depends on how soon.
- [57:36]
Dave
Yeah, it takes two is the answer. Anyone who's ever gone to an auction, it takes two people who won't both want the same thing because now you're at. That of course is singular scarcity, but it's the same idea. But yeah, I mean we'll see. I mean, well, markets are markets and they're going to continue to bounce around and we're still at this 94 level and we'll see where we are tomorrow. So in any case, as Scott is fond of saying, please follow all the speakers who give of their time. We will be back tomorrow at 10:15 for Crypto Town Hall. Thank you all very much, everybody.