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tip' Hey everyone. Welcome to this. Wednesday's release of the podcast, where we're talking about Bitcoin. Today's guest is the one and only plan B for anyone in the Bitcoin space. They obviously know who he is. But if you're new to bitcoin, you're just learning. He's the guy that developed the stock, the flow model and a couple other price models that have been closely followed and hotly debated. Amongst many of the followers in the space during the show today. We have a candid conversation about how that model might eventually break down. We talk about the
Oh economy, and we review the big sell-off that happened during the summer and much, much more. So, without further delay. Here's my conversation with the one and only plan B,
you will listening to bitcoin Fundamentals by thee, investors podcast Network. Now for your host, Preston
pish.
Hey, so like I said, in the introduction, I'm here with Plan, B. Wow, great to have you back on the show. I love these conversations excited to get into it. Thank you,
Preston. Thanks for having me. And I are you sure you still want to have me to grow? My works are deemed too dangerous and harmful and even
illegal. Oh, my Lord. Yeah. Pump looked like he had a little bit of a pucker Factor. They're going on. Luckily all got restored pretty fast.
But yeah.
Have you heard anything on what happened through all that, or is it just kind of a mystery as to how his account got? The platform there? For a few hours.
He has a very nice video and breakdown about that because he doesn't. Yeah. Yeah, and that's must listen. Actually. He speaks very well about how the ease at, which one employee of YouTube or any other platform can cancel someone, right? And he has 1 million followers so he can make a lot of money.
Ice. But there are thousands of people that cannot do that and those are cancelled as well and they are just losing their life's work. Ya know there. There are revenue streams. It's a scary thought and it happened to us yesterday or the day before that. But it is very interesting how the communication with YouTube went because YouTube first said, well things are being set that are dangerous and harmful and those are illegal activities and blah blah blah. It was
Something about the content and basically something that I said probably
pay. So the thing I want to start off with was just the overall global economy. Do you have such great thoughts? That I know the times that we've talked in the past? That's probably the part that I really enjoy talking to you. Most is just really kind of traditional markets in the macro that's happening. So right now what would you say is your overview of the bigger Global themes or trends that you're that you're tracking and just the globe?
Economy
attract us, of course very well. And it's it has to do with my lifelong employment as an Institutional Investor. So I have a look at markets. I followed them and the way I look at them as not very for non institutional investors, it's different. So I understand that people like to hear those thoughts. But what I see, it's really interesting time. We're living in a, lots of things are happening, big things. And well, one of the things, of course, is the quantity.
Of easing, the printing of money. The stuff that's happening in the US with the three point five trillion dollar bills that are introduced and the money that's needed for that. And the world is drowning in money. Every time there's a new problem in the social aspect could be covid relieved in the banking sector in some other sectors. The only solution seems to be money Printing and if that word a solution, of course, Venezuela and Zimbabwe would be the richest countries in the
World. It is not the solution. It will make the problem worse. But what we see, of course, as a consequence is lower interest rates, the negative interest rates in Europe persist. So even go down a little. So that is an unheard-of situation. We've never seen that a couple of years ago, and we've seen as surprises rising and rising and Rising. I don't know how it is in the US, but in my country than that, a lens, also other countries in Europe, the housing that the rising housing
Seeing prizes are really getting problematic. It's nice. If you're the owner of a house because you can almost stopped working and just refinance the house every year with the increase in
value.
Yeah, you are getting to that point and if we're seeing the same thing here in the US with the housing crisis is just going
berserk. Yeah, and people that don't have the money or to start capital and that's most more and more people. They can't buy a house. They have to rent a house but rents are going through the roof. It's such so that people cannot get away from their parents houses and and get into big troubles with their finances because the houses are so so high. And now they're, they're all making measures in the
Sphere. So taxing house, owners and Cetera as if that were the problem. No, the problem is the money Printing and all that money has to go somewhere equities real estate Bitcoin gold. Well, the acid the acid inflation and now that asset inflation is of course, spinning over in consumer, prices Energy, prices. First, of course, and it will go down to core inflation as well. Core inflation is the inflation basket without the energy prices because that's the volatile.
Conan's in the inflation index and core, inflation is what central banks are tracking. That will go up. That's the last last thing that's going up. But yeah, everything is going up. I mean, must be different in the US as well, but in Europe, so winter is coming, right? So heating prices, oil, gas electricity, double at the moment. So households are are going to pay double the gas and electricity prices next year and that will certainly cause problems and it's very interesting and then if we look geopolitical
It's very interesting what's going on with China and us at the moment. I think it's ever gone. The thing in China with the real estate debacle are going on there. The u.s. Bashing China. It's all started with the Terrace, of course, the trade terrorists on the Trump, but it goes on and on and China, of course, looking at Taiwan now after it took Hong Kong, those are big movements and the south sea situation militarily. It's all very
A very volatile and very you need one match to light, the whole thing up. It's scary. And in a way
new people that are maybe just coming into the space, would hear that. And they would say, well I'm playing the contrarian here and I know you're going to knock this question out of the ballpark, but I think it's important for education purposes for people. So person would be hearing all that and they'd say, well, you know, you just had a global pandemic, they had the print all this money and this is just kind of a spy.
Bike and then you're going to have like they're not going to have, they're not going to be printing four point five trillion in the coming years like they did for I think that was the number that you said for covid. So some of this stuff will start to normalize. It just needs more time. You see these banks that the big time Banks. I think it was JPMorgan come out and say, oh, the supply chain issues going to be resolved here in six months from now. Why is that wrong? In your opinion?
First from a logical point of view, if printing, money was the solution for these problems then, like I said, Zimbabwe would be the richest country in the world, and every country would be doing it. And, of course, that's, that's not true and Through the Ages as well as the Roman Empire died part of, because the debasement of the currency, the printing of the money, the why was the Daenerys at the time? So the silver content was diminished from 90% to 0% and that cause big big troubles.
Cuz nobody accepted that money anymore because it was like Monopoly money. So that's one. But on the other hand, the depth that the u.s. Is creating to keep the dollar going to keep the government going to keep everything going and the same in Europe by the way, but the u.s., Of course, the reserve currency that depth is someone else's asset. The asset can be in the pension fund. It can be well, most of yours that by the way is owned by China, right? So the China is making all this stuff for the world for the
Is earning a lot of money but parking that money in the treasury bonds. So, in the the depth of the US government, and that depth, of course, we all know that. Right? All institutional investors know, the US Dept will never ever be paid off. We all know that, but we also know if there will be new that there will be an extra credit card if you will to pay off the old credit card and as long as that goes on, that's all that's all fine, but it cannot go on.
It requires rates to keep going down.
If you would increase interest rate right now, the depth would be. Yeah, unserviceable. The us could not be the depth of when interest arises with the current tax income. So it's unsustainable. They have to keep rates low and keep decreasing them or the whole house of cards will fall down. And of course, China, sees that as well. Because imagine that, you have all this, this us Dept and you see that the depth is printing his own money.
You know, it would be worthless one day. So what were you do? You'll spend it like a madman and you see them doing that. They buy every gold, mine every scarce commodity mine in Africa there, by all the harbors, in the Middle East in Europe, even they buy everything with the u.s. Dollars that that they have except more us Dept, of course, and that's the smart thing. So, by Printing and printing more, the u.s. Is actually making China stronger and stronger every day.
I'm sure the the military thinkers and geopolitical thinkers will see that, but there is no alternative. So they have to keep doing it. And well, Europe is in the middle. We're watching it happen. It's a crazy movie, We're watching.
So, when we think about your statement there that they have to keep doing, this is most of it because you got into the government reasons of why they cannot allow interest rates to go up because then, you know, it's not serviceable, but even at the individual level, if interest rates on
Prices go from three to four and a half percent. Like you've just obliterated, your common person where most of their net worth you go to your typical person. I don't care if it's an American or somebody over in Europe, anywhere in the world. If you raise their interest rate for home prices by a hundred basis points or 200 basis points, all the sudden. I mean, they're just they're getting murdered if they're trying to move into a new house. So is it the net worth of the individual being tied up?
So much of it being tied up and the value of their house and that basically being their net worth that interest rates just cannot afford to go up in any type of meaningful way for any type of meaningful amount of time.
Well, I think it's who thinks it has to do with that. If you make that brought out of wealth effect, the Federal Reserve has always talked about the wealth effect with households. And of course the houses, the biggest asset mostly, but the more well-to-do people of course also have the equities portfolios if you raise interest rates everything.
Value will be discounted discounting does higher interest rates and the value goes down. So a very easy way for the US Central Bank to play this wealth effect to make us households think that they are rich. And can spend in the economy is to decrease interest, rates and increase all the asset prices that houses, the real estate portfolio or the equity portfolios and bond portfolios, and people feel well over wealthy and buy stuff in the economy keeps going.
And of course, that's the other way around. When you raise interest rates, everything goes down. It will crash the the stock market for sure. It will mathematically, and by definition, take the bond prices down. So portfolios, Pension funds at everything will will go down and we will sit in D2. But I think the more direct thing is the US government itself. It needs the money to pay its employees. I don't know the exact number but it's very high. The number of people in the US that are paid by the government.
Is about 60-70 percent 70 percent seven out of ten, people are paid by the US government. That's a lot of money if they don't have the money, if they don't print the money because they are nothing, nothing then that all stops, right, with the whole story with the debt ceiling. So they just raised the depth and adapt debt ceiling and can print more money again, but who's going to pay that the world right now is okay with that, but that will be a point and the Roman Empire cross that point there will be a point that people do not accept the you.
Yes dollar anymore.
When I think it's even Beyond just the US dollar. I mean, this is a global phenomenon. I'm looking at a post by a guy this morning out of Germany and he's talking about the ECB, pours more fuel on on the inflation. Fire with its Bond. Purchases ECB balance sheet Rose by another 25 billion to hit a fresh all-time high of eight point three trillion, ECB total assets. Now equating the 77% of Euro Eurozone GDP versus the feds 37% like
All in trouble. They're all doing this. It's a and I think this is where so many of the history books are hard for people to do a parody to what we're seeing today is, you had mentioned Zimbabwe, right? Those scenarios in the past were these one-off domestic one nation state type hyperinflation event and not anything that's ever happened globally. Collectively all at the same time, and I think that we're seeing the latter, and if it's all happening, too.
Everybody simultaneously, it's really hard to see because it's almost like you're in a car, going down, the highway going, 70 miles an hour and you look to your right. You can't see any backdrop. Right? All you can see is the car next to you and it's going 70 miles an hour and it appears that neither. One of you are moving. Every car were looking at is like, oh it's just standing still because we're not seeing any type of backdrop but Bitcoins the backdrop, right?
Yeah. Bitcoin. Real estate, all the hard assets. Yeah, I fully agree with
You edit. This is what is going on and this can go on and on gradually, you know, central banks that cars are going faster
faster over a hundred fifty now, down the highway. I'll
let us 60 hundred and seventy but then, but this can end very abruptly. If we look back in history, this can end in a year or two years. It's all gone because right now, some people see this, the Chinese Cedars and they're hatching. They're buying hot stuff. They are buying quality, mines, gold, mines. Kobol.
- ilithyia an adult, they're buying Harbors. They're buying infrastructure, geopolitical, important infrastructure. Investors, like you and me, buy real estate Bitcoin, of course. And why did good. That's what, that's what the government's are telling us, why they good. And that's why I real estate and housing prices are rising as well. So people see, this people are hatching and more and more, and then comes the point of no return because it's a very slippery slope when it goes. It goes
I've seen it so many times in my career, for example, if the introduction of the Euro as well. The reason why the UK is not was not in the Euro and by the way, they're out of the European Union is well known of course, after the brexit, but they were not in the Euro because they were pushed out of the pants that they had to make to be allowed to enter, because there were pushed out by Soros first the investor and all the other investors that saw that England or the UK was not able to meet the
Syria. If it's fundamentally wrong, they just push it and push it and they'll ever it and they push it out and then that's the same thing as right now. That people with they don't accept negative interest rates, they start looking for other stuff. Other stores of value if you will and the same with us. We Bitcoin investors for a reason. And even further, I mean, Satoshi Nakamoto saw this, right? The the debasement by central banks and the solution Bitcoin was made as a solution for debasement. He was very, very clear.
So it's going to happen and it's I think it will be going faster, the crumbling of the Empire and and the money that we're using today. It will go. The final decline will go faster than we think and I got a
question. Yeah.
Yeah, I thought so,
you know where I'm going with this, right? Yeah. So based on that, comment your model fails, right? Yeah. That's true.
Adam back had a very nice sweet about that, not to tweet from about that stock to formal model.
I want to talk about that. No, I'm serious. I'm dead serious. I like that.
But the one earlier about where he compared it with a she-wolf Trilogy, the foundation Trilogy written, by a stream of fantastic story. Fantastic must-read books. And yes, you could say the stock to flow will be killed by when the dollar Falls, you could also say that the stock to flow.
Is actually predicting the fall of the US dollar and it gives a time frame as well for that because this doctor flow model uses the Bitcoin price denominated in dollars. So as we all do, right, it mean the Bitcoin prices in dollars,
but it's also making an assumption that you won't have a contagion of fear on the dollar or whatever fiat currency, right?
I think that's a little different. I think it's not making that assumption explicitly. Of course, may be implicitly but I think it's like this and that's why I like to stock to flow ex-model more than the stock to flow model. If we look at the stores of value, that in these weird macroeconomic environment, we're living on right now with negative interest rates, and quantitative easing going through the roof. If we look at that, the stores of value that are available than real estate, is the biggest one. It's about a hundred trillion US Dollars globally. It's talk to
Always about hundred and it's the number one source of value that that people around me at least use as a store to put their value in there just by extra houses and rent them or Airbnb them or whatever. So, that's number one, that the second store value of course, is goal with the stock to flow of 60 and a value of 10 trillion u.s. Dollars. There's of course equities and bonds all in the hundred trillion range. But if we look at stock the floor ex model for Bitcoin Bitcoin is 55 now stocked.
Flow ratio and a values of around one trillion. So it's much smaller than real estate as much smaller than gold still. But the good thing about that structure floor ex model is that we do not have to extrapolate like all the other models extrapolate into the future that we do not know their the stock reflects model is stock to flow ratio on the x-axis and value on the y-axis. There is no time element. It's not a Time series. It's just gold, real estate Bitcoin, silver and diamonds, and
We can interpolate that model. So we know what a stock to flow hundred asset is, is valued at. It's the real estate market. We know what a 60 start to flow ratio. Value acid is value at its at 10 trillion dollar, that's gold. So, I think that hyper Bitcoin ization scenario that we are talking about breaking the model is after the soccer floor hundred ratio. So in my, in my point of view, the dollar will die the Empire will crumble after
A stock to flow hundred for a Bitcoin, that's sort of where it all goes wrong. And we're well the model fails, but maybe the denominator of all valuable things fails. We have to replace the Dollar by. I don't know, gold, Bitcoin, maybe or something else. Maybe there's a new world Reserve currency at that time. Like the SDR.
You can't believe that.
Well, they're working on it right now, trying. That's the alternative.
I mean requires trust. I mean there's I don't see how that could. I mean I'm with you it's a it's an option, but I think when the world's comparing it to something that does not require any type of trust that is just being supplied in. Such a decentralized kind of way. I don't know how somebody would choose that over. What were describing
their well that but that's the big battle. We're seeing at the moment. The big battle is between math and thermodynamic certainties Bitcoin. If you will they be the best money ever.
Erratically. It mathematically and the powers that be right that that want to protect what they have because they're going to lose it. All right? Or a lot of it. So, yeah, it's a political power game with the most powerful countries and armies in the world and central banks against a mathematical physical thermodynamical optimal solution show. Yeah. I don't know who wins but it sounds like the church at the time saying the Earth was flat and some some weird mathematician saying it.
Is round and in the end, of course, the optimal solution wins the truth wins, but can be a lot of war and nasty times in between. Let's take a quick break and hear from today sponsors. Wish you were in early on some of the best performing, IPOs of 2019 and 2020. Our crowd investors were and now you can join them in. What's next with our crowd, accredited investors have access to invest directly easily and most importantly, early hour crowd investors have benefited from our crowd.
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And scale, all of their workflows lynda.com, is how effective teams meet their goals. If you manage a team, visit Monday.com for your free two week trial. All right, back to the show. The one thing that I would push back on or I don't even know if I'm pushing back that when you're comparing all these different stock to flow levels. Like you were talking about real estate is is whatever the number was and then you're comparing it to gold and then you're talking will Bitcoin. Will eventually be at this stock to flow at this point in time based on what the math is showing us, right?
The thing that I don't think is a comparison when you're saying Bitcoin compared to real estate. Real estate is not fungible in a way that you can take ownership of that real estate, like physically. Take ownership of that real estate in a fungible, kind of way. And in a, in a way where you're getting small units that you can then go spend at a Starbucks to buy coffee and I think that difference that we're talking about a currency or something that performs like a currency, but
It is actual like gold in your pocket that you can spend like currency. I think puts a different level of adoption in demand for adoption. Then you'd see with owning real estate. Like as we're going through this transition, you are describing it earlier with China. They're buying anything that has scarcity to it. As soon as they can with the dollars that are receiving, because of it's going to retain their buying power as whatever. This thing is, that's transitioning takes place.
On the other side that buying power, still going to be there for whatever the scarce thing is that they purchased this goes for anybody, on the individual level country, level whatever. But I really think that we're going to eventually get to a point where there's going to be so much demand for people to store their buying power in this thing. That is everything in his nothing and whether the stock to flow is is slightly above real estate or slightly above.
Gold. I think you're just going to get to a point where there's just total fomo of. I can't I can't store 10 billion dollars worth of buying power. In this bond anymore is it's yielding negative, whatever percent like, I just see that hole fixed income 200 300 trillion dollars worth of buying power today just evaporating and getting sucked in like a black hole and it's just going to send it's going to send the curve. Just in a parabolic kind of Direction.
I agree. I fully agree. Real estate is not fungible.
And it's not portable edel eater. Yeah, all those Dimensions. That going is the better money. On the other hand. The only thing where we defer, I guess it's the timing of the events. So yes, the dollar will die made every Reserve currency dies, right? It's a certainty. So there will be something new something better. But when is that happening? It's the same. Same question as the supercycle. Are we entering the supercycle now or later? I think we're the supercycle will be there. It's
Inevitable. But not now. I think there is it will happen after next, half inning. If you will after the stock to flow of Bitcoins will be higher than gold and higher than real estate. Because until that point of structure flow of a hundred real estate will for whatever reason be the preferred asset as we're seeing right now. I'm seeing around me, people put more money in real estate, like, hundreds of millions. BlackRock, for example, is buying the entire city of Amsterdam because those
Companies and the money right now is with old people, they're real estate, and the goal, the physical world and not the digital world. The digital scarcity is a next-generation thing. So I think it will happen. But I also see in my own model that there is a linear relationship between scarcity and value. And I agree. That is one of the dimensions of money Fringe ability is the other one Mort ability is another one divisibility, is another one. That's also a very problematic with houses the visibility but
Scarcity is the, in my view, the most important factor causing that linear relationship, and causing people to put more money in in real estate. Now that will change. Once next to divisibility fungibility portability. Also, the scarcity of Bitcoin will be better than real estate. So my guess would be probably going into that question right now. But so are we going into this? This fomo hyperbolic scenario?
Right now or next year or the year after, or are we going to drop 80%? First have a big war with the powers that be to Central bank's? The US dollar, etcetera, etcetera, and go into that that hyperbolic scenario or or a u.s. Dollar scenario. If you will or Bitcoin is the best sort of value after the next trophic. So say 20 24 28 that would be to period or maybe a little bit after that. Let's see. Some are between 20 24 and 20 30.
To, yes, I think we both agreed. There would be this hyperbolic scenario. Bitcoin will be by far the best asset physically dynamically mathematically above all other, but the powers that be with the largest armies, to biggest balance, sheets. And all the political power. They will fight, they will fight till the death.
When you're saying that, I don't know that, that's what we've seen though today. Like it's kind of interesting and I've been a little bit surprised by the reaction that we've seen in the last six months for proof of work specifically. I was expecting a bigger battle on that front and we're not seeing an especially here in the states. Like it's actually there's some states that are very Pro proof-of-work, bring your mining rigs here and start harvesting as much of this energy as you want kind of activities in. It's, it's kind of surprised me quite a bit.
Yeah, me too. And that was hopeful but it was a big battle. Right? I mean China Banning coal. Mining is Network losing 50% and he's in the value. By the way, write the value of Bitcoin losing 50%, We went from over 60 K to under 30k in a month. So people that think we cannot see another - 80 % crash think again because we just had a - 50 % crash caused by a very tiny, little battle. This was the full-scale war. Yeah, off.
Tracy coordinating. This was just China doing its thing again. Yeah, while China is now played out. It's not a factor anymore because they gave up their their most strategic asset.
I just saw today, literally this, right before we started recording this that the United States now has the most hash rate of any country in the world. And I think it's around 35% or something like that of the of the hash rates now in the United States.
Yeah. I saw that too. And like you said, there's there.
There's some very Innovative and forward-thinking states in the u.s., There is also some very backward thinking and done states in the US
but it's very true. So true. It's
almost like there will be a new Revolution or what is that the Civil War but not the North and South the east and west coast versus the center or something. It's very interesting to see that diver stability in states in the US and
How about in Europe as far as mining goes and proof-of-work. The acceptance of that politically
Europe is under the regime of the central bank's. So the European Central Bank Logano and and the president's before that. They are very, very much against Bitcoin and discouraging A Banks and institutional investors from from investing in it. They're punishing it with severe Capital regimes. You have to hold Capital One to one for each Bitcoin investment and they're pushing it into Criminal.
Corner right there, anti-money laundering, know your customer. They're trying to kill it
on the capitalization piece. There. The one the one I'd listened to an interview with Caitlin Long and she was like because it clear so fast relative to the Legacy system which you know, adjudicates the books at night time, each day. A one-to-one ratio is, in her opinion. She actually thought it was warranted. In fact, she thought maybe may even require more than that because the because there's not some type of stable coin that
Really clears next to it. So there's these these banks that have this on their books and they're not capitalized in a manner that they that they've been D Rick's by not having enough, you know capitalization behind it.
Yeah, I think that's that's true. I mean, it's not an unfair point to make from the central bank's at all because the implied volatility of Bitcoin of course, is hundred percent around hundred percent can be higher. So, discouraging leverage if you will of a Bitcoin position because
Is that, that is, of course what banks are doing normally, they have their, the pension money from other people or Saving Bank savings from other people that they put next to their well, three, four five percent of equity into all those assets. And you should not do that with Bitcoin because you, you will be wiped out and the money of your customers with it. So it's not an unfair point, but I don't know. Maybe, maybe there there, there is hope of course and the truth will always win the Earth is round and not flat like the church.
Used to to say, but that would be, I see a lot of pushback from the SEC, kind of occasional with Gary Gensler, but well, the infrastructure Bill thing, the Senate, the fat Yellen the Congress, I think there is a lot of voices, that, of course, our bank subsidized voices, right? Those politicians. Yeah, they are all captured or linked to a bank for example, yelling the
I'll bank is she gets a lot of money for speeches from from all the banks and and of course, she's there for the banks. The central bank is for the bank's, they will fight hard. That's what their mission is. Yeah, there is hope their states. There is the truth, of course, but there's also the powers that be and yeah, I'm prepared for that next battle. I really think we're going to see a high-top first because right now, the scarcity is so enormously. The supply shortage.
The lack of sellers on chain, right? I'm not on the exchanges but it's so enormous and growing. This will come to a to a point where the, the all-time high will be maybe somewhere next year. But after that, I expect the central banks and their governments and the banks to come in knock it down again - 80% after which there will be a new equilibrium that has to be found. And that might be, that might be the foundation for the the new world. If you will, the Bitcoin world, the hyper Bitcoin.
Ization, but that will be 2024 2032 something around that period.
I don't think that the argument is for these people that the stock the fomo I think, is the name of this is hilarious. I think, for that crowd. I don't know that they're necessarily trying to say that. That if you even want to call it, a model is based on any type of mathematics or anything. I think all that they're putting out is that this thing ends with a hyperbolic push, right? The timing who knows it could be
He said the time frame that you threw out there. I don't think anybody's trying to model when the bend or the or the hyperbolic phase of it goes. I think all they're really saying and maybe a Miss. I have no idea. I don't even know who's behind it. I don't think that they're trying to time it. I think they're just trying to say that. This is how this
ends to be honest. I haven't taken a good look at it. Yeah, I interpreted it as a mean, as a joke, due to Precious talk to flow.
I don't see it as bashing it at all. I really don't.
It's cold stock to fomo and it had the only input there is time. Is that basically a nonlinear time model. Yeah, so it has nothing to do with stalk or two or fomo. It is a time all. Oh,
you're going to Leverage The Brand if you're going to have.
It also looks like my mother, I bet right that cars. And it's like the rainbow model, but rebranded, I like this splashing. There's me me, but don't take it too
serious, right?
I think there's a lot of Merit to the idea that it is going to end that way. But who knows when the timing is the timing could be faster than what either one of us really kind of expect but who knows what the heck's going to have? I mean emotions can get crazy and if you get a few whales, that manage, massive Bond tranches or whatever that really start, this really starts to click for them as to where this is all going. Who knows what can take place? You have a couple more El Salvador's that enter the fold and then you got
every small country in the world. That's been a victim of these policies for decades. I guess, that's my next question for you is at what price point. Do we see more El Salvador's and are the fold? Like, is it five trillion dollar market cap in Bitcoin that we start seeing five other nation states and say, hey, we've got remittance problems here as well. I think we're going to do the exact same thing that appears to be working really well and I'll Salvador here in our country.
That's a tough one. I don't know. Actually, it may amazes me that there's no the next El Salvador yet because the benefits are so obvious and Paul Miller takes a
crazy a lot of Courage, right? So to do it, but it's been done. Now, there's a template
but compare El Salvador to microstrategy a lot because yeah, like, you know, Michael sailor is CEO and owner
of a else has done it. Yeah.
Yeah, but he has like, total full power over the company. Yeah. He doesn't have like,
Like other big shareholders, well, some of course, but he has the voting, right? So he can do it with his small company, right? Microsoft is not a, it's not Google. It's not Amazon, so he can do it. And and it's so it's, it had to be a micro strategy, kind of company that went full Bitcoin and put Bitcoin on the balance sheet and the same with El Salvador. I wouldn't expect the Netherlands, which is also small by the way, or Europe, or you asked to do it, but this poor country with a leader that has almost all the power. Yeah, they can. They can do.
Like hedge funds by the way, right? I mean, bangs and Pension funds are under the regime of the central bank's hatch funds are much in a much looser regime because they don't play with other people's money or not with the banking or pension money, but with high-risk money, so they, they can do it more easily or family offers. They can go into Bitcoin, not Banks not to mention funds easily. So yeah, I really expected another country to enter already a maybe what we're seeing in Brazil.
Will that's very interesting, right? Brazil is, I don't think it's legal tender, like, in, in El Salvador. My Portuguese is not that well, can't read the official stuff. But if that becomes legal, at least, and supported by the government, that's a big thing. Because Brasilia Brazil has over 200 million population. So that's 2/3 of the of the u.s. It's really big country. If they go that's a big thing or Africa, Africa is another continent that the wood
Benefit hugely because they're under the regime of the IMF at the moment there. They cut their that blood sucked out every day by the IMF by more depth and that and that. So they could do the El Salvador thing and I think Nigeria or some country. Yeah. I think it was a Nigeria, is well the way to do what El Salvador did.
I mean if the price runs the a hundred thousand everyone in the world is going to be looking at El Salvador saying maybe we should be doing with those guys are
doing
Yeah, all the other. Add a hundred thousand you can you can better do it now. 50,000 band later at hundred or Lynette. Yeah, it's certainly one of the things that I'm watching like a hawk Howdy's these the countries that are most suffering from IMF how they are acting very interesting even more interesting than the ETF. Maybe
so that was where I was going next. So is that even important?
Yes, very important. It's very early. And I think that that will for us it's like well you can Bitcoin now, why would I do it through an ETF and pay one or two percent service fee, but for pops imams, and people that don't want to pass it in with
keys here in the US. You can already gone by gbtc. I mean, we know it's not the best vehicle but it's there for somebody, if you got a TD Ameritrade account or whatever,
but like you say, it's not the best vehicle. I think people with a lot of money.
But maybe all the people that don't have the digital know how and I think the whole key thing is a bit scary, which it is the old people will nip put millions or tens of millions in some, some vehicle. That's not not as good as ETF ETF is it has like a 24-hour prices or listed. Price is right? And not end of the day, sort of voodoo calculated prices. It's much more transparent and much more legal protection. ETF is really a thing. I think that would open the market for. Also, a lot of
Bangs and other companies to advertise and publish this investment do there. Well that liar.
Okay. So back to a comment. We were talking about earlier about the major op and China taking the hash power offline. Now that we can kind of look at this like Monday Morning Quarterback reviewing. The tapes was was that drop really kind of induced by the the big hashing migration or was there something else that you're seeing in the data or information that you think it was?
It was important through that period of time that cause that what do you think was the root cause
interesting? I think that China think was the bigger thing because all those miles are horse. Yeah, and all those miners, had to relocate to the US or to Afghanistan or other countries around China and that costs money to put the code, the the miners in containers, to fly them over to America, that cost money. So they had to sell Bitcoins and I think it was a lot of fear as well that China would go even further.
Not only mine and Mining but also possessing or trading Bitcoins. So the fear of us was high that the government would ban further and I guess some Chinese people minors as well. We're selling at that moment. So yeah. No, I think that that one. But the other thing of course, that was this Elon Musk tweet thing going on. At the same time,
tons of long, leverage. That
was the. First thing I would ya like to mention. The leverage was enormous it. And of course Bitcoin is if you Leverage
Bitcoin. If you leverage buy Bitcoin will be killed by the exchanges. Your position is known by the exchanges. You probably have a stoploss put in there to quote unquote, protect yourself, but that same stop loss is visible to all the exchanges. It will kill you. They will push it through the stop loss levels and liquidate an entire group of long leverage lungs, or leverage shorts. And then the whole Casino goes again, so
it's their offices dedicated to that specific trade that you just
Oh, yeah. Yeah, I do it myself as well. It's, you can't see the the order books, right? You can buy the audible confirmation from some exchanges. So so, you know where most people and it's mostly around numbers. So they never put their stop loss at the 59 and 99. They always put it at 60,000 or something. So yeah, there's people get killed. Yeah. It's a tragic thing. But yeah, that was going on as well during the crash in. What was it? Me June. And
All those leverage Long's all those people that thought the hyper hyperbolic phase was already going on because Tesla was in El, Salvador was coming. All those people were killed. Of course, if you just bought Bitcoin spot price. I got a captain in Gold starch. You went through a - 50% drop but your back about the same levels as well as it. What it was at that time right now, right. At 55, or where are we? So never ever leverage your Bitcoin buys, that would be mice.
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right, back to the show.
One of the things I wanted to talk to you about to recently. I've been, you know, I set up my own full node, and I've been opening channels.
On Lightning adding liquidity into the lightning Network and just learning. Like just this process has been just amazing. Just like seeing how it all works and in the process of doing this and just opening these channels and then trying to strategically think about like, all right, should I open a channel to this node? Because they have a thousand channels that they're connected to? And then how much capacity are how much, how much Bitcoin should I lock in that channel strategically? And is there money to be made here in a fee?
Kind of way in the future, obviously not today because the fees are just like, if you're doing it for the fees today, you're doing it, not for the right reasons, but what I'm thinking about this long-term and I think about more El, Salvador's coming online and the transaction. Throughput that's going to be going through these rails and every direction that velocity of money that be going through. These pipes could potentially be a risk. Free rate in the future. I'm curious if you opened any channels because I know you run your own.
On full Note, have you opened any channels? What are your thoughts on this idea of locking Bitcoin into channels for a price appreciation on layer 1. What are your thoughts on the? I know this is like a three-part question. But what are your thoughts on this risk? Free rate idea of the, the fees that would be collected on layer 2 Lightning. Being that becoming that standard
someday.
To be honest, I have not done much with lightning today. So I write a white paper. Understood it. I think it's a great concept, it will work. But I try to do a lightning wallet. I don't even know which one it was last year. I failed because I thought that was with the there was this on Twitter that you could have was a donations or something. People could donate some money and pay bottle bottle play. I don't know. But it was enlightening and I thought, well, there was a couple hundred bucks in there. I'll collect it.
See how that works. I never made it. I didn't succeed in doing it. So I guess it's a lot easier right now.
Yeah, it's way easier if you had the right software.
Yeah. Yeah. Yeah, so it's probably right like running a Bitcoin node, which is it is you but once you know what to do, but now I haven't found a time to do it. And yes, I'm running my own note and we're doing most of my time now is allocated to crunching that data and searching for patterns and making algorithmic trading Bots, that Scout the
For quote, unquote, Arbitrage opportunities statistical Arbitrage, of course, but and that's where most of my time is, is allocated at the moment together with the, by the way, a great team of programmers and wants growing fast and the opportunities are enormous, even the cash-and-carry, which is low at the moment issue like 10% per year, which is phenomenal. If you look at the - 1 .5 percent in Europe at the moment, so we're arbitraging. Those Fiat Bitcoin.
You're going after real yields. You're not. You don't want to talk about point, zero, zero, one percent. Yeah. Yeah. Opening channels on Lanie. And for people that are listening, those like, the yields in opening channels on on the lightning Network. I'm doing it. I'm having a lot of fun. Your you are not doing this for the money. At least today. You're not doing it for the money. I'm just curious whether you think that that could maybe mature and do something in the future.
Yeah, I do. I think Jack Morris with strike is doing for that.
It's done, right? It's yeah, it's a real with you. And of course there's the El Salvador connection as well, strike is not yet available in Europe. So we're sort of waiting waiting for that. I understand why he chooses to put out a country's first on the list, by the way, but so I think that chapter is opening once once, strike is opened here and all that. There's more shops accepting it at cetera, or maybe it's just the inertia in myself that I, I know how to do Bitcoin. I really have to learn and I'm learning every day.
Day about a Fiat Bitcoin Arbitrage and unchanged stuff that is possible, which is an entire world. You can spend 24 hours a day there. So I haven't found the time but I really do think that the level to stuff and not only Lightning by the way, also liquid. And the programming layer. The rootstock is very, very interesting and certainly next-level stuff that Bitcoin need stuff will happen there, but I guess and I'll be very honest there. That takes new people.
Like Jack mahler's to front. Run that I don't see myself as having a role or having the expertise there too. Yeah. To lead that or bring that forward. I think other people have to rise and make that happen.
This was a question that came from Twitter. I'm curious to hear your response. Would you ever reveal yourself?
No, I don't think so.
The insanity on Twitter has conditioned you to realize that you don't ever want to do that.
Right. What it's funny cuz having a second virtual Persona is really interesting because you can say things that you would normally not say
you're enjoying that.
I'm really enjoying my jobs, especially investor and and certainly in the structures Finance area that I was
With a legal and economical background. It's like, the we're doing to Wet Works for, for the bank's, the dirty stuff. And it's always in the shadows. It's always, it's not in the spotlight. So, the board is saying this, but we are structuring deals, making Investments and grew a lot of spg's. And so, I'm used to being in the dark working at night and not be in the spotlight. And, and now with a hundred trillion Plan B.
This thing doing interviews like we're doing right now, channels are blocked because this stuff the words that I'm saying are dangerous and harmful, people are getting mad because I said something the whole online thing is both.
You got Snoop Dogg following you.
Snoop. Dogg is follow me. Yeah, with those 20 million followers. It's there's actually 30 people following me with more than a million followers themselves. My reach is getting it's getting crazy. Actually is
What did I do? It's only a Model, A linear model for Christ's sakes. Well, I understand the institutional background. Bring some. You you views may be interesting stuff. But the 1 million followers, come on, it's crazy, but I like it. But it's, I have to get used to it as well. So all the They compliment the, man, the myth, the legend. That's all very, very nice to hear. But but there's also a lot of when the model goes wrong. It will go wrong. That will be a month that I miss.
Watched us the same people who are not those, but, but other people take me down, like nothing happened before. So I'm very aware of that. So, I want to
see you don't have haters. You're not doing anything.
Yeah, right now. Then it sets. Okay, right people, not agreeing, or even bashing and then all the that's part of the online presence, but I all the spammers, all the scammers.
Oh my God, version 8 us, it is crazy.
I mean, I got older.
People that are scanned, right? They think because their scam because I think it's me, it's not me and then they lose their money and they come complaining with me. So I get all those complainers and people are scam. It's not something I was prepared for. I think it's one of my best choices in my life to keep those the virtual presence and the real life Persona different in the beginning. I thought that was that was hindering me. That was because I could not go to conferences. I could not be have my my face. Hey,
The interviews, you can go. You just can't talk.
Might have gone already. Well, there you go. Hey, I like that. I like that. I'm, I'm there already.
I don't think I will be go public ever. I think it's more probable, that I will go dark one day. Well, one of the things I'm really struggling with or right now. I said it in a podcast as well. I have my online, my own chain indicators, so they are from data of my own node. You can you can
Get the blocks. Get the transactions. You can see when the latest transactions were. If it's from Big addresses, small addresses, you can see all sorts of stuff and you can cluster, you can see what kind of transactions are taking place. You know, the other thing is, I don't ask money for anything. That means we'd sort of the Articles or interviews whatever I do it because I like it and I earned my money with investing. I'm an investor right? The money works for me. And so there is a bit of a dilemma about. For example, the floor,
Or indicator. That's very successful at the moment, nailing the 47 and 43 and maybe the 63k this month, and the any on chain stuff that people are asking about how do you calculate it? And can I find it on glass node, and no, you can't. But that's the stuff that I earn my money with. So that's proprietary. That's that sort of I don't want to disclose that. I have three kinds of models, right as you know, right that the stock to flow model, which is fundamental which is more like a very rough thing.
Says scarce assets, scarce stores of value, that are recognized. The stores of value are with more than less scarce assets. Yeah. It's very logical. It's everybody knows that and it's sort of quantifying that very, very roughly. I published that the OWN on change stuff is. Wow. That's that's that's the unique thing for Bitcoin to have that data available and crunching. The four hundred gigs of data is not an easy task. So it's very interesting thing to do and you find stuff.
You find stuff. But, but that's great for tops and bottoms in my opinion and I need a floor model. It's the third model that I use and I talked about it in a bit. But together, with those three models. I can sort of triangulate the market, right? It's not like, oh, stop the flow, says there's no stock to flow. And on chain and formal. They all say the same thing and that gives me extra confidence. If you will opening up about the unchanged stuff and a floor model, that brings me in a difficult position.
That I I open up the Trade Secrets I and that impacts my my earnings, right? And since I don't have a newsletter or anything else that makes me any money anymore. So, so that's that's a bit of a problem. The floor model not on chain. It's not stuck to flow. It's pure price. So, it's a sort of technical analysis thing. You could say it's price, but it's a mathematical thing. It's capturing a classical error, mathematical error that it's not bit going related at all. It's I want this.
Close it right now.
Well, it's interesting that you have out that you have a model. I know that you're posting charts as to what that, that floor prices. I'm curious what what it is right now because I don't know
exactly and and I can't tell you exactly what it is. But it's a mathematical thing. It's just another way of looking at the same price data that everybody is looking at, we all know the moving averages that are as eyes. The well, all the technical indicators, but they all make in my view a classical.
Mathematical error that is typical to the sort of price data, that Bitcoin is the distribution of Bitcoin prices is not normal. It's following a power law. So, you, you would like to you would like to have other kinds of metrics than the standard metrics and and it's making use of that error. If you will, the whole world is looking at the standard technical analysis, tool set to an asset. So, using that standard technical analysis, tool set to look at an asset. That is not standard.
Not normal at all, but more following a power law. Yeah, you would have to look at things like fractal Dimensions or hers components or just mentioning a few, a few things.
My generic floor model isn't fancy at all. But sometimes its Simplicity works, right? It's just a 200 week moving average. Yeah, it's never penetrated the 200 week moving average. And what I also find interesting about that it's a month shy of four years.
Ears. So, if you're dealing with a four year cycle, it's kind of interesting that you've never had the price come down and penetrate. The that moving average.
Yeah, and it always goes up
in heaven and always goes up since Inception
before at the floor. The floor model is the next Generation to on that weeks moving average. Before I had the floor model at the 200 weeks moving average. Again only for the reason that you mention it. It's Flawless, but it's of course, very simple, very very rude and
Or
rough, it gets the job done.
It gets the job done, but it can be done much more eloquently and much more tightly because it's not very tight right
now. Y'all yet most of the time it's nowhere close to
it the floor molar. If it's also very simple as if you see it, you would laugh at it, but it works. Yeah. Eautifully. It's almost like the stock to flow more. But yeah, so, let's see if it hits the 63 and then God knows what happens because I see that every day.
I'm I had one of those marks I get like 50,000 followers in a
day. Keep crushing it man. Love having you on the show. Love these conversations. You've got a website Plan B TC where everything's curated as far. And that's the that's the right domain. Correct Plan. B, TC. Absolutely. And if people want to see your past interviews, they want to see some of your writings on stock, the flow or anything else that you've published. It's all on on there. It's curated on there. What else do you?
Do you have any other hand officer? People
maybe the whole Banning of YouTube thing, make me aware that that I need other channels of communication in case of emergency, right? If you didn't, I'm cancel. If the hundred trillion US dollar account on Twitter is deleted with the push of a button, then I need to be able to communicate to you and and of course person we know each other and I have my other friends in the with direct lines that could that could communicate my new handle. Yeah, but yeah.
So, I've been thinking about that, and the plan B to si.com, website, of course, can be very useful in such an emergency event as most of you have seen. I also introduced the other account of 100 trillion Euro account on Twitter. That's Louise at 100 trillion years old. Louise is my co oh she's managing all the business lines that are under the plan B brand and helps me with planning and managing all that stuff. So she'll be functional as well as
Being the backup channel in communicating in case of emergency of case. Well, something I said maybe today, president, and you're both girls across as somebody who push the button and counts for me. What was my response
when you reached out to me and said, hey pomp just got canceled on YouTube. Are you sure you want to do the interview with me? What was my
response?
Hell? Yeah. Hell yeah. Please cancel
me. Yeah. Yeah.
Yeah, yeah, exactly.
Dude. Always a pleasure. Always a
pleasure. Pleasure is mine. Thanks. Brad said,
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