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BTC213: 4Q 2024 Bitcoin Mastermind w/ Joe Carlasare, Jeff Ross, American HODL (Bitcoin Podcast)
01:21:28
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- [00:01]
Preston Pysh
You're listening to Tip.
- [00:03]
American Hodl
Hey, everyone. Welcome to this Wednesday's release of the Bitcoin Fundamentals podcast. This episode is brought to you by river, the place that I personally go to securely invest in bitcoin with confidence and with zero fees. Well, it's that time of the quarter where I bring back the bitcoin mastermind group with Joe Carlisari on legal, Jeff Ross on macro, and American Hodl on comedy and truth bombs. We cover all the big stories happening in bitcoin here at the close of 2024 and some of our projections for the coming year. And let me tell you, this group is very bullish right now. So if you're looking for a fun and enlightening chat, sit back and enjoy. This year ends closeout with the guys celebrating 10 years. You are listening to Bitcoin Fundamentals by the investors podcast network. Now for your host, Preston P.
- [00:58]
Joe Carlisari
Foreign.
- [01:03]
American Hodl
Hey, everyone, welcome to the show. We have it with back the mastermind discussion. Fourth quarter, 2024. We got American Hodl, we got Jeff Ross, we got Joe Carlisari here. Gentlemen, welcome back to the mastermind conversation.
- [01:18]
Joe Carlisari
It is good to be back, Preston. It is good to be back.
- [01:21]
Jeff Ross
It's the best conversation of the quarter. I look forward to it every time we do this.
- [01:25]
Unknown
Yeah, nothing's going on, right? It's pretty boring. Nothing at all. Nothing to talk about. So we're gonna have to our way through this one with something. We'll start a fight. For some reason, I think this is.
- [01:33]
American Hodl
This is where we have to start the third quarter. We released it on one October. I looked at the price on one October. It was at 60,000. You guys, all three of you were super bullish. You guys said that going into the fourth quarter, into 2025, things were going to get really spicy. The price is going to run. And here we are knocking on 100k store. By the time this airs, we could be over 100k for all I know. Guys, where do we go from here? You know, online, you hear a lot of people saying, this looks like a top. I'm smirking. But I want to hear your opinions before I give my opinion. What's your opinion here? We're in December 2024 getting ready for the big 2025. What kind of advice do you have for people that are saying these things online?
- [02:17]
Joe Carlisari
So I just want to say I called it. I called it. I was like, we're going to 100k by Thanksgiving. And bitcoin got me so good because it went to 99, 8 60. And then I had to eat a pumpkin pie. We were $140 away from me not having to eat a disgusting pumpkin pie and I did have to eat one and it was just as gross as I thought it would be. It ta. It tastes like the earth. It tastes like it comes from the dirt. I don't know why anyone enjoys them. Okay.
- [02:47]
American Hodl
This is one of my favorite pies. I. It pains me to hear you talk about it this way. Oh my God. Hodl.
- [02:54]
Joe Carlisari
So, yeah, I confidently made that prediction because I could just kind of gut feel because I've been around for so long that I knew we were going to get going pretty shortly here and then, you know, when Trump won the election, obviously we broke their all time highs that night. And it was interesting. You know, I'm sure you guys had the same experience, but I was watching some of the prediction markets and I was watching the bitcoin price. In addition to watching the election, me and Joe were actually there together on election night doing a live stream and we were watching the prediction markets in real time and we were like, oh, it's over. Like we, we basically called it because the bitcoin price was up, the prediction market up. Like everything was saying Trump was going to win hours before he actually won. So bitcoin priced it in and then we broke through all time highs, obviously, and then we just started ripping after that because it's a very bullish development. The red wave is what Michael Saylor has been calling it. Trump clearly has a mandate from the country. He's much more amenable to bitcoin than the last administration, which was openly hostile to bitcoin for basically no reason. So, yeah, it's all systems go from here. And I think like, we're at the start of a bull market that's going to last all throughout 2025. And for me, my diminished returns narrative is still in play. I think we're going to, there's going to be a lot of selling in the like, let's say between 150 to 225 range in there. And so that'll be a hard range to get through. But once we break through it, we're going to break through it with force. And I think the back half of the year probably, I don't know, September, October, November, December. So basically a year from now is going to be just parabolic, hyperbolic in nature and we're going to see some really crazy and shocking bitcoin prices.
- [04:26]
American Hodl
So these people, you know, calling the top right now at 100,000. You're just laughing out.
- [04:31]
Joe Carlisari
No, it's silly.
- [04:32]
American Hodl
It's.
- [04:32]
Joe Carlisari
They're tourists, right? It's like I was listening to a British gentleman on a podcast today. Be like, I love it when it's. People think it's going higher because then I sell and then my exit liquidity and blah, blah, blah. And he was bragging about getting a 4x. He was like, yeah, I made 4x from 20 to 80k, you know, whatever.
- [04:51]
American Hodl
And it's like, so he was out. That's why.
- [04:53]
Joe Carlisari
Yeah, it's like, you know, you know, a lot of us here are up 400x plus, so I don't know why. Like, 4x is cute. Good for you. But it's not that hard to make forex in bitcoin, Jeff.
- [05:06]
Jeff Ross
Yeah, so we're definitely not at the top. We're just getting started. You know, like you said at the last quarterly update, I think we recorded that towards the end of September, the 23rd or so, and we talked about. That's where in September, I cast off the Dr. Bull crab and went all in. Dr. Bull. Totally agree with Hodl. We've had lots of conversations about this. The same kind of timeframe. I think we're generally in a bull market right now. I do think all dips in general, again, not individual investment advice ever. But I do think we're in the phase where all dips are for buying. And so one thing I like to remind people who are new to bitcoin and maybe have only been around for a coup, Tom. Dips are really common and they're really violent in a bull market. So don't be surprised when the price Suddenly jacks down 20 or 30% or so. A lot of people panic in those moments and they think that it's over. And you do not want to hit the sell button. This is not the time to hit the sell button. I will say that. I think another thing we did last time, and Joe jumped in here, too, is we called out the recessionistas and said they're just flat out wrong. We are not heading into a recession. There are still people that I listen to every day, macro thinkers who have subscriptions to their products, who are still calling for a recession. They still keep talking about how we're right on the cusp of a recession, and oh my gosh, you better move to cash and long bonds, because we're going to have a deflationary bust any day now. And they're wrong. And they've been wrong for two years and they're going on three years of being wrong, and they're going to be wrong throughout most of 2025. I think. I don't know the end of 25. It's possible. Who knows what the liquidity cycle is going to be like? So we do just can't predict that far ahead. But all systems are a goal right now. I'm very bullish. I think any pullbacks are for buying and we're going to get. And Joe to get to wear his 100k hat. That's my problem. That's my promise is you will get to wear your hat. In fact, I think I said you're gonna. I said Hodl is gonna have to eat pumpkin pie. And Joe, I promised you that you'll get to wear your hat in 2025. So those are my two predictions.
- [07:01]
American Hodl
His pumpkin pie. I mean, you were. You were a hundred bucks away, man.
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Joe Carlisari
Bro, it was 140 bucks away.
- [07:07]
American Hodl
Oh my gosh.
- [07:08]
Unknown
Well, it's always funny, right? Like bitcoin peaked out around like 90. Was it like 96,000 last time? 96,000, like 420 or whatever. And it peaks right before 100. Right. The market just split messes bust. It just tries to pick numbers that are meme in themselves, which is hilarious.
- [07:26]
American Hodl
Joe, you think it's going higher too? You agree with these guys? Sure.
- [07:30]
Unknown
I mean, to me, I think everything's going higher because I think there are still too many people defensively positioned. I mean, I'm looking at the equity market, equity markets on the verge of, I think, a big breakout. You're above 6,000. We've held above 6,000. People are kind of. They held that range. And then you take a move, right. You want to make sure it base is there. And I don't know, I see a lot of constructive charts. And the thing that makes me sort of a little bit not nervous at all, but it's sort of just telling you where this is going is you see dinosaur chains and coins that haven't ran in years, that will not be named, that are going off, they're popping off. Right. That just shows you risk on environment. Just those things that are moving quickly. And I think bitcoin's when it gets going, it's really going to get going. And I still believe that people are far too bearish on where bitcoin is going this cycle. And, and to be clear, you know, I said publicly in the last, last episode. I'll say it again, I don't think this is going to be the traditional boom bust 80% decline. I think you'll absolutely see drawdowns. You'll see painful ones for all of us that they'll hold through. But I actually think we've entered a new era. That's just my view.
- [08:31]
American Hodl
That's interesting. Let's pull on that thread. So explain what you mean by that. And then I'm, I want to throw it over to these other guys to get their two cents. And while you're doing that, Joe, while you're doing that, I'm just going to throw up the Nasdaq chart people to look at based on your last comment. But go ahead and orate your point here.
- [08:46]
Unknown
Yeah, I mean I think we're entering a new era for the standpoint of you've got Wall street involved in such a big way. I think that will only continue. I think investors are, I hear, I was feeling calls today from financial advisors that are trying to build out model asset allocations and they're seeking guidance on that and what makes sense. I think that as you go forward we're going to be more and more tied to what Jeff alluded to which was the global macro liquidity cycle. Right. So if you're going to try and pick tops and bottoms in bitcoin, you might as well try to pick tops and bottoms of the stock market. I think that's the route this is going for a variety of different reasons and it's not a coincidence. And I think people always forget this. They always say oh it's a four year cycle program. Bitcoin peaked almost to the week with many other assets. Like In November of 2021 it peaked alongside express statements from the Federal Reserve that it was going to begin drawing down its balance sheet, that we were going to be entering a rate hiking cycle. It peaked alongside the Nasdaq ark, all these other investments. So it's not in a bubble. So even back as early as 2020 argue is still primarily driven by macroeconomic cycles. And when did it bottom? It bottomed in Q4 of 2022 when people were freaking out when the long bond was put in a short term bottom at least when you had effectively the stock market in free fall, the S and P around I believe 3600 if memory serves correctly, the NASDAQ. So all these asset classes didn't just randomly peak according peak and trough according to bitcoin cycle. They're driven by macro factors. And I think it won't be any different this time. To Jeff's point. Right. If you're trying to pick a top in bitcoin you might as well be trying to pick a top in the economy, which for, you know, for the record, I don't think is anywhere anywhere near that, especially with the new administration coming in.
- [10:22]
American Hodl
Yeah, right, yeah. What do you guys think?
- [10:25]
Joe Carlisari
I always want to agree with this. I want to agree with it every cycle. I'm like, this is the last cycle. There's not going to be any more, you know, whatever. But I think as a bitcoiner, I'm a little gun shy on agreeing. There's just something in my gut that tells me prepare for a significant drawdown in bitcoin, you know, Prepare for an 80% crash. So yeah, I do agree that it does feel like a new paradigm and in many ways 100k feels like the halfway point between, I mean, if you're coming in and you're buying Bitcoin at 100k, right, you're a totally different buyer than the type of buyer you guys were buying in the hundreds of dollar range. It's just been. Bitcoin has been significantly de risked. And you're coming in with the approval of the president elect, soon to be sitting U.S. president. You're coming with the approval of Wall street blackrock nation states are. There's a big rumor that someone in the Gulf is going to announce a large bitcoin buy soon and that's going to trigger a nation state stacking. There's a talk of a strategic bitcoin reserve for America. And I mean it's pretty crazy. Like if you fast forward from where we were 10 years ago when we first started our bitcoin journey to now, people are not talking about like should America buy bitcoin? They're talking about how many bitcoin should America buy? Should we buy 1 million, 2 million, 3 million? Right. Like that's a crazy paradigm shift. And so I think there's still a 500x or a thousandx left on the table. And if you're coming in now, yeah, you got to your bitcoin is more expensive, you're going to get less bitcoin. But your path there I think is a lot more secured than it was 10 years ago. And so for me, yeah, it's a new era. But like Saylor has been saying, volatility is vitality. Right. So like bitcoin is volatile in nature. There are no cash flows in bitcoin. And so it's going to trade based on human emotion and humans are fickle and there's a lot of new humans here that are going to be investing their Money in bitcoin and price comes from the margin and they're going to be selling and buying like crazy and trying to trade this thing. And not everybody is a seasoned hodler who's already mentally preparing themselves for a significant drawdown. So when I think through these things, I think, yeah, there's a lot of animal spirits in the economy that could cause these significant corrections, you know, but there's also a lot of big money coming in. Like Joe is saying, so hard to say.
- [12:30]
American Hodl
Our first six years in this space, I would say is about six years. The number one thing I would hear back from anybody that I talked to this about was the government's going to shut it down. And that was the end of the analysis. That was the end of the debate. They didn't want to hear anything else because that was their card that they were playing, that no matter what you say, the government's going to shut it down. There's no way they're ever going to give up the printing press and therefore it's dead. And now look at the conversations we're having. Is Saudi Arabia going to announce that they want to stack, you know, half a million coins or what, Whatever it is.
- [13:03]
Joe Carlisari
What.
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American Hodl
I have no idea what, what the arguments are. The rumor mill is the word I'm looking for on some of this stuff. But the fact of the matter is, is now we're not talking about that. In fact, we're talking about the exact opposite of that, which is how much are the government's going to buy. And I mean, when you say it's de risk, I think it's a foot stomp moment. It is de risk. These are real conversations. And it's just totally different than what it was back when it was, you know, $300 a coin. This is different.
- [13:31]
Joe Carlisari
Absolutely. Yeah. And so does that mean that we're in a different paradigm where Bitcoin is.
- [13:36]
American Hodl
Less volatile against what? You know, against fiat. I don't, I think it's going to get crazier against, you know, corn or oil. Then, yeah, it's going to get less volatile. Yeah, Jeff.
- [13:47]
Jeff Ross
So I agree with Joe on 99% of what we talk about, but this is one of the 1% where I disagree. I think we absolutely still have boom bust cycles, mainly because, so when animal spirits get going that Hodl alluded to and we start getting to new all time highs, what do people do? They leverage. They double down, triple down, 10x down, 100x down. They do really, really stupid things. Right. Liquidity. When it starts to flow People start thinking you can't ever lose. We're going to see crypto, unfortunately, just go to the moon also, which just drives me nuts. And Trump is super pro crypto too. So we have to deal with all this garbage for another four years at least. That's a different story. But bitcoin itself, I think what's going to happen is it's going to be piled on leverage. We're going to watch the leverage build and we're going to watch people try to short it and get their faces melted off. And then at some point we're going to get to some peak that is just going to be too much leverage. There's no more buyers anymore. And I still think we do, I think we're going to see it depends what it does. But I still think a 70% crash is very possible with bitcoin at the end of the cycle.
- [14:52]
Unknown
Just to be clear, Bitcoin will always have boom bust cycles. That's not what I was talking about. I'm talking about the four year cycle in particular, because the four year cycle is a different story. The Nasdaq has boom bust cycles. The Nasdaq has had multiple 25% corrections over the last 10 years. Everybody sees the straight line vertically, but if you've actually been a NASDAQ investor, you know it's not a straight line. There's been, there's December 2018, there was 2022. Right. Where things sold off hard. You'll absolutely see corrections and the corrections in bitcoin will be more pronounced. What I was referring to is really the traditional four year cycle, which I think is becoming more and more muted, meaning, and having less of effect for two reasons. Number one, the new supply of coins that are coming into the market is very different. The having is having a very different approach. Number two, you've got more institutional liquidity, which are long term buyers, they're not the speculators and short term thinkers. You will have absolute leverage. Right. That increases. But from my standpoint here, what I think the message the bitcoin market is just showing you is that every single correction we've had significant correction, multi year bear market corrections, they've been less and less severe. The last one, correct me, I'm wrong, Jeff, wasn't it down to a 70% decline from peak to trough, where comparatively we had 80 or 90% declines? So you're seeing that, you're seeing diminishing on the upside, diminishing on the downside, which to me is I think more of the same. I mean I wouldn't be surprised if we saw 50% correction this time around, as opposed to a 60 or 70%.
- [16:17]
Joe Carlisari
Yeah.
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Jeff Ross
Okay, so we're pretty much on the same page. I was trying to disagree with you about something, Joe. Sorry.
- [16:21]
Unknown
No, no, no. I mean, look, what I think what I'd be interested in hearing your take on is if you continue to agree that the ultimate pin in the balloon popping, the leverage, will be driven by macroeconomic liquidity cycles, which I think maybe we don't agree. But what are your thoughts on that?
- [16:37]
Jeff Ross
Definitely. So that's the number one thing I watch every day, is what's happening with the liquidity cycles. What's Global M2 doing? Is it generally expanding? And not only is it expanding, but I think what's important for people to understand is it moving from the government to the people or is it moving from the people to the government? And that's kind of a funny concept that a lot of people don't really get. But when the liquidity cycle starts to peak, what usually happens is we see loans start to dry up, we start to get eurodollar shortages around the world, and the flow of money starts to flow back to the government side for a while. And that's what leads to these big deflationary busts. So that's the thing I watch like a hawk because you do not want to be levered long bitcoin or especially levered long crypto nonsense at that point, because you'll still get destroyed and go down 80 to 99% at that point. I think those cycles will continue. By the way, a couple of things I think is I don't necessarily think that we're going to see the most liquidity from the United States this time around. I think we're. We're in a pretty healthy spot, relatively speaking. China and Europe are just in the dump right now.
- [17:45]
Unknown
Yeah, what's that? It's a basket case. I mean, you look at some of their economic data, I don't know how you could be bearish on the United States economy. When you look at some of these other countries, it's just right.
- [17:55]
Jeff Ross
We look awesome, relatively speaking, despite what our cohorts recessionistas have to say. But I think a ton of liquidity is going to come from China and I think that's going to be a big driver. I think Asian liquidity will be a huge driver of the price of bitcoin over the coming 12 months.
- [18:09]
Unknown
What do you think about the doge, the idea to cut some of this?
- [18:13]
American Hodl
Not the coins, not the coin.
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Unknown
Not the coin. What is that again?
- [18:17]
Joe Carlisari
The governmental efficiency.
- [18:20]
Unknown
Yes, the department of governmental efficiency. You know there's Elon thinks he can cut magically 2 trillion from the debt. I want to see how that math works. What do you think? Do you think that's going to be sufficient liquidity tightening that's going to affect the economy, the real economy, so well.
- [18:35]
Jeff Ross
I also want to hear what Preston sucks. Should we talk, should we get. Should we come back to Doge? I wanted to hear your opinion on the macro situation.
- [18:41]
American Hodl
Oh no, I totally agree. I just want. The only thing that I wanted to highlight, I had a gentleman on the show, I don't know, episode 200 of the Bitcoin Fundamentals, Matthew Mazinskas. He is phenomenal at tracking the global flows of liquidity. And we'll throw a link in the show notes to some of his research and his website where he has all this stuff posted. I know I have global M2 chart that I've kind of pieced together on TradingView, but I did this interview with him and some of the research and some of the ways that he goes about calculating global liquidity is amazing and just an incredible resource. So I just want to point people towards that because I agree with you Jeff and Joe, that's really kind of the main thing to focus on. And Joe, I also agree with you. I think these cycles are going to start looking a little bit different and this very systematic looking four year cycle is going to really start to look different kind of moving forward. I agree with you on that.
- [19:36]
Joe Carlisari
I mean, how do you have a continued four year cycle if you have the United States government buying bitcoin like some crazy clip and then not only that, but you have all of the competitors, the United States government buying bitcoin and all the allies, the United States government buying bitcoin and all of the major corporations underneath the United States government buying like. I don't know man. Joe's right on that. It does get hard to envision the traditional cycle continuing.
- [19:59]
Unknown
It's just a different type of seller, different type of buyer and to me that's the biggest factor.
- [20:04]
American Hodl
Yeah, yeah.
- [20:05]
Jeff Ross
One thing I wanted to bring up, just because people were asking about this on Noster, they're confused about because I keep talking about how we're starting to see this new uptrend in global M2 monetary supply. Right. But recently if people have been paying attention, it's actually been dipping and dipping hard. So I just want to explain that real quick. When people look at most of these Metrics, what we're talking about is global liquidity priced in US dollars. And so because we've had such incredible strength in the dollar, the Dixie, if you look at the chart, has basically just been going straight up since the end of September, early October because of that. Because global liquidity, at least the charts, the charts I use, I use a very similar chart. I think that you do, Preston. It makes it look like it's coming down because all of the liquidity that other nation states are doing when it's priced in dollars, the dollar is rising faster than the amount of liquidity that they're adding. So that's. Yeah, so that's a great chart. You can see why it's dipping below that. Once the dollar strength breaks, which I expect to happen hopefully pretty soon, or at the very latest, probably by the end of December, early January, we should see that resume its uptrend in a hurry. And that will be a good thing for risk assets in general.
- [21:12]
Unknown
All of these liquidity discussions have to go back to what breaks up your definition of liquidity. Because the single biggest driver of liquidity itself is financial markets. And financial markets have been an absolute tear, which creates a virtuous cycle in most liquidity measures. M2, M3, anyone you want to use. They will not include many financial assets which serve as the backbone of liquidity. The fact that real estate's at an all time high, the fact that stocks are at an all time high, that is pro liquidity for marketplaces. And this is why most of these gauges are complete bunk in my opinion.
- [21:42]
American Hodl
I like this counterpoint, Joe. I like this a lot.
- [21:44]
Unknown
No, no, I mean, I mean, look, so the way, the way I think about it is like all these M2 gauges and different things. What it's like is it's like trying to measure how big the sun is from looking at shadows on the earth. You basically see reflections and different some window into what liquidity looks like. Right. But we can't really measure direct liquidity because ultimately at the end of the day, liquidity is all about confidence. It's all about how many people are going to be lending, spurring the marketplace, providing balance sheet capacity, providing loans to people, creating cred growth. And to Jeff's point, right, Liquidity conditions can change overnight. If there's a yen carry trade crisis, liquidity instantly freezes and it ceases and that liquidity is gone. It's not in the marketplace. No one can get the bid. So to me, all the gauges are kind of, they're maybe helpful, but they have huge limitations.
- [22:31]
American Hodl
I love that counterpoint.
- [22:32]
Jeff Ross
Great point.
- [22:33]
American Hodl
I mean, look at the liquidity of bitcoin in Korea. That just happened.
- [22:37]
Joe Carlisari
Yeah, I was on the phone with a buddy trying to figure out how we can arb Korea. And we were. And then by the time we figured it out, it was. It was. And we were like, yeah, Korea anymore. That's how Sam Bankman fried made his money, you know.
- [22:52]
Unknown
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- [22:55]
American Hodl
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- [24:57]
Preston Pysh
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- [25:28]
American Hodl
Okay, we were talking about Doge. Let's go back to that. And we're talking about Doge, the government efficiency, not the coin. I love how this branding is getting mixed up. I think it's hilarious. I find it hilarious. What did you say, Joe?
- [25:44]
Unknown
Purposely so. Yeah.
- [25:47]
American Hodl
Yeah. Right.
- [25:48]
Joe Carlisari
Elon has a ironic sense of humor.
- [25:52]
American Hodl
All right, so where were we going with this? We were talking about, like, the impact of government spending and if they are actually able to cut the cost of things. Like, this is going to be challenging and kind of like very anti Trump with respect to, like, how he's just going to make the markets rip. Right. If you're cutting all these costs and you're not putting all that liquidity into the market, it's kind of contra to this broader theme of making the economy boom. So I think that was your point, right, Joe, was that kind of just.
- [26:20]
Unknown
Frame it just a little bit more interesting. I think I want to add in. Just get each one of your takes on this because I think it's fascinating. In four years from now, we're sitting at the end of the Trump administration, has the national debt increased or decreased? That simple. Has gone up.
- [26:34]
American Hodl
Yeah.
- [26:35]
Preston Pysh
Okay.
- [26:35]
Unknown
And has it gone up at a higher rate than it did under the current administration?
- [26:39]
American Hodl
I would just.
- [26:40]
Joe Carlisari
Yes. Yes.
- [26:41]
American Hodl
I don't know. I would just. My base case would be that it's just continuing on the trend that it's on right now. But I don't know.
- [26:46]
Unknown
That's massive, right?
- [26:47]
American Hodl
Yeah, Right. It's massive.
- [26:48]
Joe Carlisari
That means higher each time.
- [26:50]
American Hodl
Yeah, it's massive. Right.
- [26:51]
Jeff Ross
I think nominal debt will be definitely higher than today, but I think debt to GDP might be lower, but that's.
- [26:59]
Unknown
Just accounting for growth and productivity because.
- [27:02]
Jeff Ross
I think we're going to have significant growth. I think they're going to juice the economy and so that's good in a way. So I think they're going to do. We're going to have higher inflation, we're going to have a lot of debt still, but a lot of economic growth, real growth. And I think that's kind of the philosophy, that's sort of the right wing philosophy of can you grow out of your debt problem? I think they're going to try and I think they might sort of succeed.
- [27:27]
American Hodl
Do they have Bitcoin on the balance sheet? Are we taking this into account?
- [27:30]
Joe Carlisari
That's one of the things. Yeah, go ahead, Jeff.
- [27:33]
Jeff Ross
I am so glad to be alive right now. Right. This Doge thing, I keep telling people, like, I actually think they might do a lot of the stuff they're saying they're going to do. Elon Vivek and Trump that threesome. I think they're going to just wipe the federal government out. Tons of agencies. I think they're going to go in and they're going to fire.
- [27:52]
American Hodl
Some of this comes. So, so, Jeff, some of this comes down to their capacity to actually do it. And like, who actually holds that authority to exercise a lot of this And I think a lot of it. Yeah, go ahead, Joe. You probably understand this.
- [28:04]
Unknown
Absolutely. Like, look, I mean, half the things they're talking about cutting, they don't have authority to do, right? So it's like, so the government spends, you know, in a given year, six, six and a half trillion dollars on Medicare, Social Security, Medicaid. Right. Interest on the debt. So these things, what are, how are they going to cut these things? I mean, those are untouchable.
- [28:21]
Jeff Ross
I'm sorry, I agree with you. Most of those things are untouchable, right?
- [28:24]
Unknown
So if you're untouchable, I mean, it's like, why do you rob a bank? Because that's where the money's at, right? If the money's in all these entitlements that are untouchable, how are you going to cut $2 trillion from the debt?
- [28:33]
Jeff Ross
Let me, let me just real quick clarify. I don't think they're going to be able to get that 2 trillion number that's thrown out there. I agree with you. I don't think they can touch Medicare, Medicaid, you know, the Social Security, but I think they can touch some military and I think they will. And I think they can go into a lot of these agencies and a lot of this pork that's written into these bills that, you know, just get slipped into bills and this federal spending, I think they're going to wipe that out and I think a lot of people are going to get canned. And I just want to say, I love it that for the first time in my life. I'm 50. We've been talking about, we just need a smaller government, and no one has ever had the cojones to do it. And I think these guys do. And I think they're actually just going to be like, I don't care if you're mad. You guys lost, you're done. You know, go find a real productive job. I have friends who work in government. They're like, I think I'm going to get fired. Like, and they basically admit, like, I don't really do anything. And they're kind of mad at Musk and they're mad at Trump. And I'm like, this is your chance to be a productive citizen and actually advance society for the first times as an adult. And so, personally, I'm very excited about it. Could they make enough cuts that we actually have a recession because they drop government productivity and unemployment low enough to cause a recession? I don't think so. And I do think at some point in 2025, the bond markets are going to seize up enough, there's going to be some sort of issue that will get the liquidity train back on board, and the Fed is going to pivot from QT or whatever they're doing right now, not Q, to actual qe, and that's going to start adding liquidity again. So that's what I think is going to happen. I'm sorry, I'm talking a lot, but I'll stop there. It's going to be very interesting, though.
- [30:06]
Unknown
I think, just real quick, I'm interested in all your takes, because to me, the most interesting fire, the most interesting conflict that's going to come in term, potential termination, will be this rift that's already brewing. And you can see it like a trip, like a plane ready to hit the mountain between Jerome Powell and Donald Trump. That is, to me, going to be the most explosive battle of the first half of next year. And I. I think that's already festering with Powell's insistent comment that, I'm not going anywhere, you're going to have to pull me out of the building.
- [30:35]
Joe Carlisari
Yeah. A couple thoughts here. So, first of all, on the Doge, I don't think that it's going to be as violent as people believe it is, you know, in terms of the cutting, if they are able to do the cutting. I think Elon has already talked about doing things like just paying people out their contracts and be like, all right, we're going to pay you out for the remainder of your term, and then the contract is null and void. We're not going to continue it going forward. So there is a gentle way to do it without shocking the economy, which is, I think, the way it will be done if it does get done. To Preston's point about the balance sheet, do we put Bitcoin on the balance sheet? If you want to talk about tackling the United States massive crippling debt, it's Bitcoin. Bitcoin is the answer to tackling the US's crippling debt problem. Bitcoin, technological innovation, cultural reformation, and just governmental social change where we have a different culture in government around not wasting the taxpayers money. You know, I mean, it's like we're always talking about, you know, different group, different marginalized groups in America and how we need to have respect for them. And I agree with all that. But I think one of the most disrespected groups in America is the American net taxpayer. And if you're an American net taxpayer, which everybody on the call here is, you were just completely disrespected. Nobody's looking out for you, Nobody's making sure that your money is spent efficiently. And I think that Doge as just like sort of a cultural movement, can actually like reinvigorate the American spirit of like, why are we wasting all of our money? We are the owners of this society. This is our collective money. And I don't think we have to just accept rampant waste. Okay, and then to Joe's point about the showdown between PAL and Trump, that is absolutely coming. That is a unstoppable force meets an immovable object. And Trump is the unstoppable force and PAL is the immovable object. And we are going to watch fireworks there. And I think there's a real question here of like, who has power? Does the duly elected President elect of the United States, Donald Trump, have power? Is he the most powerful man in the country or is Jerome Powell the most powerful man in the country? We are going to find out in short succession.
- [32:31]
American Hodl
I like that question. The one thing that I think is that everybody's seeing with the Doge thing right now is these guys have the biggest megaphone in the world to point the public at all this egregious spending and this insanity that nobody else has ever had such a megaphone before. I'm looking at Elon Musk's Twitter right now. 206 million followers. And he controls the platform. So if he wants to like really let something rip as far as like messaging goes, he can do it, right? He owns it. When I look at These other people, I could look up what Trump says. I mean, it's massive.
- [33:10]
Joe Carlisari
See here, 100 million plus.
- [33:12]
American Hodl
Yeah, 95 million followers. So the thing that I think that these guys are going to do really well because nobody understands marketing and branding better than Elon. So they're going to take the list of the most egregious things known to man that are being spent here in the US they're going to highlight this, they're going to curate it, they're going to spin it and they're going to post it and they're going to shine a light on it like nobody's ever done before. And I think that's going to be the thing that's very different, that then generates a conversation to then potentially influence the elected officials and get them on some type of drumbeat to start affecting change. Will they? I don't know. But I think that that part of it is very different than anything we've seen from just like a messaging standpoint, a collective sequenced messaging standpoint that like really gets something out from like a branding and marketing standpoint from a governmental perspective. But we'll see, we'll see what happens. I know one thing, there's a lot of people that are excited and find it to be, you know, different than anything we've ever seen in the past. And I think that that's exciting. Joe, I want to talk to you about all this choke point 2.0 stuff. So Nick Carter just posted a whopper of a thread on X and basically the so what? It's a really long thread. There's a lot there. But the so what was. I got three main points out of it. Basically they sent out in the 22 time frame, the FDIC issued these pause letters to all these banks that were engaging in any type of crypto related activities, asking them to halt what they were doing. And they didn't really provide much rationale or reason as to why they were receiving these pause letters without like any type of explanation. They just said it was risky and that they should pause any type of activities. This obviously created. The second thing I would say is it created this massive amount of debanking, stifling any type of innovation in any of this area with respect to digital assets and Bitcoin. And then whether it's all the innovation.
- [35:11]
Unknown
Is up for debate. But I get to your point.
- [35:14]
American Hodl
Absolutely. Yeah, yeah. I mean if you got, if you're a miner and you're trying to go out there and you don't even have a bank, I just Talked with Jack Mallers last week and he was saying that he was debanked. He had two days to find a new bank through JP Morgan. And I mean there's strike. So I mean a dozen clients that.
- [35:32]
Unknown
Were debanked during the period, I mean it was, it was widespread, systematic, it was concerted. And I, unfortunately, because of the way a lot of things operate, cloak and dagger, I don't know if we'll ever. I know they're talking about hearings, I think Congressman French was talking about, French Hill, excuse me, was talking about investigations into congressional hearings. But you know, in this stuff with deep state actors, right, you never really get to the bottom of who's pulling the strings in the various different three letter agencies. So it's very frustrating and, and the only solace you can give people is that it's going to be a different environment under I think this administration for all digital assets. But that's not to say that people who played a hand in crushing certain aspects of an industry simply because they had animus to the type of technology or work they were doing should not be held accountable. I absolutely think they should, and I hope they are.
- [36:18]
American Hodl
That's where I want to go. So do you think that it's possible that they're going to be able to be held accountable or can they just kind of hide behind the ambiguity and everything else that was happening in the moment and they're never going to basically face any type of retribution for this insanity. And we all know who. One of the key actors, Elizabeth Warren was one of the key actors behind a lot of this that went down. And I mean, it was just egregious. Like the stuff with Silvergate, in my opinion is crazy that they forced him into bankruptcy even though that they were still liquid, that they weren't insolvent.
- [36:52]
Unknown
Right? I mean, so to answer your question, what you generally need to hold people accountable for malicious prosecution or efforts that are abusive of their powers, you kind of need a whistleblower, you need principled people. And if you're somebody listening to this podcast and you're principled and you have facts that show specific individuals were responsible and were engaging in what I think we can now see in hindsight was a very coordinated, systematic effort to enact detrimental effects on certain people, you should come forward, you should talk to a lawyer, you should talk to a whistleblower, a lawyer that can properly defend you, and you should investigate possibilities because in the United States of America, we shouldn't have government officials targeting individuals simply because they don't like the type of business they're engaging in. If they want to target them, they should do it overtly, they should do it publicly, they should issue statements, they should file litigation. Right. Say what you will about the sec. The SEC took their views with respect to the industry and they tried to argue them in court and in some instances they were unsuccessful. That's the process. That's the way it's supposed to work. It's not supposed to work through closed backroom, smoke filled rooms, people deciding we're just going to call up Joe Schmo at the local bank and tell him don't do business with this actor. That in my view is un American. And I think that people, you can't do that, you can't have that sort of widespread of a campaign without someone out there knowing this. And the reason why I'm skeptical, at the end of the day, people will be held to task is because we've had whistleblowers in the past, people like, you know, Edward Snowden. Right. And people, people should have been held responsible for the warrantless wiretaps of Americans and violations of the Constitution that were conducted en masse in the surveillance state years ago. They weren't. Right. We never had people really held to account for that. And unfortunately, I think in this instance, I think it's probably more your base case should be something similar will happen. This will try to be swept under the rug. Maybe they'll have some one individual comes forward with a tell all, but there's never any real consequence for people that engaged in it. Maybe you'll have some curings and identify some new facts you didn't know. But you know, the American consciousness is always thinking about the future and it's very hard to get people to focus enough to go make people pay a consequence for wrongful acts in the past.
- [39:03]
American Hodl
All right, let's take a quick break.
- [39:05]
Jeff Ross
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- [39:07]
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- [41:54]
Jeff Ross
All right, back to the show.
- [41:56]
American Hodl
I want to throw it around to the group. When we look at what's happening in the coming year, what is the number one thing that you think is a noteworthy highlight to bring to the audience's attention? I'm going to go. It looks like Hodl might have something. Well, I don't want to ask. Yeah, go ahead.
- [42:12]
Joe Carlisari
I was going to say, should we talk about probably the biggest story in bitcoin at the moment, which is mstr.
- [42:18]
American Hodl
Mstr. Oh baby.
- [42:19]
Joe Carlisari
I mean, MSTR is it has sort of transm for anybody who's not aware, obviously it's like sort of transmorphed into this absolute bitcoin juggernaut that is able to issue these 0% convertible notes and hit the ATM, which means do share dilution and use all of these levers they have available to them to accrete bitcoin at basically no cost. And all of their debt is unencumbered. And you know, you're looking at it sailor, like relentlessly, like just he's got a 21 billion plan this year and a 21 billion plan next year. It seems like his plan is to run through it all by February or March. Right. And so I mean this is just a crazy, I mean you're talking about a corporate here who's going to have the same number of bitcoin that the nation states are talking about adopting.
- [43:06]
Unknown
Yeah.
- [43:07]
Joe Carlisari
So you have corporation like do you.
- [43:10]
American Hodl
Think the US can even, I mean what. And the numbers that I've, that I've heard for the U.S. is 1 million to 4 million. Right. The Bitcoin that they're going to acquire, if they go to 4 million bitcoin, like I can't even imagine what the underlying price would go to for them to actually acquire formula. I don't even know that, that this number, I mean you blow up all markets I think if they go after a number like that. Or am I just being hyperbolic?
- [43:35]
Joe Carlisari
No, I don't think you're being hyperbolic at all. I think if the United States government announces their intent to stack 4 million bitcoin over some period of time, the bitcoin price is going to go to $5 million in short succession. And so yeah, I mean it's going to be very hard for them to get their hands on it. Luckily they have the largest money printer on earth. So if you have the biggest money printer on earth, it's a little bit easier for you. But at some point you're going to run out of bitcoin or the bitcoin is going to be extremely expensive or both.
- [44:04]
American Hodl
I mean, and this, that's just assuming them buying it. I mean this, it doesn't, doesn't even talk to the knock on effect of other countries and other corporates that are then going to try to front run all of this and the price, I think you blow up markets with a number that's that size. And I think that this is the thing that when you look at how much bitcoin he's got, which was what, 402,000 Bitcoin. Now while we're recording this, I'm sure by the time this airs it's going to be even more. Can a corporate even catch him? If Microsoft or Apple or somebody tries to acquire a similar amount of bitcoin, can they even catch him at this point because of how relentlessly unreflexive or what's the word I'm looking for? The bitcoin price is?
- [44:48]
Joe Carlisari
No. I think it's going to be very difficult to catch him. But I do think there are going to be a lot of people that are going to copy his strategy. Now, do they get the same number of coins that he has? Probably not. But it seems as if this demand in the bond market for the volatility that this product brings is near infinite or certainly the ceiling on it is much higher than where we currently are. And so you're seeing like, you know, Mara just spun up one and it was oversubscribed and then they spun up another one that was oversubscribed and you're going to see more MSTR style copycats, I think, who are going to, you know, Semler Scientific is a great example, or Genesis or Meta Planet. I mean there are a lot of companies that are spinning up to do this trade essentially and there's, I don't know, man, I mean, how much bitcoin in aggregate are we going to have in the, in the US public markets? You know, 3 million, 4 million, like easy.
- [45:37]
American Hodl
I think at this price, and this is if I'm on the controls of one of these companies, under a hundred thousand, I would put this on as heavy as I could possibly do it. Like his actions over Michael's actions over the past month or two I think are completely warranted and very intelligent. I think once you get to a bitcoin price of call it 150,000 or 200,000 plus, I'm just a little bit more reserved in exercising this because I don't know if we go through another cycle and we get another 70% downturn and then here you are buying three or four hundred thousand dollars coins only for the price to go back down to a hundred thousand and a year and a half or two years from now and hey, I'm with you guys, the price is always going to recover and you're always going to because there's no limit to the amount of fiat that's going to be printed, right? But from a timing standpoint and just putting yourself in a position where you're not dealing with that insanity of these really high buys, I think you Scale back like what we've seen over the past couple months. At a certain point, I'm curious if you agree with that.
- [46:38]
Joe Carlisari
I think the opposite. So I think you press it pedal to the metal as hard as you can because in a bear market it might be harder to get your lenders to give you these same opportunities. And so you got to make hay while the sun shines here. And I think he's burning through his $42 billion plan so that he can get to a multi hundred billion dollar plan which he thinks he can capitalize on in the bull market. I also think that the nature of the debt is important. Everybody sort of misunderstands the MSTR story and they think the debt is somehow tied to the bitcoin and that there could be liquidations. The debt is fully unencumbered. That is something that people need to grog. And so as long as you can handle the interest payments on the debt, which I think right now the operating. Yeah, yeah, the operating revenue from the actual software business, which everybody forgets about, but they're like the little engine that could, they're doing the hard work of servicing the multi. Billions of debt. Right. I think it's enough right now to cover the debt and probably will be into the future. So it's very difficult for me to see a significant bear case on mstr. The best bear case I can come up with is that it goes to 1x nav and functions essentially like a Bitcoin ETF.
- [47:39]
Unknown
What do you mean? The interest on the convertibles? That's why I'm confused.
- [47:43]
American Hodl
Well, the past, those are zero. Those are not the new ones.
- [47:46]
Joe Carlisari
The old ones, he has old ones that are.
- [47:49]
Unknown
But he's not, he has any signal that a move to the convertibles. I mean he's not issuing more debt to buy bitcoin, he's issuing the convertibles which is basically just. He's supplying synthetic call options to the market.
- [48:00]
Joe Carlisari
Yeah, right, you're correct Joe. And those are not a concern. But I'm, I'm anticipating a future in which he does take interest on different.
- [48:07]
Unknown
Issue, more actual straight, you know, interest bearing bonds in the market.
- [48:11]
Joe Carlisari
He, he could, I mean I don't know what his next. I think this 42 billion is mainly the 0% converts. But in the next offering I, I don't know what the debt str will look like. So I'm just anticipating, you know, potentially having more interest payments.
- [48:23]
American Hodl
I mean the fact that he's oversubscribed tells me that I don't think that there's interest coming back into the picture anytime soon. And even if.
- [48:30]
Unknown
Even if there would be.
- [48:31]
American Hodl
Even if there would be, I think he just adjusts the convertibility strike into the common at a higher level and keeps the no interest involved in the issuance. But your point that he goes even harder is something I would have to like, really sit down and think about. Because I don't know, I guess I've just been telling myself this, what I said earlier, and then you kind of came back with an opposite opinion. I need to sit down and think about that.
- [48:56]
Joe Carlisari
I think he's going to go for 210 billion. That's what I think the next one is. So he's going to 210.
- [49:02]
Unknown
What you're trying to do to Hodl's point is you're trying to trigger a critical mass if the bitcoin price really rips higher, significantly higher. And we've talked about this for years, Hydal. So I'll just paraphrase our long discussion about this. Bitcoin price going higher makes it more attractive to institutional investors. Retail thinks about the price saying, I want the price lower but bigger, more liquid. Deep markets with a higher price actually makes it more attractive to other companies. And that's basically just about liquidity. It's just liquidity picture. They want to be able to exit. And if you can trigger a critical mass by pushing the price 3 or 4 at magnitudes higher, moving from a $1 or $2 trillion market to a 5 or 6, $7 trillion market, it actually becomes more attractive for bigger players.
- [49:49]
Joe Carlisari
Yeah. When Sailor is effectively doing that, he's saying, I am the buyer of last resort in these markets and I will continue buying. I will buy every top. Like, you know, Preston, like his messaging is very much. I'm not being careful or calculated with my buys. I am buying every top forever. Yeah.
- [50:04]
American Hodl
Laura. Yeah, Joe, I'm curious your thoughts on the nationalization risk at some point.
- [50:11]
Unknown
I think that if that were to be the case, the United States of America would no longer be the United States of America. To me, the only impetus for making something that's private property, for taking like that in violation, I think of the Constitution, I think would be if there was some sort of extreme national emergency where we had already moved to a bitcoin standard and there was a need by the government to seize those assets for national security reasons. I think we're a long way away from that. I think bitcoin is way too small of a marketplace. I think from the stand, and everybody always throws up 6102 and all these things. But you got to remember there's goers of judges, jurists, legal scholars, who have all said, said those orders that were passed down, those pieces of legislation, they are unconstitutional. That today's Supreme Court, which respects private property rights, which have far more of a check on the government than courts of the past, would not allow that to stand. If somebody just said, oh, we're just confiscating all the bitcoin, aside from the fact that only it's technologically possible, I mean, if you understand how bitcoin operates, I think it's. The bigger problem is just legally, I don't think that the Constitution would permit taking a private property in that circumstance without a serious compelling state interest, which I don't think we have. So my view is, I think this is the modern equivalent of government's gonna shut it down. Now they say government's gonna take it and seal it. And I just don't think it's with support in the law.
- [51:31]
American Hodl
I don't think we're anywhere near that right now. But let's say Bitcoin's at 5 million, 10 million a coin. Now all of a sudden, that becomes a very real conversation, I would suspect. But you disagree.
- [51:43]
Unknown
The only reason the price level of Bitcoin doesn't matter for the taking. What matters is, is it an economic necessity for the government? Is it a wartime seizure? Right. The time, I mean, so maybe that's. That's your argument, that at $5 million, will the government be required to seize all the bitcoin to protect its national security interest? I don't see that. I think it's far more the opposite. I think the bitcoin can go even higher than that without it being a compelling state interest to have to seize. Because unless the US Dollar and the treasury market is no longer the preferred reserve asset of the world, then I think you have an argument if that truly is the state of affairs. But we are decades away from that minimum. I mean, I don't see how that could happen in any time in the near future. You'd have to.
- [52:26]
American Hodl
No, I agree. I don't think.
- [52:27]
Unknown
Orders of magnitude higher.
- [52:28]
Joe Carlisari
Yeah, okay, Hodl, an important point here. Just to piggyback on what Joe is saying. I agree with Joe entirely. MSTR just went through their snapshot, and they're about to be included in the nasdaq. They're about to be included in the queues. And when that happens, you're going to have 402,000 bitcoin and then later, a million bitcoin or however much they get to be included in the Nasdaq. And so indexers are going to win. And who are we indexing with? I mean, that's America's 401ks and pensions, et cetera. And so everyone is getting exposure to these mass bitcoin. And so. But just having these large troves of bitcoin within the United States public markets strengthens America's position against the rest of the world. And so you wouldn't want to kill that golden goose by doing something like a nationalization. Unless to Joe's point, you were exceedingly desperate.
- [53:18]
American Hodl
Right. Jeff, let's go to you. What's the number one thing that you want to talk about coming into 2025?
- [53:24]
Jeff Ross
I'm still thinking about this MSTR stuff, only because what I keep thinking about, I don't think of the 6102. What I think about is the Hunt brothers cornering silver back in 1980 or whatever that was. And here's the scenario I could actually imagine is that say sailor gets up, they get up to a million bitcoin, and the US Starts to try to accumulate this strategic. First of all, I think there's no way they get to 4 million. I think maybe they can target 1 million is sort of reasonable. And then other companies start pulling a sail and they all start following the bitcoin on your balance sheet. And then what I could see is mass psychotic jealousy of the fact that Saylor unfairly bought it while it was cheap and took advantage of the market participants. And so having big bankers who now they can custody bitcoin by that point, right? So they want bitcoin. All these tech companies that want to have it on their balance sheet, but can only get hundreds of bitcoins instead of hundreds of thousands of bitcoin because the price is getting so high, in an act of unified jealousy, coming before Congress and saying we need to stop microstrategy from cornering the bitcoin market. And I can actually imagine that, even though it's totally ridiculous, but I could actually see that happening 10 years from now. But that's 10 years away.
- [54:45]
American Hodl
Is Jason leading this charge?
- [54:48]
Jeff Ross
Jason.
- [54:51]
American Hodl
You'Re on noster. You're not seeing all this.
- [54:53]
Joe Carlisari
I don't see that, dude. You know, it's crazy too. I. I think this is a error in, I don't know, like human thought here, where everybody thinks it's Michael Saylor's bitcoin. It's a collective trove of bitcoin. It belongs to the MSTR shareholders.
- [55:09]
Jeff Ross
Right?
- [55:10]
Joe Carlisari
BlackRock is one of the large shareholders. And so like when Sailor is like sailors buying all the Bitcoin. No, no, no. The MSCR shareholders as a collective, I mean it's basically, listen, MSCR is basically a group project, speculative attack using a public company as the vehicle. That's what it is like and it's crazy to watch it play out. And honestly kudos to Sailor for figuring that out because he took two obvious ideas and combined them and now we have like a Gamestop that never stops. It just squeezes the entire world until eventually it ends up as the Dutch East India trading company of our time and it's like a nation state unto itself. That's where we're headed on msm.
- [55:47]
American Hodl
This is the quote of the episode by the way. It's MSTR is the Gamestop that doesn't stop.
- [55:56]
Unknown
So Hodl, are you, are you betting on it being included in the Nasdaq? Do you think it's good? That's a done deal. And Jeff and Preston too, I'm interested in your thoughts.
- [56:03]
Joe Carlisari
So listen, I'm not an expert in this area but it went through the snapshot and apparently according to the people who know more about this stuff, it did meet all of the qualifications. And so there is a heavy expectation that it is going to be included in the NASDAQ on December 13th. I believe it is. So that's the date to look out for there.
- [56:21]
Unknown
Well, is it isn't the big question whether it's a non financial company?
- [56:25]
Joe Carlisari
So in on NASDAQ's website they have it listed under software and technology. Right. So I mean I think that's how they, I think that's how they ranked it when they did the snapshot. And so I don't expect that to change is my point.
- [56:37]
American Hodl
Bitcoin software and technology, Joe?
- [56:40]
Unknown
Yeah, no, it's going to be interesting. I think my base case is probably it does get included but there's a little bit of question mark in my mind that they there are powerful people that can again pick up a phone call and I'm interested to see. Jeff, what do you think? Do you agree? Do you think it's a done deal that's included in qqq?
- [56:56]
Jeff Ross
I think it's a coin flip for the same reasons because Taylor himself goes on CNBC now about daily saying we're a bitcoin bank.
- [57:05]
Joe Carlisari
Bitcoin treasury company, treasury company, btc.
- [57:08]
Jeff Ross
Sure. But he also has said bitcoin bank. He's used that term before and I'M like, that doesn't help your case for. I would have waited to say that till after you got into the Nasdaq and then maybe throwing that term up. We'll see.
- [57:19]
Joe Carlisari
I think again though, back to the point about if you're an indexer, you're into passive indexation. I mean, this is the bull case for that, is that you get to sit and just invest in the NASDAQ and the S&P 500 and the Bitcoin comes to you. So, yeah, if I'm an NASDAQ investor and I'm looking for high beta, that I want this.
- [57:36]
Unknown
I agree.
- [57:37]
Jeff Ross
That's another inevitable trend, I believe over time is bitcoin is going to infiltrate the S P500 and the NASDAQ and the Dow and so these incredible gains. The kegr of bitcoin.
- [57:47]
Unknown
Right.
- [57:47]
Jeff Ross
That's so far above. It's actually going to rise to meet it over time. And they're going to coalesce over time.
- [57:53]
Joe Carlisari
Mstr, I think, will get into the nasdaq. If I had to bet on it right now, I would say like I have like a 85 confidence. Yeah. In December, 10 days. 13th.
- [58:04]
Unknown
13Th.
- [58:05]
Joe Carlisari
Yeah. And. But the S P 500 is going to be a lot harder because there are a lot more qualifications and they have a lot more, more room to deny. So I think S&P 500, that's still, it's prestigious to be in the S&P 500. So it'll be harder to get into, but they will, I think, eventually get in over there as well.
- [58:23]
Jeff Ross
Why do you think what would hold them back from the S P500? What do you see?
- [58:26]
Joe Carlisari
Yeah, so again, I'm not an expert on this. I was just listening to a bunch of guys talking about this and they. There are all these denials from S P 500 companies who otherwise qualified for sort of murky and mysterious reasons. And so you can see that happening to mstr, whereas NASDAQ seems to be obviously pretty comfortable with technology plays. And so they let things like this in all the time.
- [58:46]
Jeff Ross
I have the opposite opinion of you. I think it's a 50, 50 chance of NASDAQ because they could say you're a financial company. You say it yourself, you know, you're a Treasury company. And then The S&P 500, I think to me it seems like it would be easier to get in. But I, I don't, I don't know anybody on either committee. So who knows?
- [59:02]
Joe Carlisari
It is a funny thing that they have this very small B2B software business that is now dwarfed by, you know, the operations that their board is running. And Michael Saylor's not even the CEO anymore, he's just chairman of the board. And it's. It's funny, man. It's. It's almost like subterfuge. It's like, look at us. We're just a small little software company.
- [59:22]
American Hodl
We're outperforming Nvidia.
- [59:24]
Jeff Ross
I said that once on some Twitter space and I heard Saylor actually say it after where we were talking about. I said. And I said, I love microstrategy. Like at the time it was 2023 or something. I said, what's going to happen is because bitcoin is growing at such a rapid rate and is so valuable and getting increasingly valuable is the value of their tech business is going to go to zero over time in bitcoin terms. So it's just going to become this bitcoin business. And then he actually started talking about that publicly too, and has basically admitted my business was. It was a dying business. What Bitcoiner. He kind of has one foot in the traditional finance, one foot in the bitcoin world. I think as a bitcoiner, that every business owner should be pulling a sailor, right? Public, private, every individual. If you are able to and smart enough and can handle it, you should be doing your own. I got to be careful of it. You could be doing your own speculative arbitrage like he's doing. And so I think people should generally be applauding it, although it is a concern that it's centralizing it so much. But I think most of those fears are overblown. And I think we should continue to be encouraging other business owners, CEOs, CFOs, to be doing exactly what he's doing. It just hastens the strength and power of the bitcoin network and, you know, and sort of the demise of the Fiat network. So I think it's awesome what he's doing and I hope thousands of other businesses copy him.
- [60:46]
Unknown
I think the reason people are negative on The S&P 500, Jeff, is because you have to have, I think four consecutive quarters of quarterly gains. Can't have quarter law. And they post quarterly losses this year in one of the quarters.
- [60:57]
Jeff Ross
Okay. Other positive earnings.
- [60:59]
Unknown
Yes.
- [61:00]
Jeff Ross
Yeah.
- [61:01]
Joe Carlisari
It's kind of related.
- [61:03]
American Hodl
It's related to the gap. Yeah.
- [61:06]
Jeff Ross
Okay, gotcha.
- [61:07]
American Hodl
So because of the accounting has changed and his election to when he wanted to incorporate it, there's losses that are showing up because you had to mark your books. If Bitcoin was down from when you bought it. And this whole. But the fact of the matter is the operations of the company, I believe, have been you take the bitcoin out of it and you don't have to apply this FASB GAAP accounting rule. The operations of the business have been profitable. So once that starts kicking in, maybe there might be a slight delay on the S&P 500, depending on the treatment of that before it gets incorporated. All right, Joe, did you have one that you wanted to talk about for your number one?
- [61:49]
Unknown
Nobody's talking about it right now. There's nobody in bitcoin circles. But to me, the most fascinating thing to look at, aside from epic bitcoin price we're going to all enjoy over the next six to 12 months, is what's going to go on with the consumer price inflation data. To me, I think it's still running a little hotter than I expected, mostly held up by housing. And I'm interested to see what the reaction is from the central planners with that data. You got to remember the last couple of years we've had this seasonal effect with some of the CPI data where the early part of the year comes in a little hotter than the prior year. So I'm interested to see what the narrative is with that if you still have inflation running closer to three than two, particularly with what I alluded to earlier, where you've got this growing cut conflict between Powell and Trump. I mean, I don't know if you all saw that clip. He was so I don't recall. I don't know, maybe Jeff or Preston, you remember, but I don't recall a moment where he was sort of more vitriolic and definitive with his response where he just said no. And then he said not permitted under the law. That I cannot be fired under the law, period. So to me, that is one thing I know about Donald Trump is you don't tell him. You can't do something that's like poking a bear, right?
- [63:00]
American Hodl
You don't do that.
- [63:01]
Unknown
So when he did that, I'm like, okay, he's asking for it. There will absolutely be a conflict here. And like I said, I alluded to earlier, but I think that's going to be a massive story that people in fintwit and financial markets are going to be talking about a lot because we do know that he's going to try and get to John's point. Rapid growth. He said he thinks rates are too high. He said he thinks they should probably come down. But then that against the backdrop of inflation, which if the markets are ripping guys, that's positive for consumer demand. People going out and spending, especially the upper quartile, who does most of the consumer demand spending, they're buying houses, they're buying all sorts of luxury items. That drives the economy. And if those people have portfolios and you got bitcoin@ 200,000 and housing market takes off again because of some lower rates, man, I mean you can see another wave, not what we saw, you know, in 2022 or that type of inflation, but you can see a movement back up, which I think is something we're not talking about in assessing. And what do planners do in that environment?
- [63:59]
American Hodl
I love that. All right, good. Yeah, no, Jeff, go ahead.
- [64:03]
Jeff Ross
Okay. I'll throw out my inflation thoughts. I think that we've bottomed and I was saying that October was probably the bottom for cpi. September, October, ish. I think we have mild increased inflation for the next six to nine months or so at least. It's hard to see past that. But so I agree with you. So a couple things. I think at our last meeting I said we're going to have the 50bps cut and then a 25 which we got. And then one more. I think we're going to get one more still at this next meeting. One more 25 federal funds rate, bips cut and then we're done for now. And then the tension is going to start happening. Right, because Trump's going to be pressuring Powell to lower rates. We're going to see CPI slowly increase. I think we're going to get up into the kind of the three ish three and a half levels again. A lot of people to Joe's point are talking about, they keep showing this double peak. We talked about this last time due the double 70s inflation peak. We're not going to get that. We just are not. Absolutely not. So get that out of your head. But we will have slowly rising. I will say, by the way, that's very good for risk assets. This is a good sign of an economic growing economic strength that we're back in the recovery phase and early phase for the economic cycle. That's actually great. You want to see commodity inflation. That's early phase, early business cycle inflation. That's good. It bodes well for risk assets. It bodes well for commodities. If you're a commodity investors. What it does make it difficult for is for Powell to justify continuing to lower the federal funds rate, which is.
- [65:34]
Unknown
What the chart Preston is showing. And you can show the 10 year, you can show the 20 year. They're all telling the same thing. If you look at that bottom, which is in September, that's coincident with the Fed saying we're going to begin the cutting process. Right. And what has the market done? What is the bond market done? It's actually sold off since then. It's basically said that yeah, you'll get a couple of high cuts on the front end, but we think we're going to have a bear steepening. We're going to have long end rates actually rise and the 10 year is higher today than when they did the original cuts. That is telling you something from a market perspective. And I think that's an incredibly important story.
- [66:07]
Jeff Ross
And I'll tell you what it's telling me. I see a lot of people saying like the Fed made a mistake or they say the market has it wrong. I say absolutely. What this means is the market participants are expecting higher future growth expectations. Economic growth and inflation are going to increase heading forward. And that's what rising rates mean because.
- [66:29]
Unknown
It'S a bear steepening. Right. And you had all the recessiones for years talking about the inverted yield curve. The curve's now uninverted. You have a positively sloping curve. So what is that telling you? That's telling you that they expect there not to be a recession. It's just the opposite. Right. It expects that we have actually troughed. We think inflation is going to remain hotter, which should be reflected in longer end bond issuance. Yep.
- [66:52]
Jeff Ross
To me it's very straightforward. There are people that flip out about it on the Internet all the time and this is an indicator that we're heading into recession and the Powell is making a mistake and oh my gosh, move to cash.
- [67:01]
American Hodl
Anyways, I think the people that are saying that are looking at the market and they're just saying there hasn't been a traditional bear market that they remember in their lifetime over the last 30, 40 years or what. That looked like a 2008 scenario. Right. We haven't had that. I mean we did have a year of equity selling off. Almost a year, I would say, wasn't it? And that was kind of you. Yeah, that was the bear market. Now it's. It's ripping again. Right. Like I don't know. I'm with you guys. I agree.
- [67:31]
Unknown
Just to be clear, there have been many stock markets around the world that have had bear markets for 10 years, right? Yeah. The American stock market has done extraordinarily well for a lot of different reasons. Structural reasons. Right. The dollar, the strength of the Dollar. But there are other markets that have had real long persistent. I mean, do you want to own European equities? You want to own Japanese equities for the long run?
- [67:51]
American Hodl
Nope.
- [67:53]
Jeff Ross
This is a trick question.
- [67:55]
Unknown
No, I was thinking of diversifying.
- [68:00]
Joe Carlisari
All in Meta Planet Japanese, by the way.
- [68:05]
American Hodl
Is it the best performing equity in the Japanese market? And you got Dylan leclaire at the helm of this company.
- [68:11]
Joe Carlisari
How great is that? Insane.
- [68:13]
American Hodl
Insane. I don't know how old he is. Is he 22? What, what is he now?
- [68:17]
Joe Carlisari
Pretty young?
- [68:19]
Jeff Ross
By the way, I worked closely with Dylan and Bitcoin magazine Pro for a little chunk of time where we spoke regularly daily. I have extreme confidence in his intelligence and his ability. He is phenomenal and he's unreal. The great thinkers and I think he'll be one of the great fund managers of his age. So it's fun to get to see him.
- [68:41]
Joe Carlisari
Isn't that crazy? I remember when he was just like a kid who followed me on Twitter. He had like 300 followers or something. He was like, like, hey, dude, should I drop out of college and go all in bitcoin? I was like, yeah, do it.
- [68:52]
American Hodl
As somebody who talks to him quite often as well, Jeff. Unreal. The level of intelligence, the thing that I always walk away with after talking to him is like, how in the world does this kid in his early twenties possibly know what he knows? The only way I know where I was at in my early 20s. And when I have these conversations with him, I was like, how in the world could you possibly know all this unless you just downloaded your brain like a computer, like it's nuts. But. All right, that's all I have, guys for the show. Did. Did you guys, anybody else have something that they want to highlight or make.
- [69:26]
Unknown
Sure we highlight this. This ruling we got from the fifth Circuit, which I don't know if you're familiar with the. And I know it's more of a broader crypto case, but it is significant. This tornado cash ruling we got, are you familiar with that?
- [69:37]
American Hodl
Yeah. No. Go cover this, Joe. I wanted to cover this.
- [69:40]
Unknown
So the tornado cash ruling that came down, again, this is a court of appeals, right? So you've got the federal system for the viewers. You've got the district level courts, federal courts. They're the ones where you start out every case and then you go to the courts of appeals, then you go to the Supreme Court. So this is a court that sits right below the United States Supreme Court. And they basically analyzed an issue whether the Department, the Treasury Department's Foreign Asset Control. OFAC exceeded its authority with respect to freezing Tornado Cash's smart contracts and the assets held in those smart contracts. The reason this is significant, without getting into too much of the legalese, is that they were analyzing what it means to be property under some of the OFAC guidance under the act, which is not properly defined. And one of the amazing. It's a great opinion if you're bored and like me and you want to go read it. But what it basically came down to is this. They found that the more immutable a contract, if a contract is truly immutable, meaning it cannot be changed, then it is not property. And OFAC was exceeding its authority when it was sanctioning that. So this is a huge, basically approval of the Bitcoiners mantra, which is basically, let's make it decentralized, let's make it immutable. Let's make it something where there is no man that can be hauled into court to change the nature of the assets. And it's massive. Right. And it has implications for the Samurai case, others. It's sort of a first major court of appeals decision on this subject and what the principle of law to take from it. And the court actually goes through an analysis. They say if there was some ability to change this, if the court protocol was not immutable, meaning that it could be controlled or changed or modified by anyone. If it was not immutable, then we would say that it is property. But property requires an element of control. Property requires you to have some ability to influence it. So the TLDR is the more immutable protocol. The more unchangeable a protocol, the more difficult, if not completely unlawful it is for the government to sanction and seize the asset. So massive importance for. For privacy, for anonymizers, for protocols that are coming down the way. And if you're advising companies or you're working with companies. Right. The key thing you got to focus on is to evade some of this. Sanction anonymizers and promoting privacy. So you have to focus on how do we make the protocol work without an individual having control over it. Take the human element out of it.
- [71:56]
American Hodl
That's amazing. Amazing summary too, Joe. Thank you for making sure we brought that up.
- [72:01]
Unknown
That is absolutely important opinion. So.
- [72:04]
American Hodl
Yeah.
- [72:04]
Jeff Ross
Wow, that's exciting.
- [72:06]
American Hodl
That's really exciting. Thank you for that. Okay, anybody else? We good? All right. Fourth quarter. Mastermind. Conversation concluded. Gentlemen, thank you. We will have links in the show, notes to your Twitter feeds or X feeds or whatever we're calling them. To your Noster feeds, because I know Jeff, he's on Noster. Guys, it's a great time to try out noster. Primal 2.0 just came out. It's an amazing client. I. I'm an advisor at Primal, so I'm very biased, but it go there, Try it out. It's amazing. You get a bitcoin lightning wallet with your account and you're able to post in a decentralized kind of way, just like you do on Twitter. And it is very vibrant over there. Very vibrant.
- [72:47]
Unknown
Is there an equivalent of like Twitter spaces on?
- [72:50]
American Hodl
There is. Well, there's a Noster's Nest.
- [72:52]
Joe Carlisari
Noster Nest.
- [72:53]
American Hodl
There's Noster Nest, which is. Here's the downfall with Noster Nest is because everything's decentralized. You don't have like when you go on the Twitter and you log in and you see like a purple, like circle around my logo, you know I'm talking and that there might be other people there that you want to listen to. So you dial into that conversation because this is like another entity or another service provider. The interoperability between that service provider and Nostr is still just not there. So you're not being able to generate these larger conversations. I don't even know if their servers could handle the larger conversation. Maybe they can, I don't know. But that interoperability is the piece that's still like, still getting worked on. Will it get there? I'm pretty sure it's going to get. But for right now, the space is part of it. It exists, but it's a little. They're smaller conversations.
- [73:46]
Unknown
Good things take time.
- [73:47]
American Hodl
Good things take time.
- [73:48]
Jeff Ross
Yeah, they're building it. They're working on it.
- [73:50]
American Hodl
They are working on it. So Primal, check it out.
- [73:53]
Joe Carlisari
Very cool. I co signed everything. Preston said they call themselves a social bitcoin wallet. And if you're a bitcoiner who's like, eh, whatever, man. I get all my news from X and who cares? I don't need to be on Nost or whatever. It's just a bunch of nerds talking about bitcoin. It is. That's why I like it. But the thing that's interesting is I think it's a window into these different types of social interactions relating to some of bitcoin's unique properties, like zapping people's posts and value for value and being able to pay people directly and easily and cheaply. It's something that's very interesting and I would highly recommend downloading Primal and just checking it out.
- [74:30]
Jeff Ross
Joe you got to come over more than Usher so we can have our conversations. Like, just. Just pop over and start. Say something controversial so we can get a conversation.
- [74:38]
American Hodl
Everybody go. Everybody go to Joe on Twitter and tell him he needs to get on Noster and download Primal. It's. It's easy, Joe. It's. It's super easy.
- [74:47]
Unknown
I gotta do it. All right, but then what. What do you do with Twitter with X? What, do you just abandon the platform? I mean, you guys.
- [74:54]
American Hodl
No, I'm using.
- [74:55]
Unknown
I'm using both. It's.
- [74:56]
Joe Carlisari
Yeah, it's not like you're losing money. There's no opportunity cost being on both, you know, so just. Yeah, use both.
- [75:01]
Unknown
Time. Time is the opportunity cost.
- [75:04]
American Hodl
Yeah, right.
- [75:05]
Joe Carlisari
Hey, no, listen, listen. It's important to spend as much time on your phone as you can while you're alive, because you won't have it when you die.
- [75:12]
Jeff Ross
Okay?
- [75:13]
Joe Carlisari
Not gonna be able to take your phone with you when you die. Spend as much time on it now. Ignore your children. Ignore your wife. Spend a lot. Eight hours, nine hours. That's not enough. You got to go 12, 13, 14 hours a day on your phone.
- [75:24]
American Hodl
And for anybody that knows Hodl, they know that that is definitely not his real advice. He is a family man to a T. Guys, this has been a blast. We'll have, you know the stuff we talked about in the show notes. I'll have links to these folks in the show notes. And thank you so much for coming on and doing this every quarter. It really means a lot to me. I know we get a lot of positive feedback from the audience. So, guys, thanks for making time.
- [75:48]
Unknown
Thanks, Preston.
- [75:49]
Joe Carlisari
Thanks for having us.
- [75:50]
American Hodl
Thank you for listening to Tip. Make sure to follow bitcoin fundamentals on.
- [75:56]
Preston Pysh
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- [75:59]
American Hodl
To access our show notes, transcripts, or.
- [76:02]
Preston Pysh
Courses, go to theinvestorspodcast.com this show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by the Investors Podcast Network.
- [76:13]
Jeff Ross
Work.
- [76:14]
Preston Pysh
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