Transcript+
Let's be clear, Bitcoin is an international asset. We are spending like drunken sailors. Bitcoin is the only economic entity where the supply is unaffected by the demand. If you want to preserve your wealth, you have. To convert. That currency into an asset that's scarce, desirable, portable, durable, and maintainable. Thank you for joining us for this week's episode of Scarce Assets, a podcast from on Ramp Media. On today's show, Andy Edstrom and Jesse Myers sit down with Anthony Scaramucci to discuss his journey into Bitcoin and the current state of the market. They discuss Anthony's early investment in Bitcoin and the challenges he faced, as well as the potential for Bitcoin to disrupt traditional financial institutions. They also touch on the volatility of Bitcoin and potential price targets for the future. The conversation highlights the growing acceptance of Bitcoin among institutional investors and the need for patience as the market continues to evolve and mature. Scaramucci also touches on the potential impact of Bitcoin on politics, challenges faced by pension funds, and the psychological aspects of investing in Bitcoin. And now, time for the show. Hello, my name is Andy Edstrom and I'm happy to welcome you to the 12th episode of Scarce Assets, a show that examined scarcity, the most fundamental driver of economics and markets and the scarcest asset of all, which is Bitcoin. I'm delighted to be here with my great friend and Co host Jesse Myers and our guest Anthony Scaramucci. Now, when Anthony got into Bitcoin, he was one of the highest profile, most well known people in the traditional investment space to take a positive stand on Bitcoin. Over three years ago, Anthony's firm launched a dedicated Bitcoin fund and he quoted me and his marketing materials. And Jesse and I still agree that that Skybridge document is probably the best Bitcoin slide deck we've ever seen. Anthony invited me on to a panel to talk about Bitcoin as an ass in class. And it was around that time that I told a friend that we now have two of the best salesman on earth selling Bitcoin, and that's Michael Saylor and Anthony Scaramucci. Now, adopting Bitcoin is not the only controversial thing that Anthony's done, and he's had some victories and some defeats. But through it all, I respect his ability to admit his mistakes, learn, and move forward. And whatever happens in the future, I will not be betting against him. So, Anthony, welcome to the show and how are you? Well, I mean, first of all, you're very sweet and you wrote an amazing book which I read before I made my first Bitcoin investment. And so kudos to you. And I think the reason why you liked our slideshow so much as I plagiarized it from your book. So that's probably the reason why you liked it. So. But but in All, in all seriousness, Michael Saylor made his first Bitcoin investments. People probably know this, but he made his first Bitcoin investments in August of 2020. We followed him and made our investments in October, November. And so he is by far the way better salesman. But what's interesting about him, he's way more free spirited than me because he has his own balance sheet. I put client money into this and the wire houses, these very famous lagging indicating wire houses, they fired us, put a sell on our fund. They said that we were doped for being in Bitcoin and that we don't know what we're doing. And so they fired us. And so a lot of their clients left as a result of their decision to fire us. Smarter clients stayed and they've been ridiculously rewarded. And I'm not patting myself on the back or anything like that. It's just this was something that you either saw and you embraced. Well, you didn't see, but I would submit to you and all of your viewers and listeners, if you're doing the homework on this asset, which is actually an asset class, Bitcoin itself is an asset class. You go towards the asset. I don't know anybody that's done the homework, OK, The way you guys have done it and the way Andy writes so beautifully about it in his book, it doesn't say, oh, OK, I, I hate that it's a Ponzi scheme. It's a decentralized pet rock. I'm, I'm not going to buy it. I just don't know anybody. So if you find somebody, you let me know. I'm searching for that person. At On Ramp, we believe that Bitcoin will be the most important asset to own in the 21st century. Our multi institution custody solution is the safest and most secure way to ensure that your Bitcoin remains in your in your family's possession for decades to come. Multi institution custody maximizes security and minimizes counterparty risk. Leveraging bitcoins native properties to eliminate single points of failure of historically complicated Bitcoin ownership on ramp provides Peace of Mind for your Bitcoin journey. For more information, check us out at on rampbitcoin.com. Yeah, I think that's I think that's right. And appreciate your kind words about the book. You've got a book, you've got a book coming out which I'm sure we'll get a chance to to talk about in a minute. But look, I mean, I look at the list of guys who who allocate real money or have allocated real money over a career and figured out Bitcoin and went public about it, you know, and launched a product. And that list is extremely, extremely short. And I think one of the things you mentioned was the journey is a wild ride. It can be arduous. You age me, you son of a bitch. You shouldn't just listen when I when I, when you did my podcast, you said, look, I think you smart to make this investment, but you're going to be 95 years old in the next three years. You're going to be in that like Night Shamalan movie about aging. You know, I didn't tell me any of that. I didn't know. I mean this hub is stressful man. We just, we suck you in, we bit corners, we, we tell you about all the good stuff. And, and you know, and we hope that you don't read the, the laundry list of, of risks, including, you know, including the volatility. Jesse knows about that. Our performance comes with being in pain 90% of the time. Well, you know what it, you know what it is interesting because the volatility is nerve racking. I'm not going to say this otherwise because I am a human being. But if you really understand that asset, you understand how early it is in that asset. First of all, every early asset, whether it was SpaceX, Amazon, eBay, Google, every early asset comes with its concomitant level of volatility because you have early adopters, you have early haters. You're, you're now have to accept some change. I don't talk about this often, but I was thinking about it this morning. Jerry Yang, who was a, he's a billionaire today, but he was a undergraduate student at Stanford. It's a great story about him where he invents this thing that he calls Yahoo. I'm a young kid, I'm going to call it Yahoo. He gets a meeting with the Pacific Bell business executives and he says to them, what's your favorite pizzeria? And they tell him. He types it into his laptop computer and through the Internet outcomes the name of the pizzeria and the phone number. I just want to show this to you, and this is something I call Yahoo. Would you like to buy this for me for $1,000,000? And they look at him and say, get the hell out of our office. You know what we do is we chop down 4 million trees, we then boil down these trees in the paper, we dye these trees yellow and then we ship a 4 LB book to our clients with a list of everybody in it, plus the advertising. Oh, and by the way, we've been doing this for 96 years and we're doing just fine with this. OK, so we don't need you get out of our office. And so that's a feeling that people in technology and people in early adoption, people who are seeing something change have to go through. And so every bit corner listening to you guys has gone through it. Yeah. Well, I love that you mentioned the Yellow Pages. I was not expecting us to go in this direction. So, Anthony, when I was doing junk bond deals at Goldman in the mid 2000s, one of the hot, I don't want to say hot, but let's say popular businesses for throwing tons of debt on, right and for doing leveraged buyouts of was the Yellow Pages businesses and these things were still kicking around. Even in the minting money Andy minting money Yes, money highly profitable business cash flow. Yeah. And so you had meetings where, you know, one guy on the credit committee was yelling, these are phenomenal cash flowing businesses and it's recurring revenue and another guy yelling, this is a dead business. You know, it's a zero. It has no enterprise value. So it just goes to show that another great example of an asset that is being disintermediated, an industry being disrupted and it's been going on for years and yet people still don't know about it. So I want to I wanted to talk about your time at Goldman, which I think was back in the 90s. Give us, I don't know if you would, would you tell us a story or give us a sense what the what the big Wall Street world was like back in those days as compared to now? I. Don't know what the hot job is for the college grad right now. 10 years ago when my son graduated from college it was Google or Facebook that was a super hot job. So you don't have to tell me what the hot job is right now, but when I graduated, which is 30, five years ago, as hard as it to believe it was Goldman, McKinsey, these were the hottest, hardest places to get into. And I was an insecure status seeking 25 year old. And so I didn't know much about these places, but I knew they were hot and successful and I wanted to prove my chops to my pure base and I wanted to get into Goldman Sachs. So I did everything I possibly could to get into Goldman Sachs. And after a legion of interviews, 35 interviews, I got into Goldman and I got the top, top job. That was the coolest job. So I was the man Sweet. But, and you see the fireworks going, but I wasn't really the man. It wasn't the man. And let me tell you why. Because I went to a job that I absolutely sucked at and I went to a job that I was seeking for status, but not for passion or not for enthusiasm, money, but none of those other things. And so when I got the job, I didn't really understand what I was doing. I was started as an investment banking associate and I started on August 14th, 1989, which was a Monday. You could go look it up on your phone. And I got fired on a Friday, February 1st, 1991. OK. So 18 months in, the job fired. I worked very hard, but I wasn't good at the job. And we were going through a recession at the time. And they fired me and I was in a panic. I had school debt up the wazoo. I had parents that I was subsidizing with some of my income. And I was panicked. And so I took a roll of quarters. I went back into New York. There were no cell phones back then. I took the train back into New York, started pumping quarters into the pay phone, and I finally got on the phone with somebody. They said, you know, there's a job I think you'd be good at. I said, OK, great, where is it? He said at Goldman Sachs. I said, oh, you got to be shitting me. I said, where at Goldman Sachs? Well, it's in the sales area. You weren't investment banking, you sucked at that, but you'd probably be a good sales guy. So I said, hmm, so lesson #1 don't piss off the person that fires you, because you may need the person. OK, so I didn't, I understood what was going on with that guy and his name was Mike Facitelli. I saw him last night, very, very close friend of mine. I called Mike and I said, Mike, there's a job in the sales area. I know you'll like me. I understand why I'm being fired. Could you help me get that job? And he said yes. And so I got rehired. So Mike, on Friday, February 1st, he handed me an $11,000 severance check. On March 28th I got rehired into Goldman Sachs. I love that. Personnel called and they said, hey, you know, this is great. You know, we, we're going to just mark you down as interdepartmental transfer. You never going to have to tell anybody you got fired. I said, well, that's great. Can we get the $11,000 check back, please? OK. And I said something that was probably politically damaging. I said, no, I'm not giving you the check back because I'm I'm, I'm keeping a check and I got fired. I put the check, I needed the money to pay off my school debts, all kinds of stuff. So so I got hired and fired back into Goldman and my career really started after I got good at the sales process and eventually the asset management. But here's three things I'll say about Goldman. The culture was amazing. They're very team oriented place. They're very, very hard working people. They've helped a really good work ethic and my boss made his soul. Rest in peace had a great line that I'll share with your viewers and listeners. He said, you know, Anthony, some people grow and other people swell. Make sure you're the guy that does the growing and not the swelling. And that was the kind of place it was. That was the kind of guy he was to work for. And I learned a lot there, and I tried to copy and mime a lot of the things that they did there in the businesses that I eventually started and have run to this day. Well, that's a fantastic story. Lessons learned. A lot of Nuggets in there. You know what I think, Anthony, first of all, I I agree with your character characterization of Golden. That's how it was when I was there. I also wasn't there that long either. I was a young analyst and moved on to other things, although they did ask me to stay longer than my two year program. So I I had that going for me, which is worthless in retrospect. But I think with regard to your $11,000 severance check, I think they owed you that money because I think they owed you for figuring out that there was a side of the house that that needed your talents and, and your go get em and your skills. And so, you know, you earned that severance check, I think well. Yeah, in some ways I guess I did. You know, I basically, I was in panic. But that 11 comes up for me a lot. You know, I was fired after 11 days in the White House. I got an $11,000 severance check. One of my kids was born on April the 11th. And so, you know, I don't know if you guys believe in all that stuff, but Eleven comes up for me a lot. Lucky number 11. Well, I think Jesse's favorite number might be 21. But Speaking of, you know, Speaking of hustling and getting one up on on life when it when it deals you lemons, I think that I heard that you put a significant portion of the Skybridge balance sheet into Bitcoin. And so notwithstanding the volatility, I I feel like you might be getting the last laugh in in that regard. Any thoughts? I mean, listen, I mean I may or may not be getting the last laugh. You'll have to tell me. You, you might have to tell me, you know what I mean. But in any, you know, guess if you're right, and I believe you, you will be right, that this is gonna go to a couple $100,000 a coin, then we'll all get the last laugh. But you know, I'm humbled. I've been humbled by life. I've been humbled by markets. When I made that investment, it was at 17,000. It then went from 17,000 to 69,000. It actually went up and then went down and then it went up and by the end of 2021 it was nearing 69,000. And you know, I mean, this is me. I just say this to you, I thought for certain that the Bitcoin Spot ETF was going to get approved three months after the Bitcoin futures ETF. Because I went to law school and I read all that administrative law and I understood that a appropriate procedure in order not to be arbitrary and capricious in implementing or administrating the laws was that you would something very similar was to Bitcoin spot ETF was to the futures ETF. You couldn't have one without the other. And so I got that wrong and it went down and the politics of Washington DA was us did everything they could to try to stop it or slow it down. And I'm going to say something that's a little controversial for Bitcoiners that helped us. So Gary Gensler, I cannot stand the guy. I'd like him to resign from the SEC tomorrow. I think he's a disaster for American innovation and for financial services leadership. He doesn't even understand what he's doing. And he's really hurt the overall industry, not just the bitcoiners and digital assets. I'm talking about the industry known as Wall Street and financial services. But I will say this, that arbitrary and capricious decision to slow down the cash ETF exposed fraud over leverage, poor risk management in a very nascent industry. And many imploded, including my friend Sam Bankman Freed, who's now serving 25 years in jail. And had they not imploded and they predict by the way, I, you know, at least in hindsight, they would have not imploded if he approved that ETF now, we'd still be living in a Sam Bankman Freed FTX world. And since he was doing things that were nefarious, it would have been an even bigger blow up years hence. So things have a way of working themselves out. But that's been quite a rocket ride from 69,000 from 70,000 to 69,000 to 17,000 or 15,000 and then back up to 70,000 now 65 ish 1000. Yeah, this asset has a a way of a programmatic way of humbling everyone every four years and and, you know, forcing the tide to go out to reveal people swimming naked and. What's your price target, Jesse, if you don't mind? And and Andy, just let me ask you one question on your podcast. Sure. I'd say before the ETFs were approved, my price target for 12 to 18 months post halving, I would have said 12 to 120 to 180,000. Then when we saw the ETFs launch and then you know the expected inflows from them suddenly got dwarfed by the actual inflows about a month. In particular once the GP, GB, TC stuff had settled out. I think that showed the potential for how much demand inflow there could be through the. ETFs And so I think that makes it maybe more like 250 for 12 to 18 months from now. However, the reflexivity of demand in the ETFs has been, you know, notable more than I would have guessed to date in the sense that, you know, the last month or so as the price has gone sideways, there's been kind of net, not really much ETF demand. I think that the mechanics of the having will force that flywheel of a, of a, a bull market into a bubble. And then that reflexivity should pick up again of the ETF demand. And then I think that's what takes us to 2:50. But, you know, I've been wrong in every single cycle and every prediction I've made. So I'm not going to, you know, put too much stock in here. Yeah, no, it's interesting. What do you say, Annie? Yeah. So I think one of the things that Jesse is saying is the ETF that you seated has had a material positive effect on the price move so far and has woken a lot of people up. So that's an interesting fact. I feel a lot like I felt 3 summers ago when it was the sort of interim period between the big first leg and there's a pause and the big second leg. I will be, you know, I was kind of surprised we didn't hit 100K in the last cycle. So I have to admit that. But I'll be shocked if we don't see 100K in this cycle. I think 200 would not surprise me at all. And, you know, north of that, I think we're getting into ambitious territory, unless of course, you know, the, the powers that be like the Fed just print tons of money, which who knows that that will be a major, a major factor. I think that, you know, we've been hearing, we had Samson Moe on our, on our show a few episodes ago. He's talking about $1,000,000 Bitcoin. I find that as to be highly unlikely in this cycle. I'm hoping it doesn't happen in this cycle 'cause I think it'd be mayhem. But yeah, I think, I think in the zip code of 200 sounds about right for this cycle and then maybe we're one more four year cycle from either hitting seven figures or getting close. See, so it's, so it's interesting, you know, I appreciate you guys sharing that with me. And I think what's interesting, something I want to key on with Jesse, cause I've been on Wall Street forever. The mutual funds are retail depositories. And So what ends up happening, if you'll get excited and then they've been told these big numbers for Bitcoin, and so the big numbers didn't happen right away. And so they do this and they sell immediately. And if you look at the churn in the ETFs, yes, they're up from I guess 3540 thousand at the beginning of the year to 65,000, very healthy, fantastic return. But if you get a blip, you get a hiccup, you get a scare related to the Federal Reserve scare and inflation, you're going to see people depart that ETF. They're not the traditional Bitcoin hodlers or as Michael Saylor says, hodlers that we like, right? And so there's good and bad in that. You get the reflexivity that Jesse's describing. But the flip side of that is something that's happening, this industry that we have to mention and explore, there's decisions being made right now by some of the largest pension funds in the world. And some of these people are drawing the conclusion that if I'm not long Bitcoin, I'm actually short Bitcoin. Now let me just explain this to people. They're benchmarking off of a asset allocation, a tactical total institutional asset allocation. So it's a components of bonds, fixed income, stocks, alternative investments, etcetera. And they own gold and they own all different varieties of assets to stay diversified. But they're now looking at a wedge developing called Bitcoin and it's going to take out a pizza slice in that portfolio. Maybe it's a 1% pizza slice, maybe it's a 2% pizza slice over the state of Wisconsin is telling people they have a large position now that they need to disclose in Bitcoin through the ETFs. They're telling you something. They're telling you. We predict that a tactical asset allocation strategy, conventional, conventional wisdom, tactical asset allegation strategy is going to hold some Bitcoin going forward. Result of which if I don't own Bitcoin, I'm going to underperform as a result of not owning it and the dominoes are falling guys, the dominoes are falling. Morgan Stanley announced this week $270 million in Bitcoin ETS on their balance. So you so so so you're you're seeing the dominoes fall and as you know the supply has shrunk for Bitcoin. You know the having the network is only producing 450 coins now down from 900. And so if you get spikes in demand, which I predict will happen, you'll you'll jam up and force up the price. Yep, exactly. I, I think that's the thing that you know, Anthony, I wanted to ask you this like why do, why do folks at Goldman or so many other places still not see that the having comes along 3030 days prior to the having Bitcoin network was created $1.8 billion of new Bitcoin supply. That's a great, it's a great question. So they, they're electing not to do the homework. You know, they're the Pacific Bell executives that want to sell Yellow Pages. Yellow Pages are working good business for me. I don't want to do this homework. Also, if you really go down the rabbit hole and you get down to the permutational outcomes of Bitcoin, you start to realize, well, wait a minute, I can almost negate or reduce my transactions, the cost of my transactions to zero and my business is tied to these transactions. I don't want to do this. You know, the phone companies, we were told the phone company, you know, I was going to knock the phone companies out of business because we were going to create these cost less phone calls between all of us. But it didn't happen because they innovate, innovative, widened the bandwidth. They charge you a monthly fee. You get unlimited access for that monthly fee and so on and so forth. I think that's true of the banks, but but they're nervous and so they don't want to adopt this. They want to be slow to adopt this. They're calling our very dear friend Elizabeth Warren, who hates the two of you, but she doesn't hate the two of you as much as she hates me. She doesn't know who who I am for sure. She might know who you are though. Yes, she just sees the two of you as nonsensical bitcoiners that are buying quote UN quote mathematical blather and selling it or thinking about owning it due to your personal stupidity. She sees me as a big mouth because she wants to decapitate me. She's not very happy with me, but she to me, she represents failure and she represents an old guard that is leaving whether she likes it or not. You know, it's just no way that the way she thinks about the world is going to exist in five or ten years. And so I'm here to tell you guys that we have more volatility to come because we have short termism in the ETFs, greater uncertainty about the regulatory rubric in the society. But it, it speaks to literally how early we are, that guy Goldman that Elizabeth Warren gets blown out of there and you get John Deaton in there who's running against, who's pro Bitcoin. When they start passing pro Bitcoin, pro digital asset legislation, then the numbers we're talking about are very, very small. And that will happen quickly if it starts to scale. Now presidential race is an interesting one because Donald Trump hated Bitcoin. He's now telling people he likes it. Joe Biden. I don't think Joe Biden could find a Bitcoin with two hands if it was in the bathtub. You know, he can't. He's no way. He doesn't know what that is. OK. And so he's got people on the staff that Elizabeth Warren planted that absolutely hate Bitcoin. And so they're threatening the ecosystem. So of everything that's going on right now, we have to be patient because there's an inevitability to Bitcoin and inevitability to the network of Bitcoin, and the guy at Goldman is going to recommend it to his clients at 150,000. When he gets that price target, it will be acceptable to him. You know, same when I told you guys I got fired by a lot of the wire houses when I put my first Bitcoin trade on. Those very same wire houses are now going to add Bitcoin to their model portfolios. Yes, these prices are higher. It's it's still kind of stupendous. How Bitcoin represents 0.1% of the world's assets at this stage, you know, and, and it was still 116th of the size of gold. It's, it's kind of remarkable that, that it, it's still so small that we haven't gotten to the point where it becomes even, you know, viewed as like a, a contrarian bet. We're still not even big enough to be that. Whether you've been buying Bitcoin for years or just getting started on your journey, our Multi Institution Custody solution is the safest and easiest way to custody your Bitcoin. With On Ramp and our partners at Bitco and Coincover, you can sleep soundly at night knowing that your Bitcoin is safe from exchange failures, the loss of seed phrases and broken hardware devices. On Ramp's Multi Institution Custody solution eliminates any single point of failure, distributes counterparty risk, and minimizes required trust, all while providing greater assurances that a client's Bitcoin is secure and auditable on chain. As a client of On Ramp, your assets live in a multi save vault controlled by three distinct entities, none of which have unilateral control. On Ramp provides products and services that honor our clients ownership and control of the underlying asset. To learn more about Multi Institution Custody, check us out at On rampbitcoin.com. So Speaking of both recent political events, Anthony, I couldn't help but notice that this rule sub 121, which had basically prohibited the banks from holding Bitcoin, is now seemingly has passed the House and the Senate. And so I guess has put the administration, the the Biden administration in the position of having to outright veto it. And I'm curious, I mean to me this is a major signposts along the development of exactly what you described. This will be a monumentally stupid thing for them to do. And so he's got enough problem with the young people right now 'cause you have these college college protests as an axiomatic fact. I'm not here to opine on the virtues of the vices, the college protests, but what I am here to say to you, these are usually bad for incumbent presence, college protests. And if you have 25 or 30 million people that have Bitcoin wallets in the United States, you know, and you're going to outright veto something that has been passed in the House and the Senate and your own people and your own party are telling you, please don't do this. You really got a shotgun torture foot and you really want to blow off that foot. And this guy is going to need young people. He's going to need the suburban women and the young people to carry him to re election. So right now he's got a shotgun. Now he's pointing it at his foot. He wants to blow his foot off, OK. I mean, it's going to be really hard for him if he stays on that path. And by the way, I can't stand Donald Trump. I think people know that. I've been very well open about it, but Donald Trump's not a dummy. He has good political instincts. So what is he saying? I I was against Bitcoin now and forth. You know, I think the Biden administration might benefit from 11 days of Anthony Scaramucci, you know, on on the team whispering in his ear some things which maybe seem obvious politically, but they seem not to be to getting. Through to him. They don't want to they don't want to hear from guys like me because they I'm a ex Trumper, I'm a former Trump and so they don't want guys like me part of the campaign 'cause they don't want to alienate the hard left. Yeah, there are people on the hard left. They hate my guts because I was once with Donald Trump. Even if I denounced him and said I don't like him, doesn't matter. These are the puritanical, self-righteous hard left you guys with me. So you know that's how it works. Yeah. Yeah, it's a funny. It's a funny game. Boy. Well, well, let's, let's pivot it a little bit back to Bitcoin and what you're seeing. One of the things we're talking about was Wall Street adoption. And I'm just curious, if you look at the layers of groups that adopt over time, individuals, you know, retail investors, family offices, hedge funds, you mentioned pensions are starting to get in the game. And each of those is its own beast and its own, I don't want to say cycle, but let's say wave of adoption, adoption, some slower, some faster. What are you seeing these days in terms of those various parties, maybe classes of institutions with respect to Bitcoin adoption? Slow. Slower than we thought, but exactly where? It. Truly is what people thought in 2021. So if you were in the air in 2021, people said we're going to get some institutional adoption this year and we didn't get shit in terms of institutional adoption. I was wrong too, by the way, Anthony. I was wrong too at that time. Oh, I look, I was wrong, but now we're good. Yeah. Because because now it's a now it's a career risk that then here comes the next happening. The next bull market is setting up you. We've seen what happens every time. And you know, the institutions that didn't show up in, in 2021, they, well, they missed out. Actually, they, they should have showed up. And now here's their chance. And now it's a risk to to make the mistake of missing out again. I would love to see. I'm curious if you have any Intel. I just want to expand on what Jeff said. That's why the state of Wisconsin said, you know what, I'm not missing this. That's why there are sovereign wealth funds that said, yo, you know what? I'm gonna buy 100 Bitcoin a day forever. You know what? I'm not missing this. You see what I mean? So exactly what you just said is the reason why it's going hard. And and then how do people not see that that is a chain reaction, you know, through all of global capital eventually? Because I've made my money the old fashioned way and Bitcoin has no cash flow and it's just a cryptocurrency chain of math and letters and symbols on the Internet. It definitionally has to be worthless. And oh, by the way, I don't want to embarrass myself at this next board meeting by owning Bitcoin. It's not acceptable to own Bitcoin yet. You know, I went to an event in 2009 where the fixed income guy at the state pension fund said I've got to get rid of the subprime on my balance sheet. And So what do you mean? Well, it was at 100 straight into 25, I said. But at 25, it's on its way to 80. Yeah, Yeah, you're right. It's on its way to 80. But you know what? I got to go to a board meeting in February, and if I don't window dress this portfolio here in December, in February I got to face the music and I got to tell people I own something at 25. They learned in like Economics 101 that bonds trade back to par and this stuff's only going to trade to 80 and I'll be able to explain it to them and they're all going to be sour post at me. So rather than absorb and take this investment opportunity, I'm selling all this shit right now to window dress so that when I get to that board meeting, I keep my job. You see what I'm saying, Jesse? Andy, this is the mentality of slowness of adoptability in the market. So I love that example. You're spot on. I've seen that in my business, the December 31st, sometimes it's quarter end, but even more so year end. And I have to say I hadn't thought about this before, but that's probably one of the things I like about how this bull market likely is shaping up for the rest of 2024. Again, nobody knows for sure, but you know, let's say I'm I'm bullishly tilted is because I got to imagine if you were anyone who's benchmarking and you're looking at how your year is going and you're seeing, yes, you know, there's a big fast move in Bitcoin. Maybe I missed it. It was really hard to point it when you're going from when prices going from 40 to 50 and 50 to 60 and 60 to 70. You got to be worried about buying the top right, you got to be worried about chasing that rabbit and getting the wrong side of that momentum. But we still got 6-7 months in the year to go here, plenty of time to consolidate. And you know, I don't really care about short term price movements, but I have to imagine that the set up there is still pretty good going into year end because there's still a lot of days on the calendar before any of that window dressing happens for December 31st. No, no, you're right. I mean, but listen, I'm a really conservative person. Not me, by the way. I'm play acting with you. I'm a really conservative person. I'm at this very big pension fund and I don't want to lose my job. And you know what? I can buy a bond. I could lose money in that bond. I could buy a stock as long as it's in the top 50 names and I could lose money in that bond. No one's going to fault me. But this thing called Bitcoin, This could cost me my job. Even though it could take care of these pensioners. It could help me get to an over funded position in these pension accounts. I don't need to take that risk because I want to be here next year on this job. By the way, guys, guys, I got fired when I put my Bitcoin on. The right thing to have done was to call your clients and say, hey, these guys are pretty good fundamentalists. They see something in Bitcoin we should add to these positions, but they don't do that because I could get them fired. That's it. That's it if. You you know the following syllogism. If I fire you and it keeps me from getting fired? Or should I hire you and it potentially threatens me to end up getting fired? What am I doing? You guys are pretty smart people. What am I doing? You're protecting yourself. That's human nature. And so and so that's why you're going to run to 100, make it to 120 maybe like you said, 12 to 18 months from now, higher than that, you could be some positivity to the flywheel as a result of the demand going into the ETS and the Wall Street selling cycle and there could be a couple of rate cuts. So I got to, I got to ask you, Anthony, with all the pain and suffering that comes from living through these cycles. You know, you could have got a really good friend and told me about all this shit when I met you first hand. He. Didn't though he wanted you in the same boat as. Him you knew in your heart that misery love, company, Andy. No. Well, maybe this is. Great, get in this miserable boat with me and ride these volatile Rapids. Maybe this is a good chance to throw your partner Brett under the bus a little bit here. Oh. No, I tried to strangle him twice. Don't you know? Don't. Kid yourself. Well, I'm, I'm actually curious. I mean, is there a story there in terms of his interest in Bitcoin, his learning process, your learning process, you know, sort of how that part of your Bitcoin journey evolved? Yes, 'cause we're, we're like a married couple, Brett and I, OK, we are in a 37 year relationship. The reason why our relationship works so well, frankly, is we've never had sex with each other. I absolutely believe that's the secret, the longevity in a relationship because once you start having exactly, they start fighting with each other. You know you guys have spouses. Or mates, girlfriends. Boyfriends, whatever it might be. So him and I have a 37 year relationship and so I wanted to make a Bitcoin investment in 2017 when I got back out of the White House and Brett told me, what are you crazy? Bitcoin's garbage, OK. And I said, oh, OK, here's why I want to make the investment. And then he gave me the lecture that I just gave you guys, what are you crazy? We have a great business XYZ. What the hell do we need to be investing in Bitcoin? So I dropped it and he caught the bug from Brigger and Sailor and Novogratz. He came back and said I want to make it Bitcoin. He was like, you talk me out of it. Now all of a sudden you want to make the investment? Yes, I want to make the investment XYZ. And then I said, all right, you know what? I want to make this investment too. Let's make the investment. And that's what happened. So I love that because I always assumed that it was Brett who was orange, peeling you and turns. Out the opposite. Brett overdosed on the orange pills. You know I'm I wanted to take the pill cutter out and cut the pill in half. That was the recommended daily dose of Bitcoin. He wanted the entire bottle. Then he wanted to call the pharm, the orange pharmaceutical company order like another canister. Oh man. So great, love it, love, love it. It's, it's hard to, it's hard to have the right position size for this asset because it it, if you dig in deep enough and you see it for what it is, it just blows everything else out of the water and it's hard to. OK, let's go around the whole. All right, great. Jesse, the percentage of your net worth, let's just use liquid net worth and we'll say Bitcoin is a liquid asset. Let's take out your real estate and let's say your percentage of your liquid net worth in Bitcoin. Go ahead. 103 percent. OK. All right. Miles with. Net levered long. Net levered long right there. Yep, Andy, what's yours? So Anthony, I never comment on that specifically, but I will admit that I am irresponsibly long. How about that all? Right. Well, I comment on specifically I'm about 80% right now. Wow, by the way, I got there because of this. Look at me the the pizza went like this with Bitcoin due to price appreciation. So if you had a 20% position on A1 up 4X, guess what happens to? It. Same same to be fair and and then you know at a certain point it it took over everything so. That's it and that's what we see coming. I'm sure you do too, Anthony. With each cycle of Bitcoin, you get guys and let's be real, it's mostly guys, fortunately not all, and more women getting involved every day. But but hodlers who yeah, see a multiple happen and if they don't rebalance, which many of them don't, then that's what happens with the with your allocation. I love your I love your image of the inverted pizza. I want to see a a graphic of that. It's it's something Jesse. Jesse would do animation. Big opportunity there. That's but that's, but that's what happens because you know, what are you going to do if you're right? OK, so let's say you don't sell anything in your portfolio and you're, you know, you're over 100%. So that's 100%. But I'm just saying, let's say you had $20 in cash and $80.00 in Bitcoin and so you were 8020. But you are right, Bitcoin is going up 3:00 to 1:00. So now you have $240 in Bitcoin, you still have the $20.00, right? And so if you have $240 in Bitcoin, you now have a 92% position in Bitcoin relative to everything else. You see what I mean? It just keeps going. It keeps eating. Absolutely. And you get, you get backdoored into that becoming your now you're on a Bitcoin standard now that's your, your unit of account. So you you winced a little because the number didn't sound high enough, going from 80 to 80 to 9092. But if you started with a smaller number, it goes up way high. But then, like your algebra teacher taught you in 7th grade, you can't. If you go halfway across the room every move, you'd never touch the other side because you're but you keep going halfway. It gets tighter and tighter at the top. But let's say you started with 10% in Bitcoin and $90.00 in in in in cash and it went up four to one. You get the point. Zeno's Paradox. Right, exactly. That's it. So and so here, here we are, we're sitting here, and then the question is what could derail us? So I asked that question out loud, 'cause I was debating Nouriel Roubini and Peter Schiff, the legendary Erik Voorhees and IA few weeks ago. And I said, OK, what you guys hate Bitcoin? What could I say to you or what could happen? Could Jesus land back on earth and tell you it's OK? I mean, what could happen? And they said nothing, we hate Bitcoin, we will always hate Bitcoin. Said OK. And they said to me, well, what would you say that would turn you off the Bitcoin? I said with the network, if you told me everyone was pulling out of the network, unplugging from the network, and these hundreds of thousands of nodes and hundreds of millions of wallets are going down to one wallet. Yeah, Bitcoins going down, no question. But I gotta tell you, that's a rough one, man. That doesn't feel like it's going to happen. If anything I've watched after the last four years bitcoins growth go exponential. Now you've been, you've been through a cycle now at least a cycle now, Anthony, and you felt the pain. And of course, with every cycle, the multiple goes higher and is the the pizza slice inverts, maybe the pain is reduced. But suffice to say, having a huge allocation of Bitcoin, I think for most mere mortals is painful in the bear market. Yes, it does. It does build build resilience, though. And I want to, I want to use that opportunity to draw in your experience to comment. You've got a book here, Wall Street to the White House and back, the scare Moochie Guide, Unbreakable resilience. What can you tell us about lessons learned on resilience and what you put pen to paper here with? Well, a couple of things. I think the, you know, if you want to be happy, and I'm oversimplifying, but if you want to be happy, happy is not a permanent state because you have to deal with tragedy in life and so can't be permanently happy. But there's a couple things you can do to be happy, OK? The number one thing is you got to forgive your parents, OK? Because the great tragedy and the great Greek philosopher Sophocles said that we blame our parents for our trials and tribulations, why our parents never asked us for permission to be born here. We are living in this tumultuous life. And so when bad things happen to us, I blame my parents, OK? That's what Saavik Lee said. But if you forgive your parents, whatever behavior, whatever malfeasance, whatever you feel was the grievance that you could harbor against your parents, you can set yourself free and you can have some release from that neurotic anxiety. The second thing you got to do is you got to have a a gratitude list. You know, I wake up at the fact that I could have a great cup of coffee this morning or just eat that chocolate bar while I'm talking to you. That is a pleasure for me. And you got to have a gratitude list. And people have to just put the forget about what other people have. What do you have that you're the happiest about? And then the third thing, which I think is the most important thing, is you're going to die. We got that. We go into denialism, which are not going to die, but we are going to die. So calm down, focus on something you really, really like and do that and ignore everything else because it's not that consequential, right? So that if you get those three things right, you can also be an incredibly resilient person. So when you get fired from the White House after 11 days and you're blown through the door in Pennsylvania Ave. and you're skinned alive and you're rolled in Margarita salt and every late night comedian is torching you and they're making fun of you and impersonating on Saturday Night Live and you're getting blasted on the front page of every newspaper and every tabloid. If you got those three things right, you can be resilient because you'll look at that and say, OK, that happened. That really sucks that that happened. That's not something I planned or wanted in my life. But that happened and there were some choices I made that made that happen and I have to be accountable for it. I have to own whatever happened, whatever the mistakes I made. I never blamed anybody for my firing other than me. Then you're going to say, OK, do I really care about this? Well, it turns out I have a life expectancy of approximately 80. If God is good to me, maybe I'll live longer than that. I got fired at age 53 from the White House. I'm now 67. Years have gone by. If I pissed and moaned and played the victim and acted miserable over those seven years, how wasteful would that have been another 20 years ago? If I'm lucky, why am I going to sit around with a millstone of regret on my neck, lamenting that I made these terrible choices that got me fired from the White House? Or am I going to take the millstone of regret off my neck, drop it behind me, and go forward and do some great and really fun things? That's you become resilient guys. You got to set up your frame of mind and you got to say, I don't care what other people think. Yes, I've made mistakes. I'm willing to own them. You're the things I'm happy about. Let's get back to work. Well, Anthony, I love your stories and it's because they're from your life and the lessons you've learned facing challenges, you know, facing failures as well as successes. And so I look forward to reading it from Wall Street to the White House and back. The Scaramucci guide to unbreakable resilience. I'm pre ordering now and thank you. This has been a tremendous conversation. You guys are kind of up to have me on. I really am grateful to you. It's really a. Pleasure, Andy. The next time that you write another book about some great investment, just let me know how old I'm going to be after I'm done reading it and buying the investment, OK? You just put a stipulation at the back of the book. Well, you've managed to hide any Gray hairs you may have developed, so you know I mean. There's a lot more hair dye up there than there was four years ago, I could say, And all the lightning again, so it looks more natural than it actually is. All right. Well, thank you very much. Really appreciate Anthony. Tremendous conversation and this has been scarce assets. Great to be on with you 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 Ramp 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 on rampbitcoin.com/contact. Schedule a consultation with one of our private client advisors.
Transcript source: fountain