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The Wolf Of All Streets
Plan B Predicts $1M Bitcoin – Is It Happening This Cycle?
00:52:33
Plan B Predicts $1M Bitcoin – Is It Happening This Cycle?
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- [00:00]
Scott
This podcast is proudly presented to you by Aptos.
- [00:03]
Plan B
So every institutional investor knows the debt will never ever be paid off.
- [00:10]
Scott
Governments have made recessions illegal.
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Plan B
I'm sure Elon will be, will be a master in that. There's so much crazy stuff going on right now. I think he has balls enough to do it.
- [00:20]
Scott
Magically disappears.
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Plan B
Just print the dollars, buy the damn bitcoin and be over with.
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Scott
It's amazing though that we could be in a situation now where we prove print money to buy bitcoin.
- [00:30]
Plan B
There are losers and there are winners in all these events.
- [00:34]
Scott
Let's cut directly to the chase. Plan B is one of the biggest names in crypto, one of the most followed people, and he believes, like me, that bitcoin could go to $250,000 or even a million dollars during this cycle. Listen and find out why.
- [00:52]
Plan B
That's dop. That's dope.
- [01:06]
Scott
Here I am with the man, the myth, the legend, the mysterious legend. Of course, no face Plan B, you just said it's been two years since we spoke last. A lot has changed and it seems that stock to flow is back in vogue and that we are definitely looking at much higher prices. Right, yeah.
- [01:26]
Plan B
Scott, thanks for having me again and good to see you after those two years. Indeed, yeah.
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Scott
So how are you feeling now? Obviously, you know we closed November 96,000. I think everybody getting excited for much higher targets. My feeling is that we're just getting started. I'm assuming that aligns with how you're feeling as well.
- [01:50]
Plan B
Yeah, true. Yeah. We had an early breakout of course in March, a bit of FOMO around the ETFs. But I guess the all time high that we saw in November is the real one and it should only get better from here.
- [02:05]
Scott
Yeah, I've noticed in your tweets and obviously anyone who looks at a chart, you know that all time highs at this part of the cycle sort of beget more all time highs. Right. So I think that there's a pretty consensus expectation that makes a lot of sense that we'll at least be in the hundred thousands at some point in December, if not higher. And then what are we talking about after that?
- [02:25]
Plan B
Yeah, for sure. It's almost scary that it is happening again. It seems programmed. Three years of boring bear markets and then one year of FOMO and face melting a bull action. And it's like that in all the past cycles. So if history is any guide, we're going to see that again and I certainly think we are going to see that again. So indeed, 100 if not 150. Somewhere between that for this month, December, and then. Yeah. Again, if history is any guide, the returns of bitcoin are not normally distributed. So it's not like we get an all time high and then a bear market and an all time high and then some middle ground. No, it's all time high. After all time high after all time high. It's very clustered. So maybe six to 12 months of real bull market action would be nice though.
- [03:28]
Scott
I think it's coming. If it ain't broke, don't try to fix it. We've stayed on cycle this far. So where do you think that puts bitcoin? I don't need an exact number, but a range of where we'll top potentially in this cycle or how high we can go.
- [03:43]
Plan B
Sure.
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Scott
To be honest, I thought we were going into the two 30s last cycle.
- [03:47]
Plan B
Right.
- [03:48]
Scott
When we broke 65 and hit 69, I was thought we were going to levitate straight to 100. So obviously I was extremely bullish. I guess at the wrong time there.
- [03:56]
Plan B
Yeah, it was same here. Of course, I was thinking 100k in 2021 as well. Obviously I was wrong. I'm wrong about a lot of things. I have no crystal ball. But still, I was very happy with the 70k we got back then. Right. Coming from, what was it, 4k, 1k.
- [04:16]
Scott
3600 or something at the bottom, I think.
- [04:18]
Plan B
Yeah, it's okay. So yeah, no, I think last time we spoke we already said, well, this is a bear market for sure. There will be a bull market again, maybe. Probably there will be ranges like 100k1 million. That's a wide range, obviously. But I still think that range is. We can narrow it down a little bit. I've done that before on Twitter. So I'm thinking 251 million is where I expect it to be on average. Right. That's not the all time high or anything. That's the next level that bitcoin will rotate to with all the action we see on the microstrategy, treasury kind of things. And with Trump and National Reserve Talks, big investors, ETFs. To be honest, I would be surprised if we're not ending somewhere near 251 million.
- [05:17]
Scott
Yeah, it begged so many questions because you and I Both said in 2022, here we are, depths of the bear market on cycle. You have this expectation that the cycle will ramp up again and then it happens and then it makes me feel a bit silly for even having daily conversations about what's going to happen. With bitcoin or about the Fed or Evergrande or Chinese stimulus or Covid or any of it. Because you could have just fallen on your head and woken up today. And bitcoin's doing exactly what it should have. Right. But then I get equally excited about all of the tailwinds that we have that you just mentioned. We obviously have a Trump presidency which is very pro bitcoin. His cabinet members are pro bitcoin. Michael Saylor has seen a massive uptick in his buying billions at a time at this point. And we know what's likely coming with more institutional and nation state adoption. But in the same way that we could have not had the conversations about the fundamentals over all of those years. Do you think we should just be looking at the chart and ignoring that now too? Or does that play now into your analysis?
- [06:16]
Plan B
I think it plays in the analysis. It's what we need to get to that next cycle. If we really go to say 500k Bitcoin, that would be a 10 trillion market cap up from today's 2 trillion market cap. So that needs some capital flowing from either real estate or stocks or bonds or gold towards bitcoin. And I think that's what we're seeing right now that actually bitcoin should be in a well balanced portfolio. It has a place in a well balanced institutional portfolio. That was unheard of a couple years ago. Right now, I mean the blackrocks and the fidelities are talking about it like it always has been like that. And it's logical. So no, I think those events play into the enormous jump in level price level that we all expect. And it's, I mean in that case, and I'm thinking about my third article that I once wrote about the stock to flow X model, which is of course a very broad model, but it was comparing bitcoin with gold and real estate and it was talking about stages like or phases actually. So the beginning bitcoin was just a proof of concept, a nerd toy. Then it went to a transactional thing. It broke $1, $1 for one bitcoin. It was, wow, this thing has some worth. We can use it for paying cups of coffee. And then we got the idea of digital gold. And now we're entering a phase where an institutional asset, a real institutional asset, where BlackRock, Fidelity and even national states are thinking about investing in it. So no, it's really a next chapter and yeah, a new price level, a higher price level goes with that next chapter.
- [08:28]
Scott
When you look back at the way we were thinking about things in 2022. We were just excited to put the contagion behind us, which we thought would take a couple of years. I have to pinch myself to even wake up and look at how incredibly bullish everything fundamentally is. Are you surprised at all? I don't mean by the price. I don't think either of us are surprised that here, seven or eight months after the having bitcoin is ramped up, that's what we expected. But I mean this level of the institutional adoption that you just talked about, the mainstream recognition of the asset, the biggest institutions in the world talking about bitcoin like they've been orange pilled and they've been here forever. I mean Larry Fink sounds like Satoshi Nakamoto at this point. Right? I mean do you find all of that surprising? Because I am a bit shocked we got this far this fast.
- [09:16]
Plan B
No, same here. I'm surprised too. It's always very surprising that it's three years of nothing and worries and exchanges failing and all kinds of risks and then all of a sudden everything happens at the same time. It has always been like that. 2013, 2017, 2021 and now probably, well next year will probably even more surprising than this year. Everything tends to be clustered in a very short period of time and it always comes as a surprise if you have, if you have left through two or three cycles.
- [10:00]
Scott
Yeah, I really like your point that the chart is basically reflecting that adoption. The only way that you can get to $500,000 bitcoin or million dollar Bitcoin is not going to be simply by the same people buying and selling it. It's going to require that level of adoption. But do you find any worries with those people taking so much control or interest in the asset class? Right. This started for cypher. Punks and libertarians are opting out of the system. You and I have talked about that many times through Covid and all of the money printing and nonsense. I mean you're 100 trillion USD. Does it worry you now that it's being so institutionalized and it's kind of getting out of the hands of those original holders who are passionate about it for a very specific reason?
- [10:46]
Plan B
No, it doesn't worry me at all actually. I think the wealth distribution problem in the world is not going to be solved by bitcoin. So there will be. It will be Pareto distributed wealth. So a couple of people will own most of the wealth and most people own the rest, which is a small part of the wealth. And within bitcoin that will be the same. So for example, well, from the. Of the 20 million bitcoins out there, 1 million of course is. Satoshi has probably gone forever. But then there's the Winklevoss brothers, early OGs. They also have 1 million bitcoins. Right. And then you have Michael Saylor. Now what does he have with a microstrategy?
- [11:34]
Scott
Like 400, 400,000 or so probably at this point. Yeah, yeah.
- [11:38]
Plan B
And then there's a couple more OGs that have 100k or more. Yeah, yeah. That's in every aspect of the economy. And that will not change with bitcoin. It will not be evenly distributed. And for example, the ETF, ETFs, it looks like BlackRock and Fidelity, the really big capital managers of the world, money managers, that they have that money and they control it because it's in their etf. But of course they own it for the clients. Right.
- [12:09]
Scott
It's such important nuance and people miss it. I hate when people say BlackRock has 500,000 Bitcoin. No they don't. The Coinbase is custodying 500,000 Bitcoin on behalf of BlackRock clients.
- [12:23]
Plan B
Right, right. In that way. The most exciting news from last couple of weeks I found was Allianz Insurance Company, a German insurance company that had 25% of the MicroStrategy bonds, the bitcoin bonds on their balance sheet. Now that is real money. That is really Allianz's money, Allianz's balance sheet. They have to, they run the risk on those bonds, which is low, of course, but that's the first big insurance company that puts a toe in the water and puts a bitcoin related exposure on the balance sheet. That's real money on a real institutional balance sheet.
- [13:07]
Scott
It's interesting because we've been talking about Microsoft potentially adding Bitcoin to the balance sheet. I don't think that anyone necessarily expects it to happen now, but it's interesting that it's even on the docket. And of course that Michael Saylor had the opportunity to pitch them for all three minutes. But I actually thought it would be more interesting if Microsoft did exactly what you just described and put those micro strategy notes on the balance sheet. That seems actually like potentially a more realistic approach for a lot of institutions than having to deal with buying and custodying bitcoin. Do you think that's likely to happen?
- [13:40]
Plan B
I don't know if it. To be honest, if I were the CFO of Microsoft, I would probably vote against having a bitcoin reserve Unless you're very much into Bitcoin and believe in Bitcoin and are specialized in Bitcoin like Micro Sailor and MicroStrategy is right now. But if you're not like that or Microsoft really needs some convincing now it seems. So if you're not into Bitcoin then financial literature stipulates that you just return the money to the, to the investors as dividend or buy back. And yeah, and I'm not going to play hedge fund or bank as a basically software company. But yeah, that's, that's probably.
- [14:24]
Scott
Yeah, I mean we talk about, yeah, we talk about the concentration obviously of Bitcoin and we're talking about MicroStrategy and Michael Saylor already. What do you think his angle is? This massive uptick in buying even at these higher prices? I think we all understand that, you know, he thinks it's going much higher, that basically he's found a bit of a money glitch where regardless of the price he can make money. But if he ends up, you know, with a million, 2 million Bitcoin down the road, what do you think the final plan is or the final angle there is for MicroStrategy?
- [14:57]
Plan B
Yeah, I think he talks about that himself and there's so many angles. We could talk hours about the micro, a strategy case alone and a couple of things. He was the first. I congratulated Michael when he just did it. When he did his first purchase, I said, well, congrats with basically having the first ETF on the market because he has this vehicle, an exchange traded company that he filled with Bitcoin which then essentially becomes an exchange traded fund Avant. So even before it was allowed for real ETFs, he was doing it. And that alone was like a brilliant move. But then the end game. It's funny if you look at the German Weimar period, the beginning of 1930, 29, that period when we had hyperinflation in Germany, there were a lot of losers, but there were some winners. And one of the winners was a guy who had a company who actually borrowed money in that worthless paper deutsche mark and then bought gold with it, the gold bars and the gold marks. And essentially Michael Saylor is doing the same thing. It's really, really interesting what he's doing and also what he explained time and time again is I will never sell my bitcoin. And I understand that because especially in a capital gains tax environment, you would rather borrow against the Bitcoin and then wait until Bitcoin goes up and then roll over that debt With a bigger debt. So you just pay it off and have a bigger debt. So you indeed never sell the bitcoin. That's very interesting thought for also personally people if they need money, like, well take me for example, I'm all in bitcoin since, well, for a long time. And so I have to sell to eat. But I can also borrow against the bitcoin and eat from the loan, which is wiser I think than selling the bitcoin because the bitcoin will catch up and you just repay the loan with a new loan. So that's very interesting. And another thing, I find it really interesting as an ex institutional investor because there is all kinds of arbitrage going on as we speak between the crypto world, the bitcoin world and the fiat world. And essentially Michael Saylor is playing this arbitrage superbly. But you can do it yourself as well, right? I mean if you look at the futures market now, it's not as wild as 2021 for sure it will be. But right now if you just buy a bitcoin for say, what is it, 95,000 or something, thousand euros or dollars, you can sell that bitcoin in the futures market for one year later, just for delivery one year later for 105. So that's a $10,000 risk free quote, unquote profit, which is a little more than 10%. So of course you run the exchange rate risk on the exchanges that they go bust. So you should do it with a CB or something. But if you can borrow money for less than 10% and Michael Saylor is borrowing money for 0%, then it's just free money. It should not exist in an efficient market world. So no, I understand Michael Saylor and everybody can do the same thing.
- [18:59]
Scott
I mean is the end then that he becomes a bitcoin bank. He's holding so much of this. We finally get mature institutional level ability to earn yield and loans and all the things you just discussed. And he's just at the center of all of that. I mean we see obviously BNY Mellon moving into the space we know straight State street and Goldman, they're all coming, right? The largest custodians in the world. That has to be because eventually they want to do all the things that you just described, right?
- [19:29]
Plan B
Yeah, yeah, I think we get, we're going into a very interesting period, a very interesting next year, five years, 10 years, where indeed all those things will be offered by normal banks or new banks, maybe micro strategy kind of banks. And then even further down the Road, there is this end game, maybe, that the dollar is irrelevant. You will never change anything for dollars. And I don't know how that world would look like, but what's the purpose of exchanging it in dollars, selling it for dollars, or borrowing dollars against the bitcoin? It's just because in the economy the US Dollar is accepted and not bitcoin. But what if Bitcoin is accepted? What if El Salvador, with its legal tender, bitcoin as legal tender, gets more support and more follow up by, let's say, a Middle east country.
- [20:31]
Scott
Your avatar obviously is the hat, but you have the $100 trillion Zimbabwe bill. Right. Which speaks to this. And we all know that hyperinflation has happened all over the world. I think a lot of people think it's hyperbolic to expect it to happen to the dollar. But in context, we've talked about bitcoin. But how do you now view the entire economy? The amount of debt we're adding, effectively, you know, a trillion dollars every 90 days or so. I mean, there's been days where we've added almost $100 billion in debt. It's insane.
- [21:03]
Plan B
It is.
- [21:03]
Scott
I mean, it seems like an unsustainable path, you know, out of control train. So even regardless of bitcoin, how does that end now? People are so excited about the economy, excited about the stock market, excited about Trump, but nobody seems to be addressing the biggest problems. And we've seen these problems explode in other countries for years.
- [21:24]
Plan B
Yeah, it's unbelievable that it's not talked about and that nothing is. Nobody's willing to do anything about it. Maybe under the new Trump administration they will do it, but it's going on in Europe as well. The amount of money printing is staggering. And it has been actually going on since 1998. The first crisis when Russia defaulted and the Asian tigers defaulted, and the global financial crisis in 2008. We had nine, 11 in between there and Covid, of course, in 2020. So governments need money. They will keep printing. They have no option. It is madness, like you say. So every institutional investor knows the debt will never, ever be paid off. And it's not. Yeah, well, as long as it gets rolled over into a new debt and they get their interest, it's all okay.
- [22:24]
Scott
But that ends sometimes, right? I mean, what I've been most impressed about, honestly, is their ability to find new ways to pull levers and kick the can down the road and to extend these things. Maybe they can do that indefinitely. It's never happened anywhere else. I just.
- [22:39]
Plan B
No, it will Stop. It will stop. I mean, the US had a sweet deal, of course, with the Middle east to buy oil for dollars. And as long as that goes on, that's okay. But I think the petrodollar area is about to end soon, if not already. And the other sweet deal was with China, of course. Well, okay, we outsource all the factories to China. China will be making this stuff. We will be buying it. But we buy it. We, the US with dollars. And then the dollars that China gets. Yeah, well, you have to invest that in the U.S. treasury, right. You have to give those back as a loan. Well, as long as China played along, that was all okay. But I think we're at that moment in time where China might stop playing along gradually, never suddenly. And yeah, I think it will stop. Yeah, it's time for something new.
- [23:33]
Scott
But does that look like a dollar collapse or is that just a slow bleed out and something like a bitcoin or something else can slowly replace it and we don't have the massive monetary collapse that many people are expecting. I had this conversation not that long ago actually with Lynn Alden and she believed that it could progressively happen and there didn't need to be massive depression for it to sort of end with bitcoin as the global standard.
- [24:00]
Plan B
No, I think that's right, because it happened time and time again over the last hundred years. We had the euro in Europe. Every country had a currency and then we had the euro. There are losers and there are winners in all these events. And of course we had a $1971 decoupling from gold. That was a similar event where the dollar just free floated from there. You have winners and losers in all those situations. So I don't think a real depression will be the result of that. But a lot of people are going to lose money, of course, and the ones that see it will earn the money, for example, the bitcoiners. So there will be a wealth redistribution. But that's something that happened for ages, right? It's nothing new. I would be surprised if it would not happen. And it can be gradual, by the way. It can be gradual until this, well, another 1971 or 1999 Euro, the introduction of the euro moment. I think there will be a moment like that.
- [25:11]
Scott
Yeah, I agree with you. I think there will too. I don't know if it will be bitcoin or not, but I know that it will be a part of the conversation at that point for sure. We talked about, obviously, the Trump administration, the unsustainable debt spiral, many People believe that this debt spiral cannot be solved, that it's already too far. It's literally impossible. On the flip side, you have, obviously, the Department of Government Efficiency Doge, they're going to come in and purportedly start cutting things. We've seen Milei in Argentina come in with a hacksaw and take their hyperinflation down to roughly, you know, two and a half or 3%. Do you think that there are things the government can do to stop this train? Are there enough things that you can cut to solve this problem?
- [25:56]
Plan B
Yeah, well, the 36 trillion or whatever, I don't know where it stands exactly. Now, 6.1, it cannot be stopped. It's done. It's water under the bridge, so that has to be dealt with. But the first thing, of course, is to just close the water flowing so the Doge, you can stop the bleeding first and the debt is not growing anymore. And I'm sure Elon will be a master in that. There's so much crazy stuff going on right now in every government in Europe and us so he'll probably half the expenditure. The expenditure, that's the word I was looking for. But then the debt. Yeah, that's the second problem. It cannot be solved. Those trillions and trillions, it cannot be solved. So that has to be fixed, restructured. So there has to be a lot of negotiations with the owners of that debt, mainly China. Well, we will not pay anymore or we will pay half. Well, all those kinds of debt restructuring talks that banks do all the time with people that cannot pay their credit card debt, those talks have to be going on, have to be started, and then maybe they can pay back 10 trillion and the other 25, 26 trillion will be a loss for the owners of the debt. Read.
- [27:25]
Scott
China magically disappears.
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Plan B
Yes, exactly. Yeah, yeah. It's like that, right? Yeah. If the owner agrees, then the other party agrees. Of course.
- [27:36]
Scott
It's really incredible. I mean, we've heard talk of brics and a potential BRICS currency. Of course, Russia and China being a fundamental part of that. Trump stepped in very quickly and went on social media even ahead of being president, said there will be no BRICS currency and anyone who attempts to create one is going to get 100% tariffs. So it seems like he's going to aggressively protect the dollar, at least during his administration.
- [28:00]
Plan B
Yeah, and I like Trump in that respect. That's how you should do it. You should aim high. 100% tariff and then we start the negotiation from there. And I think he's just a man for that you need a kind of pit bull to do this to get the owners of the U.S. debt agreement with brightening up off the debt and restructuring the economy with terrorists. Well, Terrace is a great tool. There are a lot of other tools.
- [28:31]
Scott
Of course, so it's interesting. We talk about cutting half of the government inefficiency. That means cutting obviously a lot of jobs. We talk about tariffs. We know that those would be probably inflationary in the short term. So as excited as people are about the economy and the government, most of the things he's proposing objectively could be exceptionally good in the long term, but very painful in the short term. So what do you think that looks like if they actually go through with all of these plans? Do you think we're going to see, you know, some economic pain on the way to that more sustainable path?
- [29:08]
Plan B
For sure. I'm not a macro economist or more like an investor, so. And those things are two separate things, the investment world and all the stocks and bonds and assets versus the real economy, the jobs, the inflation, et cetera. But yeah, If Elon fires 50% of the administration of the bureaucracy, that same 50% of. Yeah. Will probably draw some kind of support, some social benefits. So yeah, you have to pay them either way. It will be a lot less, of course. So that's good. But I guess I don't know the exact, exact numbers, but I think somewhere between 60 and 70% of the U.S. economy is the U.S. government. So GDP. Right. So. So if you. Half that. Yeah, well, it has to be replaced with real companies. Yeah.
- [30:04]
Scott
And all these positive job numbers. When you dig into the actual job numbers, it's largely government jobs being added, part time jobs, people that are working one hour a week from home. Right. These aren't real private, you know, private jobs from companies generally. So those numbers are going to look very, very ugly if they start cutting government jobs en masse. Maybe people will just view those through a different lens and understand what's happening. But we react to this economic data. The market's so used to, you know, pricing based on what they see there. It's going to need a new pricing model if this is going to be the case.
- [30:39]
Plan B
Yeah, for sure. Well, the good thing, the good news is that the other side, the investment world is very quick, very fast in interpreting what the new route will be. So for example, in Argentina with Milei, he does sort of the same thing, right. He fires department after department in the government, in the administration, and well, investors have a trust in him. So the inflation stopped, the economy is growing and pretty fast, I should say. I think he's only three or six months at the job and he already succeeded in making all those numbers better.
- [31:25]
Scott
Amazing.
- [31:25]
Plan B
And I think that will be the same.
- [31:27]
Scott
And people thought that it would collapse everything. But it's one of those situations if you have 10,000% inflation or whatever it was. I don't know if that's the number. What's your risk of trying?
- [31:38]
Plan B
Exactly. It is a big mess now and for sure will be a big mess if you fix it. But there is light at the end of the tunnel and I think that's what investors will support and see and trust and value.
- [31:52]
Scott
If we see some major market downside, I mean, it seems like. I'll put it in the words of Matt Hogan from Bitwise who came on my show. He said governments have made recessions illegal. They basically have every lever they can pull to make sure that the stock market never goes down more than 5, 10%, that the numbers look good. You know, they basically just gloss over anything that looks recessionary. But at some point the stock market has to go down 20 or 30% just because that's what cycles look like. And you know, unemployment has to go up and we have to have a recession. What does that look like for bitcoin at this point? Right. You have many people who view it as a risk on investment. It's just another tech stock. You and I do not count in that category. I would imagine there's others that price it as digital gold. Blackrock's now out there saying that it's risked off. But generally bitcoin does dip when stocks dip massively, Especially if it's a black swan event. We know that all correlations generally go to one. But can it decouple in the event of a relatively long term downturn in the stock market?
- [32:54]
Plan B
Yes, and I very much agree with that view that risk is not allowed in the stock market anymore. And there's plunge protection teams and circuit breakers and all that risk cannot be. Nobody can make a loss anymore. That doesn't mean the risk is gone. The risk just goes elsewhere. And my view, that's one of the things I've been really breaking my head about. One view is that that risk goes to bitcoin. So bitcoin is extremely volatile, especially with bear markets of 80% plus that didn't go down. Everybody's talking about diminishing returns and all that, but the volatility did not go down over the last 15 years. A bear market has an 80% dish plus crash. And the volatility in options is still 80, 90, 100%. Implied volatility sometimes. So in my view, bitcoin is one of those places, maybe the only place where volatility and risk is allowed to happen, allowed to live. And with the volatility, with the risk comes the return. So maybe there will not be a stock market crash. Maybe it will be just move elsewhere. The risk and the return.
- [34:13]
Scott
That makes perfect sense. Do you think then that bitcoin will continue to be that volatile through next cycles? We're at that point where everybody just wants to talk about bitcoin going up, what the prices will be at the end of the cycle. Inevitably in six months we'll be talking about super cycles. Never there, never being a bear market again. All the things you hear, those euphoric tops, new paradigm. We've all seen the Wall street cheat sheet. We will obviously have bear markets again. And you don't have a crystal ball, but a lot of people say that the more institutionalized bitcoin becomes, the less volatile it will be. So, you know, do we see a world where bear markets become 50% instead of 80% or 25% instead of 80%?
- [34:55]
Plan B
No, I don't think so. I think we will see an 80%.
- [34:58]
Scott
You know, a million back to 200,000 and we're depressed. Great.
- [35:02]
Plan B
Yeah. Oh shit. Bitcoin crashed to 200,000. We're going to laugh at that, at that tweet one day. And yeah, it's like that. I think it will be like that. And because everybody's talking about the super cycle, but really, institutional investors are also humans. They also have greed and fear. And it's not like the stock market didn't have any crashes right in 2000, 2008, and even with institutional investors, you have crashes. So no, I don't think that changes anything at all.
- [35:35]
Scott
Are you surprised that we haven't seen more institutional adoption and more nation state adoption yet, considering it's been now over four years, I believe, since MicroStrategy first bought Bitcoin? Obviously the accounting rules were not particularly friendly at that time. But now that you know a company can put bitcoin on its balance sheet without unfavorable accounting rules, and nations like El Salvador have done exceptionally well. Do you think that we're going to see a lot more of that quickly or do you think those things just take time? I personally at the time obviously thought we would see it much faster.
- [36:13]
Plan B
Yeah, me too, me too. I thought we would see it match much faster. And obviously there was A lot of inertia in the market, a lot of lagging with all the things you see. And also the operation choke point where governments are actively working against Bitcoin. But also accounting rules, all kinds of investors, institutional investors have mandates, right? They have mandates. You're allowed to invest in stocks for X percent, bonds for X percent. There's no Bitcoin on there.
- [36:47]
Scott
There's not even gold, to be fair.
- [36:49]
Plan B
No, no, no, indeed. And so even if they want it, they first need to change the mandate and that takes a lot of time, especially if it's a big mandate with a liability behind it like a pension fund or a life insurance liability pool. So no, yeah, it takes more time than I thought. And I guess that the people in the institutions, in the banks and the financial institutions like me at the time, the people that know that see the obvious arbitrage, that see the enormous risk return asymmetry, they just leave and going to do it themselves because the benefits are so enormous. Why would you ever do that for? So, so those people go do it for themselves or they go pool pool at hedge funds and just play the market. They arbitrage these slow dinosaurs.
- [37:47]
Scott
It's interesting though because we talk about nation state adoption. Maybe we haven't seen that. There's a lot of conjecture that maybe Saudi Arabia or Qatar, some of these countries have started adding. There are a number of smaller countries that are mining that don't get much attention. But we have had some relatively large news of late. China obviously, basically unbanning bitcoin again. And anyone who's been here a while knows that we travel in cycles of China banning and unbanning bitcoin as much as we do in the price cycles. But also, you know, Putin speaking openly about bitcoin, talking about it being property and a legal framework. I mean there's pretty big news that I think just in the context of how many things are happening goes somewhat unnoticed. But it's very much in the conversation in the biggest countries in the world.
- [38:34]
Plan B
Yes, yes, very much so. And also the people I talk to, it is happening, but it's really difficult issue of whether you should be public about it. Right. As soon as you be public about that, you're arbitraging the financial, that you're going to do this, then you also stop your arbitrage. Right? You're, you're, you're working against yourself. If you publicize it, if you make it public, you should better be working under the radar. And that's a very difficult decision to make to Publicly state. And that's why I admire Michael Sailor, because basically everybody can front run him. Right.
- [39:19]
Scott
You can front run the global strategic reserve if you believe in it for Trump. Right. Which could be up to a million bitcoin if you know, Lumis get your way. You can front run every single time Michael Saylor raises a convertible note. You know. Exactly. You know he's going to eventually buy 40 more billion in bitcoin or so when has retail ever had an opportunity like that? And then there's the unknown unknowns of some other company or country making one of these announcements. But to your point, the global strategic reserve, the United States should buy all that bitcoin before announcing that they've bought all that bitcoin. Or they're just going to. Or they're just going to raise the price by double before they get the chance.
- [39:58]
Plan B
And I'm quite sure they do that. They're just doing it under the radar and they keep doing it as long as possible.
- [40:04]
Scott
Yeah. And so that's what I would do, you think? Yeah, anyone would in any market. Do you think we will see a global strategic reserve is not global, a strategic reserve in the United States, do you think that will happen?
- [40:17]
Plan B
I don't know how the political system really works, if Trump can really decide that or he needs the Senate and the Congress, of course, and how those numbers are. But yeah, I think that, I think he has balls enough to do it and I think the money you need for it is small enough to do it. It's like nothing. Right.
- [40:37]
Scott
It doesn't have to be a lot like, you know, as you said, you can just keep the Silk Road bitcoin, which of course this administration is still sending to Coinbase as of this week. So maybe they'll sell that off in spite before Trump even comes into office. But strategic reserve doesn't need to be a huge amount. It just needs to be a commitment to hold it on the balance sheet in some amount. But if the United States puts bitcoin officially on the balance sheet, doesn't every country in the world effectively have to.
- [41:04]
Plan B
Well, the US has one big advantage and that's it can just print the dollars. Right. It doesn't need real dollars, just print the dollars, buy the damn bitcoin and be over with.
- [41:16]
Scott
It's amazing though that we could be in a situation now where we print money to buy bitcoin.
- [41:22]
Plan B
Yes.
- [41:23]
Scott
Yeah.
- [41:24]
Plan B
And if you're some obscure country, I mean the dollar is best, but then you can do that under the radar too. So you can just Print. Well, Europe is too big, but maybe some small other country, maybe China is doing it. You don't know.
- [41:39]
Scott
Yeah, it's just the irony.
- [41:42]
Plan B
If you think about it. It's crazy. As bitcoiners, it means one thing. Bitcoin will go up in whatever currency you will denominated. So eventually maybe we should go towards a dollar or a bitcoin price. Not in dollars, but in gold or anything that cannot be printed. Right.
- [42:08]
Scott
And now bitcoin for the first time since March is making new highs against gold. A lot of the macro economists said, look, bitcoin's underperforming gold since March. Anybody who knows the four year cycle knows that, you know, the having for the next six months was going to be boring. But hey, not everybody apparently believes in that. But now bitcoin is making new all time highs against gold as well.
- [42:29]
Plan B
Yeah, and gold is making new all time highs as well. So that's double even. And of course with gold thousand year old asset that everybody knows is very conservative thing that every central bank has. And bitcoin is a new thing. So bitcoin will grow into the asset pool. And there's very nice pictures that Michael Saylor also used about the 500 trillion asset pool globally and Bitcoin being 2 trillion and it will grow into that market. But that money will come, well from other assets and from money printing probably because that pool will grow as well. Right. The 500 trillion will be 1000 trillion in 10 years for sure. Yeah.
- [43:12]
Scott
So I want to, before I have to let you go because I know we'll get close to time, I want to talk about your modeling these days. I've noticed you've been talking about RSI quite a bit more. I think that you've incorporated some more aspects into your model. Do you still use the same stock to flow model you've been using in the past? Do you find that there's been some tweaks that you find helpful of late? How are you now using your model, updating it or viewing it in context of how the market's moving?
- [43:43]
Plan B
Basically still using the same 2019, 55k model. Of course we had some variants, the 100k model that grew out of a discussion about well hey there's the whole stock to flow thing is built on the halvings. And in 2019 when I made the model, there were only two halvings before. Right. In 2016 and 2012. So there was a whole discussion at the time about hey N is two, you have two halvings. You cannot Extrapolate from two halvings. And then I said, well, let's go before the November 2012 halving and see if the prices of those four years and the stock to flows can predict, with hindsight could have predicted the 2012 and 2016 halving. That essentially was the 100k model. I really liked it, I used it. I don't use it anymore. But it's more an answer to the question there's only few halvings and can we use it? Will the halving be relevant again? I think yes. I think yes, it will. And then the third model of course was the stock to flow cross asset model. That said, well, you have a stock to flow of other assets, gold, silver, real estate. Can we use those assets and not the time series of Bitcoin, but those assets to predict Bitcoin's value. And then it would be 288k was at the time obviously too high, but very rough and very well useful I would say. But I use for myself now still the original model. So the 2019 model, if people haven't read the article, so a lot of new people right now that entered the market last year, this year would probably not read the article that was written in 2019. But please, if you want to make sense of things I say it really helps to read that three pages of an article and you can find it on my website, by the way, planbtc.com but yeah, that's one model. But yeah, I'm a modeler, I use a lot of models. So even the very basic technical indicators that you mentioned, rsi. I like it because you see the overbought oversold situations, the greed and the fear. I like it. Yeah, that will never go away, right?
- [45:58]
Scott
Humans will especially, especially on a higher time frame. Like you know you talk about on a weekly time frame when Bitcoin gets overbought, you're looking at months and months and months of fomo. That's when it's getting started. Now if you're looking at a four hour chart, maybe you start to get worried when it's overbought. But on a higher time frame. That's the power hour, right?
- [46:18]
Plan B
And the same is true for moving average. If you take a long four year moving average, I like four years because of the four year cycle of course, but that never goes down and it acts as a floor. It's really helpful to have that in the suite of models. What was the other one that I use a lot? Yeah, the on chain stuff. So the realized price, that's Very unique to Bitcoin. You know, each coin, when it moved, if it went to a big wallet or a small wallet, is it a small investor, a big investor, is it an old transaction or a new transaction, which price did it go against? So you can do all sorts of nice stuff with it. And I like the realized price thing because it takes volume implicit in it as well. So. Yeah, and even the derivatives market give a lot of information at the moment. I don't talk about that frequently or even tweet about it because that comes close to where I earn my money. But it's can't give away the secret.
- [47:27]
Scott
Sauce to the millions of people that are following you all at once in real time. That would be just like the government front running themselves, right?
- [47:35]
Plan B
Yeah. But of course futures and option markets give very useful signals as well.
- [47:40]
Scott
And I think the ETF options market will be huge and will give even more signal in that direction.
- [47:45]
Plan B
Oh for sure, yeah, yeah, for sure, for sure. And it's interesting that you don't need exchanges, Bitcoin and crypto exchanges for that. You can just buy options in your normal brokerage account on a NASDAQ or S and P listed stock etf.
- [48:06]
Scott
Yeah, yeah. As we come to the end here, is there anything I missed, anything you're excited about that you want to mention? Anything that's on your radar?
- [48:16]
Plan B
Oh yeah. Well for me the big discussion that keeps it all interesting because it can be maybe boring if you have done two or three cycles. You know, the bull markets coming, you know, the bear market will be after that minus 80%, you can always sketch it out. But the one thing that will be a big question mark for me, and that will make it interesting is will we see diminishing returns in the next cycle? Because I don't know, I don't have a crystal ball. The data seems to suggest diminishing returns. Every bull market was or every, if we look at last three bull markets, they tend to be smaller. Then again, the last bull market was, was sort of shortstopped by China and FDX and all sorts of things. And more importantly, theoretically the adoption, the S curve is exponential until 50% adoption. So you go from 1% to 2 to 4, to 8, et cetera to 50% and then in one step from 50, you double to 100%. So it cannot be theoretically in my opinion that we have diminishing returns already. But I can be wrong. So that will be a big bet for next bull market. And maybe one more point that also means that the top of the Bull market and everybody wants to sell the top, of course. Well, I missed it last time. I was waiting for 100k.
- [49:58]
Scott
You and me both.
- [50:01]
Plan B
I'm not that good at calling tops and probably I will be wrong again, but it will be very interesting to see where that top will be. A lot of people, I can predict one thing, a lot of people will sell too early because they're traumatized.
- [50:17]
Scott
There's a lot of people selling already.
- [50:19]
Plan B
Yeah, yeah, yeah, yeah, yeah, we can see that right now. Yeah. Although as we speak, it's at 99,000.
- [50:25]
Scott
Yeah, it's crazy. I mean, it's going to get there. It's going to get to 100, by the way. I mean, it went to 99,860 on Coinbase. In my mind, that's 100,000 already.
- [50:35]
Plan B
Yeah, that's around 100,000. Yeah. No, we will be there. We will be there before Christmas is my opinion.
- [50:43]
Scott
Absolutely incredible. I wish we could talk for hours. And I need a promise it's not going to take two years to do this again, that we can do this more regularly.
- [50:51]
Plan B
You got that? That's the deal.
- [50:52]
Scott
All right, guys. And where can everybody follow you? Follow your work. Obviously you mentioned some of the very important articles. I mean, your audience has just exploded once again. You have to be one of the most followed people in bitcoin, period.
- [51:07]
Plan B
I bet you can make a model on that alone.
- [51:11]
Scott
I can say follows Plan B's growth and stagnation, of course.
- [51:16]
Plan B
So I can confirm the bull market has started. Indeed. No, you can follow me on maybe my website is the best pointer plan, btc.com because on that website is a link to all the articles that I wrote, but also to the social media like the X account, which is the most well known app, and the YouTube account. I do some monthly market view on YouTube. If you don't know that it's. Well, I like it a lot, so I'll go on with that. There is, by the way, no other social media, so there's a lot of scammers. Be aware of the gu.
- [51:48]
Scott
Gosh, it's atrocious.
- [51:49]
Plan B
You have them too. Everybody has them. It's. And, and also that is a sign that the bull market has started because they have been away for long.
- [51:57]
Scott
Yeah, yeah, sadly. Well, thank you so much for your time. I really enjoyed it. If we get to, you know, some more meaningful levels, 200, 300, 500, we can just do more podcasts each time we hit those, you know, round psychological levels.
- [52:13]
Plan B
Let's do that, Scott. Thank you. Very much for having me. Thanks.
- [52:16]
Scott
Always a pleasure.
- [52:18]
Plan B
That's dope.