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It all comes down to computers communicating the information superhighway can be a confusing mix of on ramps and off ramps. Bitcoin is worthless artificial gold. Is it still rat poison? Probably rat poison squared. We need to get into the. World of OK, this is actually foundational technology. What the Internet of Money does is it creates a single network which can do a microtransaction to a giga transaction. The Internet is going to be one of the major forces for reducing the role of gun. The one thing that's missing that will soon be developed is a reliable E cash. Hey guys, thanks for tuning in to another episode of Final Settlement. We had a awesome podcast covering all the news, you know, whether it's the new IP OS coming to market, Gemini bullish or some of the new announcements for the BIS and marking coins tying back to the digital asset treasury companies and you know, some of the fundamentals that people should know about when it comes to management fees and rent extraction there. Quick word from on ramp. We've had incredible demand and interest from the launch of Bitcoin Dynasty Trust. We recorded a podcast this morning that'll go out Wednesday with the first Covenant team tying in a little bit more into what we're doing there. Would encourage you guys to check it out. If you have a lot of questions, thoughts, you can look at our websites right there on the top on our bitcoin.com, the Dynasty Trust services page. There's reports that breakdown how it works, but then also there's a great report that I'll walk through a little bit of the the savings in the process that goes into it. Again, you can feel free to book a consultation or reach out directly to somebody from the team. Michael at onramp.com is a good example where Jackson or Cam. All right, on to the rest of the show. Gentlemen, welcome back to another episode of Final Settlement. Today is Monday, August 18th, 10:25 AM. Little bit of a later start today. Little dreary in my background. No beach day for me today. It's a little overcast, a little rainy, but great to be here with my Co host Liam Nelson, Michael Tango and how how we doing boys? Yeah, this is my, this is my sick game. I was, I didn't think I was going to make it. It's my it's my flu game. You know, whenever they they unleash the new COVID or whatever, but you got dreary. I got like a little, you know, feeling under the weather, but that means we're just going to like bring a little extra heat. So we'll make sure to to to make up for it, yes. Yes, we will. So I think we're going to start with a slew of news items, deals, IP, OS from late last week. We're going to start with bullish IPO last week ran up to about $90.00. It's now back around 65 I believe, but it IPO at around 37 crypto currency exchange based out of Hong Kong, I believe. And this is, you know, sort of a trend that we're seeing what we'll talk in a in a bit about Gemini finally go public as well. It goes another on that list, I believe Kraken as well. So we're seeing a lot of this. But any thoughts on the bullish announcement, Liam perhaps? Yeah, though, I mean, this is just what we've been seeing. I think that they tried to go back, go public back in 2022, but it failed just because of the market interest overall, really positive stock performance. Another thing that we've just been seeing overall and that Bill Gurley's been really on is just like the inefficient pricing. I think that you know, market participants and they were, they received shares bullish did at $37 and then immediately traded up towards like 70. So unfortunate to see the team lose out on, you know, efficient pricing from going public. But regardless, very positive, positive reaction from you know, the public markets. I think it's just everybody knows that right now there's a lot of institutional interest in the sector despite it's pretty much every company under the sun that goes public in the digital asset space is getting some sort of positive reaction. And so at this point, we're just going to see more and more of this and in very early days of it. Yeah. I mean, I think it's positive in the sense they're from a pure techno technological entrepreneur startup, you know, getting liquidity you've been grinding. No matter how much we think or don't think about crypto, it's a positive sentiment to be able for the, you know, get to the public markets them get exposure to your company. With that said, I think it's actually a really good podcast, not really good, but there was any touched on this in the private and public markets, really bad for the private market, specifically VC and on the all in pod. And it was relating to like a lot of these companies, you can just wait for them to IPO and if you know how to pick the winners, you know, obviously the forgot what they're like palantirs, the Facebooks of the world, you can really get a lift. And what I'm taking from that and relaying here is like, if you really like the company, if you think you'd use them, if you, they have solid fundamentals, like, you know, if you like your equity, if you like your store value parked in, you know, the S&P 500 or whatever, then then maybe there's a company out there for you. But would it be bullish? And what do they do? Who uses them would be my question. You know, they spun out of block 1, which was they had its own, you know, interesting originations back in the 2017 ICO bubble. Think they like got, is it 210,000 BTC? Is it? Was it that large? 170 I'm pretty sure. 170 still just like that is an insane number at the time and it it wasn't even that, you know, it was a billion, I think maybe roughly now, whatever that would be. So anyway, it's just interesting dynamic. I think the to the core sentiment is you're just going to see everyone under the sun in the crypto space. It's almost like AI. It's like, look, we could tap liquidity. We like we have the tailwinds that are back in the sense of people think this industry is hot. They want to be able to express a view to it. And so we're this is just something we're going to see and mainly just be careful if you're, you know, trying to park Capital here in a long term buying. Well said. One other interesting aspect is the company went public with 24,000 Bitcoin to they also clarify in their S1 that they also own some wrapped Bitcoin as well, which I believe based on my preliminary reading that they consider the wrapped Bitcoin is Bitcoin on their balance sheet as well. Important clarification. And yeah, to your point, it's it's interesting to see in terms of digital asset sales, which is, you know, the primary revenue stream for the business, it's flat from 2024, the first three months of the year to 2025. Interesting to see that despite the slew of interesting, you know, how much higher Bitcoin is and all the other digital assets as well their institutional focus. So just, you know, interesting to see them not really growing quite as much as the industry at whole. Yeah, another sort of trend following announcement that that broke earlier this morning, the Dutch crypto company Amdax is going to do a Bitcoin treasury company strategy. So Michael, you'd sent this one over via text this morning targeting 1% of the supply. So everyone's going for all the bitcoins, everyone's going to get 1% of the supply, allegedly. Any any thoughts on this one guys? I didn't think you were going to pull it up. I thought it was that funny of a joke. It killed me. We're going to keep talking about it, but I guess we have the, I think the kicker is when we go back, the Bitcoin treasury crazy, we looked at as like the most Fiat thing that has ever existed. Because at the end of the day, when you really break it down as you're just selling one Bitcoin for $0.90 or you're selling one Bitcoin or, I'm sorry, one Bitcoin for, you know. 1.12 to $10. Yeah, you're, you're sending, you're selling and we'll just boot like what were we thinking? And I guess like, if you're going to pull this up, we can, you can go into the treasury market or the, the research from bit Max, because you know, like very few people have looked at the management teams, the advisor agreements and bit mechs had a really good breakdown of treasury company advisor agreements. Looking at just some won't go too far. I think I had them written somewhere. But ultimately it's like anywhere between 1.5 to 2.5% annually management fees, fees that go to these management teams. There's one, again, without naming names, you can read all this that the, the company gets exposed to 85% of the Bitcoin appreciation and the other 15% goes directly to the, to the management company. And then obviously on Twitter, you see no shortage of kind of where these salaries are coming in from, you know, leadership, it's just a grift. It's, it's a huge money grab. And like the reality is because there's multiple layers to be able to pull it down, where like if you really had a fundamental business, you would just pay all that stock and then they would, you don't need the cash. And then also if you were really building a fundamental business, you would use that cash to provide additional value. It wouldn't go to like, like just the whole thing doesn't align with fundamental value and ultimately fundamental value being delivered. So anyway, I thought this was a good write up goes into obviously some of the other crypto dats and Solana and they're all equally. It doesn't matter if it's Bitcoin, crypto hyper liquid, you know, there's a story ton. I think the sad part is this is just getting started. This is going to go much higher than we I think are expecting. I think we're just kind of in a mini lull right now for the the dat Dat craze. Yeah, you know, it's well said and you know particularly on the sort of dat side outside of Bitcoin with this all strikes me as is just like a way to effectively like re ICO all these old coins just in the tratify world. So in a tratify wrapper and just do a, a very similar sort of pump and dump to insiders who get in early on the deal when there's actually nothing fundamental either from a business perspective or the even the underlying token. And so I, I would also agree with you like I, I do think this can this can persist longer than than many anticipate, despite how insane it it already seems. Maybe slight transition to another a few other announcements from last week, more on the mining side of things. So block finally came. They've been working on this for a few years, but they came out with their mining hardware. This is called proto and pretty big deal. I, I would say in my mind, just in terms of, you know, historically in the Bitcoin mining space, there's been a concern or general risk that a lot of the, or the vast majority of the manufacturing of ASICS is in China. And so Block took upon themselves to actually build out from scratch mining hardware business as sort of one of their many subsidiaries that are are sort of Bitcoin focused. Any thoughts on this one guys? Yeah, manufacturing, mining hardware is a very difficult business and the biggest players in the space have been around for a long time and just have a ton of capital, which is essentially what you need in order to be competitive. It's very capitally intensive business. What's most interesting here and has been an issue for the industry for a long time, is the module. It's modular in order to kind of swap, repair all of these basics as they continue to depreciate over time. There's a lot of repairs and changes that happened within the industry and this is going to be very positive in terms of, or it sounds very positive in terms of the actual changing and repairs for the infrastructure. We'll see how well it actually goes out in terms of, you know, the deployment and everything. But the other most interesting aspect too is that they're planning to open source all of the firmware, which historically has been an issue with respect to the mining manufacturers and blocking as a company in total just seems to be really leaning into Bitcoin as a whole. They have now square rolling out to all the merchants. Proto rig is, you know, a competitor to bit main micro BT they're they're really leaning in and and obviously stacking Bitcoin themselves in exchange hardware devices. It's, it's good to see and, and hopefully these, the announcement and the adoption of it continues to, to be as progress or be as strong as the announcements. Because we've have seen unfortunately a lot of these announcements that have kind of not come through quite as well as many of the industry participants really hoped, but you know, very positive to see at least from a design perspective. Yeah, I don't have a lot insights on the mining side outside of the what Liam touched on. The modularity is pretty interesting and the the take is that what you would take in a two to four year depreciating asset you can extend to 10 years, but been able to switch out those boards. So you know, in theory it sounds more efficient. I I think Jack and and Block are an incredible company. I think they're net definitely net positive for the space. Everything that they've done from spiral to to the, you know, cash app integration being one of the first, you know, I think they have the bit license, but being one of the first to offer like a Bitcoin only exchange back in like 17. The thing that I'm most interested or want to call out is where they'll succeed in any of these sectors in a vacuum, meaning it's my fear that there's such a large company that it's really hard for them to start from ground up because that's effectively what you're doing is starting from ground up to build like an area. It's not like Google started in search has a very like, you know, had a very strong hold there and they could start to like filter into these other products that were tied into search and the Internet. You think about Chrome and Chrome naturally served the browser from search into Google search where you see like the the hardware device is a great example at face value, it may look super interesting, but anybody that's like shipped hardware devices on boarded individuals in specifically collaborative custody. It's like a not really a great product for 10 different reasons. And it's something that would come from a company that would have, you know, billions of dollars at their disposal. Because I was also at Google and I understood like those are well meaning individuals, but it's very inefficient when you have 10 layers of middle management planning different products and services and doing, you know, user testing versus like truly being focused. And so that's kind of my take is just like, I wonder how much even all the way down to the terminal stuff, because the terminal exists, you know, in the sense of like cash up, cash up the application, the terminal and that there's the perfect synergy there. But like, do they really have whether it's the will the connectivity to go out and get millions of users to start adopting it. Now the the counter to that is Jack is, you know, world class entrepreneur. I don't know how many entrepreneurs have run publicly traded companies. 2 CEOs. He could be playing a very, I mean, I know he's playing a long game because this is all setting up for, you know, multi decade Bitcoin exposure. So I don't want to discount say that couldn't be a master plan. But it's just something that I think about when I see a lot of these updates come out. It's like when I look at if there was a singular company singularly focused on what block is doing, they're not doing anything like best in class and somebody else will go out and run them if they were focused solely on it. Yeah, it's fair. Maybe just one other mining related announcement, then we can move, move on. But Terra Wolf signs 200 plus MW 10 year AI hosting agreement with fluid stack. This is notable just in, in the sense of again, sort of an ongoing trend that we've seen is either Bitcoin miners getting into AI data hosting or the other way around. And so you, you're sort of just seeing the merging of these two fields, Bitcoin mining and AI infrastructure. And Google was a part of this deal backstopping 1.8 billion fluid stack obligations. And so this Nets out to, you know, Google being involved. I think 8%, they have an 8% stake in the company. And I think I saw a tweet this morning that that is now actually 14% they upped it. Any thoughts on this or we can we can move on? I guess it's at a high level. Bitcoin mining is not great for economies of scale for the most part and AI high, high performance compute is. So it's just natural that larger Bitcoin miners are going to shift more into that industry just given their ability to source low cost electricity. So it's just something that we're going to see more of. Other than that, no, no real insight that's differentiated. Yeah, the only thing for me is just a fascination between mining, AI in general, you know, technology. Like you think about these things two or three years ago, it was generally desperate and they were segmented. And then AI started to really, you know, take a stronghold when it came to compute power. And then you saw, you know, Co location and then natural blind. And I can't help but think there's going to be increasing synergies as you go through it. Now, the interesting part is like the AI models and my understanding the way that that they, the cycles require like, you know, 100% out of time. It's not like mining where you can shut off, but this still concept exists that the miners are like the cockroaches, at least in Bitcoin mining that they're out there. They're the Canaries in the coal mine looking for the cheapest cost of energy. They're like the wildcatters and then everyone else comes behind them. And so it'll just be interesting to see how they play out. I think part of a big mining deal that just happened over the weekend as well was Galaxy. It wasn't even mining. I think it's it's AI infrastructure. It's a big facility down in Texas that they saw. I don't even know exactly what the headline was, but it was for a sizable power plant in Texas between Galaxy and they had like Novogratz down meeting with Governor Abbott. Yeah, slight transition back to sort of IPO world. This one was fairly startling. People called this out on Twitter. These are pretty bad numbers coming, coming out of Gemini, unprofitable 2024 for a crypto exchange. How someone replied to that. Am I reading this correctly? 140 million in revenue in 2024 and they spend 130 million on salaries. There's a lot, a lot of ways to unpack this one. I think what comes to mind most for me is like something we've we've sort of known and, and talked about a bit on the show is like retail really isn't here. And these numbers would support that in the sense that, you know, entities like Gemini, Gemini are, are primarily retail focused businesses. And you know, having myself worked at Coinbase for a stint, you know, I, I saw the, the business model of retail focus exchange first hand. And the, the underlying, the underlying incentives at play there, which are effectively, you know, they, they make the bulk of their revenue from getting people to trade and really pushing them out the risk curve and, and getting them to speculate on all these the really the long tail of crypto assets and making the bulk of their, their money from trading revenue. And so interesting to see, but I think this is just indicative of what we've all sort of felt is that like retail really isn't here. There's you know, marginal institutional bidding. Here's the the, you know, treasury companies, the Dats now. But by and large, it feels like retail really isn't here. But there's probably a few other ways we could unpack this one or your guys thoughts. Yeah. I mean, one of the main ones is we're still kind of in a mini crypto Bitcoin bear market, at least for for companies in this space. Because to your point, something we just felt anecdotally that retail is in here and the retail that's here has been stepping in. We had James Sayford on the pod last week explaining about 700% of ETF inflows has been, you know have been retail and then the Bitcoin treasury companies as well. And so when you look at whether it's a Bitcoin only company that's doing exchange or a crypto, you know, exchange crack in Gemini, like even though the price is sitting at, you know, close to all time highs between like micro strategy and this like constant bid from large buyers, there hasn't been the natural retail bid. And then usually in the markets for exchanges, the retail bid for Bitcoin as Bitcoin grew, then it naturally flew, flew into alts and then trading. And so that's just one core component. I don't think enough people really appreciate. There's a lot of companies still bleeding out there. And then it ties into unit economics. And this is really just kind of like Fiat bloat, one-on-one, whether it's traditional tech company or crypto exchange, there's just a recognition or unrecognition of how to build a business in these companies. This tweet that Brian pulled up his am I reading this correctly? It's 140 million in revenue in 2024 and they spent $130,000,000 in salaries. And it just really ties into as you build a business, you naturally have to compete for talent. And there's generally two ways to compete for talent. You can give them more money and that's effectively mercenaries or you can, you know, effectively give them more meaning and for for oversimplifying and you can actually have a sustainable viable business that makes a difference. And then those people, you know, at a certain point of capitalism, like you naturally will almost do anything. You don't necessarily need more money. You need something to like be able to make a debt. There's a lot, there's a lot of things to go further into it. But point lien is like these exchanges are mercenaries and so they have to go out and a lot of these companies are and so they have to go pay these 203 hundred $400,000 base salaries along with crazy bonuses, corporate cards. And that's just that the individuals that's not titling marketing other referral spends. I think there was some losses that had to do with the Genesis deal. And so again, it ties back to the bullish conversation earlier. Like just be careful if you're getting exposure to these public equities because the name brand and crypto, you know it. It's just the same thing we talked about with traditional equities. They're the the price of earnings multiples are at like at insane all time highs. And do you really want exposure to that? Especially if you're listening to this, you're probably weighing it against Bitcoin. Yeah, that's Paul, said one, I looked at their S1 a little bit closer to and some of the metrics that they closely follow it's it's pretty much all just trading volume and futures volume. So that's grown like 50% for the industry from 2020 to 2024, which is when you know, their latest S run comes as well as interestingly in 2023 to 2024, we were in just so absolutely Raging Bull market for Bitcoin. There's you know, I think here it it it probably doubled there went up even more than that. I think it was like 42 to to something even higher. Their monthly transacting users went up 14% and I was shocked by that. I was like, all right, well, you know, they had their whole issue with Gemini Earn and thought that, you know, maybe it's just an issue or they're underperforming the industry. But one looked at Coinbase as well and they're the same exact numbers and it's pretty much similarly like 14 ish percent so far the first six months of 2025. So a lot of the things that we've been saying about the lack of new users in the space is just driven by, you know, the the industry overall I think doesn't have very good brand after everything that happened to FCX back in 2022. And you know, everybody still just generally thinks the industry is a scam. We've seen one of the new 13F filings of Revan Howard taking you know, over $2 billion stake and Mubadala or the Abu Dhabi sovereign wealth fund leading in a little bit more. So it really is just a lack of retail driven adoption at all of these, you know crypto exchanges and just lack of really new industry retail driven participants. It's awesome to see you went through that and it's a fascinating insight of the, you know, kind of ties it it, it provides the data back in what we said anecdotally about retail not being here. I think a lot of this ties into where there's a huge opportunity in this space, whether it's from investors on our side or if you're an entrepreneur and having the focus. Because one of the, the at least my understanding of where Gemini came about was the the winkle by having that, the Bitcoin that they held trying to get an ETF, because I think they actually wanted to park their Bitcoin in the ETF and seed it. I think from a custody perspective, ultimately the SEC coming back and saying, hey, you know, custody is a problem. So they had to build an exchange and then they went down the rabbit hole of we're doing things the right way. If you guys remember back in 17 and 18, they were the like doing the I forget what the slogan was. Point being is that they were trying to do everything, you know, a certain way and then they end up getting their clients rug via Genesis. But there hasn't ever been a direction there. There's no direction. Are they for institutions? Are they for individuals? What are they? Are they for family offices and derivatives traders? And the point mean is you can imagine how that growth would increase if there was a natural vertical integration like Bitcoin, just Bitcoin is a savings technology, right? Like that's pretty powerful, but nobody says that specifically. Nobody at scale because they've had to raise capital or they're all the way down the long tail of crypto assets. So you get the Krakens, the coin bases, the, you know, the Geminis, the world of them say like FTX and block 5, but they're they're no longer here. But it was a similar concept that they were selling everything to everyone under the sun. And so you really are all fighting, everyone's fighting over these scraps of this like speculative mania coming into digital asset. You land on the page and you have 101 crypto currencies to trade versus like somebody that built a vertically integrated strong solution on how to get best of class exposure to Bitcoin. How do you custody and how do you lend against it? How do you develop IRS? How do you do all the things that this asset continues to grow? And here's the kicker, it continues to grow at whatever the CAGR is. So your dollar denominated balance sheet actually is increasing with it, while the Bitcoin stays the same. It compounds and that's how early we are that this is just foreign and you we talk to people all the time. Like that would make zero sense. Like if Bitcoin's the only thing. I'm curious your guys thoughts on that because it seems so clear to us. But this is where these companies come into a gap because they're all fighting over the all the same D Jens And so like, that's how you get 15% growth. Yeah. I think it's also a function of just general short termism as opposed to thinking long term like everything you described around. Like if they were to have a more dedicated focus around Bitcoin, like that is thinking longer term because maybe that doesn't lead to insane trading revenues in the short term. But over the long term, you build out financial products and services that are akin to a specific asset, a specific asset, which will actually help people preserve value over the long term versus focusing on everything under the sun, as you mentioned, really going after sort of short, short term manias in hype. And that lack of focus I think is just indicative of like, yeah, if you, if you're, if you're everything, if you're trying to do everything, you're kind of doing nothing would be my my broader take away about a lot of these types of companies. Yeah, that's exactly right. And I, I was thinking while you guys were talking just about, you know, what may be the other side of this with publicly available financials. And the only one that I could really come up with was River. No, they just put out their audited financial statements for 2024 and you know, they, they don't have anything for 2023. So it's difficult to compare the growth in total users from, from them, but I would imagine it's probably higher than 14%. And then just looking at, you know, salaries and related benefits at 8 million for River versus 130 for Gemini, it's just, you know, completely different. I would imagine that that team is a little bit more mission focused on bringing Bitcoin to the world and and in a in a really thoughtful way. And, you know, wanting to stack Bitcoin on the balance sheet does have a implicit cost. And so, you know, there was just kind of one example, but every business under the sun should be thinking that same exact way of just, you know, the ability to stack Bitcoin is and you should be comparing every single cost that you have versus this returns that it will generate by just holding more Bitcoin and not just, you know, Bitcoin and financial related companies in general. Yeah. And I think that underpins why this isn't a buy if you're a, you know, stock trader have advantage of portfolio. It's ultimately the the notion of you like I forgot the exact term, but it was it's, it's the whole idea like throwing good money after bad. Like if a company needs additional equity round specifically like the private markets, it's like 9 times out of 10, if not ten times out of 10. They're not going to get their unique economics and fundamentals better after they get more money. And so if they already manage the company like this, getting the public markets does, it is not going to make them some insane efficient company. And we're going to do a show or something on this because I'm kind of like from Brian being in the private banking space and investing, you know, in AI, don't know if a Buffet ISM is the word, but like studying Warren Buffett. It's just a realization of like this whole thing. If you just have a low time preference or 10 year horizon, you can just out compete everyone in almost any field, specifically here. So whether it's building a business and focusing solely on Bitcoin or it's just the notion of holding spot Bitcoin, the compounding nature of not touching that asset was just kind of forward to me. Like you, you know, you hold it, but from an ideological or whatever it is. But when you go look at the greatest investors of all time, this is how all their wealth was made is finding out how to be busy while their asset ran. And that's what I think one of the bigger versions for myself on the pubco stuff. It's just a trade. Everyone is so mired in the like day-to-day. What's the hottest, what's the latest thing? And when you take into account just a simple like selling in taxes, you're already going into the black, let alone everything else when you're missing out on bitcoins appreciation anyway. So like I think there's I just this is like I'm coming about it on the other side of it after holding Bitcoin and not, you know, selling and trading it, realizing like this is the fundamental innovation as you just little part you literally park it anyway. I don't know if. You no, no, that's that's spot on. And you would share over the weekend a, an old clip of Warren Buffett speaking at University of Florida. And, and I had watched that many years ago. And so it was, I'm glad that you'd shared it because, you know, say what you will about Warren and, and his, you know, disdain for Bitcoin and, and maybe, you know, clouded judgement around generally newer emerging technologies, but there's a lot of things that he, you know, built his stellar career on that are objectively true. In terms of one, what you mentioned, the long term orientation, I think is, is key to outperforming just generally speaking, whether it's stocks or emerging tech. But the other, the other one that's he, you know, he talks a lot about in that, in that clip that you that you'd shared is what we sort of just discussed, which is focus and not branching out to things that you don't have, don't understand. And so keeping things as simple as possible because that's what allows you to have a long term view on something. If, if it's easy to understand, simple. Like, you know, he talks about the see's candy business. You know, it's a very simple business. The numbers are, are pretty plain vanilla. And if you can just raise prices a little bit each year, like, you know, he knew that that business was going to do well because it had brand recognition, a mode around it, etcetera. And so it's this, this notion of simplicity or staying in your circle of competence, which I think is super critical and also, you know, relates to exactly what we're talking about. Like if you are trying to service the entire crypto sphere, you can't possibly have a circle of competence across all of these different domains. And it's also not simple because a lot of it is, you know, the vast majority of it is bullshit. And so how could you possibly have an expertise on something that is not doesn't even have fundamental value? And so you kind of have to play this game where you pretend to know all the stuff about all these things, whereas then you compare it to like the river example, it's like, well, no, they deeply understand Bitcoin. They're solely dedicated and focused on that. That's their circle of competence. They have a very long term horizon and that dedication to the one thing the singular asset is actually their that's their ability to forecast it long term. And so I think, you know, say what you will about what Warren and, and the, the value investing sort of ethos and, and the disciples thereof, but there's a lot of truth in the, in the things that made them successful that are applicable to, to this space as well. Yeah. I mean, this is the notion of really just rechecking your priors because I had the version of Warren just giving you see the clips he has. But in that video, there's more like alpha or value I heard in the 1st 15 minutes. I probably heard in the past 15 months from anybody talking even like newer, you know, individuals outside of Bitcoin. It's just timeless wisdom. And to back into how I got there. So there's a really great book called Richard Wiser Happier and it outlines like the top 15 investors of all time. And I forgot what the investor was, but it was basically saying that he listened to that that video like 15 times or something like multiple times in a year. I was like, well, I got to listen to it because why the hell is somebody listening to it for, you know, 15 times? And so there was the notion what Brian shared, haven't even finished it. But the other part was breaking down long term Capital Management. And how did 16 people all blow themselves up? And he was breaking down how these 16 people were the best in their class, the best professionals, like they had every reason not to. And he's trying to understand what brings somebody to play a game where there's a chance that they can lose everything. And he likes, and I'm missing exactly what he had said, but he likens it to like, effectively playing Russian roulette. And even if you have like 1000 shots and there's only one bullet and you can make $1,000,000 or a billion dollars, by definition, you still shouldn't play like you would never play that game because you can get knocked out. And it just reminded me of custody as a, as a whole, because most people just rely on a single custodian or they rely on their own self custody set up. And if that's all your money and you messed it up, like if there's one small chance that a fire or whatever happens, you get hit by a bus and your family never recovers, you should have played that game. But we do for a number of reasons. And they're more psychological. That's what made Warren Buffett greatest. Like he was at risk. He managed risk appropriately. So anyway, I think this just it's a it's a it's a good example of like just sticking to those principles can do you very well as a person, as an investor or company builder if you just kind of go away from the noise. The other one I think was Nick Sleep, because that's why this book got, I think so popular is because Nick Sleep, one of the best performing asset managers had never like opened up kind of like, I think I think he had a shareholder letters, but he had never given feedback on like what went into the psychology. And these guys were similar and very concentrated bets. But he also referenced how like they had one Bloomberg Terminal and it was like on the other side of the office and there was no, there was not even a chair. You had to like lean in to like view it because it was just the notion of staying away from the day-to-day news. We think about like Twitter and all these things. You're literally just like blasting people in the face, moving them out of position or getting them to think in short term views versus like the thesis of Bitcoin has relatively been the same for 15 years. It doesn't matter what happens in the short term. It's doing what everyone expected. 100% that's very well said and I think that many people in the space would be do would do well to hear a lot of that like you know the thesis of Bitcoin, I could go into a coma for 15 years and would be completely unchanged. But there are many people out there who look at the revenues of hyper liquid over the past month or so and think about how they should be allocating to the space for the next 10 years. And it's just completely out of touch with reality as well as just like everything related to to business building, as you mentioned it, it should be, you know, the the greatest flywheel is potentially, you know, the adoption of Bitcoin is from both, you know, users adopting it as their reserve asset and in custody. Everything to trading and getting exposure, especially for all the hedge funds, all the products and services that you need around it. The companies like like the blocks and the rivers are trying to create should be one of the should be some of the fastest growing areas of the market, just giving bitcoins adoption and the reflexive feedback nature across all of the other related products and services around Bitcoin. But there are many of these publicly traded companies, especially most of them that are looking to go public that just haven't completely identified. That's the core thesis here. Just trying to grow, you know, monthly active users and adding useless to their, you know, product road map platform rather than focusing on what what will be the good part. Their core business for the next 10 plus years versus what's the hot aspect for today that they can really start to get some revenue off, but maybe a poor investment of time, resources, etcetera, just because it's going to take away time, energy, effort and focus from the core business. 100% and a few things that you noted in there. It's it also comes back to competitive forces, right? Like we could do a whole show on why, you know, Bitcoin has an insurmountable lead and has really already won in terms of digital store value. And so that is, you know, akin to a Moat around a business. There's a Moat around digital store value that is extremely hardened and it's a wide Moat, whereas everything else in the crypto space has effectively 0 Moat. And it's going to be continued, You know, there will be continued competition and people making, you know, faster, cheaper block chains, which are inherently centralized. And so it's, it's very difficult to forecast 10/20/50 years out when there are those ever increasing competitive dynamics at play. And so that's, you know, a lot of what Warren and, and sort of all the, the school of, of traditional value investors talk about is predictability, the ability to forecast long term and and really, you know, finding things that have defensible notes because that's again what allows you to have a long term vision on something. Yeah, maybe. Yeah, Yeah. Go ahead. Before you transition just the IT all goes back to rent extraction like that's the core idea. Maybe we'll talk about it again next week, but the notion of whether it's like trying to arbitrage daily active users or the the dat stuff like everyone. And it's not anybody's fault. It's just the nature of a Fiat. And as you have more dollars inserted, you have people chasing. How do you arbitrage that? You see this at the state federal, you see this is like medical care, like everyone's trying to get theirs. And so you look instead of providing value, how do you extract value? And I had a lot of time on my end this weekend because everyone was sick. And so I was listening to a bunch of politics and catching up. And there was a really good one with a issue to talk. Laura Shannon. There was a guy, I can't remember if, if you remind me after we'll put in the show notes. He was effectively a guy that came from Trapfy. And they were breaking down like all of the mechanics with the stable coin stuff and the relation to like, you know, building their own blockchains and blah, blah, blah. And it was, he was really thoughtful because at the end of it, he was like, I think who wins? And, and what it looks like is, is really Bitcoin because of its neutrality. And like, well, that's obvious, right? Like it's neutrality. And it's like this notion that it's, you know, censorship resistant and unseasonable. And like, so then you have this like thing that hadn't existed and then where the value occurs, but that again, is antithetical and juxtaposed against what people are trying to do is extract value versus try to like lean into it and figure out how to, you know, deliver value around it. And so yeah, I think it's just full circle as we we think about like crypto in general, it's like how do I launch the token, make some money? And then the sad part is that's where people's like reputation comes in because there's a lot, there's a lack of long term orientation or reputation. And that's the reality. We said earlier about trying to sell, it's like trying to sell a Bitcoin for 1.1 or sell a Bitcoin, you know, $1.00's worth of Bitcoin for $2.00. Like that's inherently Fiat. And that inherently is it can't persist forever. And so when this eventually happens that like people's reputations will be burned. And most people don't care about reputations because we have a very short term mind frame or mindset it when it comes to all this stuff. So yeah, there's just a lot of like really interesting stuff that like will be fun to. I know you did a great piece of Bitcoin as the ultimate value investment as an ode back to Warren Buffett, but it'll be fun to bring back more of these concepts because for whatever reason, they've kind of just gotten pushed to the side when they're like time lost one. Yeah. I, I think the, the one aspect that we're all kind of trying to tie back to is it's better to almost overpay for a really good business or asset like Bitcoin rather than it is to try to, you know, buy what they perceive to be an undervalued asset and try to time that. And until the market values it properly. Because you know, a lot of the times the undervalued asset or is just, you know, valued properly, whether it be some of these alt coins out there or these dats that don't necessarily have a very long term value proposition to them. And if you, you know, I think most people are just inherently bad traders, especially if they don't have inside information on the token or dot or whatever it may be. And so it's just significantly easier both for your mind to just focus on what you're best at. If you just focus on, you know, what is going to provide the most value over the long term and continue to focus on that rather than these inherently these businesses and tokens etcetera with just poor unit economics and trying to buy them at an undervalued metric and and hope that they can turn it around. Yeah, it's a good, it's a good point. And, and interestingly, that is sort of a, an evolution that Warren himself and other value investors sort of progressed through was, you know, initially in the, in the early days of value investing in sort of the 80s, there was this notion of like investing in a cigar butt business, which, you know, proverbiable proverbility, like, you know, there's one puff left on the cigar, but it's way too cheap. And so you would buy something like that because it's, you know, quote UN quote value investment. And effectively, he got burned on too many of those and and evolved his thinking on that over time to realize exactly what you said, Liam. Like in some scenarios, like it makes sense to not overpay, but pay up for a higher quality business, something that is more defensible, has a strong management team, all of these factors that you would look for in a quality business. And sometimes, again, over the long term, that's a much better bet than looking at a cigar butt type business. Hey guys, hope you're enjoying the show. There's a lot to talk about today. Quick note from Honorim, I wanted to call out that we had this last week or Honorim mid year client briefing. We had over 200 individuals that were clients of on Ramp and also friends and family that join. I wanted to share a few of the responses that initially came out before we we took a poll to help influence kind of some of the topics we talked about and common questions came up around what is on ramp offer beyond custody and inheritance. How does the insurance product work with Lloyd's of London? How does honor and protect against digital threats? How does honor and protect against physical threats? How does inheritance planning work? And really, what are the differences between multi institution custody and self custody? It was a great session and if you're interested in learning about it, please shoot us a note. Michael at honor@bitcoin.com, Hello at honor@bitcoin.com or book a consultation. We'll happily share that private video so you can get some more information on what we do. Hope you enjoy the rest of the show. Hey guys, hope you're enjoying this show. Wanted to give a quick call out to the Guild by early writers and on ramp. We have no shortage of exciting things coming out, whether it's world class research, the investments that we've been making and we'll be announcing soon that our public as well as the opportunity to give operators and investors asymmetric information and insights really into what we're seeing, what we're building in the market. There's no shortage of clients and folks that listen to this podcast or regular podcast that really want to figure out how they can get involved in what we're building. And ultimately, maybe not ready to leave their full time job, but are thinking about how do they start to allocate and then also invest more of their time into a private network so they can develop what their core thesis is will be as their next chapter. And whether it's investing or operating slash building a company, I'd encourage you to check it out and then reach out or just subscribe to our research. We're going to be sending some updates about in person events, virtual events, polls and data sets that we're capturing around the industry as a whole. I think there's a lot of listeners that get a lot of value for it. So I felt it would be a good thing to call out again. You can always shoot us a note as well. If you ever want to discuss or learn more at contact the early writers.com. All right, have a great rest of your week and we'll see you on. Don't forget Scarce Assets this weekend. Wednesday for the Dynasty Trust Deep Dive and then Thursday we have a pretty special guest for the last train. But I do want to transition slightly here to Bank of America put out a survey. I think they do this either monthly or quarterly. But this most recent one for August, it's the Global Fund Manager survey. And there was a few different charts from this circulating on Twitter. This is this is where we'll start. Marty had put this out and many others had as well. Global fund managers are still woefully underweight Bitcoin. A recent Bank of America studies found that just 9% of managers that responded have any exposure to Bitcoin with a weighted average allocation of those who have being 0.3% of AUM. So the smart money is still missing the best performing asset of all time over the last 16 years at least. And so here is that chart. But this is, you know, as we were talking about before retails, not here. And you know, institutions are are allocating at the margin, but by and large, they're still, you know, structurally underweight or have no exposure to Bitcoin or, or crypto as it as it's described here. I thought it was interesting that part of this, it shows 48% of investors have exposure to gold, 2.2% of AUM. So it's pretty significant difference, you know, basically I guess 5X from 5X exposure from the the cohort that had exposure crypto. And then what is that like 77X, roughly 7X the size of allocation to gold versus VTC? And it kind of ties into what we've been discussing that as Bitcoin aligns more with gold from a sound money trade, you're going to naturally start to see these investors get, you know, more proportionate allocations. It still has, I think, Bitcoin in crypto or two intertwined that these individuals just see all of it as noise and like, what's the next Bitcoin? And there's just, again, any ties back to the education aspect of it? Yeah. I would also, fund managers are generally very unsophisticated and generally underperform the market, whatever their benchmark is over time. And so they're going to be the last ones to really adopt this in a meaningful way. It's going to come only once they've adopted it from a personal perspective and their clients have asked for it enough times that they're going to understand exactly how to get exposure. And the V1 is not going to be the way that they will ensure it in the long term. And so it's really not that surprising to see. Yeah. And then this goes into, I think, I think we did it on last trader with Brom about Ray Dalio making some comment. I can't remember the numbers on gold and Bitcoin, but it's like that's what he's saying publicly. That's not probably what his portfolio has. And there's a lot of inertia underpinning why he would say that. In the same way there's a lot of inertia where fund managers, financial advisors won't position Bitcoin anything in material amounts because a, they have a book of business. They don't want to look lose that book of business because of the aversion to the asset class. And then also, I think there's a lot of fear that if you're, you know, telling somebody to hold spot BTC, it's like, why wouldn't they just hold it themselves? Which I think is kind of like doesn't make sense because there's still a lot of knowledge needed to manage, you know, Bitcoin if you're going to do it for a long time outside of what you're just saying to the ETF. But that's a lot of these things tying to some of the things we'll be doing on the honor of Bitcoin trust, because I think Brian, like that's a huge component of going to this rabbit hole of, you know, just prudence that the trust is a is a no brainer for institutional investors. Because if you're thinking about a buy and hold, well, then you need to make sure to that quote earlier about you can't get knocked out of the game. Why would you be willing for Coinbase to go down? Doesn't matter if it's one in 1000 chance that the bullet can be, you know, the trigger pulled and there's a bullet in the chamber. It's that you have to think about this. The problem is that most people again here at .3% allocation, so it's very speculative. So you're going to custody in a speculative way, which is again underpins just how early we are to this whole thing. Yeah, I was just going to say that's spot on in the sense of if you view the asset as speculative and your, you know, allocate allocating a, a sort of flyer allocation, whether it's 0.3% or, or whatever it is, it's that's de minimis relative to your broader portfolio. You're not really incentivized to to think about custody critically because you're already considering that allocation as being able to be knocked out of the game just due to the investment thesis being wrong and it going to 0 because you know, it was a scam or had no fundamental value. Whereas once you start to see, you know, specifically Bitcoin for what it is and and you allocate more materially to it, you start to think a little bit more critically about the ability not to get knocked out of the game because you start to realize you're not going to get knocked out of the game due to the investment thesis wrong being wrong. Bitcoin is not going to go to 0. And so the only way that you screw this up is effectively picking the wrong custodian, having single counterparty risk to the point where you could get, you know, theoretically knocked out of the game. And so I think all of that is to say like we are very early and sort of the the transition of people having, you know, at least in these circles having material exposure to the point where they start to think about this stuff a little bit more critically. The other chart that I wanted to share from this same survey was one that Luke Grumman highlighted. The question was effectively asking the respondents, do you expect the next Fed chair to resort to quantitative quantitative easing or yield curve control to help alleviate the US debt burden? And the majority of respondents, 54% said yes. And the other notable thing here is that so Harnett, I forget his first name, but Harnett is the chief investment officer at Bank of America. And in response to this data from the survey, he said effectively raise your allocations to gold. And again, crypto, not specifically Bitcoin here, but just a recognition again that I think despite how early we are, there is more and more talk and discourse around dollar debasement, inflation hedges and recognizing that sound money, particularly gold and Bitcoin have a have an increasingly important role to play in portfolios, whether that's at the individual level or or the institutional allocator level. Any thoughts there? Oh, great. I think it's going to be even more interesting to see all the speculation about Fed chairs. And as the they narrow down the list of Trump's 11 or so that he said that he publicly is interviewing or considering for the Fed chair. What they start to say about the monetary policy is going to become significantly more important than anything the Powell does or existing Fed Chair members because it's all markets are forward-looking and they're going to continue to see where they expect interest rates, yield curve control and quantitative easing to go longer term as well as to continued issuance of short term Treasuries versus long term. Yeah, one, one thing I did want to raise Michael. You'd beat me to the punch on this one. I wanted to share this one, but you'd already had it on the list. The BIS proposes grading wallets for permissionless blockchain AML. And so effectively what this is suggesting is that the Bank for International Settlements is thinking through ways to effectively look at Bitcoin and say, hey, this Bitcoin is different than this other Bitcoin because it was associated with XYZ transaction that we deem nefarious. And the reason I found this interesting was because, you know, if you put your sort of tinfoil hat on for a second, you know, there was a whole sort of two year period where people were playing around with ordinals and rare sats and developing methodologies to effectively allow you to separate and make, you know, distinctions around this Satoshi versus this Satoshi, this bitcoins a little bit different than this Bitcoin. And now the BIS is kind of running with that and doing, you know, nefarious things with it. So Michael, I don't know if that was your line of thinking on this or if you had other thoughts. Yeah. I mean, I think I think just in general, you know, Bisi think they were behind or a faction of them was the fat F rules. If you remember, like travel rule and wallets and you know, KYC and that was a like unelected body sitting somewhere in Europe and very similar here. I think you'll naturally, it's kind of like a barbell approach that when I think about whether it's the ordinals or grading wallets on the use of a UTXO to the other side of the barbell when it comes to centralization via ETFs or Bitcoin treasury companies. In that whenever you kind of just see these tailwinds in this inertia and momentum grow in directions, you kind of want to take a step back and just wonder what's the underpinning, underpinning nature of it? But also is it conducive to like long term, this asset, you know, free floating and doing what it needs to do? And both of these things, I think completely kind of like kneecap. And I don't think I think Bitcoin will do its thing and market forces will drive to the to the outcome, the ultimate outcome. But it did still doesn't mean that we have to remain vigilant and kind of call these things out. It's just a ludicrous statement. And we've seen a lot of like European governance and forward direction of like how they want to effectively kneecap the movement of this asset in general. Yeah, this is almost something similar to the US dollar. I think there's a statistic out there that 65% of U.S. dollars that are physical have some sort of drugs on them from usage in the past. And if you are traveling with that and there was an article about a false positive on the essentially dog sniffing drugs that were on dollar bills and somebody going to jail for it or having his fun seized in the past. And I think that, you know, all money is generally fungible. And so it's, it's going to be something where a lot of people that just don't understand that there may have been something that has been bad with their money that's been done in the past, but it's not necessarily applicable to what they've done and how they've used their money and. It's very going to be very difficult for individuals in order to to track and understand what the QTXO said or, or dollars to make that equivalent has done in the past. And it's it shouldn't be their responsibility to, you know, where, what transactions money has been used in the past and and that shouldn't relate to how they use money in the future. Yeah. I mean, you could see how the angle though will naturally get perpetuated in the sense of like Bitcoin has this, you know, stigma of being used for drug dealers and nefarious activities. So they'll naturally tie it to that. I think this really breaks down to the elegance and beauty of Bitcoin in the market clearing forces, because the other side to this that also underpins where this can have somewhat bout outcomes of the centralization of like mining pools and the regulated status of them. So when it comes to, OK, if you're able to, you know, mark a UTXO as having some kind of, you know, blacklist or even potential Gray list and then the ability to mine them from a centralized, you know, pool or get deemed with some kind of sanctions or whatever it might be. But those market clearing forces of miners exist globally. And if somebody's willing to pay more for a transaction, they will ultimately clear and be able to validate and send that transaction is the thing that I think we don't know how it will work until it happens. But you have the mechanisms in place. And then eventually you kind of like the best way to beat any of this is the technology. And if the technology works as it's intended to, it'll ultimately be an exercise of utility to mark anything is whatever you want because somebody will clear it and those assets will still move. Yeah, that's a great point coming up on time, maybe one more. I think you brought this Michael, and it sort of ties back to what we were talking about on the mining side of things. AI arms race heats up as start-ups borrow billions to buy NVIDIA GP us. And so I think you'd sort of alluded to an analogy here a few years ago when, you know, people were borrowing against depreciating assets in Asic's. And so this is a similar dynamic that we're seeing here. Yeah, I this, I don't know where this came up over the weekend, but it was the notion of startups borrowing Billings to buy the GPU's. But then naturally market starting it's it talks about on the bottom starting to form or private credit stepping in. I think there was a $500 million facility references at the bottom to step into letting startups lend against their GPU's to access liquidity. And I think this is kind of where there's a lot of notion of like NVIDIA in itself being a little bit of a Ponzi because they do like the financing for the underlying purchase or they work with third parties right there. Yeah, Lambda Labs also raised $500 million special purpose financing vehicle collateralized by GPU's. And yeah, we saw this play out. It was. It's again fascinating to to sit in 2025 and everyone act like 2022 never happened. This is how a number of financers and large mining companies and publicly traded firms went bankrupt was because they ultimately went against this physical depreciating asset. And so naturally, you know, when you have Bitcoin in the collateralized market, that's already super speculative and risky and you have to have great risk management from custody all the way to not rehypothecating the underlying. But now you have this thing tied to it and the GP US are effectively tied to a is demand where it sits today. Because you can see if the market took some type of correction, whether it's open source nature or other ways that the market forces would start to squint, not be able to see how they'll be a return on capital. These GPU's and the startups get marked down and then these assets that were lent out get marked down significantly. And it's just a whole flywheel that we're going to see blow up. It's just a matter if not when. And yeah, there's too much dollars out there. And so the again, it goes back to extracting rent because you ultimately have the demand here. You have demand for AI, you have demand for startups, you have demand for dollars to look for something above the Fed funds rate. And so people are willing to step in, lend those dollars, and have no idea on the other side of it they're going to blow themselves up and potentially their reputations. All right, boys, that was that was most of the list. Any other parting thoughts or comments or news items? Focus on Bitcoin, use that as your hurdle rate with your personal investments in business and you know, rather than focusing on speculative assets and you know, fleeting revenue streams and business lines I think is the core point that we wanted to get across today. Yeah, On my side, it's been incredible to see the demand for the Bitcoin Dynasty trust product. We just finished recording a pod before this with the team from First Covenant to go a little bit deeper into that product. And like you did at the time, it's like finding Bitcoin at $10. It's a, it's a no brainer in the sense that almost everyone will eventually have to come into that that trade. If you're trying to protect your wealth, protect the ability to move it in a way that's advantage not only to your like legacy, but for for tax purposes. So yeah, please reach out if you're interested, just find us on the website. There's a bunch of reports we'll be putting out and then you can always reach out or view the podcast and believe it'll drop. Wednesday morning really goes deep into a lot of the themes and questions that individuals have been having that have held Bitcoin for a while and want to know if this is something that's right for them. Good stuff. All right. Thank you, gentlemen. We'll see you around next week. Thanks guys. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Rat Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com contact to schedule a consultation with one of our private client advisors.
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