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Strategic Bitcoin Reserve Approved! Summit Today | Crypto Town Hall
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Strategic Bitcoin Reserve Approved! Summit Today | Crypto Town Hall
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- [00:00]
Scott Melker
Happy Friday, everybody. Welcome to crypto Town hall. Every weekday, 10:15am Eastern Standard Time, exclusively here on X. And today is a historic day. I think it's fair to say that this is one of the biggest events that we've had in the history of bitcoin and the crypto space. The approval by executive order of a strategic bitcoin reserve. Not only a strategic bitcoin reserve, but also a digital asset stockpile, giving us the clarity that we were looking for on how these assets will be treated and divided. We will obviously dig into the nuance of what is stated in the executive order and I guess we can also have a conversation whether we should be excited about government being involved in bitcoin in the first place. But assuming that we accept that government is going to be a part of bitcoin and that all institutions will eventually be a part of bitcoin, this is basically the dream scenario that we were looking for delivered. We're getting a strategic bitcoin reserve by executive order. Of course, we would love to see legislation. As many projected, the first tranche of the bitcoin that will become the strategic reserve will be what's already held by the government that's been taken by seizures from Silk Road and potentially Bitfinex, although that is likely to be eventually returned. Many people were upset with this executive order, which blows my mind that our industry is full of such whiny, entitled children. Bitcoin obviously sold off, went down about $6,000 in the first 30 to 45 minutes after the announcement because people apparently were upset that the executive order did not commit to buying more bitcoin for the strategic reserve, which, if you've been listening to this show, nobody expected. But it did specifically a, say that we would get an audit on what bitcoin we hold and B, more importantly, that Percent and Lutnick at treasury and Commerce respectively could find budget neutral ways to acquire more bitcoin. Of course, Michael Saylor immediately responded saying, I have a whole lot of budget neutral ways that we can acquire bitcoin for the United States government. People were bearish on this, saying, we're not going to buy bitcoin. Be sent literally. On CNBC this morning with Joe Swock talking about the importance of finding ways to acquire more bitcoin. So those are bad takes for people saying it won't be bought. I would say that if you're a huge XRP fan or Cardano fan or Solana fan, and we're expecting those to be a part of a strategic reserve, I could see why you would be disappointed because the government holds very little of those and the digital asset stockpile is more mechanic then a commitment to those assets in the United States will not be buying more. That's the very, very quick rundown here. But I think it's notable that we debated what this would look like. People were depressed. It's not going to be just bitcoin. It's going to include shitcoins. They would say we're not going to buy. There's no commitment to all these things. And what we ended up with was an executive order that listened to basically every side of the industry that gave most of them what they would have wanted and intended and gave us a strictly bitcoin reserve. I don't see how you can take this as a negative, but miserable people, miserable takes. Let's jump to the panel. Whoever would like to jump in with their first takes on this strategic reserve, please give them to me infra. Go ahead.
- [03:45]
Infra
Hey, good morning guys. Yeah, no, I think, I think long term, like I'm still very bullish on bitcoin. I would say the market had clearly priced in more optimism or more aggressive strategy, which is why it sold off. I would say though that bitcoin over NQ shows bitcoin's been performing quite well just in the short term time frames. But I think that an important point is that as so long as the, the US continues to run twin deficits, you know, it's all kind of moot. So even if we had decided, hey, we're going to print a trillion dollars and, and, and use that to buy bitcoin, which was kind of the, you know, hyper bullish opinion or you know, outlook.
- [04:30]
Scott Melker
But no bitcoiner would want, by the way. Yeah, a true bitcoiner printing money to buy bitcoin. Yeah, go ahead.
- [04:37]
Infra
Of course. But for number go up. Right. And so that even in that hyper bullish kind of scenario, here's the thing, because we run a twin deficit that bitcoin would flow out. A lot of people have touched on the sovereign wealth fund and we're twin deficit nation. But I want to kind of touch on the international trade angle, which is because we all it would take, right. Say we have a trillion dollars of bitcoin now we printed the money, bought the bitcoin. Well, China runs a surplus against us Malaysia. Right. You pick any of the dozens of countries that runs a trade surplus against the US all they would have to do is say, okay, cool, great. We, we actually really like bitcoin. We're not taking Dollars anymore. We want your bitcoin instead. And, and bitcoin would flow out of the country. This is how it used to work, right, with gold countries that ran these really big trade surpluses. Gold would flow into their country. They were net producers in the global context, right? They, they produced more value for the world than they consumed. So what happened? Gold would gradually flow in and accumulate and their currency would strengthen until eventually it gets too strong, where their stuff isn't competitive anymore. They stop selling as much stuff, maybe, maybe start to run a slight deficit. Gold starts to flow out of their country. The problem here is that the global system is broken. The dollar is fundamentally grossly overvalued on a fundamentals basis because of this kind of dollar complex that we've built. And until we address kind of some of these release valves that should be operating to correct trade imbalances and disparities and all that. Until we do that, we could print a trillion dollars, buy bitcoin all we want. That'll just by nature of running a twin deficit. It's only a matter of time before that basically flows out of, of the country.
- [06:37]
Scott Melker
Ryan? Ryan, are you able to lift your mic? Ryan can't speak. Go ahead, Jason. Hey man.
- [06:49]
Jason
So I am one of those, not necessarily the pessimistic people, but I find the geopolitical implications of this absolutely fascinating. A lot of what infra said resonates really strongly. But the other point here that I think is interesting is it makes bitcoin now a viable target and tool in a proxy war, a proxy economic war, which I find really interesting, I mean, because between China, Russia and Kazakhstan, about 44% of all of the hash power for the bitcoin network is combined into those three occasionally aligned powers. And that's an interesting thing because it makes the possibility for 51% attack of the network not entirely insanely improbable. You just have to knock a bunch of stuff offline and then bring up, you know, some more hash power and you know, you could nuke a reserve, which I find fascinating and terrifying at the same time.
- [07:50]
Scott Melker
My mic was not working there for a second either. I couldn't see the actual hands up besides Ryan, whose hand went down. Dave, I think you had your hand up. Go ahead.
- [08:00]
Jason
Yeah, I mean I. Look, I'd love to have a more in depth conversation with infrequent etc on this topic, but effectively what he was describing was the world before 1971 when Nixon closed the gold window and finding economists who, other than the Austrian school, which I'm Going to guess in front I both belong to that doesn't think that closing the gold window and allowing the dollar to be manipulated in a way to be able to create, you know, prosperity and outlaw recessions in the business cycle, etcetera, Is very hard. The way the global economy started with petrodollars in the 70s but has evolved to today is we have other than, I would have said other than Germany, although it looks like they're going to join the party. Other than Germany, all governments with debt to GDP of over 100%. I mean, keep in mind people talk about Paul Volcker, which was after Nixon closed the gold window, and they talk about his financial cure for the economy to slow it down to decrease inflation and break inflationary expectations. Keep in mind, our budget deficit to GDP was 34%, not 134%. So we're in a situation which is rather different. And the economy and the FX rates are clearly with everything in fiat world in competitive devaluation mode. Every once in a while you get there. And these tariff wars that we're not talking about today, but the strategic reserve are all part of the same complex. The one point here, which is the most important point, I made it this morning on our show, Scott, and I'll make it again now, is Bitcoin is still an infant asset or more likely an option because it's not a store of value yet it's too volatile for a store of value. A store of value at the gold level would imply a price of over 10 times the price that it's at today. And if you ask yourself the question, do investors who believe that it will ultimately win have a higher probability today than they did yesterday at this time on thinking they would win? And the answer is yes. So what you're seeing in the trading of bitcoin, and we saw it last night with the idiotic dump and forced liquidations of people, are people reacting to the technicals in the chart but not considering the fact that more investors are being stirred to saying, wait a minute, this is a 10x bet that I can make that it's going to be okay. And it's a higher probability to me, markets are irrational in the short term, but rarely irrational forever. And I think that this is an opportunity that people need to take and understand. I do believe that that's why we're trading the way we're trading today. But it's very important to understand that you can make all these assertions about government buying Bitcoin being the death of it. Well, not really not if they're owners of it in the sense of they own the asset. The issue is, do we want governments actually running the nodes and mining and being able to do a 51% attack? And that, to me, is the thing that seems very unlikely and that this is not going to increase the likelihood of that.
- [11:27]
Scott Melker
We do have some guests, guys I know, Gareth, Joe, some of you guys were invited. We have a full panel, but we'll work on getting you up here. For you guys in the audience who I know are waiting. Ryan, is your mic working? I saw you raise your hand again.
- [11:41]
Ryan
Yep, yep, got it. Sorry about that. Yeah, this is. This is an interesting one. So many people had their hopes up that this was going to be this massive buy. Government was going to come in with billions, if not trillions of dollars. And, you know, and then Trump comes out and says, oh, Solana and XRP and Cardano. And the reality is, when you actually read the executive order is just saying, hey, everything that we have anywhere in government, we want to pull it into one place so we can actually see what we have. And then at that point, there's a ton of exceptions in the executive order on when they can sell the bitcoin and when they can sell the altcoins. So it's not like we're just going to accumulate everything into the treasury and hold it. It's like there's a lot of exceptions on when they can sell it. And then this whole idea of budget neutral acquisition, well, in my opinion, that just means we take it. It's like, oh, we're going to get bitcoin without it costing us anything. So that's a lot of different ways they can do that. When it comes to the mining side of things, I find it really fascinating where they could say, oh, we want all the bitcoin minted here in America. Well, why? Well, typically when things are minted or made in America, it's the government gets some type of a portion of that. So is there going to be a mining tax? Is there going to be a reason why they want all the bitcoin minted in America other than just the revenue from the tax of the income? There's a lot of questions I have on how they think they're going to acquire bitcoin other than just taking it from people?
- [13:22]
Scott Melker
Zach, I think this is really quite close to best case scenario for what could have happened. I mean, I understand the market was pricing in something differently, but this was an executive order. Right. And there's only so much you can do by executive order. It recognizes in the text the properties of Bitcoin that make it valuable. They talk about the supply cap and the security. They talk about it as a strategic asset. It references the nation state level race to acquire Bitcoin and the game theory around that. It separates Bitcoin from altcoins, which are treated differently. It, the actual text of the EO directs. Right. It forces the Treasury Department and the Commerce Department to develop strategies to buy more Bitcoin. You know, theoretically. You know, I've argued before that there is a legal ability by executive order maybe to do some buying through the exchange stabilization fund, but that would have been contested in court, even if they went with that. But, you know, really, I don't know what else you possibly could have done by executive order that would have been better than this and more legitimizing of bitcoin. So I don't know. I think this is like a historic achievement for bitcoin, so. Totally agree. Especially if you zoom out and think back a few months or a year or 18 months before we even had spot ETFs, how unimaginable this situation was to be bearish on it or upset. It just absolutely blows my mind. G. By the way, the next step is every bitcoin or crypto oriented policy person in D.C. is going to start educating the treasury and Commerce Departments on budget neutral ways to buy bitcoin. That's starting today. I don't know, the idea that the price went down on this announcement blows my mind. Gareth, I saw you had your hand up before you managed to get on stage.
- [15:11]
Gareth
Yeah, I think it was just a waving emoji, not a hand up, but houses. Scott. Hello, everyone. Good to be here again. We just had a space on the cointelegraph account a little bit earlier and had a great chat with Dennis, Dennis Porter and Pierre Rashad, who was with Riot for a long time. And I think the biggest takeaway from me was Trump making good on his promise at Bitcoin Nashville and saying, hey, we, we already have this 200,000 bitcoin or so that we've seized and we're going to take that and we're going to make that part of our bitcoin reserve. So he's made good on one promise and for me, the other big takeaway is this is the start of that game theory. Right. I remember, Scott, like when we were talking about this, I think in November last year, we were kind of saying that, you know, if, if the US does come through with some executive order or the Establishment of a bitcoin act, then every other nation state has to, has to follow suit. Now we've got a very clear statement, right? The US government is saying, hey, we're holding bitcoin through, you know, law enforcement over the years. A lot of this bitcoin comes from the Bitfinex hack and of course the takedown of Silk Road. So that's where a lot of this bitcoin comes from. But the US government is clearly saying to everyone else, we understand what bitcoin is, we understand the value proposition, we understand that it's hard money. We have this bitcoin and we're not going to sell it, we're going to hold it because it has value. And for me, this is just the start of the game now, right? Like if the biggest nation, you know, the, the superpower of the world is saying to everyone else, guys, we know what bitcoin is, we know it's valuable and we're holding on to what we've got. And at some stage we're looking at a budget neutral way of acquiring more of it. Then every other nation state now has to do something about it. And I mean, I asked the South African President at the World Economic Forum earlier this year if they would consider doing the same thing, you know, establishing a bitcoin reserve if the United States were to do that. And he said, listen, our people are looking into that. So the statement has been made and I think that every other, every other nation state now that has considerable reserves in precious assets and minerals and all those kind of things are going to have to look really hard at bitcoin now. And if they haven't done their homework already, they catch up. So for me, honestly, this is a watershed moment. It's an exciting time to be in the industry and I can't wait to see what happens at the White House today as well at the crypto summit.
- [17:46]
Scott Melker
Iago. Yeah.
- [17:49]
Iago
So from my perspective, this is just another example of the fact that in crypto prices never respond to fundamentals and frequently go exactly the opposite of fundamentals. It's as funny today as it ever been. It's a really phenomenal thing that has happened. I do want to point out a few things which are I think worth realizing. So the United states so called 200,000 BTC is not 200,000 BTC. Gareth actually sort of hinted at this. Around 64,000 of that.
- [18:25]
Scott Melker
Belong to good for next and I think it's 94,000.
- [18:33]
Iago
Well, yeah, so the numbers change. There's going to. Which is one of the reasons that the eo actual, actual audit. But in any event, it doesn't look like the US has more than about 112,000 BTC in comparison to countries like the UK, which has 61,000 BTC. The country of Ukraine, which is 46,000 BTC. El Salvador, this tiny little country with 6,000 BTC.
- [19:03]
Scott Melker
So, you know, one question, right, and the most importantly. Sorry I'll not to interrupt, but China has almost 200,000, like 190 something.
- [19:11]
Iago
So that was, that was everyone was going to come to, right? So if the United States, especially under a president like Trump, sees that the telegat, you know, a little bit more than twice a tiny insignificant island like the uk, that's already a strong motivator. And then if it's got less than China, oh my God, that's, that's time to press the panic buy button. In addition to that, there's a lot of countries which have large but undisclosed or as yet undisclosed amounts of btc. And this process has been accelerating over the course of the last year and in particular over the course of the last months since it looked like Trump was going to get elected. And after Nashville, primarily we're talking about Kuwait, Abu Dhabi and then rumors of some other Gulf countries. And so there's already this process which is happening. But the bigger story from my perspective is that this has legitimized BTC as the first true new asset class of the digital age. And that is going to have massive repercussions for, for, for decades. We're talking about for the first time, the birth of an entirely new asset classes. Asset classes have valuations in the tens of billions. The real target now is at, and it's just a question of time is when does bitcoin flip in gold? Gold is a $20 trillion asset. That would be a more than 10x climb from here. And then the second part of it is the very, very clear distinction that has been made between Bitcoin and everything else. And I was actually writing an investor letter this morning, so I'll just pull out some choice quotes. I think there were basically four key points made in the executive order. The first point is that the United States government will not sell Bitcoin. So BTC deposit and strategic reserve shall not be sold. The second is that the US Dollar, the US Government will seek to purchase more btc, right? And that's the quote, shall develop strategies for acquiring additional government btc. And then on the flip side, and this is, you know, coming to the question of soul and XRP and ADA and and all of the rest. It explicitly says the ESG will not seek to purchase other crypto assets, shall not acquire additional stockpile assets, and that these additional assets can be sold. So digital assets other than BTC can be sold possibly for additional BTC as a revenue neutral mechanism. Clear distinction from the largest economy economy in the world and one which has effectively been sanctioning this asset class for the last five or six years. It's a watershed moment. This is. You know, you get to see a moment like this once every few generations and we're very lucky to see it ourselves.
- [22:16]
Scott Melker
Lost connection there for a minute, but was able to catch the rest of that. We're having a glitch, by the way, on spaces for the guests who are trying to get off and on. It's kicking some people off and inviting others. We can't really see who is or is not on stage. Gary, I see you're up here. Your brother was just up here too. I was looking at two cardone.
- [22:34]
Gary
Oh, was he? Well, being he was up here for.
- [22:37]
Scott Melker
A second man, and then I think he just disappeared.
- [22:40]
Gary
I'd be interested to see what he thinks about all this since he studied it so long. Hey guys.
- [22:48]
Scott Melker
He's working.
- [22:49]
Gary
I gotta tell you, I think I am so glad this is all getting ready to be done and we can move on to the real world. I really do not like governments involved in any kind of commerce. Now that they're involved, I will say I am incredibly impressed at how mature the government's response to this was. They have been plagued with special interest groups. I think they've been plagued with a lot of skepticism from us thinking that this was going to turn into a shit show. If you're a McKinsey, a consultant, if you just get away from your own bags and look at this. This was as professional of a response. It's extremely consistent with what he said in Nashville. I was like eyeball to eyeball with him. So he's lived up to what he said he was going to do. I suspect a good 50% of the crypto community will be disappointed. And I can only say that like I think it was extremely naive to ever think that some paper that can be created by a US firm was going to be put on the reserve. I'm very impressed with what he said so far and the neutral basis to be able to. That's a strong indicator. Hey, we may look at arbitraging some of the other assets on our balance sheet that may include some of the Other crypto and not to be negative on anybody, but I own some Solana, okay? So like, I've got to sit here and go, wow, now what's Solana's role moving forward? Am I buying something that's going to have a true utility? Because before I was betting on, you know, maybe I've got, call it like 20 Bitcoin. And then I've got, you know, one position relative to those 20 units in Solana. I have to look at this now and say, is this worth the risk for Gary Cardone to have one twentieth of his allocation to Solana when I can't really explain what role Solana is going to play in the new world? I think they will play some role, but I can't actually explain it. I can't identify the addressable size of the market. I can't address how much traction they can get and keep. So I don't think this is going to be positive for the alts, which I actually think is very healthy, quite frankly, because we have too many things here that are just not. They're not businesses, man. They're literally lottery tickets. Probably you've got better odds with the lottery tickets. So I'm excited. I think it's awesome. Does not surprise me that we can buy 88,000 today. I have plowed into this thing pretty heavily recently again, and I plan on doing anything in the 80s. I think it's going to be spectacularly smart, look smart in six months to a year. So we will see. Congrats to everyone. And if you. And if you are disappointed in your holding alts, you know, I've learned over time, the sooner I can make a decision and agree that I have made a mistake and cut that decision, the sooner I get back on. On the, on the horse and start going in the right direction. So, like, I don't get married to my ego on these decisions. This is just business, dude. It's just business. And I got to pick the right. The right horse to take me to the journey. So thank you guys very much.
- [26:45]
Scott Melker
David, Gary Salon is digital Vegas, man. You know, you get on a piece of the casino.
- [26:50]
Gary
Yeah, Vegas. I hear Vegas.
- [26:51]
Scott Melker
I wouldn't.
- [26:52]
Gary
You know, Vegas is nearly empty right now, okay?
- [26:56]
Scott Melker
Digital Macao. Vegas was packed last time I was there. But point being, you know, if you believe that humans are going to gamble and speculate, then that that might be your justification for owning the casino of Solana. I'm not saying that Solana's only purpose.
- [27:09]
Gary
By the way, but I get you, man.
- [27:13]
Jason
Dave, Yeah, I was just typing a response to your digital Vegas comment. I mean look, the largest product on Wall street, the largest new product on Wall street are single day options and they have a frighteningly high percentage of the options market which itself has a frighteningly large percentage of the overall investing market for most of the brokerages out there. So what Solana is vying to be and whether they will get it or not is a different story. What they are vying to be isn't digital Vegas but the digital Wall street casino which is a multi, multi trillion dollar wallet. And it goes way beyond just US equities and options. But there's also, you know, there's so many things in the, in the world of defi and so many verticals, whether you're talking interest rate swaps or security, securities lending, etc. Etc. And it's global. So that's years from now. Right? But when you want to understand what the potential is, that's what the potential is. Now quite frankly, the reason Ethereum, despite no metric really justifying it, it still has the market cap that it does is because people understand that the total TAM for all of these tokens is dramatically larger. And I think that to bring it back to the topic of the day, the way that they did this, by making it bitcoin for a strategic reserve and a stockpile which will be further clarified over time of other tokens, I think it's really a question which is I think totally correct and everyone knows that's the way I've been looking at it as well. But I do think that when you're talking Gary, about total addressable markets, you need to look in the future. You don't have to wait a decade for these things to happen, but we do need to wait at least for the policy of how regulation is going to incentivize building for real utility. And that's going to be the back half of the year. Atkinson at the SEC and contends that the CFTC haven't even been confirmed yet, much less have a chance to, to start addressing their policies and talk about how they're going to cooperate. So a lot of these things are going to take a lot longer. But you know, yeah, you're right. The hot money idea that the government was going to be buying Solana and xrp. Yeah, okay, that was always a pipe.
- [29:37]
Scott Melker
That, that was never going to happen. But I don't, I'm laughing by the way. Sorry.
- [29:42]
Jason
I was just saying I don't see anything in this which was which this actually exceeded My expectations, we'll leave it that way. I'm with that.
- [29:52]
Scott Melker
Me too. 100. I'm laughing, by the way. I just pinned a tweet in the nest. Obviously we have the crypto summit at the White House today. We've litigated the guest list repeatedly here. I'm reading this tweet above and I'm literally not sure which side of good or bad this is on. No capital gains tax exemptions expected at White House crypto summit. That could literally either read that we're getting no capital gains in an exemption or that there will be no capital gains tax exemption. So I'm not sure if this means we're getting a capital gains tax exemption or not, but clearly this is the main topic of the summit today, now that we've been preempted by Trump, I think, on the news about the sbr. Go ahead, Gareth.
- [30:41]
Gareth
Yeah, I was just going to piggyback off what Gary said because I think he made such a good point, right. Like I was having a chat with my dad the other night about this, about the whole bitcoin versus crypto reserve, and he was pretty much he's not even invested in Bitcoin or any cryptocurrencies, but he was like, surely there just needs to be a clear definition about what classifies as what. And I think that's what this all comes down to. You need to understand the fundamental value proposition of Bitcoin and why it's both digital gold and electronic money, and understand that all the other altcoins are essentially utility tokens of different blockchain protocols that have different use cases. It doesn't mean that they're useless. The people that have built all these protocols and these technologies are great technologists and they're all interested in making things work. And I interviewed Tolle, who's the co founder of Solana, a couple years ago, and he broke down the essential the value proposition for Solana. And you know, he worked at Qualcomm for a really long time and that is the basis for how Solana works. Right. And the use case for Solana is a, is a high throughput, high speed blockchain and it was supposed to be a tool for high frequency trading and those type of use cases on blockchain. So understand what it is that you're investing in and then you can forget about all the hype and everything else. And like, for me, the main thing is, you know, obviously the price of Bitcoin will always determine how much you're willing to buy.
- [32:13]
Scott Melker
Of It.
- [32:14]
Gareth
But if you understand what the use case is and you have a very low time preference like safety talks about in the bitcoin standard, you understand that you're investing in something that is both and electronic money, and it's not something that you're breaking.
- [32:33]
Scott Melker
You're breaking up buddies. Yes. Sorry, you've got a. You got a bad connection. See if you could. I think you're in the car, but go ahead, ryan. And then A.J.
- [32:44]
Gareth
Yeah.
- [32:44]
Ryan
Two things. Like one, I. I hope the. The former point about no capital gains on bitcoin. I hope it's not the.
- [32:54]
Gary
The latter.
- [32:55]
Ryan
Which means a lot of people in Puerto Rico will be coming back to the mainland.
- [33:01]
Scott Melker
That's right.
- [33:02]
Ryan
Which means I need to get my house ready. Now, the second point I thought Gary touched on was really, really good. Executive order does clearly say that the strategic stockpile can be used to acquire bitcoin. Which means that you have the government, if they get into a race with China or whoever else to acquire more and more bitcoin, then it could be at the risk of tanking these other networks because they're basically liquidating all these other coins in order to claw more bitcoin. I find it a really interesting scenario, especially given the propensity of Trump and this administration to. To constantly compare ourselves to China. So if China does have a large amount of bitcoin, then I see this as a very real possibility of Solana, Cardano, XRP or whatever else being liquidated. Just to keep up.
- [34:09]
Gary
I think you called on me, Scott. I don't know what's been going on my phone.
- [34:12]
Scott Melker
Yeah. Next. Jump right in. Thank you. Good morning.
- [34:15]
Gary
Well, overall, I'm still extremely bullish. I know everyone was expecting. I don't know what they were expecting, but definitely not go down. But it's going to just take time. A lot of things, stuff like this takes time. I mean, he's in there doing all kinds of crazy stuff, trying to pass. Actually, he's not even trying to pass things yet. He's just signing executive orders. And then when it comes to this stockpile and that executive order, it has to be budget neutral. I mean, can't that be reallocated funds from. From. He thinks hundreds of billions and trillions of dollars of wasted spending. I don't think he has to. I don't think he wants to tank another US Crypto toke token that's not bitcoin to buy more bitcoin. So I don't see it that way. I more see it as he just wants American crypto companies to rise. And actually if bitcoin still sits at around this price for a long time, that gives us more opportunity to have an old season so we can buy more bitcoin after that. So overall for me, I just think we need more time. I think we're all in the rush, honestly for price to go up, but I am not because I want to accumulate more bitcoin. So I'm okay with it sitting around here for a while and I'm okay with having alt season happen and I'm okay with Trump taking his time and doing it right. Hey, can I just be noted, Can I just bounce in here? People are talking about Trump. One of the things I noticed and I think other people notice, I don't think Trump's interested in this subject at all. If you look at the way he, hey, do you believe in this? It was Howard, I guess I can't remember who.
- [35:52]
Scott Melker
Yeah, he was talking to Sachs, signing the order yesterday. He's not, he's like, I promise this.
- [35:58]
Gary
He'S not interested in this dude there. And the truth is he shouldn't be. I am so excited. We have a 37 year old cabinet that's pushing this. He's asking the team, hey, do you guys believe in this? Good, we'll do it. But he should be focused on peace and war. I think it's cool that Trump's not really that engaged here and it shouldn't be. Let, let, let the committee do it. Do y'all agree with that? I think we're giving 100 person can do this and it's not 100%.
- [36:25]
Scott Melker
He should be, yeah, he should be outsourcing things that he doesn't understand or is not passionate about to smarter people than himself who are. And that's what he's doing across the government right now. Whether you agree with those people or not, everybody can have their political opinion. At least that's what he's trying. Right? I mean, and we ended up with a bitcoiner in every position, even the non financial ones.
- [36:49]
Gary
Scott, if you don't mind, he did say he wants the US to be the crypto capital of the world though. So he is going to.
- [36:55]
Scott Melker
Yes, the talking political talking points. And listen, I'm not disagreeing with you. I do think that he wants that because it would be politically popular because of raising money and because his advisors are saying that. I mean, Gary, I was sitting there with you at the, in Nashville, right? Obviously. Listen, anyone who listened to that speech, you were super excited that he was talking about Bitcoin and that he was headlining and he was there. But when you heard him kind of like make the quips and realize the fire Gargans are, oh, you guys really like that. Let me. And he closed the speech with like, have fun playing with your bitcoin and crypto and stuff. You know, it's very clear. Like, he understands it's politically popular. It's something that he needs to do and is important to other people in the administration. But I agree with Gary, like, he's got much bigger fish to fry than bitcoin than he should. Go ahead.
- [37:45]
Gary
By the way, that is the perfect leader, okay? A guy that if he trusts his team and he doesn't stick his nose into this, it is the perfect leader, okay? It's, it's. It's actually the most mature thing I have seen happen to bitcoin in the whole crypto industry since I have been here. I was stunned at how mature the decision was last night. Really.
- [38:11]
Scott Melker
Like, I, I just want to say before I jump to, Joe, you and I now have known each other a couple years, three years maybe, something like that. And I remember our first conversation ever. And you were kind of new to bitcoin, but definitely got it. And you kept telling me that the institutions were coming, it was going to end up being the adults in the room, the governments and the suits. And I obviously agreed with that. But you really, really nailed exactly where this was going and how it was going to go there a very long time ago, even when you were relatively new to the industry.
- [38:44]
Gary
Well, every, every now and then, I get lucky.
- [38:47]
Scott Melker
You know me, boss. Go ahead, Joe.
- [38:51]
Joe
Okay. Thanks, Scott, for having me up. First off, I agree with a lot of what's been said. I want to emphasize one thing that I think is the most important takeaway from what we got yesterday. Number one, if you go back to when the original digital asset EO came down, they called it the digital assets stockpile, right? They specifically refrain from using strategic bitcoin reserve in the original one. Now we finally got one that says strategic reserve and that has profound importance regardless of the inter crypto battles about which assets valuable and which is important. When you label something as a strategic asset that is necessary for reserves, that has not just domestic implications, but international ones. For example, okay, if you look at the IMF charter, the articles of agreement specifically define certain reserve assets. There's foreign currencies, there's special drawing rights, gold, certain fixed income instruments. They are defined and understood on the IMF as reserve assets. Now, the United States has veto power over this. United States can also petition, based on its internal policy, the reclassification of certain other assets under SDRs and elsewhere to be reserve assets. Why is that important? Well, because if you believe like I do, that the emerging markets are the, perhaps the most interesting place where things like bitcoin can really catch fire. Places like El Salvador, which by the way, the IMF was putting pressure on El Salvador to adapt and, you know, modify its bitcoin strategy here. That has huge implications now that they have the COVID from the United States saying that this is a strategic reserve asset, we're holding it for strategic reserve purposes. And that can potentially lead to IMF change, which can help this catch fire throughout the emerging markets in a really big way. So that's a massive deal. The fact that it's called a strategic reserve as opposed to just a digital asset stockpile. I mean the government stockpiles, all sorts of things. Right. But just the labeling, just the messaging of that. I don't think the market has really gotten the secondary and tertiary impacts of that. And occasionally the market just short term, it's just a lot of noise. Right. It's responding to macro things. It's responding to the fact that the S and P has really been struggling. Don't take the fact that there's some short term noise in the price because a lot of pajama traders thought that the US was going to buy a million bitcoin overnight as being some indication that this is not insanely bullish from a geopolitical arms race standpoint with respect to reserves assets. So anyway, thanks for having me up.
- [41:31]
Scott Melker
Sorry, I'm, I'm here as a speaker now. I got booted for some reason as co hosts. Welcome to Spaces. But Yago, go ahead. If you guys can hear me.
- [41:39]
Iago
Yeah, so one of the key things that people have been mentioning and sort of citing as a bearish indicator is like we don't know what budget neutral means. How can you buy something if it's not going to have a budgetary.
- [41:52]
Joe
Yes, we do. We know what budget neutral means. Just it's defined in the federal.
- [41:55]
Gary
For sure. For sure, man.
- [41:57]
Joe
There is, it's absolutely defined. We know exactly what it means.
- [42:00]
Iago
Sure. I would not say I, I, this is a chapter that I've been seeing. So I, I think it was purposeful. The. There were two very choice choices of words. One was the fact, and this has been pointed out by others, that it was called a strategic reserve equivalent to the strategic reserve of gold. The second thing is the US does have a strategic reserve of gold and it has a government mandated price. The price of gold right now, according to the US government is 42. Well, it's variable, but 35 to $42 per ounce. The actual value of gold is between 1800 and $2000 per troy ounce. The US government is 261 million troy ounces. And one of the primary plans that has been floated over the last few months repeatedly is the repricing of the US Gold reserves to market price. So that would be the repricing of 261 million ounces to 1,800 or more dollars per ounce.
- [43:15]
Scott Melker
2,800, just to be clear. Sorry. Yeah, yeah.
- [43:18]
Iago
So there would be an increase of over half a trillion dollars. So there has been consistent talk about doing this to open up the ability for the Trump administration to have more flexibility in its budget and specifically with regards to its ability to acquire additional BTC. So that's well over $500 billion in potential dry powder. The implications are twofold. One is the ability to purchase significantly more btc. But even more important is that gold is primarily valued on the basis of its use as a reserve asset globally. By making bitcoin an equivalent reserve asset, you would expect bitcoin to begin to see its value come to that of gold or exceeding that of gold due to its additional, you know, the fact that it can be transported effectively instantaneously between countries, which is something that you cannot do with gold. And so I cannot emphasize this point enough. Gold is the primary target here. It's a $20 trillion asset which is 10 times the size of bitcoin. And it's very, very difficult to see a scenario here where bitcoin does not see its price begin to rise in line with it as the market absorbs the impact of this information.
- [45:03]
Scott Melker
Oh, if you guys can hear Mike.
- [45:05]
Gary
I can't hear you, Scott.
- [45:08]
Scott Melker
Okay, go ahead.
- [45:09]
Gary
You know, it's interesting to listen to that gentleman talk about the goal scenario. And this is not meant offensively, but it's so boring now. You know, it's like, well, of course we're going after go. It's going to go after the Mag 7. It's gonna. This is. We're here. The news only got better yesterday. It got confirmed. I don't think it got better, just got confirmed. And I think a lot of the noise that we've suffered, this industry suffered about some of this meme coins and stuff. This is really clear definition. Now there's the top end casino which is called Bitcoin and Then there's everything else is down the strip.
- [45:51]
Jason
I love your gambling analogies, but. But I think the most important point is I think this takes bitcoin out of being considered like this because the Vegas casino and more like the Wall street casino, which sounds like a small thing, but it isn't, because there are tens of trillions of dollars controlled by pension funds that still consider that bitcoin investments, to the extent they do them, and they're very small, are alternative investments. Whereas BlackRock may have been the first. But expect all the pension fund consultants now to have the air cover to start thinking about whether bitcoin belongs in model portfolios. That amount of money flow is dramatically larger than anything we're talking about that the federal government is going to actively buy. I don't think. And I don't think they're going to be taking gold out of Fort Knox to buy. To buy bitcoin, Although who knows if it's even there? I mean, I hope it's there for. For all of our sakes. But there. There's a lot of cross currents here. The most important one is the signal to the world that bitcoin is a strategic investable asset. And the market is getting that completely wrong today. But I'm not surprised. First, reactions to these things that are more subtle, of course, are often wrong. I mean, right now you just have people selling because. Because they were hoping for more. Okay, whatever. But I think there are plenty of willing buyers not very far below this or even at these levels. So we'll see what happens.
- [47:23]
Iago
Dave, just to clarify, by repricing the gold that adds additional value to the treasury, it does not require them to actually sell even a single ounce of gold in order to realize that value. They can just, in their books, say, we're revaluing gold to its market price. We now have discovered another half trillion dollars.
- [47:43]
Jason
Yeah, Iago, I'm not very much money.
- [47:47]
Scott Melker
I'm not.
- [47:47]
Jason
I'm not sure I care. But I think you're right. I made the point this morning to somebody who basically said, oh, this means the government will never be buying it. It's like anyone who knows anything about Washington knows there's all sorts of sophistry when it comes to the words in quotes, pay for. So they use pay for as kind of a verb to say, you know, how you can justify certain things in budgets that might very well be a pay for others we've talked about could be tying research for energy sources or grants towards people building new energy plants, toward being able to Use some of it. They're going to be doing a lot with the electric grid in bitcoin mining. I could easily see ways for the government to acquire bitcoin by helping and doing things they're otherwise already doing to actually start building that reserve. But the most important point here is whatever they do, if they were going to buy bitcoin in the open market, there is no effing way they're going to. And they felt they had the legal authority to do so. They're not going to announce it first, no way. Because the price would run away from them and they don't want that.
- [48:57]
Scott Melker
Can you all hear me yet? Is this working?
- [49:00]
Jason
Twerking now.
- [49:02]
Scott Melker
God, thank goodness. So glitchy. Yeah, thank you, Dennis. I saw you requested jumped up on stage. Obviously. We kind of briefly yesterday discussed Texas, right, In context of all this. But it's not just at the national level that we're seeing progress.
- [49:20]
I
Yeah, that's absolutely right. We are seeing quite a bit of progress at the state level. And we will probably see even more because of this type of news. Lawmakers across the country are trying to make the decision if they want to be the first to create a strategic bitcoin reserve at the state level. And you have to imagine that news like this, the White House and President Trump coming out and creating a strategic bitcoin reserve certainly bolsters the ability and the decision making process for many of these lawmakers. I mean, we just recently saw Lieutenant Governor Dan Patrick put out a, a press release saying that he wanted to endorse President Trump's move to create a strategic bitcoin reserve. This is, of course, just maybe hours before he actually created the reserve. And then he also said he wanted to join in leading towards that digital future in the state of Texas. And for those that don't know, Lieutenant Governor Dan Patrick has historically actually been sort of skeptical around things like bitcoin mining. But it certainly changed his or turned over a leaf, I should say, with regards to this technology. Now publicly endorsing the strategic bitcoin reserve policy in the state of Texas and also making it a priority bill, which means that he is going to be forcibly pushing for it to get across the finish line. We just saw it pass 25 to 5 in the Texas Senate. And we're also waiting today. Today is the last day, if we will see. We'll get some news out of Utah. Utah is a state that we have spent a lot of time in working with a lot of the model policies surrounding strategic bitcoin reserve Technologies at the state level came from the state of Utah. We worked with the task force there for over a year to help them and encourage them to add bitcoin to their gold and silver portfolio process. And that has been so far pretty successful. But we had some last minute, I would say, hurdles that we had to overcome in the state of Utah. So we will be seeing shortly, if not whether or not today, if Utah is able to get across the finish line. But many other states are also well positioned. Oklahoma, Iowa, North Carolina in particular. The speaker has a single bill that he is running, the speaker of the House of North Carolina. And it is a strategic bitcoin reserve bill. Awesome work being done in North Carolina. Big shout out to Dan. Spoiler if he's in the room. He's been doing great work to get that state across the finish lines.
- [51:28]
Jason
Hey, Dennis, could I ask you a question?
- [51:31]
I
Absolutely.
- [51:32]
Jason
So the Texas mechanism, we as we understood it, I don't know, I haven't kept up with it to see if that's the one that got the 25 to 5 vote. That's the mechanism that says they're not buying it, but they're going to allow people to pay taxes in bitcoin. Is that correct?
- [51:46]
I
So that was the original bill. The original bill was only donations and taxes. But after, you know, I believe they saw the momentum that was taking place at the state level where other states were saying that they were going to enable the state treasurer to be able to purchase bitcoin. I believe that's when Texas rewrote the bill and included parts of the legislation and the model that we've seen in other states. So that bill will allow Texas to buy bitcoin and digital assets over a certain market cap threshold. And of course, that market cap threshold is so high that today only bitcoin currently qualifies to be able to be purchased within the reserve.
- [52:23]
Jason
Cool.
- [52:23]
I
And it's just for clarity, it's the comptroller that would be the one, I believe, overseeing this in the state of Texas.
- [52:28]
Gary
And Dennis, it has to be that the Texas approving this, the odds of that has to go up with this last night, right?
- [52:38]
Scott Melker
Absolutely.
- [52:39]
Gary
Yeah, for sure.
- [52:41]
Scott Melker
But you have to imagine the odds are already high. Right. I mean, 25 to 5 in the Senate is a massive victory. It's a primarily Republican Congress and we know that Abbott would likely sign. Right, Dennis?
- [52:53]
I
Yeah. I think you're, you're projecting all of that correctly. I believe that Governor Abbott has been been historically more supportive of this technology than even his lieutenant. I will say the Lieutenant governor. Many people are saying he plans to run for governor very soon, so there's likely going to be a switchover. But yes, Governor Abbott has been supportive of the technology when given the opportunity for sort of, I would say, a low threshold. Yes, there was an opportunity for him to shut down SB 1751 in the past, which was an anti bitcoin mining bill in the state. He didn't weigh in on that bill to stop it from happening. Ultimately, many groups on the ground, including ours and others from Texas and a group from out of. Out in D.C. were able to kill that bill, but it was done just by pure advocacy and, and, you know, grinding it out, trying to get the process to be halted. He, many people thought he would weigh in because he was so supportive of bitcoin mining in the past. But so my, my views of Governor Abbott is that if there is, if it's politically popular and it's not going to get in the way of his other priorities, that it's going to be a very easy yes for him. I'm not saying he wouldn't weigh in and even if it wasn't politically unpopular, but in the situation where President Trump is creating a strategic bitcoin reserve and the lieutenant Governor is supporting it, I would believe pretty firmly that the governor of Texas would sign that bill into law.
- [54:09]
Scott Melker
You were cutting out for me, but it could have been on my end. What's the mechanics here with the executive order, obviously establishing the strategic bitcoin reserve with relation to Lummis's bill? So how much legislation, I guess, is needed in this context? Or if we're not buying, is the legislation not really needed?
- [54:33]
I
So, I mean, as you saw in the executive order, they're exploring budget neutral methods to be able to purchase Bitcoin. I believe that could include working on using the funds that are currently in the esf. I think people have also talked about special drawing rights. Additionally, I believe that there's a potential here for us to sell other altcoins and purchase Bitcoin, which is an idea that we floated internally at Satoshi Action for some time. I do believe that there's a possibility for them to be able to purchase Bitcoin without actually going through the traditional appropriations process because they would not have to find new monies to do that. They could just essentially transition money from other funds to be able to buy Bitcoin and those funds.
- [55:17]
Scott Melker
Didn't Ludnick also float the idea of utilizing funds from tariffs? He said that this week. I don't know that was kind of preempted, all this actual information that we got. But he did say that. I was just curious if we, you know, if Lummis needs to get this across the finish line now, or are we basically good to go?
- [55:36]
I
I would say that this certainly provides a lot of political support or the Lamas concept. I think, certainly regardless of whether the EO sort of. Whether it was weaker than this or stronger than this, at the end of the day, it's an executive order. And if you live by an executive order, you'll die by an executive order. And so if we want to see the strategic bitcoin reserve policy be cemented into law and be protected for many years to come, to stand the test of time, we're going to need to be supportive of Senator Lummis Bitcoin act, which will create a strategic bitcoin reserve and establish it and codify it into law.
- [56:08]
Scott Melker
That's the answer that certainly is that if we don't, you know, when the winds of politics change and you inevitably get a Democratic president at some point or another Republican president who doesn't believe in this, executive orders can just be undone. So we need to be in law.
- [56:22]
I
That's exactly correct.
- [56:25]
Scott Melker
So a lot still, A lot still to do here in that regard to protect it now that it's done, but still. And so incredible. I mean, listen, you have to have just been, like, so excited yesterday. Yeah.
- [56:39]
I
I mean, it's an exciting moment for all of us, and it's a historical moment that will be talked about for centuries to come. But we need to make sure that we protect this win. It is a big win. It is a huge win. And it will lean to, I believe, other states ultimately passing this into law. At least the odds of it happening is much, much higher now. But at the end of the day, if we want to make sure that people talk about what President Trump has done as of yesterday, we're going to need to make sure that we codify that into law. If it's not codified into law, I don't think we're going to be talking about it for centuries to come.
- [57:13]
Scott Melker
I mean, I know.
- [57:14]
Gary
45. What are we? Day 45, day 47.
- [57:17]
Scott Melker
It's crazy.
- [57:18]
Gary
And we. Okay. And people were like, this won't even happen within the first 100 days. Big win for everyone. Really, guys. Big win.
- [57:27]
Scott Melker
I agree. I mean, I know we're kind of at time here, but anybody have any particular expectations now that we already have this executive order quarter as regards to what will happen at the summit today. And I did see that President Trump is actually going to speak on crypto at the summit around 3:00pm Eastern Standard Time today. If you guys didn't catch that, but any specific expectations here? Guess not. Me either.
- [57:51]
Gary
I think alts get hurt and Bitcoin's gonna continue to just kind of go up. I don't. I don't see this thing getting sold off hard.
- [57:59]
Scott Melker
Beautiful. Guys, I gotta run. I would love to keep this conversation going all day. Everybody in the audience, sorry for the glitching. It happens here on Spaces. We'll be back on Monday for sure. With another issue of crypto. Town Hall, I think I'm literally glitching as we're talking about this. Have a great day, everyone. Bye.
- [58:20]
I
Thank you.