← The Wolf Of All Streets
The Wolf Of All Streets
HUGE Bitcoin News: The Fed Just Gave BTC The Green Light!
00:45:02
HUGE Bitcoin News: The Fed Just Gave BTC The Green Light!
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- [00:01]
Scott Melker
We have some absolutely huge news from the Fed meeting yesterday. Jerome Powell, when asked about crypto, said that United States banks are free to participate in crypto as they see fit. Obviously a 180 degree pivot from the policies they've had before and from Operation Chokepoint 2.0. On top of that, we have a lot of movement on strategic reserves around the world from. For bitcoin and other news to dig into here. I'm not sure if we've decided yet officially to call Thursdays bitcoin and. But I'm going with it. So here we are, me and Yago, Yago and I bitcoin and let's go.
- [00:42]
Yago
Let's do.
- [00:56]
Scott Melker
Let's do. What is up, everybody? I'm Scott Melker, also known as the Wolf of Allstreets. Before we get started, please subscribe to the channel and hit the like button for Bitcoin and Bullshit. You'll see how many times I can say that on one show. Are we officially naming it that or did I just.
- [01:11]
Yago
I just want to make sure. Are you the bitcoin and I'm the bullshit?
- [01:15]
Scott Melker
No, you're obviously the bitcoin. I'm the bullshit. When I made this joke to Misha, you know, the producer, he was like, maybe we should call it bullshit on bitcoin, right? And we can just talk about ordinals and NFTs and memes on. On Bitcoin. Maybe we got to.
- [01:30]
Yago
We can still do that, right? We can have the on Bitcoin segment in the bitcoin and show.
- [01:36]
Scott Melker
That's true. And that's so like it's Inception. But you know, I think that we're going to see a lot of built on bitcoin. But maybe that's something to talk about later. First I want to talk about the title here because this is. Wow, what, what a pivot, obviously from the Fed. Banks can serve crypto clients as long as they can manage the risk factors. Fed Chair Jerome Powell says. Let's just watch the video real quick. For those who might have missed it, this is in the actual FOMC press conference when everybody was asking about rates. We're talking about crypto and bitcoin and.
- [02:05]
Jerome Powell
Banks now with bitcoin really is to look at. With crypto really is to look at the banks. And you know, we think it's, you know, banks are perfectly able to serve crypto customers as long as they understand and can manage the risks. And it's safe, safe and sound. As many of our, a good number of our banks that we regulate and supervise do that. You know, the threshold has been a little higher for banks engaging.
- [02:35]
Scott Melker
Okay, so there's so much to unpack here. Right. I mean, to give some history, obviously we saw Silicon Valley bank collapse and.
- [02:43]
Yago
Then, I mean, it didn't collapse, it was collapsed.
- [02:46]
Scott Melker
Okay. But I was going to say then we really saw, you know, Signature and Silver. I mean, those were just taken out. Right. I mean, so like Signature was closed on a Sunday where they were not insolvent. It came to be proven. And it was just because they were basically banking the entire crypto industry. We know about operation choke point 2.0 and we know about SAB121, which was just reversed by the SEC. So SAB121, when it was reversed, basically said banks can custody Bitcoin without calling it a liability. But Jerome Powell, I, I don't know if he's just pretending or he's taking his cues from the new administration that he hates so much and from purse reversing this, but there's a wholesale reversal completely.
- [03:31]
Yago
I mean, it's basically the, the Fed are not only a backtracking, they're bending the knee, bending the need to bitcoin, the bending the need to Trump and his administration. It's obvious. Like this is a sea change, but not an unexpected one. The reality is that banks existed long before the Federal Reserve existed. Right. Banks existed long before central banks existed. And the way they started was by custody in gold. That was the very first thing that banks did. That's how they were invented. And so, you know, for Jerome Powell now to sort of waltz in and say, oh, yeah, maybe banks can manage the risk. Like, the only reason they wouldn't be able to manage the risk is because you put your finger on the scale banks have been managing, not because of.
- [04:13]
Scott Melker
Anything to do with Bitcoin.
- [04:15]
Yago
Yeah, banks have been managing that risk for five or six hundred years at this point.
- [04:21]
Scott Melker
Right. I mean, I guess the fear here is that they just turn it into yet another asset in their fractionally reserved banks on their path to exploding.
- [04:31]
Yago
You know, the thing about bank. Look, banking, the, the, the, this fractional reserve thing, the big problem is that banks lend long and borrow short, right? So they'll, they'll hold your capital for short periods of time because you, you can pull out your money whenever, but they've lent you money on a mortgage they're not going to get back in 30, 35 years. Right. And so that's what breaks banking. With Bitcoin, at least for now, they're Actually going back to their roots.
- [05:02]
Scott Melker
So.
- [05:02]
Yago
So the very, very first banks as we know them started in Italy in the Renaissance. And it was basically a bunch of merchants and they had to figure out how they were going to trade globally. And so they, and they also had a lot of gold, which, you know, it's scary to cast a little gold, especially if you're traveling, you know, on your, your boat to, I don't know, Constantinople every, most of the time. So there were people who set up, usually it was churches or wealthy people set up these vaults and they would hold gold for you and then they would give you this IOU for the gold. And that was the first fiat currency, that was the first bitcoin backed fiat, because you could then go with this IOU and people started swapping these IOUs. And at some point the banks figured out actually we could like actually make more IOUs than we have gold. And so that, that's something we need to pay attention to. There's some really great laws that have come out of Wisconsin around full reserve banking with bitcoin. It has been held up by the Fed. The Fed.
- [06:04]
Scott Melker
Wyoming. Wyoming, just to be clear.
- [06:06]
Yago
That's right, yes.
- [06:08]
Scott Melker
Which is where Cynthia Lumbas is from. And that's obviously Caitlyn Long.
- [06:11]
Yago
Exactly.
- [06:11]
Scott Melker
Custodian.
- [06:12]
Yago
It's totally Caitly along. Caitlin has done an amazing job and supposedly in order to protect you from making, you know, they said, no, no, no, you can't use full reserve breaking. You have to use our fractional reserve. Bullshit. It's obvious that this is not really for consumer or user or anyone's protection outside of the banking system and the Federal Reserve System and that is starting to crumble. And it's a great sight to see.
- [06:39]
Scott Melker
We have this interesting sort of dichotomy where you have bitcoin maximalists who are early cypherpunks who are raging against the machine and f. The banks are now cheering for central bank adoption. We'll talk about the Czech Republic in a minute. That was big news yesterday. That's ongoing today. But then you're supposed to be cheering against these banks, but maybe they'll help the number go up. On the flip side, when I posted something about that, Eric Voorhees I think responded, and so did Mark Moss, but basically saying, listen, it's actually bitcoin eating the world. This is the path they're bending the knee. Exactly what they said as you did. This isn't like they were dying to get bitcoin involved and trying to necessarily take control of it, it's that they have no other choice in their opinion.
- [07:25]
Yago
Look, I mean, the thing is, what is this machine? The machine is the institutional mechanism that corrupts the banks. Banks by themselves are not corrupt institutions. In fact, the fastest growing economy that ever existed was Scotland in the 1800s. And it was because they had a free banking system based on gold. So, so banks would issue pounds on the basis of the gold and silver that they had. And they were disciplined because the other banks could come and claim it for him. Right. If you went and deposited bank of Edinburgh note in the bank of Glasgow, the bank of Glasgow would immediately run to the bank of Edinburgh and say, give me my gold. And so these banks were disciplined by the free market. The second fastest growing economy in all time was the United States under the free banking system, which ended. Why did it end? Because the civil war started and the government decided that we needed to flake away the dollar so they could fund their war. And so free banking, the free markets, freedom, just generally leads to prosperity and reduces corruption. It's the sunlight that cleans away corruption. So the machine isn't banks, it's the corrupt cartel banking system that we have today, which is not a free market. So, so then the big question is, how do you get back to that? And the way you get back to that is by having a digital asset which is incorruptible, which can discipline the rest of the market. And that's why I actually think, you know, yeah, I want to see Bitcoin eat the central banks of the world, them adopting it now is, is just going to be more of the turbine that spins sort of Bitcoin and, and leads us to, you know, this sort of inevitable future where Bitcoin is the base currency of the world, the ultimate measure of value.
- [09:15]
Scott Melker
Right. So just as sort of an update, we'll talk about the strategic Bitcoin reserve here in the United States. But the Czech Republic seemingly taking the lead. This is not a random dude proposing this, right? This is a. The governor of the central bank of the Czech Republic who is proposing this to be discussed today. It's such big news that actually Lummis, who's proposing in the United States felt compelled to comment on X. If you're not first your last. America must take decisive action to establish a strategic Bitcoin reserve and secure its place in the 21st century. Then of course, it should be noted that a non central banker, the Czech finance minister today voiced some concern over the Bitcoin reserve proposal. Right. This isn't going to pass without pushback, there's going to be people who question it, maybe it's justified. But this is probably outside of El Salvador. I would say the biggest news, the closest maybe we've gotten to an actual strategic bitcoin reserve as opposed to legal tender or countries mining the other ways that we've seen nation states adopt. I mean, how big is this in your mind?
- [10:24]
Yago
If it goes through, and I probably think maybe a 40% chance that it goes through, if it goes through, it's a very big deal because it's dominoes, right? And each domino is able to collapse a bigger domino after. And so when you look at the sort of world of governments and central banks adopting bitcoin, right now you've got El Salvador, that's one data point. You've got Bhutan, that's maybe another data point. You've got rumors of Kuwait and possibly the Emirates and Qatar also, that's another data point. But those are much less public. Bhutan have not been very public about what they're doing, even though we know they're doing it. Kuwait have not been very public about what they're doing, even though we know they're doing it. The second public one, plus the fact that you've got the US talking about it, that starts to becoming a, that starts becoming a line, a trend. And when a banker or a financier or high net worth individuals can start seeing the line, they start seeing, seeing the trend. And that means they all have to get on board.
- [11:31]
Scott Melker
Okay, so I want to play a video because I'm actually doing a little bit of research on this on the background on ChatGPT because this is really, really interesting. I want to pivot to Lummis and what she said because obviously she has said and I'll find it here, but she tweeted that the first, here it is, the first order of business, basically one of the first orders of business will be to hold public hearings on the strategic bitcoin reserve. So she's definitely, obviously trying to advance this. She's now in a position of power where she can do so. But justifiably there's some questions as to how this would be funded and to happen. And this is an interview that she just gave that I want to discuss because this is pretty crazy detail that I was just thinking about while we were talking the gold standard a long time ago. My question is how much you would spend tax dollars at a time when we're talking about trying to reduce costs. How much would you spend on bitcoin as part of this reserve.
- [12:26]
Cynthia Lummis
We wouldn't have to spend any new dollars. We have reserves at our 12 Federal Reserve banks, including gold certificates that could be converted to current fair market value. They're held at their 1970s value on the books and then sell them into Bitcoin. That, that way we wouldn't have to use any new dollars in order to establish this reserve. The United States already holds over 200,000 Bitcoin in the asset forfeiture funds. So that would be the initial source of Bitcoin. So no new money spent on this reserve.
- [13:06]
Scott Melker
Okay, so I think we can all agree that printing money to buy Bitcoin is a bit hilarious or ironic. But I, I just looked up, because I couldn't actually believe it when I was just thinking about it, that our gold certificates are valued in 1973.
- [13:20]
Yago
I think $40 an ounce.
- [13:22]
Scott Melker
Right? I thought that was wrong. Here you go. Gold certificates held by the US treasury are still valued at their 1973 statutory price of $42.22 per ounce, rather than the current market price of gold, that.
- [13:37]
Yago
Is, which is insane.
- [13:38]
Scott Melker
We're over $2,000 ounce exactly. Gold held at Fort Knox and other depositories. The US holds 261.5 million troy ounces at the outdated valuation. This gold Reserve is reported as 11 billion on the Federal Reserve's balance sheet. So it's only reported at 11 billion.
- [14:00]
Yago
And how much is it actually worth?
- [14:01]
Scott Melker
You have to multiply by 40, 40 to 50 times. So you're talking about 40500 something billion dollars, $600 billion.
- [14:11]
Yago
One quarter, one quarter of the, of the, of the market cap of, of, of bitcoin. Nuts.
- [14:21]
Scott Melker
Explain this to me. Okay, first of all, Peter Schiff must be losing his damn mind.
- [14:28]
Yago
Remember the flipping? Remember there was this idea that Ethereum.
- [14:32]
Scott Melker
Was going to flip bitcoin, that east.
- [14:33]
Yago
Was going to flip in bitcoin. But what's actually happening is that bitcoin, we're, we're, we're starting to see the early phases of bitcoin flipping in gold. Now gold is a 20 plus trillion dollar asset. Bitcoin is a 2 trillion dollar asset. But what's going to happen is that the United States and other governments are going to start a rotation from gold to Bitcoin. Bitcoin's just more useful than gold. If I am the US Government and I want to, you know, fund the Kurds and their fight against, I don't know, Iran or whatever, I'm not going to ship gold to them. It's even very hard to Ship dollars to them, but I can get bitcoin to them in the next 10 minutes. And so governments are going to start this rotation. If I'm Russia I can't really use gold to get around, you know, the, the sanctions that imposed by the US But I can use bitcoin. And so governments are going to start rotating to bitcoin. And when governments rotate to bitcoin that's a signal to everyone else to start rotating to bitcoin. In China and in India you have the two populations that the largest holdings of privately held gold, India in particular has a huge amount of privately held gold. And, and the signal is basically going to be from the governments to people to start this rotation. So I don't know if we flip and gold this, you know, over the next four years, but over the eight next eight years I think there's a pretty high likelihood that gold flippings bitcoin, sorry that bitcoin flipping to gold and that's going to be turning bitcoin into the single most valuable asset in the world.
- [16:10]
Scott Melker
I mean it may not flip it yet in market cap. Right, but do they have a few thousand? Me too. I'm saying that might not happen immediately. That made, you know, gold's had a few thousand years head start but in price it has broken the all time high in the bitcoin to gold ratio. So, so you know, there is a flipping of sorts that's already happened. I see people in the, in the comments questioning the math here. I mean listen, chat, GPT is not always accurate, but here you go. If marked to current market value, the reserves will be worth over $500 billion. Why don't they do it? Adjusting the value would affect monetary policy, treasury accounting and international financial agreements. But dude, I mean if they marked it to 500 billion, just sell 10% buy 50 billion worth of bitcoin at current market.
- [17:03]
Yago
Now just also to put this into context, 500 billion is a huge amount of money. But the US deficit is $2 trillion a year, right.
- [17:14]
Scott Melker
And only increasing, right?
- [17:16]
Yago
So if they buy bitcoin, right? And bitcoin as we anticipate goes up and exceeds the, the, the, the, the, the, the, the gold market cap, that 500 billion that they buy could end up being worth 5 trillion which is actually a pretty chunky part of the U. S deficit, right. It's larger than an annual deficit. Whereas the gold right now would be, you know, wouldn't even be a drop in a single year of, of, of debt. And so when you start seeing people saying ridiculous Things like the solve some of its debt problem by purchasing Bitcoin. Yes, it's an exaggeration. It's not like you're going to get rid of U.S. government debt, which is sitting at 32,000, sorry, $32 trillion just by buying Bitcoin. Because the price of Bitcoin will go up as they're buying it. But actually, yes, it can significantly reduce the, the debt burden in two ways. One, by increasing the assets held by the US Government, and two, and much more importantly, by disciplining the Federal Reserve, the Treasury, and the US Government.
- [18:18]
Scott Melker
So bettors are not very bullish on this happening in the United States. A bitcoin reserve. Taking a look at Poly Market, they've got it 16%, to be fair. That's in the first hundred days. That's a very different, Different.
- [18:31]
Yago
I think if you look.
- [18:32]
Scott Melker
Will this happen?
- [18:33]
Yago
If you look at. For the first year, I remember was an unpoly market at 70%, 53 on.
- [18:41]
Scott Melker
The Texas bill, it says here. I guess I can look at the first year. I'll look it up in a second. But it obviously should be a much higher, higher chance.
- [18:50]
Yago
I'm gonna, I'm gonna, I'm gonna log into Polymarket right now and see.
- [18:56]
Scott Melker
Because.
- [18:56]
Yago
I remember it being much higher. US bitcoin reserve, 28 chance in the first hundred days. And then.
- [19:08]
Scott Melker
Yeah, I can't find the actual first year or that it gets approved at all. But, yeah, obviously it'll be higher. But still, the fact that we're saying 16% chance that Trump will create a bitcoin reserve also has some nuances. All right, I'm wondering what if the Senate passes it and Trump doesn't technically create the reserve? Right.
- [19:28]
Yago
So just so you know, Poly Market right now is bidding at 56% chance or close to 60% chance that there'll be a US National Bicarbonate Reserve in 2025.
- [19:38]
Scott Melker
There you go. So that's better than half. We have Texas at better than half. Utah and Arizona have both actually moved forward in meaningful ways now past committee, which is the first time that we've seen that. Right. So I mean, reserves are coming. Right? And I want to talk about sort of another topic here. Tordemiester tweeted this. It's something that we've all kind of been talking about. But to that end, there's so much news about bitcoin. People are able to buy these in ETFs. And we know that someone who buys a Bitcoin ETF that money doesn't trickle down to meme coins and utility coins and ethereum. Right? So we've had a very bitcoin only cycle, right? You can look at it here. The decoupling of bitcoin and crypto market caps. Normally in a cycle, if we were going to repeat the four year cycle of crypto and not just a bitcoin, because bitcoin's right on track with the four year cycle. If you had gone to $109,000 on Bitcoin and then it chilled and consolidated above 100,000, altcoins would be going absolutely bananas. And here we are seeing them at bear market cycle lows, some of them. None of them anywhere close to beating bitcoin. Right? I mean, I even have. Let me bring this up because this was pretty crazy. I just happened to look at it. I mean, here's the Solana versus Bitcoin chart, right? I mean, Solana went from seven bucks to, you know, hundreds of dollars. Still basically 50% off its highs against Bitcoin in 2021. Salon has been the darling of altcoins, the best performer of anything of any significance and is still getting absolutely crushed by bitcoin. I mean, this is an argument I've.
- [21:23]
Yago
Been having with people. Like, actually one example is, you know, friendly with both of us run nooner. I've been having this debate with him for the last 10 years. Look, I think this was inevitable. Like, I've been anticipating this for a very long time. And the reason is that the vast majority of what we describe as crypto is what in this show we describe as, right? We've got bitcoin and we got bullshit. And, and, and, and I think everyone knew, everyone, all of the people buying coins, buying meme coins, buying dog coins, everyone knew they were playing this game and everyone felt okay with it because they knew that the, the gravity well of bitcoin, as it went up, it would pull everything with it. And, and, and this has driven bitcoin Maxi's bananas, right? They hate it. They hate the fact that they're sort of.
- [22:16]
Scott Melker
They don't want the rising tide to lift all boats, right?
- [22:19]
Yago
That's right. But. But what? But I think the problem is that the game has been played for long enough that people are starting to realize that it's a game. And so it was always inevitable that this magical period where if bitcoin goes up, everything goes up, regardless of its quality, was going to end. And it looks like this cycle might be the cycle where it ends or at least significantly diminishes change. So then the question, right?
- [22:51]
Scott Melker
That doesn't mean there won't be winners. It just means that you can't throw a dart at a altcoin that was hyped in 2020 and is down 90% and hope that it's just going to magically go up. There's just not enough money in the market. I still think we have massive alt seasons coming. I just don't think they look the same. I think you have to select well. Yeah. And by the way, somebody was like, now do XRP bitcoin in the chat. Yeah, it absolutely wrecked down 90% versus cycle high against Bitcoin. There you go. Now it's 0.000002. So I'm sorry, it's not even back to like 2020, it's just breaking 23. So for all the bluster and run of even XRP here, it's still not beating bitcoin. It has been since. It has been since November, to be fair. Right? I mean, but you're talking about from the low to the high of kind of a range there.
- [23:43]
Yago
Look, I'll tell you a secret. There's actually a trick to figuring out what is going to be valuable over the next 10 years, and it's not always valuable over the last 10 years. So what crypto was supposed to be was the application layer to Bitcoin, right? Bitcoin is btc, the assets. And it's also like the Internet of value. It's the ultimate ledger, the ultimate settlement layer. And so the whole point of having smart contract chains was that you could build the application layer onto this. The problem is that Bitcoin didn't know how to talk to these chains. And so these applications lived in their own little islands. Ethereum was an island not connected to Bitcoin. Solana is an island not connected to bitcoin. The next 10 years is the story is we're going to be actually building an application there because, like for a $2 trillion base of a stranded asset, an asset that you can't really do anything with, that is. And by the end of this year, it's going to be a 4 or $5 trillion base. That's, that's a huge market, people are going to be building decentralized services for that. And so the next 10 years is going to be the 10 years where people build systems within the bitcoin ecosystem. And so we're going to see the replication of Solana, we're going to see the replication of Ethereum and much more advanced things just built in the bitcoin ecosystem. And I think if you want, want to be able to do, you know, you and I, I think we were lucky, right? We, we, we were old enough and we were savvy enough to get in to bitcoin early enough to, to, to benefit from the gains. Bitcoin from here is still, I think, going to go up, you know, another 30, 40x, but it's not going to go up 100 or, or 200 or a thousandx like we've kind of experienced. But that doesn't mean that the systems built around bitcoin won't because there's, there's a huge opportunity now to build basically the economy for bitcoin. And that's what's going to happen over the next 10, 15 years. And if you get in now, you're going to be getting in early enough that you'll be able to once again see hundred x thousand x gains. But it's not going to be dog nonsense.
- [25:50]
Scott Melker
Right, but why will. So that's altcoins on bitcoin, basically, right? Or some sort of assets running on bitcoin. Why will those perform fundamentally better than hyped assets on other chains? Is it just because there'll be so much value in bitcoin and so much interest and everything?
- [26:08]
Yago
Because basically the reason that everything else has been doing well is because all of these other things have been implicitly connected to bitcoin. Like just look, go back to that chart you were showing me. Bitcoin, you know, bitcoin goes up, everything else goes up in Lockstein. So things were tied in. Yeah, yeah. I mean the, the original chart.
- [26:30]
Scott Melker
Yeah, the Tor de meester one. Yeah, that we get. Here we go.
- [26:34]
Yago
Right, so you look at, it's like one to one. And so, so basically what was happening is bitcoin had this gravity well for other cryptos because honestly, people just were clueless. Nobody knew what crypto was, what bitcoin was. And so people like, you know, there were sentences, you know, people would say things like blockchain, not bitcoin, like nobody knew what was going on. And so when bitcoin went up, anything vaguely bitcoin esque, xrp, some bank coin, anything could go up. Dental coin went up. But what makes it. But what's going to change now is the connection is going to be explicit, right? You're going to have systems which are going to be flooded with btc. They're going to free BTC to be used as a collateral asset for stablecoins to be used in financial derivatives. To be used to power AI transactions. And so the next wave is those things that are explicitly instead of implicitly connected to bitcoin.
- [27:34]
Scott Melker
Yeah, hard not to agree that XRP chart and the SOL charts, actually, as I look at them, they just shocking to some degree. Not that shocking because intellectually I know it, but I mean, it's more, actually. More. It's just about remembering now how insane 2017 and even 2021 were. Or is it even when all coins shredding bitcoin, you know, like I wasn't there in 2014, so I, you know, wish I was.
- [28:03]
Yago
Look, the thing, people don't know this because of the way sort of coingecko and coin market cap show it. Like they show bitcoin dominance is 60%. But actually if you take out stable coins, which really shouldn't be counted in it, and you just look at Bitcoin versus let's call it out, Bitcoin's at 75 dominance. It is the market. Everything else is everything else. That last 25% is fractured across 10,000 or 100,000 different assets. This one asset is 75. Bitcoin is the market. Always has been, always will be.
- [28:35]
Scott Melker
I had that chart somewhere, but now I can't find it. But the dominance, because I actually got to a point where I was like, why are we looking at bitcoin dominance historically when there were no stable coins at the beginning of this chart? Right. Of course, bitcoin dominance was 90 something percent at the beginning. And then stablecoins come in and bitcoin dominance drops and makes lower highs. But they're printing or minting stable coins at a billion dollars a clip. Right? So buy bitcoin.
- [29:02]
Yago
Yeah, so, yeah, come on, man.
- [29:05]
Scott Melker
That's not why they're doing it. Anyways. So listen, I want to actually talk to you about what's happening in El Salvador at the moment as another sort of a topic here. Lawmakers in El Salvador rushed new bitcoin reform after IMF deal. So there was a lot of bluster about this not long ago. This went to Congress on Wednesday. Of course, Congress, Congress in El Salvador does what Bukele says. So this passed, I think unanimously. But basically, you know, to take this IMF deal, El Salvador was forced to make some small concessions as to how they approach bitcoin. I think most namely was that people couldn't be forced to use chivo wallet, which was the national wallet. And then also it became voluntary to accept it by vendors as legal tender and not forced. Honestly, I think that's semantics because I don't think there was a bitcoin like, Gestapo running around enforcing whether the mini mart was accepting bitcoin or not and sending them five.
- [29:59]
Yago
Yeah. So the only companies that really were sort of forced because, you know, they cared enough about the formality of the law, were actually large organizations. And so it was like if you would go to the supermarket or you would go to McDonald's, then you would definitely be able to pay with bitcoin. But in small corner stores, it was up to, you know, whoever owned the corner store to decide. And so really, the change is. Is minimal at this point. Like, it's built into bitcoin right now, is built in. In. In El Salvador. It's built into the point of sale, like the POS systems. And so it's not coming out. So you're going to. 10 years from now, 15 years from, you'll still be able to go into a McDonald's or. Or a supermarket and use bitcoin to buy in El Salvador.
- [30:50]
Scott Melker
Yeah. And the more interesting nuance maybe is that they were not able to get these loans because they adopted bitcoin. Right. And we know anyone who's ever studied the World bank and the imf, these are predatory agencies that give a huge loan with terms that can never be paid back so they can effectively take control of the country that they're giving the loan to on behalf of the United States and our corporations. If you go back to the 1970s and 80s, we also used the CIA to make sure that we supplanted the leaders that we didn't like for leaders who already were in place to accept IMF and World bank loans. This is not FUD or conspiracy theory. This is just how we affected regime change and made sure that the United States had dominance. The real story here was that they were about to take an IMF loan and bitcoin effectively ended up bailing them out out of a loan they were unable to get because it continued up so much. They were able to sort of talk about issuing the bonds, and now they got to negotiate basically a tiny concession and get the money anyways. And they'll probably be the first country in history, assuming bitcoin continues to do well over the long term, to be able to pay back an IMF loan and for it not to end up being predatory and controlling.
- [32:04]
Yago
I think there's a really important part of the story, which is the. The El Salvador have been under huge pressure from the World bank, the IMF and other international organizations not to be engaged with bitcoin. And the fact that they've managed to break through that and effectively force the IMF to accept the fact that they have Bitcoin is going to give a lot of comfort to a lot of other countries in similar situations. And so the taboo against bitcoin, you know, what Bukele has done really, for the world is he's brought broken the institutional geopolitical taboo against Bitcoin, and that is going to continue to reverberate for a long time.
- [32:44]
Scott Melker
Yeah, I think the, the nuance that made El Salvador unique is that their, is that their currency is the dollar. Right. So they were, to be fair, they were able to do this because the United States IMF and World bank cannot attack their currency as they normally would have in a situation like this. So other countries that have their own hyperinflating currencies, they can't really adopt Bitcoin because it would be very easy for the United States to manipulate or crash those currencies. But still, endless credit to El Salvador for doing this. I don't know if you saw this, just a random dunk, but hilarious. Senator Bob Menendez, who fought against El Salvador adopting bitcoin, was just sentenced to 11 years in prison for taking bribes in gold and cash. And Bukele tweets, this guy said, we use Bitcoin for money laundering and corruption with a crying face emoji. Can't make this stuff up. The simulation is on fire lately. That's all I can say.
- [33:41]
Yago
You remember there was a time in the US where every single senator who spoke out against homosexuality ended up with.
- [33:48]
Scott Melker
Like, being, like, every single one.
- [33:50]
Yago
Yeah, it's kind of the same movie.
- [33:53]
Scott Melker
American Beauty, you know, like the end. Yeah. Yeah. Listen, there's a long pattern of politicians accusing people of the very things they're doing themselves. Right? Yeah.
- [34:06]
Yago
So what does it tell you about Elizabeth Warren?
- [34:09]
Scott Melker
Did you see her yesterday? Okay, this is not a topic, but did you see her yesterday with rfk?
- [34:14]
Yago
Yeah. Yeah. It didn't go so well for her.
- [34:17]
Scott Melker
I mean, I just don't know, but she basically was screaming in defense of the pharma companies and vaccine manufacturers, telling him that he would enrich himself by suing them. I mean, it was crazy talk. I, I had a great. This was, I thought this was pretty funny since we're about to end soon. But I, I, I tweeted this yesterday. I mean, this is what she looked like. I said, we have the rare opportunity to observe an American carrot in its natural habitat. After I sent that, I actually thought that I should have Said something about the mating ritual of the American carrot in its natural habitat. And that would have been a funnier tweet. But I, you know, we have our regrets and we sometimes miss, but she was going absolutely ballistic. Once again, very clearly protecting the huge interests that she is supposed to be, you know, aligned against. The big banks, the pharma company. I mean, yeah, she is the absolute worst man. Oh, and by the way, so one more video as to the odds of the strategic bitcoin reserve that I missed. This is David Sachs. He'll always be from the all in podcast to me.
- [35:17]
David Sachs
Finally, when are we going to hear the announcement about the bitcoin reserve from the Trump administration? Administration. Everyone's waiting for that. We got the study and the review. But the bitcoin reserve, Texas is going to move forward, it looks like, with legislation Dan Patrick announced today. That's a big priority for them in Texas. But how about the Trump administration?
- [35:36]
Scott Melker
Well, there's also a bill in the Senate, I think Cynthia Lummis from Wyoming has introduced a bill to create a national bitcoin reserve. The President Trump has asked us to study that issue. So we're just not ready to comment on it yet. But is one of the things our working group is going to look at.
- [35:49]
David Sachs
Can't wait. David, thank you so much for joining us. We really appreciate it.
- [35:54]
Scott Melker
Pretty non committal, you know, from the actual administration, which I think is fine.
- [35:58]
Yago
Well, I mean, they just want to.
- [36:00]
Scott Melker
Let this play out in the Senate.
- [36:02]
Yago
Yeah, I, look, I think de facto you have a strategic, sort of temporary strategic reserve already in the US because de facto, they're not selling the 200, 000 Bitcoin. They have, they were intending to sell it and that has, that process has stopped. So for all intents and purposes, you have, at least in the interim, an effective bitcoin reserve.
- [36:30]
Scott Melker
Yeah. And to be fair, like if we are aggressively pursuing a bitcoin reserve, it'll be really dumb to tell everybody and send the price up 50% before we can load our bags for impersonation. Right.
- [36:42]
Yago
So, and look at, look at, look at Trump. I mean, you can look at his personal account. He's loading up on btc.
- [36:48]
Scott Melker
Yeah. So wrapped btc, my friend. And he, and he, as far as.
- [36:56]
Yago
He'S concerned, he's, he's loading up on, on btc. I, I don't know that he's making the this distinction eventually.
- [37:03]
Scott Melker
As far as he's concerned, he's just doing crypto with, with the boys. Like his team's doing whatever they're doing and you know. But I, I totally agree. So listen, like, I just. Really quickly, before I let you go back to sort of the building on bitcoin conversation, you're wearing the Bitcoin OS hat. I mean, just give us the quick rundown on what you're building and the status of it, since we should just update that sort of on a weekly basis here.
- [37:26]
Yago
Sure. So I think, you know, with bus, what we've built is we've built a way to build programs.
- [37:31]
Scott Melker
Are we calling it boss? Should I call it boss? Do I call it boss?
- [37:33]
Yago
Yeah, bus. Bitcoin OS boss.
- [37:37]
Scott Melker
I mean, that makes sense. I just did. My kids say these words like the bus. That's bus. I didn't know if it was bus or boss or there's a new word, skibidi. I don't know what that one means.
- [37:47]
Yago
Well, I don't know, but maybe we should.
- [37:48]
Scott Melker
Boss. Yeah, your boss.
- [37:50]
Yago
All right, so bus allows us to have programmability with Bitcoin and also for the first time, allows for other systems like even Ethereum, to interact trustlessly with Bitcoin. So you can actually now have smart contracts written on Ethereum that executes on Bitcoin Mainnet. Now we've been sort of building this. We demonstrated for the first time ever, like on Mainnet, the ability to do GP proofs. There you were, there you have the hat. Nashville and Nashville where Trump was speaking. And so we committed that before the next bitcoin annual bitcoin conference, we would have this on Mainnet. We have the testnet going out next week. And so watch the space because bitcoin, everything you know about bitcoin is changing completely. Bitcoin can now do everything and everyone is now early to bitcoin again.
- [38:51]
Scott Melker
So are Maxis going to love you or hate you next week? I can't keep up.
- [38:55]
Yago
It depends on how intelligent they are. Intelligent Maxis love us. The others less so.
- [39:01]
Scott Melker
Oh, what a world, man. You know, you can only, like, you can only get in front of that train wreck so many times before you just opt out of the of it.
- [39:10]
Yago
Yeah, look, I mean, you know I'm a maxi's maxi, right? I've been a maxi before. Most of these people who now call themselves Maxis, you know, knew about bitcoin. But I'm a maxi not because I have an ideology where we should only have bitcoin. In fact, I would like to have many other systems and chains just as a redundancy. Right. Like we want to have a robust ecosystem so that it's not so easy to attack. But broadly speaking, there's just a really, really simple equation. Every single time we've seen a technology which has a natural network effect that ends up with like one network dominating. The Internet is the last obvious example of it. But it's true just in general. And Bitcoin is a network. It's a network of capital, that's a network of transactions. It's, you know, much easier for everyone to be on the same value standard than to be in different value standards, difference between speaking 100 different languages and speaking 1. And the Internet is dominated by another network effect. It's dominated by English. Right? Everywhere you go on the Internet is English. So they're going to be like little niche use cases for maybe other sort of little networks. But ultimately the platform, bitcoin is going to be dominant. And it was always going to be.
- [40:31]
Scott Melker
Yeah, with one exception. It's almost like everything else has become a test net.
- [40:37]
Yago
Well, well, well, the bit here, here's the big thing, right? The big thing is why hasn't this happened yet? Why? I mean, it kind of has, right? Bitcoin is 75% dominant, but why isn't it 90 dominant, like Google? And the reason is that bitcoin hasn't had programmability, so it's couldn't unleash the full power of its network. And that is what boss is changing. And that's why BOSS is a big deal too.
- [41:01]
Scott Melker
Well, no cap, you're skibidi Riz Buzz boss. My kids come home. My daughter's nine and my son's five, and they come home and they're blasting this song in the car. It's just goes. And now they're just screaming this all day long every day. I mean, I know that we were there too. It's like, come on, man, it's a lot. I can't keep up with these kids these days. Your boss, that, that's. That's the gist. So where can everybody, by the way, where can people check out what's happening with big bitcoin os?
- [41:31]
Yago
On Twitter, it's BTC underscore os. And on the Internet, it's like bitcoin OS build.
- [41:42]
Scott Melker
I can show it so people can see it and they should follow you. You're in the description, so you don't need to tell them. You guys look down the shows. Over here, he has BTC under underscore OS.62, 3K followers, doing good. It's like you're building a real community.
- [41:55]
Yago
Growing and growing. Yeah, awesome.
- [41:58]
Scott Melker
I mean it's going to get really exciting. And listen so like to that Tour de Meester, you know, chart like alt season dead for now, I think it comes. But alt season on bitcoin. Can you, I just, you know, are you gonna, are we gonna like fund bitcoin? Are we gonna launch Trump on bitcoin? It's gonna, we're gonna. People want to be able to do it. They'll be able to do it.
- [42:21]
Yago
They will be able to do it. And more than. But I think there'll be a little bit less, it's going to be a little bit less dominant on bitcoin because once you're integrated with bitcoin, you can actually do real and you don't have to do just do scams. But people will still do scams, people will still do nonsense and still people will still do fun, which is perfectly fine. And also there's going to be a lot of speculative stuff like when you're innovating, you know, 99 out of 100 ideas are dumb, but you just want it to be 99 out of 100, not like 999 out of a thousand. So look, the Internet itself doesn't, you know, we know it's generated a huge value. If you look at the magnificent seven, which are all Internet companies, they're all companies that build around the Internet, they're together worth $21 trillion, right? They're worth 10 times what Bitcoin is worth. Bitcoin itself is going to be 100 trillion dollar asset. And multiple projects building on bitcoin and some of them could be like things that exist like right now, like Cardano are making a major effort to become a Bitcoin L2 using boss. Right?
- [43:26]
Scott Melker
Well, that was you, right? That's you and Charles. Yeah, yeah, yeah. Maxi's on fire for a while there.
- [43:34]
Yago
So my point is, if you look around you in the world today, there are projects that are going to be worth multiple trillions of dollars. They're going to be worth more than bitcoin today, even though they're going to be just a small fraction of bitcoin. That's what we're looking at. We're looking at the. If the Internet of data created 21 trillion, the Internet of value is going to create like $210 trillion in value.
- [43:59]
Scott Melker
I'm here for it guys. Give Yago a follow. Give Bitcoin OS a a follow and we'll be back soon. Thank you man, as much as always for showing up and giving all of your perspective. Very skibidy. I looked up skibidy while we were talking. It's a term with ambiguous meaning, originating from a viral YouTube video featuring sentient toilets. Its usage varies signify sentient toilets. Its usage verify. Its usage varies significant, signifying anything from good to bad or weird. Primarily serving to perplex those over 25. Well done.
- [44:33]
Yago
They did well, Scott. You're really cooking now.
- [44:36]
Scott Melker
I'm cooking. It's bust, boss. All right, guys, we're out of here before I say anything else stupid. Thank you, Yago man. See you soon.
- [44:42]
Yago
Thank you.
- [44:43]
Scott Melker
Bye, everyone.
- [44:45]
Yago
Let's do. Let's do.