← The Wolf Of All Streets
The Wolf Of All Streets
Why You MUST Buy Bitcoin Right Now (No Matter the Price) | Mark Yusko Explains
00:54:16
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- [00:02]
Mark Yusko
That's dope.
- [00:15]
Tillman Holloway
Let's go. Good morning everybody to a March Madness Tuesday. We're here with Mark Yusko and Tillman Holloway. Mark is in Chapel Hill, North Carolina, the nexus of controversy where North Carolina was added to March Madness and people are wondering why. Mark, what do you say about that? Tell us, tell us, what do you think?
- [00:39]
Mark Yusko
I mean the team won 22 games. They, they played Duke to the wire, which might be the best team in the country in the ACC tournament and people are complaining. I, I mean there are teams in the tournament that were 6 and 12 in their conference.
- [00:58]
Tillman Holloway
Yeah, the SEC bias is a problem. Right? It is a real problem. Also Texas should not have been in the tournament and they were at it as well. And we've got a.
- [01:09]
Unnamed Speaker
Come on, Texas being there every. We've got the biggest fan base. We'll pay the most money for the tickets.
- [01:15]
Mark Yusko
Come on, you got to, you know, and again, what is it really about, Right? It's about the fan experience and it's about having the stadiums full and, yeah, and, and look, I'm all for all the underdogs getting in. Yeah. And it's great, right. If you win some mid major conference, you get a berth. But there's, there's teams I don't want to pick on anyone in particular. But, but this one's easy. Cornell.
- [01:44]
Tillman Holloway
Yeah.
- [01:45]
Mark Yusko
You came in second in the Ivy.
- [01:48]
Tillman Holloway
Yeah.
- [01:48]
Mark Yusko
You got like an 1812 record or some, something like. Yeah, I, not a big fan base. I'm sorry to all you Cornell fans, Big Red, but I, it's, it's all kind of silly. I mean, 68 teams, that's a lot of teams. And there's always going to be somebody who feels like they were left out. You know, Wake Forest is the one that should be really unhappy. But, but then again, head to head North Carolina beat him the second time, you know.
- [02:22]
Tillman Holloway
Well, I, I, I, you know, I've got my own beef because I'm a long time Michigan fan. And they finish third in the Big Ten and win the big, Big Ten title and they're a five seed. Thanks for, appreciate that. So let's get to the business of the day and March Madness here with bitcoin. Mark, I know you, you. There was a Coin Telegraph article a little bit ago associated with, you know, your thoughts on a crypto bear market. You know, maybe Cointelegraph is being a bit having some editorial fun. No, take it away, my friend.
- [03:01]
Mark Yusko
It's accurate. Look, there are a whole bunch of people that starting middle of last year, post etf adoption, as Trump was getting closer to winning the White House were like, it was really kind of post Nashville, post Bitcoin 2025, whereby the four year cycle's over, we're going to the moon, it's up only. And guys, let's think about this for a second. The, the four year cycle is embedded in the code. It's literally embedded in the code. And what are you talking about? Like, well, let's think about how this works. Every four years you cut the number of block rewards, right? Okay, why does that matter? Well, in theory, if you do that, half of the miners would go out of business, right? Their costs are fixed so they will hold their coins until someone bids them higher because they need to pay the bills. So there's a built in price escalator every four years. Okay, great. Why does that matter? Well, that attracts attention, right? I mean guys in particular, I think you, if somebody were to walk down the hall, I would look at them because guys were hunters, right? Our eyes follow movement. I joke all the time. My wife says, get the ketchup. I open the door, honey, there's no ketchup. She walks up, she grabs the ketchup. If it ain't moving, I can't see it. And that's just price starts to move and that attracts attention and attracts capital and we start to move again. And so normally that having event occurs toward, you know, crypto summer. So we're starting to get back toward fair value after the last crypto winter. You know, we go through winter, we go with the fall. Then you have this year of, you know, spring. And spring is kind of yucky, it's windy, it's cold, it's wet, it's mushy. And so you're kind of bouncing along the bottom, starting to drift up. And then in summer you start to head back toward fair value. People say, the, the normal participants, investors say, huh, that asset is trading below fair value. I should buy some. Okay, that makes sense. And start to move towards fair value. The halving occurs. Well now suddenly the fair value doubles right now. Well, no, it doesn't make sense. It actually does. But, but let's just think about the math. So now the traders get involved because now things starting to move, right? People watch the show like, oh, I, I, I don't really care about fair value. I just, I just need movement and I need to scalp some profits. Well then as we get to fair value, right? And then the miners say once it's above fair value, the miners are like, okay, I can sell I can pay my bills. Okay, good. So now we start to get above fair value. Now the speculators come in. Well, what's a speculator? Speculator is the opposite side of a hedger. Well, what's a hedger? A hedger is like a miner or an oil producer. You are selling your product forward in the market and the speculator takes the other side. That's all that means. Now there are other types of speculators, but that's generally what happens. Well, so then we're where we are today. We're in crypto fall.
- [06:39]
Tillman Holloway
Right.
- [06:40]
Mark Yusko
And you start to see the price move away from fair value. Well, then the gamblers come in and the gamblers, they don't give a shit about fair value. They don't care about anything except, hey, I can buy. I can buy it on leverage. So they lever up and we start to go parabolic. Now some would argue, well, that's what happened in December. Right? All this enthusiasm about the strategic bitcoin reserve. We went well above fair value. Fair value was 85. We got to 106. And now they're like, oh, it's over, we missed it. No. So yes, there was buy the rumor, sell the news. Right. It was clear to anyone who did a little work that the President could not create an SBR through executive order.
- [07:33]
Tillman Holloway
Right.
- [07:33]
Mark Yusko
They just couldn't. Right, Right. That's why we have three branches of government and all this stuff. There is a treasury and that is controlled by Congress and Congress has to pass a bill into a law. So slip between cup and lip, we get a little. But the thing that people are missing, and this is a long answer to your question, every lunar new year, we have a dip.
- [07:58]
Tillman Holloway
Yeah.
- [07:59]
Mark Yusko
Why is that? Well, because a bunch of people trying to sell to fill up the red envelopes with money.
- [08:04]
Tillman Holloway
Yeah.
- [08:05]
Mark Yusko
No, China doesn't own any. Are you joking? Yeah, they banned it. But the Chinese own a lot of bitcoin, so especially people like Bitmain, et cetera. So they own a lot of bitcoin and they sell. So we have a little dip in February, kind of ish. Well, then in March Madness in advance of tax day in April, we have another sell off. And it's worse when we've had a really big year the year before.
- [08:39]
Tillman Holloway
Right.
- [08:39]
Mark Yusko
Because if we had a bad year, no one needs to sell.
- [08:43]
Tillman Holloway
Right.
- [08:43]
Mark Yusko
We have a really great year, up 140%. People got a lot of taxes, so we're seeing that coupled. So you get all these things and we. And we do this. So if you go Back to the 21 cycle. This happened. We peaked in January and then Elon did his tweet, so it was a little early. And we went from 60s and we went all the way down through July back to 30,000. 32,000. Yeah, right back to fair value. And then we shot up all the way to 69 by November. So what I said is I do this thing, the ten surprises modeled after Byron Wein, the famous Morgan Stan strategist, God rest his soul. I guess he passed away a couple years ago. And so I do this ten surprises. And one of my surprises was, look, everyone thinks number go up four year cycles over. I'm here to say it's not. So what's likely to happen in my mind is we're going to have our typical crypto fall. It'll probably start summertime and go right through the fall and will peak. Pick a number. If fair value is 85 to 90 today, by fall it'll be 100ish. Let's just call it a round number 100. And that's because of Metcalfe's law, you can calculate what fair value is and Tim Peterson does a great chart on it. So all of that says okay, in previous cycles we've gone to 2 to 2.1 times fair value during the parabolic stupid phase. And what I mean by stupid meaning when you pay two times fair value for something, you shouldn't expect to make a lot of return.
- [10:29]
Tillman Holloway
Right.
- [10:30]
Mark Yusko
You'd expect, it's like buying Nvidia at 140 bucks. You shouldn't expect to to make a lot before. I mean you'll lose and maybe you'll make money long term. But it was trading at 36 times revenues. So you shouldn't expect to make a lot of money. So this time I think there's less leverage. There's still leverage. And everyone's been reading about this levered trader 40 times. But 40 times is different than a hundred times used to be. A hundred times leverage you could get. So let's say this cycle we go to one and a half 1.6. So I said somewhere between 150 and 170 would be the peak and then we would have another crypto winter. And so that's not like saying oh my God, tomorrow we're going to zero. It's saying that humans are going to human and we're going to push the price above fair value and then we're going to push a blood. Now look, if, if 106 was this cycle top, if they pulled that forward with all the nonsense, we're not going down much from here. I mean, we're below fair value, so there's not a lot of big leverage to unwind. There's not a lot of things that have to get undone. So unless we go to 150 to 170, then we're not going to have a correction. We already had it. And so is it possible that we're in a new era and we're going to kind of hover right around fair value and maybe just have a little bit of volatility around fair value and becoming a stable coin? I don't think so. I think humans are going to human.
- [12:09]
Tillman Holloway
I think it is really interesting, Tillman, that we're in this spot where six to nine months ago, it felt like there was. You had to really work hard to find a downside narrative to bitcoin, like really work hard. And we're now in this phase that mark is a little bit described here, where it's kind of like, well, you know, what's the, what's the significant upside catalyst? Like, for all intents and purposes, the new administration has done everything that they said that they would do at the bitcoin conference. So all that stuff is now, you know, we turned the page there. So what's the significant upside catalyst? So let's say you, Tillman.
- [12:49]
Unnamed Speaker
Well, I, I love listening to Margaret. I think he's really brilliant on these things. And I'd like to kind of dig in a little bit more as it pertains to the miners. I used to be a miner. I was a Miner back in 2013. That's how I fell in love with bitcoin. It was the, the magic of mining that got me hooked. And I've had this begging question, you know, the. It was obvious to me that the miners controlled the price back then in a very direct manner. And then it looked like the ICOs were driving the price in this last one. And now to me, it seems like we've switched to institutional buyers really driving the price. I think there's some pretty large numbers attached to even microstrategy's contributions to the overall demand. And so I guess the question that I can't answer myself is as the miners become less and less involved in the price in driving the price because they contribute, control less of the supply, who does the price become a lot more stable? Because selling bitcoin to pay bills like miners have to do, especially if you're in a. If you're not sitting on a huge, you know, treasury of Bitcoin that you can leverage. But if you're, if you're kind of starting this cycle as a miner, these are, these are death sentences in a lot of cases when the price collapses. And I don't know, I'm still waiting to see whether this cycle is different. You know, the famous last words, this time's different. There's a part of me that thinks that maybe this time is different because the buyer is so different and the seller is so different. Like when you change the dynamic of the people that are controlling the asset themselves. You know, the vast majority of them, you've got diamond hand holders like Micro Strategies, accumulating at a rate that's so disproportionate to what the individual miner could do or the individual retail investor. It seems like we're, you know, from a retail perspective, we've entered into a new arena, essentially. What, what would be your take on that?
- [15:09]
Tillman Holloway
Well, I.
- [15:11]
Mark Yusko
Fantastic point. And, and I really, I think you have to really think critically about market participants. The way you just, you just outlined the subtle thing is while the numbers are down, you know, the number of block rewards are down, the price is higher, so the value that's getting bought and sold continues to increase. And so while I totally agree with the point that the miners have less incremental control. And then there's a second sinister part to this, which is what we've been talking about is spot. But most of the nastiness of the last year has nothing to do with spot. It has to do with futures. And see, this goes all the way back to that 2017 period. So in 2017, there was, you know, all this ICO stuff and all, you know, craziness and Gensler's cracking down and, you know, everybody's. That's pre crackdown and everybody's getting upset. And there's this guy, Leo Melamed. Leo runs the Chicago Mercantile Exchange and had this quote in 2017, which I thought was really strange, but now prophetic, and he says, we will tame bitcoin, which is a very interesting word to choose. Right? That's an active choice. We will tame. And he's like, we, the cme, we institutions. We, you know, Wall street, the dark side. Well, what did he mean by that? Well, what he meant was when Bitcoin was deemed a commodity, everybody's like, yay, we're not a security. Be careful what you ask for. You might get it. We would have much preferred to be a security. Why? Well, because by being classified a commodity now, Leo and Crew can create futures on our product. Why does that matter? Well, Bitcoin is something that can only be created, not out of thin air. Not true. A futures contract can create bitcoin out of thin air, just like it creates oil out of thin air or wheat or corn. And what does that mean? Like in the old days, if I had oil and I wanted to sell to you, right, I had to physically have it or have title to get it. Well, then the futures came along and said, hell to the no. I can just write a contract with you. And as long as we settle the contract before the delivery date, I don't ever have to have any oil. That can just be a financial transaction. So you get these very weird. If you look at oil market, right, it'll go way, way up high, and then it'll crash and it'll go way, way up high and it'll crash. Well, in those big peaks and big crashes, what happens is the imbalance between paper and spot becomes very, very large. Well, remember 2017. I remember it to the day. December 18th was the peak. Why was that the peak? Because that was the day they launched the futures which allowed institutions to go naked short and push down the price. We went from 20 to 10 and then from 10 to 6, and then from 6 to 3, right? And people said, oh, my God, it's dead, it's over. Wasn't over. So fast forward to last year, January 10th. Everybody's like, Yay, Bitcoin ETFs. Mike. Yeah. Is anyone else watching this? The freaking CME approved a slew of new futures contracts. And so what drives me crazy, every, you know, 45 days, when or every 90 days when the 13 Fs come out, everybody reports, oh, Millennium bought $2 billion of Bitcoin. No, they didn't. Yes, they own 2 billion of Ibit, but they're short at least 2 billion, maybe more. Usually they're market neutral, but maybe sometimes they're even net short because the futures price is always higher than the spot price. And so over the 30 days, you roll down the curve and that's called roll yield. And that's why if you buy any of these commodity ETNs or ETFs, you lose money every single day because you're just getting destroyed. So again, a long answer to saying what's happening is there's very, very big money to your point, on the institutions that is shorting the crud out of futures with reckless abandon. This is what happened with gold. When the gold ETF was approved, it took over a year for GLD to get back to its issue price because they were spoofing the Futures. And J.P. morgan. I love this part. So in the gold market, JP Morgan does something called spoofing, right? They, they, they pretend to have interest and then they pull back the bids right at the end and they push the price artificially down. It's against the law, you get fined. A couple years ago they paid a $960 million fine. Yep, almost a billion dollars.
- [21:06]
Tillman Holloway
Yeah.
- [21:06]
Mark Yusko
And when they asked the guys like, yeah, but we made 20 billion, so. So it's just like a cost of doing business. It's like a 5% tax. And the SEC loves it. Right. Because they're funded by their FE fines. That's a crazy thing. They don't get government funding. They fund themselves by finding people.
- [21:26]
Unnamed Speaker
Police for profit.
- [21:27]
Mark Yusko
Yeah, they like to find crypto people.
- [21:30]
Tillman Holloway
Well, speaking of funding, Sailor made another announcement today. So if we can, we can pull that up. Strife, which is an interesting, an interesting way to categorize a new perpetual preferred. And then there was a follow up tweet by our, our guy at Bitwise, Jeff park that I thought was hilarious. A few moments later he said, is, is it really called perpetual strife?
- [22:08]
Mark Yusko
The law of unintended consequences?
- [22:10]
Unnamed Speaker
Yeah.
- [22:16]
Tillman Holloway
Called perpetual strife. Yeah. So, yeah, perpetual strife. There it is. So you know, a perp preferred, which looks like it has a little bit of a dividend. So, you know, Sailor pulling as many levers and, and pulleys and switches that, that he possibly can to, to buy more bitcoin, which is, you know, his mo. But again, hilarious that it's called perpetual strife, which it is hilarious.
- [22:47]
Mark Yusko
And, and look, the one thing I don't, I don't like right now, if I'm, if I just, you know, I'm brutally honest with what's happening market wise, is when the ETFs came out, we all did the math that there was 30 trillion of money in FAS controlled by UBS and Morgan Stanley and the like, Ameriprise. And let's say we get 1%. 30 billion. So 30 billion is a lot of money. That would have been pretty close to a significant portion of all the money that had actually gone into bitcoin on an annual basis. So that's good. The problem is not much of that's come in. I still at ubs, you know, I'm not allowed to buy it, which is crazy. Can't buy it at Vanguard. It's crazy. And so there's been a little bit of money, you know, Hunter Horsley, at Bitwise has been talking about all these people they've talked to, they've talked to hundreds and hundreds of financial advisors. They're all like, yeah, we agree, 1%. You know, BlackRock said 1 to 2% in their models, but most of that 50 billion that came in the ETFs was from these big dog institutions that are probably short the future on the other side. And that's net. Net, not so great for price. Yeah, I'd like to see some more adoption like that. Everyone saw the thing yesterday, right? 86% of people polled said, no, I wouldn't buy it.
- [24:32]
Tillman Holloway
Yeah, that's right.
- [24:33]
Mark Yusko
I mean, financial illiteracy is real, right? I mean, it's real. You know, they don't teach it in school. It's, it's, you know, and for 86% of people to still not understand, that's the bad news. The good news is we're right on track. Right. This is right where the Internet was in 1999, 2000. We were at like 14, 15%. We're right at 14%. Remember, first decade, first 10%, the next decade, 80%.
- [25:05]
Tillman Holloway
Correct. Yep.
- [25:06]
Mark Yusko
So we're a couple years into the knee of the S curve. So the adoption's gonna go parabolic.
- [25:16]
Unnamed Speaker
But don't you think the adoption going parabolic though, is going to be on the paper side? Like, you know, if you watch the silver and the gold market over the last two decades, it's very clear that having a uncontrollable indicator of inflation is not a popular thing.
- [25:38]
Mark Yusko
Oh my gosh, that's such a great insight. I mean, that is, that is the key insight. Right. Is public enemy number one is a scoreboard for. Yeah, right. That's why people hate Doge. I mean, and to your point, inflation, that thing that's supposed to be good for us and what people just don't remember because they just don't study history from 1776 when this republic. We're not democracy or republic, by the way. When, when this republic was formed, till 1913, a dollar which came from the original Reichstag. Why did we take a name? Reichstag? That's a whole other story. So a dollar was worth a dollar. Okay, a little fluctuation around wars and the free banking era, but a dollar's worth a dollar. There was no such thing as inflation. Since 1913, that dollar has turned into 3 cents. You know, Jay Leno joke, I heard we're going to do a dollar coin, but we already have. It's called a nickel. And so the, that theft. Because here's the thing. Why would a plan that takes half my purchasing power every 30 years be good for me? That, that makes no sense. And everybody's like, oh, but my house went up. No, it didn't. Your house did not grow. It did not get more efficient and actually wore out. You had to put money into it. Your money got worse. And so bitcoin as a scoreboard or gold as a scoreboard, you're right. They don't like it. And I also agree with the point on paper versus Spot. What we'd really like is for everyone to have a wallet and everybody to use this to exchange value in the peer to peer electronic cash. Not that we have to buy coffee with it, but if I want to send you value, we don't need to go through a bank and pay wire fees.
- [27:36]
Unnamed Speaker
Well, I would make the argument just as an emergency fund. You know, you keep emergency funds in highly liquid forms that you have direct control over that you have proximity control over. Bitcoin, I would argue is, is a better form. If you look at, I did a tweet about this last week, but if you look at the 4,000 banks that exist in the United States over the last 20 years, we've seen more than 10% of them fail. Like over 500 failures. Failures. So if you're talking about getting cash today, I would argue Bitcoin is as good of an instrument as exists for.
- [28:11]
Mark Yusko
That, for that it's the ultimate savings tool. Couldn't agree more.
- [28:15]
Unnamed Speaker
Yeah, yeah. It's interesting to me. I, I so if the paper continues to grow, right. Which we know it will because that's the control mechanism that allows them to escalate at the rate in which they deem appropriate. The I, I guess the question becomes, is, is there a hard, is there a fork in our future? Because that's not, there's this, you know, I think if you, if you poll the bitcoin community, that's not in the thesis that they're reading. Right. They're, they are still stuck with, oh, the world's adopting Bitcoin because they see the beauty in it like we do. And I don't think where the big money is coming from. They don't see it in that way. They see it as another very volatile risk on asset that now has a complete loop of financial products that allows them to play the game that they play with every other commodity on the earth. So.
- [29:13]
Mark Yusko
Yep, I totally agree with that. And, and I think you can have both, right? As, yeah, as gold Is the only asset that's both a money and a commodity, right? Has commodity uses, industrial uses, but it's also money. And everyone talks about we just hit $3,000 in gold and now there's 20 trillion half 10. So 10 is the monetary part, the bars and the bricks and stuff in the vaults. The other half is jewelry and chalices and gold leaf on the dome. And so that doesn't really count because you're not going to barter the jewelry very often. But that monetary value, 10 trillion to me, that's what Bitcoin basically replaces. It's a better form of gold for money as the base layer in the future because it's more divisible and more portable. Beyond that then it gets to well, how do we replace these currencies that are out there backed by debt that gets a little dicier. And the nation states are going to fight that. But ultimately I think we can exist if there's a financialization above the base layer. I think because you can always choose to self custody and hold directly or you can choose the boomer wrapper of the ETF or you can choose the financial instrument like a future or an option.
- [30:55]
Unnamed Speaker
It just seems like logically to me the volatility has to continue to go down in order for that model to work. Because if the volatility stays what we've experienced in the previous cycles, you can't survive. There's not, it's an, it's too much of an extent. And there's a price difference to the point where they would be a break, right? There would be a, there would be such a premium put on ins on, on, on physical Bitcoin versus the paper that the paper would lose its luster, wouldn't it?
- [31:29]
Mark Yusko
No, that's again a great point. And the key there is like I said, adoption, right? It's getting more participants involved. Because the thing that bothers me about this, this recent downturn, it's on no volume, right?
- [31:47]
Unnamed Speaker
Oh my.
- [31:47]
Mark Yusko
There have been outflows for five weeks. Yeah. How much? You know, 5 billion, 6 billion. I mean that's not a lot relative to 1.8 trillion. Well then why is the price moving so much? Because of this financialization and you know the thing that the people have a hard time with. And it's true of any asset, right? Think about Nvidia stock. How much money did Nvidia actually raise when they went public? Okay, not that much. How much is the value of that stock? What do you mean value? Like because here's the thing, you're taking the price of if you and I trade a hundred shares, we'll get that price and we're multiplying that by the billions of outstanding shares and getting a market cap. But here's the problem. If I had 1,000 shares, I'm not gonna get that price. If I had a million shares, I'm not getting close to that price. If I had a billion shares, I couldn't sell them.
- [32:54]
Unnamed Speaker
Well, as bad as of an example it is, you can see the on chain data in a, in a very clear way. It's like the Trump coin, right? He controlled 80% of the supply that he launched and they were able to extract I think a couple hundred million. Well, the market cap at the point of extraction was like 75 billion. But that was all the liquidity in that $75 billion value.
- [33:18]
Mark Yusko
Your point? The extraction has to be liquidated. Like, you know, Mark and Elon own a bunch of doge, right? At least that's what we think. And on, on paper, it's worth a bunch of money. No, it's not. Because the minute one of those two wallets sells, one Doge price is collapsed. It's going to collapse. And the only way is if you feed the ducks, right? If you are feeding into that frenzy of the money coming in, XRP comes to mind, which, you know, cuts both ways though.
- [33:58]
Unnamed Speaker
The last previous cycles, man, it was. They weren't feeding the ducks, they were pulling back because they were selling ducks.
- [34:05]
Mark Yusko
Exactly. But it's amazing how people still don't understand that if, if a foundation or an individual owns the bulk of something and they're selling it to you, they're not on your side, like literally zero. You are their exit liquidity. And it's the most egregious example of that was there was this consulting company that went public in the dot com boom. It's a husband wife team out in California. They floated 1% of the company. That thing would trade 40 times a day. Like the whole market cap would turn over 40 times and they would just feed another half percent every day until they eventually sold this worthless company, which helped companies change their name to dot com. I mean, there was literally no there there. And they got super rich and everybody lost money. And that again, that's a story as old as time.
- [35:10]
Unnamed Speaker
Absolutely. And, and the solution's not hard. I mean, people in the meme coin space have grasped like, how do you keep a project from getting rug pulled? I can tell you keep all your liquidity post launch and put it in after launch. That's how you do it. You know, the fact that you've got these sniper bots, you know, attacking the market before anybody even sees the market is, is the issue.
- [35:35]
Mark Yusko
And it's crazy. I mean, free and fair is the only if. Look, I'm not a big believer in meme coins generally. You know, it's. Oh, it's monetizing attention. I'm like, no, it's a Ponzi scheme, just like old Ponzi schemes. And that's fine. You want to do a Ponzi scheme, knock yourself out. But don't tell me it's some new fangled thing. It's just this month's edition of what's popular, okay, but you're not creating any value. And it's part of my struggle. So whenever I talk bitcoin to bitcoiners, like, oh, you're a shitcoiner. Like, what are you talking about? I own more bitcoin than you do, probably. And not you personally, but most people like talking and they're like, no, you own Ethereum, you own Solana. I'm like, yeah, so what? Well then you're a shitcoiner.
- [36:25]
Unnamed Speaker
I'm objective.
- [36:27]
Mark Yusko
I'm objective. And one, I like to make money. And two, I believe that there's a role in the world or smart contract technology. I believe that now whether we know how it's going to work. But what I don't like, I love the construct of Uniswap, a decentralized exchange where we control. I love that. Not centralized, not New York Stock exchange. What I don't like is that the token doesn't share in the revenues of the Dex and they even know it, right? They've been trying to do uni 2 and they get close and they. And again, I'm not criticizing anybody because that's what the ICO thing was. But just because you can issue a token with no claim on equity, no share of debt, no share of cash flows, doesn't mean you should. And just because you can launch a pre mined meme coin where you own 80% and you feed the ducks, doesn't mean you should like I have one meme coin dog go to the moon, right? How'd I get it? I got it because it was airdropped to me because I did some ordinals and I love it, right? It was free and fair. Everybody that had a certain thing on a certain day got some. Yeah, they didn't keep it for themselves. Now maybe it'll go to zero too. I don't think I mean, I don't know. But that, at least to me, has a chance of being okay.
- [38:03]
Unnamed Speaker
Yeah, the fair and. The fair and equitable distribution is a big deal to me. It's where bitcoin, to me, separates itself men from the boys. There is no other coin that has been as fairly and equitably distributed. In fact, I would argue there's never been any form of value that's ever been as fairly, you know, other than.
- [38:23]
Mark Yusko
Gold, which you had to work to mine. But. But I agree with you. And I used to be on the other side of this. I. At the very beginning, this is funny, the very beginning, I was like, no, it would have been better if everyone in the world got some and you could decide if you're going to keep it or not keep it. But. But then everyone would have started the same place and. And I don't remember. I wish I could give credit to the person that, you know, showed me the light, but they said, no, no, no, no, no, no. This is about effort. This is about contributing work.
- [38:59]
Unnamed Speaker
Proof of work is in the name of work. Yeah.
- [39:02]
Mark Yusko
And I was like. And what I don't like about that is if you were lucky enough to be in the circle to know to buy one of those little USB miners back in 2009, okay, that's just luck. Or if you happen to be a cryptography student or running drugs on Silk Road. So that doesn't sit that well with me, but it does in the sense that every single person that wanted to get it for free, not for free, but by putting in energy, you had to convert energy to value. And now I'm a huge believer in that. And that's why me and you had.
- [39:42]
Unnamed Speaker
To invest in the network. Like, why is bitcoin valuable? It's because networks are valuable. And this is one hell of a network.
- [39:49]
Mark Yusko
This is an investment computing network the world's ever seen.
- [39:53]
Unnamed Speaker
Ever seen.
- [39:54]
Mark Yusko
It was an epiphany moment for me where it was like, no, no, no, no. It's all about proof of work. It's all about converting energy to value.
- [40:03]
Unnamed Speaker
Well, and to me, the. What made me love bitcoin was this notion that there were billions of people that couldn't access financial services. And not only could they access it, they could be an equal participant without a usb, without. They just needed to take a portion of, in the early days, their graphics card and dedicated to mining through a partition or it wasn't that difficult. And the other point that I thought was, you know, look at the heart of Satoshi. He Published the white paper a month before he started mining. It wasn't a race to the golden pot of coins for him. It was this experiment of if you put in the work, you get rewarded for it, and other people will recognize the value of that work. And if the risk reward ratio is appropriate, then more people will join you in that effort. Right.
- [41:01]
Mark Yusko
It really is one of the most elegant creations ever. I agree that's a lofty statement, but it really is, I mean, the genius of just what you described of the root level network effect. And networks are so incredibly valued. In fact, the five most valuable assets in the world today are networks. Right. What does Amazon make? They don't make anything. They're a network of buyers and sellers and they take a cut of transactions. I mean, AWS is a little different, but their core business is a network. Apple, right? Yes, they make these, but that's not the power is the network. And so the same thing's true here, and it's really interesting. So I've done a decent amount of work on this and I even came up with my own correlate. So, you know the first guy, Sarnoff, said networks are valuable because anyone who can hear a signal, literally like a radio signal, is part of a network. So I say, growing up, I could listen to WGN radio in Chicago. I was in Seattle. How's that possible? They had the giant antenna and it would bounce up and down off the clouds. So anyone who could hear that signal was part of the network. Sarnoff's law. And it was a linear relationship, one to one. But then Metcalfe came along and said.
- [42:29]
Tillman Holloway
Well, no, no, no, no, no.
- [42:30]
Mark Yusko
Because if Mark and Tillman both hear it and then they connect, that include, that's another connection. That's a bigger part. So it's actually an exponential growth. Okay, cool. Then Reid came along and said, well, yeah, but once you have that big ball of connected people, there's some people who like, you know, video games and other people that like to golf and other people that. So there are these subgroups that create even more cohesion. And I came up with something. I named it after a friend of mine, Sophia Vachetto. I said, Vachetto's law is those connections between nodes are not the same. Some are fat, some are skinny, some are active, some are inactive. So there's a fourth derivative of how valuable networks. And like, I'm an on chain monkey guy. My PFP is an on chain monkey. Ah, I see. You're a shitcoiner. I'm like, no, no, I'm part of a community that is amazing. And I've gotten involved in some unbelievable things because of the network and because how active certain nodes in that network are. And that community element of bitcoiners, on top of the elegant technology is pretty extraordinary.
- [43:48]
Unnamed Speaker
Well, I think it's a. It. It's a kind of inevitable. If you, if you fell in love with bitcoin before the price made you fall in love with it, you had to appreciate those characteristics. You. You found the beauty in the architecture. And now I guess that's the biggest thing about this cycle that I just can't put my thumb on, which is, you know, who controls it going forward. Because I, I've seen this my whole life. My dad's been a gold bug since I was, you know, since I can remember. And he's. He's been talking about this exact same nature, this characteristic in this relationship between Wall street and gold in the exact same way that now bitcoin is, is. Is being spoken about. It's going to be an interesting way to see how it plays out.
- [44:39]
Tillman Holloway
So, Mark, thanks for being on the show today. We're going to pivot to Arch Public and talk about our algos and our bitcoin now go in particular.
- [44:47]
Mark Yusko
Awesome.
- [44:48]
Tillman Holloway
Thanks for taking the time. Good luck to UNC in the. In March Madness this week and we'll be seeing you, my friend.
- [44:55]
Mark Yusko
All right, thanks, y'all. It was a super fun.
- [44:58]
Tillman Holloway
You bet. So, you know, all the things that that Mark talked about there really speak to institutional, having institutional hands on bitcoin on crypto in general. Right. Citadel doesn't show up at. At, you know, at the party with an interest in just making an appearance, walking in the door and then leaving. Citadel is there now to take over the party. And what does that mean by taking over the party? It means grabbing the transactional value associated with bitcoin as an asset, crypto as assets, and squeezing the, you know, all of the transactional value that they can possibly get, whether it's buying or selling, volatility or not volatility, paper, bitcoin or spot, bitcoin futures or options? Citadel wants to do it all. And so, you know, our point here at Arch Public is basically, do you have an institutional level tool that can play at the same level that these institutions are going to play at? And if we can pull up the chart that we've shown there, you know that that is what we do. We provide institutional level tools that people can use to benefit from volatility. There's been A lot of volatility with Bitcoin and crypto over the last month or so. And with that being said, you know, do you have a tool that allows you to buy when things are moving in a certain direction, sell when things are moving in a different direction, and do it in an emotionless, remove the fear and greed from, from the process.
- [46:37]
Unnamed Speaker
In a systematic way? It's, you know, you come up with a plan and then you execute on that plan. And it's very hard to execute on a plan that you haven't come up with. So the first, you know, order of business is to really put thought into, okay, I, I love Bitcoin, I, I love Ethereum, I love Solana, I want to own more of these assets. I also want to take advantage of the volatility of these assets in the form of trying to trade, trade them. But most people don't have the time to sit in front of a computer nor the, you know, attention to, to give it, to become an expert in it. But the market and the charts are nothing more than numbers being displayed in the visual format. And so automation is monitoring the numbers behind the, the picture. And when the numbers fit the criteria that you set out for it in order to execute both sell and buy, those criteria don't have emotions attached to it, it just gets done. And so that is, in my experience, the biggest enemy of a trader is, is it is the trader themselves and the emotion that they carry into. Not only when, you know, it cuts both ways. If you're in a trade and you're losing a lot of money, there's this fear that grips you. And you know, there's an old saying my dad used to tell me is sell until you can sleep. You know, if you're in so deep that you can't sleep, you're in too deep, sell, you know, get out. And the converse is, is if you're, you know, in profit and something's going parabolic, the age old question is, is, oh God, am I leaving money on the table? How do I get out? Well, the answer is, is different than you think. There is no one, there is no thing that can perfectly time those peaks and troughs. So what you have to apply is a systematic in and a systematic out. A dollar cost average strategy that has intelligence built in. So it's not just a blind dca, but you're getting the benefit of multiple purchases when indicators are telling you that the market is exhausted. And so when market gets exhausted on the, on the uptick, that's the time where you're supposed to be selling a little bit. And when the market gets exhausted on the downtick, that's when you buy a little bit. And if you could put a strategy in place that doesn't involve you sitting in front of the market and you took advantage of those, you would have exactly what we built here, which is an automated tool that allows you to programmatically buy and sell those positions based upon when the market presents the right numbers to you, not based upon when you feel like you should do it.
- [49:21]
Tillman Holloway
Right. And, and take a look at those entries and exits. And this is, you know, our, our Bitcoin, Ethereum and Solana Algos are all free to the public. So if you want to sign up, it's free. $10,000 in transactional value on an annualized basis is free for you to use, use the tool how you want to use it. But taking a look at an ARB strategy with Solana over the past several weeks and, and the volatility there, right? So you have purchases at the, you know, at downturns in candles, right? Then you have sales when you have significant upticks in those candles. And again, you know, I'll say this, and I said this so many times, you can't follow crypto markets 24 hours a day. It's impossible. So our algos are making trades on your behalf while you're sleeping or while you're at dinner with family, or while you're on vacation, or while you're on whatever you happen to be doing that's not sitting in front of a computer, you know, looking at price on top of that, you know, it's impossible for you to execute at the level that these algos are executing trades in the midst of fear and greed. Like can you buy Bitcoin at 78, 5 or 79 when all of crypto Twitter is telling you that we're going to 62 imminently, right? Can you sell at 104 or 109 when all of crypto Twitter is telling you you're going to 125? It is a stark and institutional level tool that allows you to say, I want to do this with my, my crypto portfolio and I want to set it in motion and then I want it to just happen. And you know, it's very, very difficult to find those tools out there. Whether it's crypto exchanges or the like, they, they simply just don't offer them. We offer these tools for people and we offer them for free. You literally can use Bitcoin Ethereum and Solana for free at Arch Public. And there's our website, archpublic.com. go there, take a look, use us, you know, sign up for a demo and, and talk to us. You know, well, use, use, sign up.
- [51:33]
Unnamed Speaker
For the product, use it for free, and then come tell us your opinion about it. Tell us how we can improve it. Tell us how you would like to use it, how you are using it. All of that is incredibly valuable to us. We, we pride ourselves in kind of pushing the barriers of what's available to retail traders. So this is a selfish endeavor that we are going to continue to improve upon based upon customer feedback. So please come use it. Come tell us how you like it. Schedule a demonstration so that we can show you all the feature sets attached to it. There's literally an infinite number of ways to use the software. You can set up 50 buy instances that are all different in nature. You could set up 50 cell instances. They're all different in nature. You can have an automatic intelligent buy and sell functionality to it. There's a lot of, of, of options here. You can literally customize this to, to exactly your needs and your desires.
- [52:32]
Tillman Holloway
Well, thanks everybody for taking the time with us. We really enjoyed the conversation with Mark Yusko. You know, guy that's been in the space for a very, very long time and has skin in the game, right? Runs Morgan Creek Capital, that owns a ton of Bitcoin and, and crypto in general. So fantastic.
- [52:51]
Unnamed Speaker
Well, he's one of the adults at the table that actually understands the whole story, right? There's a lot of adults at the table these days, but they. Can the arbitrage be used in the four hours? Yes, it can. You can use the arbitrage one hour, Four hour, one minute. You can customize your time frames completely. But Mark has this, this depth of knowledge that gives him, in my opinion, an advantage over the legacy Wall street folks. That legacy Wall street folks have never thought about the network, they've never thought about mining. They don't understand what Bitcoin is compared to all the other ones. Ethereum, Solana, they, they just have a, an understanding of the markets and how Bitcoin is now participating in those markets rather than the technology and how Bitcoin made it to be able to participate in those markets. So I, I, I think Mark is cut above. So a great, great conversation today. Enjoyed it thoroughly.
- [53:52]
Tillman Holloway
All right, everybody, have a great Tuesday and a great week. We'll see you later.
- [53:56]
Unnamed Speaker
See you guys.
- [53:58]
Mark Yusko
That's dope.