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What you're telling me is that music is about stuff and we're going to be left, holding the biggest bag of odorous extra ever assembled in the history of down test. 1974 1987 1297 2000 and whatever we're going to call this. It's all just the same thing over and over. We can't help ourselves. I say when we sell Gentlemen, the signals are going off. BlackRock is here. Matt dines is joining us for episode 5 of The Last raid. Matt, welcome. Started off. Let's start it off at the signals or say I'm saying, right before we hit record, I've got an investment banker in the family, A cousin-in-law, if you will, when things are happening and that side of the industry of the, the finance side of the world, I usually get a text from him. I got a text from him yesterday. I think Black Rock has sent a signal out there and you have all Wall Street trying to figure out. All right, what is our Bitcoin strategy? What are we doing? I won't get into the specifics of what have reached out about, but Wall Street seems to be interested in what Bitcoin companies are doing these days. I had a signal to Stanford friend of mine who has been bullish on. Crypto, broadly, reached out yesterday, a little bit little bit in despair about the future of crypto, because it suddenly seems a lot darker with SEC coming in and making its actions. And, you know, I think that's part of the journey towards bit. A coin is realizing that everything else is is doesn't have staying power and it's feels like that is a little indicator for me that my network is just a little bit closer to seeing the Bit Coin and crypto are different and Bitcoin has real real value of real legs and and should be a part of everybody's portfolio. Yeah, I think it's very interesting times. When you know, you know, we have a directional idea what's going to happen over the course of this year, next year. And as we started kind of the cells motion with on-ramp and Outreach and inbound in credit to Jesse and his piece this week, with the Black Rock, Trust in on-ramp and, you know, one's a bicycle and can run properly. And one stuck in mud or is inevitably going to be fucking mud, had some conversations with unions that have allocated and small. Mounts. But what was interesting is that they said now other unions are looking at them. Asking them look at what the Playbook is, how they could evaluate in today. I had a really good conversation with a pension fund in early stages that are asking all the right questions on the fundamentals. They realize it's been the best performing asset for 10 years, but also, at the same time, they haven't figured out how do they hold it long term. And so we think we're onto something and being able to help them, but it's just early days, right? So it's gonna be very interesting. Next, let's call 18 to 24 months. Yeah, you get he signals out there so if you just look at the week in review there wasn't that much news from what you call like that just the broader Capital markets abroad, a finance, it was really you know that the lines have been hitting the ticker that I reveal, the big ones were obviously the SEC enforcement the things going on with what would you say like the the prime trust situation? The The finance situation, the true USD situation. Everything there seems like the action is happening and then on top of that you had just the cover smoke signal of the BlackRock Bitcoin ETF. But on top of that, you saw other just kind of infrastructure news that the the capital markets players are showing up to Big headlines. I think that I saw that showed up on my radar so there's the firm edx markets have been Kind of building up. But these are the big boys showing up. So, backed by want to say Fidelity Schwab and Citadel their CEO is the former Global head of Business Development at the spot trading firm for Miss a Bitcoin but they're not exclusively listing Bitcoin as their sole Focus, they list, you know the other day just crypto assets if you want to like these terms. But the the other stuff they do include that on what they're offering on. Auto trading vests but you know, from from that angle, you know, to show up with that degree of a caliber of a person launching this project. Just like, it's telling you, like they're mobilizing the troops for The Invasion into Carthage. I think it's coming another one. I saw Elwood Technologies, the sperm is backed by Alan Howard like billionaire. Co-founder of a massive hedge fund brevan Howard. They're basically creating Ting, you know, portfolio management order management system for institutional clients. So our firm build, we use for our order management system. I can explain what that tool does a little bit but basically Bloomberg part announced a partnership and this has been a few months in the making and all this is public intuitive, so I'm not sharing anything that's, you know, not on the news wire if you're looking for it but they announced, you know, portfolio trading for Bitcoin, but Also lists, those others, obviously, they're not showing up with an exclusive Bitcoin Focus but that's where we believe the action is. But yeah, the order management system for institutional players, it's part of like the table Stakes that you need for tools and infrastructure for this to show up and be like a reliable asset class for Capital markets and scale players if you will. So, when I say that, you know, that that acronym order management system or OMS, it just means like when you're Trading for a client account. Like, let's say build. We manage multiple clients funds when you need to buy or sell, you know, a holding in their portfolio. You need to show like a ticket. If you would like an order to get same way, if you go, you know, order food at Cooper's barbecue or something like that. Yeah, you'll get your ticket back and shout out to my awesome friends. Want to make sure I put this in, you know, the terms you guys like to see but you get it, you get a ticketing and like a timestamp price that your trade was struck. Lawyer. And then your counterparty for that. So you see this system, you know, build out, going on. And then also, like the spot Market development, where you don't have movies. You're just like the bucket shops the by Nance that, you know, all of these exchanges that are just, you know, Fly by Night. They come, they go. It seems like you're seeing right now. The infrastructure getting built at the base layer for the for the scale players to show up. And yeah, you know, where the long time frame, it's it's not just going to be a quick copy paste of the old system onto the new. I think this will. This will change everything. Yeah, yeah. Feels like it's happening. Yeah, it does feel like, it feels, it feels like Wall. Street wants to run this industry. The crypto industry in particular, I found it interesting that like edx the Schwab Citadel. And who else was it? Is it? Fidelity also. Oh yeah, you know, they're not just going to do Bitcoin which means that They believe that the SEC is not going to like, completely clamp down on crypto or at least for the foreseeable future, which then kind of cast into into Dale choir, why is that she going after crypto and crypto companies, like Finance, but they're going to allow edx to set up shop and do the same sort of thing in a more professional more Wall Street way. It does seem like Regulators, it kind of clearing the slate in order to Make room for the big boys who have decided they can't miss out on any more. So I would say about be good to have a lawyer on to bring the perspective on this because there's, you know, just demarcation lines that can be drawn. So obviously they coin with the Immaculate Conception, you know, it's UT exocet that's, you know, treated as not a security or it's, you know, on one end of the spectrum like put it as further to the left on as decentralized as you can be as clear as you can be. This is You know, a commodity Ledger money, then you go to the right the full end of the spectrum would be like the a 16z coins, you know, just just spending up projects, get the wash right and going and pump-and-dump type of Securities and there's some demarcation, you know, along the middle and if you're using something like you guys know the space better than I do. But something that forked over the UT exocet from Bitcoin at one point or another If it was just like a hard for the technology, those are the things that are kind of grandfathered in or treated us differently than these. Just start up Silicon Valley, funded tokenization, pump-and-dump type of thing. So it's somewhere in there and you don't, you're not going to see any of these at this point. I'm just coming in as Bitcoin only his kind of what I'm reading as I go through these news announcements. Yeah. They the institutions have to learn their Instead they're going to get wrecked. They're going to get rid of that. Oh yeah. But yeah. And, and BlackRock might be a big part of that for some of these people because of the paper Bitcoin claims that will be created out of out of their product. Well, I think it's a good opportunity to jump into this. Obviously news of the week is Blackrock are filing for the ETF. The trust will just call it an ETF just run with that even though it's probably not Jesse will let you elaborate on that but I think it's great that we have. Mad on today during this week during this Newsweek to set the stage for this conversation. We met we booked you a few weeks ago before any of this was news and it's a bit prescient that you're with us this week particularly because all right Black Rock filed for the trust which essentially will operate like GLD which people refer to as an ETF, Jesse you dove into the filing and wrote a piece and a nice thread on it. Really what the truss structure is, what individual clients or people buying into that? Trust going to be able to do in terms of taking the Bitcoin and kind of eventually or not being able to as it is seen, as it seems, the paper Bitcoin that can leak into that structure. And I think having Matt here to build on that conversation BlackRock. Obviously the largest asset manager in the world. A lot of people have tied up their retirement funds with the Black Rock. Ox and vanguard's of the world. And that is something that Matt is very passionate about the the situation of retirement accounts in the US. And so let's start with jumping into the structure of black rocks, trust how it works. And then I think we can dive into the landscape of retirement accounts in the US. How Black Rock plays into that and how Bitcoin We Believe can can really help retirees as Are retirement accounts. Begin to fall under water. Awesome. Yeah, I'm looking forward to this one. So I spent last weekend kind of digging into the BlackRock product and pouring through there, there s one filing, but they intend to do with this product. It's a trust, it's a grantor trust model, which is a great model. And is in fact, what what on-ramp what honorariums Bitcoin trust is structured, as that is an excellent model for Bitcoin specifically because Because as a single commodity investment vehicle, a grantor trust allows the tax status to live with the with the investor. So it's, you know, for tax purposes owning a share of BlackRock Bitcoin trust since it's a grantor trust is equivalent to owning that underlying Bitcoin, from a tax perspective, which means that when that investor wants to withdraw in kind that. Bitcoin, it isn't a taxable event and That's essential for delivering that that desirable attribute of this truss structure. No taxable event on in-kind Redemption, which is great. And that's how it should be. That's better than gbtc gbtc is not structured that way because to get out of gbtc you can't with withdrawing kind, you have to sell your shares in two dollars. Then use those dollars to go buy Bitcoin. So that's a taxable event and so, you know, in that transaction, you could take a thirty percent hit on the value of your Holdings because you have to go pay the tax man. So the grantor trust side of what black rock is doing is great. It's, it's a good design and the other benefit of what is happening here. Is that because this is a spot product, not a Futures based product. It means that Black Rock has to actually buy Bitcoin. So any allocation that they make towards Bitcoin via this fund from the the 10 trillion dollars of a um that they have. That means buying Bitcoins. So if they had a one percent allocation of their 10 trillion under under management, that's a hundred billion dollars worth of demand, that would be spread out over some time, but that seems reasonable over the next few years and 100 In dollars of inflowing demand, you know for an asset that's 500 billion dollars in total valuation. But most of it is not available for sale means that you're a hundred billion dollars of demand is bidding for a tiny pool of what is available for sale which will and since prices so the margin you're going to string out a series of Trades that amount to a hundred billion dollars of in flowing, demand bidding up the price of Bitcoin dramatically in order to find Supply willing to Sold massively bullish for Bitcoin in that sense. So that's the good of what BlackRock is doing. The bad of it is that it's Black Rock and they are bringing BlackRock Norms of governance and custody to an asset that doesn't play nicely with that type of expectation. So a few, the three, Me in my mind. Biggest problems with this. As first of all, we hypothec ation. There's no, there's nothing that prohibits BlackRock from lending out the Bitcoin that ends up in their trust. As a result, they will do that. So they will get a little extra yield by lending the Bitcoin that they're holding two to the three arrows capitals types. The maybe the block five types, who are going to go further out on the risk curve and do something with that Bitcoin and maybe it works out or maybe it doesn't, you know. So they're going to generate a little, a little extra yield that way but in doing. So they're creating paper Bitcoin claims because they're taking the Bitcoin in the And that the investors in the fund, think they own and they're giving that Bitcoin their lending it out to somebody else. And then now there's two claims on that Bitcoin. There's the the big that Bitcoin lives with somebody who's borrowing it but the original investor in the in the trust thinks that they own it. And actually they have a paper claim on it now. So in that way, you're going to be creating paper Bitcoin. Messing with the supply of Bitcoin in the process and ultimately that, you know, that loan either has to be resolved, get closed. And in order to restore the, there's one Bitcoin for one claim, or if it goes sideways, somebody's stuck without Bitcoin because there's two claims and only one coin. So that's a big problem with the rehypothecation side side. Things there. Gosh. That's such a deeper hole that I did last night. Yeah. God, is it explicit that they're able to rehypothecation? Is it something that's just like, not mention that they can't and therefore it's implicit? Maybe that they could probably will do with it. And it's the norm in with, with, with ETFs in general that this is just how Wall Street, does things like you're allowed to lend out. Out the Assets in the ETF. And so people do and and there's nothing in the S one that says they can't do it. Which means that they're going to do it. Yeah. And Michael whether America. Sorry Michael. If you have something go ahead I have another angle to. Yeah problem creation Redemption. Yeah, I think there's a couple components to this. That would be interesting. One is I'm really excited to have Matt joined because I feel like he's our Resident like Bitcoin her inside. We saw you like look to your your right or left, whatever Direction. Where I'm treated like a Bloomberg screen and you're talking the lingo, and you know what's happening in that world. And one of the things that came up when we started thinking about on-ramp was finding out from folks between Black Rock, consider Bell, that black rock had institutional demand, but they did not want to face quote-unquote like web to web three companies and Owen base fell into that. This is even before FTX blew up. And so part of that was the edx formation which came from again, Fidelity, Citadel and Charles Schwab. And so that all sounds good until you realize like the backend engine of that was paxos and I think they were even going to leverage them for custody. I don't I guess that's kind of changed. Now these are marketing themselves as like a decentralized exchange and they're going to have like the settlement somewhere else. Maybe it is packed so still But regardless of means practice or not. The reality is all these custodians are the same thing. It's just there's no difference between coinbase. FTX custody or paxos and the reality is that like looking at this and see what happened the past few years. Had this realization that we're going to see this orders of magnitude larger. Whether it's the rehypothecation from BlackRock, or someone else or the centralization of the assets and just the similarly just destruction of chemical Capital that happened. And so one of the things that I'm just curious on your side. Mat is, what do you think has changed with that? Because you talked about the dance with the SEC. And, you know, now they're letting, you know, the firm's come in and it's like, there's feels like there's something with coinbase, like, bending the knee, that is happening in the background of like, okay Block rock. You know, we're here, we're going to use coinbase, they have the infrastructure but like we almost we own you at this point because at the other side, Talk about fees, the structure and he's completely kneecap exchanges when it comes to the compression of these within an ETF. And so, there was corn base, you know, liquidity and feed trading fees when it comes to that, along with a bunch of other exchanges. So I'm curious if you thinking things to change or what's happened in the course of the past six months will coin basis. Now, looked at as a counterparty that institutional investors are going to be willing to trust with their Bitcoin. So I think over the last race, a 15 months, right? Last spring it was a point in time where you had a lot of filings going out but they were getting pulled and you know this is pretty well known. I was looking to you know find some Solution on top like build around Bitcoin. Like this is you know how we got to this point where we are today with this with this private placement offering or private placement that we have talked about with the Unchained Bitcoin back loans. But we were looking at evaluating, you know, how do you how do you go through this process? What could we bring to Market? And in that process you talk to lawyers and you see what everybody else is doing. And we were told I think it was last March or April, it's like don'ti don't file here, we had another asset manager who just, you know, submitted a filing and they were told to pull it back. Like the, they were asked by the SEC to withdraw. It's not a rejection or just like, just don't do this right now. So, it was kind of known at least from what we were told. By our lawyers who are plugged in with the capital markets. This is what they do. You know, big law firms. They said just just pull back. This is, this is just, you know, hot stove, do not touch this right now and then as of this week, right? It's like oh, we're back. We're game on. So I don't know if it's, you know, tied to certain shoes dropping over the last 15 months where we've seen certain players like The Leverage build up in the system. You know people doing things on a building on top of on sound practices, those going wrong. And getting exposed or if it's just kind of learning where within the, you know, the X's and O's or the just the black text on the white paper. How do you how do you map this offering? Right if we have this goal, like everybody is known about this prize that's sitting there for someone to go get to have an exchange-traded offering with actual you txo like spot Bitcoin. I guess is the term People use, who is the first one who can take that Hill, like you're sitting on, you know, a revenue stream of fees and commissions. And this is the way Wall Street is kind of viewed it and known about for a while. But is it an element of like the right things had to happen? The right regulatory actions were taken the right back room. You know, meetings were made, I don't know that or is it just they figured out how to, how to submit the filing to increase their prospects of? Hey, We think we can get this thing through the door and make this happen. I don't know. It could be, could be a bit of both. We don't know as as the outside observers. But you know it could be somewhere in between, but it went from, I would say like the the temperature went from, do not touch this thing 15 months ago to now you see what happened? One black rock way and then now you had a land rush. I don't know exactly the number of came out with follow-on filings and I know Wisdom Tree and that's great. Six. Yeah, so it's back on again. They're going for the land rush and, you know, this isn't going to change that. Like, I don't know if we're still in a bear Market, I would assume we are until till we hit another all-time high. But you know, it's getting ready for the land. Grab you can see, you know, they're positioning for the next bull market. Yeah, it's really interesting. And because I tweeted this out earlier today in Jesse, I mean, you alluded to it with the rehypothecation and on-ramp is obviously created the custody of the Bitcoin held in the on-ramp trust in a very specific way to leverage Bitcoins, native properties, particularly multisig, and that's what's going to be incredibly fascinating to watch, play out over the next three to five years is Wall, Street, getting acquainted with the technology side of Bitcoin. Like, how do you custody to this custody? This We do use a third-party, you use multiple third parties and it's going to be fun. Watching Wall Street, learn these lessons because as we know Bitcoin as he's native properties, that make it very easy to build. Sound and secure Financial products on chain. Particularly with multisig, that Wall Street, doesn't seem to grok yet. Obviously, with blocks York, see me BlackRock not block stream, using Queen basis, custody that is a signal that they sort of don't get it yet as they probably should. And that's like another aspect that's thrown into it. Like, we are so early. Bitcoin has these native properties that really don't map to the And financial and banking system. And we're so far ahead of the curve on ramp particularly, unchain companies that are leveraging. Multisig, river, shrike are so far ahead, the chain the trend in terms of native security of Bitcoin. And so let's just touch on that like why on-ramp and of explained in the past but I think juxtaposing it to the Black Rock filing and they're offering if it gets approved is Is is really important for people to understand and intuitively grasp because their decision allocate to one trust with a certain security model versus another is a pretty big one. Yeah, so well I'll cover off a little bit, a little bit more on the BlackRock side of we touched on rehypothecation. There are two other problems that come up with how they're approaching custody and governance, one is who's allowed to do in kind redemptions. What's that Redemption process? Like the other is what happens in the event of forks and together, those three problems are Attic of how Wall Street has yet to appreciate the Bitcoin has these properties that protect client rights and by minimizing counterparty risk or you know, making making it easier to audit and and and Ctrl + C and limit the ability to re hypothecated this asset. Because it can live on chain, it can live in a multisig vault, where three different parties control that Vault into are necessary to effect control. And, and then that prohibits the ability to do any funny business, any be hypothec ation because you can't lend it. Unless you have the agreement of of multiple institutions involved, which is how on-ramp is built, but it is not how black Because doing things, because as a custom, their custodian model is they're handing it to coinbase. So, now you've got two counterparties stacked up here, you've got black rock in the risks, there with them as a counterparty and then you've got coinbase as your custodian, the counterparty risk there. And and that is not as good as diversifying your counterparty risk by Splitting it into three different keys that in the multisig Quorum. So yeah, the in-kind redemptions problem with black rocks model is that The, you're only allowed to withdraw in kind your Bitcoin, if you are an authorized participant, which means a registered broker-dealer firm that has entered a separate contract with black rock and with and is in the good graces of BlackRock at that point in time. So that obviously is a, is a list of of firms with that, right? That can shift and can go to Well depending on what BlackRock wants to do and that's that reduces the rights of the end client to access their Bitcoin versus what's possible. The other problem here is the forks situation where there's a kind of a large section in black rocks, filing that specifies, that in the event of a Bitcoin Fork, BlackRock asserts the right to determine which Fork is the real one in which And they will honor. And the one that's not real in their mind, they can ignore or sell off the those assets depending on what they want to do, which is problematic because this is Black Rock and their the originator of the ESG score concept, it's them, that's that's their thing. And you know, it CSG the issue score is effectively a capitalist social credit system. Charlie capitalists pretty caught. Well, it's it's a so social credit system for wrapped in capitalism, you know, my party's a big fan a ESG so good. Let's see why shit-eating grin. Here is a, yeah, it's so you play that forward. You can obviously see a scenario where BlackRock would, you know, the black, right? Let's say black rocks. Trust end up becoming a very large holder of Bitcoin. Then they get some pressure from the government to, you know, impose a change on bitcoin to Fork it and create an ESG, friendly Bitcoin it or call it green, Bitcoin, whatever. And now you're looking at a Bitcoin cash scenario where there's corporate interests pushing for a fork but now it's not like small-time players, this is Black, Rock in the US. Pushing this fork and they're holding hostage. A lot of the institutions that have gotten Bitcoin exposure through this trust and that becomes a scarier fight then then Bitcoin cash was. And that's all because in this document BlackRock asserts that right and it's just in Legally sand hard to really see the threat there. But it's there and it doesn't need to be that way. And so, you know, on-ramp on-ramps model is to Is that grantor trust model, which is excellent. But to leverage Bitcoins properties of custody and governance to deliver best-in-class. Custody through the multi-party custody solution that we have where we have three institutions holding a key to our vaults. Two of those institutions are qualified custodians And it should all be about the rights of the client to access and control their Bitcoin and not about a permission system where you have to be in the good graces of of BlackRock, who can change the rules at any time and can impose their politicized desires. So, petition for change with a fork and declines code, Yeah, in just like expand on that I think Marty's thread was or tweet earlier was a little inspired from conversations. We have in the sense of like there's two parts and this is like one of the funnest times to just be involved in all of this stuff because we're basically, if you somebody's been workin, in space, you're looking at it. They've seen the stuff play out. We know how this How This Ends. So, Jesse to game out with Jesse. Just alluded to the closest, at least in my mind parallel was blocked Phi. And And the lending model that they had experienced this, I don't chain capital on the lending desk. Where in nominal terms, it was more expensive to go and take a loan from unchain versus block by and what we experience as you having those conversations and we explained that normally it costs a little more to take a loan, but risk adjusted, the lot more expensive to take the block file own, who's we understood? And people that, you know, it's just an asymmetry and information would Jesse just To it's the market not fully understanding. One that this is a different kind of asset or no bailouts and Bitcoin you can't print more Bitcoin. If the Bitcoin is lost, stolen hacked, or your rehypothecation. And you know, the tide goes out in your college store but in the same situation, block Phi over the course of years, we would start to see more individuals realized as that information, was disseminated the market. Oh, this isn't the right way. I want to know my Bitcoins on chain. I want to know. I'm willing to pay that additional The extra bits to know that the Bitcoin sits there. It's not being real and out and it was really fascinating because during the conversations over the course of years. It we would say the differential I would personally saying I felt it was a bold statement but I believed it. I didn't know what happened. So quick is that the difference between block line and change market cap was simply? And the Delta between information similar is like Bitcoin, becoming money is just understanding of all the things that individuals have spent. The time looking at And, you know, little we know like 12 months later, whatever the time frame was that block fight basically Enterprise Value, 0, or negative. And I think of the it sounds like Blossom and it's crazy and say but I feel like very similar to any structure that goes against the principles that we're talking about here with Bitcoin in the centralization. Like this is an asset, it doesn't have to be held in the old way we don't the map the old world to it and part of murders tweet earlier was talking about you know, qualified Doing and I don't know, I don't know ever made. Um it was basically referring to like there are legal confines and Regulatory structures that we have to adhere to or were US citizens and there's things to offer Financial products but at the same time there's a way to offer those with also staying close as close to Bitcoins principles that allow for the longevity of the custody and just being able to hold that asset, right? Very easy to buy Bitcoins. Her to hold it long term to the volatility Exchange tax and everything that we know. And so I think that's very important because there's plenty of people out there that will tout Au because it's in a trust structure because it's in a qualified custodian, or because it's Black Rock. But the end of the day, like, Bitcoin is show number 13 years that it doesn't matter, who's holding it, unless you do it in the right way. Your Bitcoin is at risk of being gone and being gone forever. We can't make more of it. And I think that's the fundamental thing that we see with BlackRock as people that have looked at Bitcoin long enough that there's no world, where Black Rock The lot of Bitcoin call it hundreds of thousands, not millions that it ends up good for the people that are putting their dollars in and thinking they have Bitcoin. Yeah. My tweet earlier you can check all the legal boxes. You me qualify custodian. You can read out meet all the fcc's regulations. All the banking regulations but if you don't Croc Bitcoin security and build your product around Bitcoins, native properties, there's no legal checkbox in the world that can save you from losing people's Bitcoins security, That key Point like, is a, the liabilities and athletic mismatch, like the common thought that came up about block by eat it. I know I was part of it was like, look like fiber has a hole or a zero. What Peter teal? Do back them up, they'll fill it in that common thought happens. Now with Fidelity or black rock that if something happens if they're hacked, if you know there's a mismatch in you know the rehypothecation lending, whatever might happen. There's such large institutions that they will backfill but if you think about Got it. The idea is, if somebody's holding that asset, then they're looking at the price to get 10x, 100x, whatever the number is, and at some threshold, it's, they're upside down and what they're holding versus the Enterprise Value. And at that point, that's where the question happens one. If they're, if they're haploid, or something happens to the funds, it's, it's more than likely a zero. But then also, in this ties in, I was having this conversation earlier to be able to take redemptions. Because if that price appreciates, then there's this Like dancing Bitcoin, you shows, think about your MDK talents, I don't know exactly where it came from, but it's just the thought that, you know, you always want to think about your security model as if the price of Bitcoin is 10x what it is today because of the never will. And then you're going to, you don't want to be scrambling when it does that. And similarly, with having with black Iraq, you can imagine institution endowment that allocates a billion dollars, whatever the number is. And now at 10 billion and black rocks falling trillions. And you're thinking, wait, this doesn't make much sense, but you're stuck because you can't take it and we seen Thousands of people stuck with GGC a cell like Jesse's piece was great because it really laid out the the fundamental things that we thought about with on-ramp and in the difference between what Black Rock God and the visual of the bike with one wheel, will it stuck with a square whatever? The square thing was a rock maybe was very apt and explaining, you know how or vehicle moved. Yeah. A map, did I catch it correctly? Earlier, were you about to go into the potential duration mismatches that could arise if they do? A hypothec it hours of talk about the creation of redemption. That's just to cut just an echo on with Michael saying, like, the the risk, right? Yeah. You're on the back end of a fun Financial product, Etc. Like, your your weakest links in the entire process, right? They're going to take you out. Financial industry is built on wrist, like it is a risky business period. And any point that you do not understand where the risk is it will build up and when things go wrong, that's that's when the stretchers and and body Max get built out. So to some degree you're playing with fire here, right? And it's not just Bitcoin, you know, wrapping it in these layers in the industry and applying just in a lever leverage Capital Market System. Michael mentioned, do you come in? Just fill in the hole as soon as you run into a situation where hey, your company took on rested, didn't understand or wasn't aware of now you're in a situation where you need to go out and raise more Capital. Oh yeah. Yeah. Ask Peter thiel's, maybe he'll fill it in but in a system where you're running it 12 to 1 or 15 to 1 leverage on average. If you don't understand the uranium that you're playing with or polka, not like you got to be careful and I don't think we've fully thought thought through all of the things that could go wrong. Wrong with putting actual UT EXO's into an ETF ETL like fully liquid 24/7 with elastic. Create redeem you mentioned the authorized participants as like a point of failure, Jesse in terms of kind of like a exclusionary, right? Like, I get to choose who's in here but I think it goes beyond that. It's mechanical, right? If you're looking at how the Creation Redemption mechanism works right when I say those words like that's what makes the ATF special is that you can be perpetually, like open as a as a pooled fund and traded on an exchange because you assume these authorized participants. And tandem with the market makers, who do the actual trading against your, your retail or institutional clients right? Who were moving in and out and trading shares in your fund, the author. Guys participant is the one firm who can create or redeem baskets of shares his way. It works. So the way our firm has an 80s, I had to learn about all of this. There's people who do this for their living, 20, 30 years of experience, like, they know this inside and out way better than I do. But I understand like the kind of like the Practical elements of this. Like, I've actually sat at the keyboard and process these these strategies, creating redeems, what happens with the with the AP, as like, they'll get an order from the market makers there. They understand supply and demand, they do like the share count need to go up or down and then they'll create a new basket. So one basket will be, I think, for the, for the filing of said, 40,000 shares. Yeah, they it starts at at the share price of 25 that's a million dollars in assets per basket. So let's say an authorized participant like we're starting at zero share so you got to create baskets, you'll say we need a million dollars worth of you Texas. There's no other asset that you can get to put it in this basket, right? You have to deliver Ever Bitcoin utx. I was right and there's some degree like if we ever get into a kind of a bar fight. What is the chain? What am I CU? T XL. Well it's also Black Box decision. What makes it in there, right? What goes in the back seat basket. If it's a fork, you've got to go get those you got to show them and you know, these weights and measures like here's the price forty, forty thousand shares worth 10, 20 50 million dollars worth of worth of UT EXO's. You put those in the basket. Now you can you check this against a market? Where if you look at the Dynamics you look at like the the really good kind of analysts we have in this space is something that's like unique to bitcoin that other assets. Don't have like you have an open source community of analysts like you've got dealing with Claire out there and rational room people putting together, good work and know this industry I think better than then. You know, the entry-level analyst and Senior along this, that better even on the street. But you look at a market where the available supply for trade. Probably peaked and and q1 of like 20, 20 or 20 21. And the last cycle, your declining, what happens in your creation basket. When now you need to go create shares and you go into a spot Market where available Supply to trade is dwindling, right? You got to go get those. And at some point this market, like if you just, Follow the logic like where this looks like it's going. Like it looks like 5 to 10 years from now. Could you know, give or take? Who knows when that day comes with. It looks like this is a market with a reasonable probability of you know that the market going no offer and then what do you do? Like you're in this situation like day to duel in shares out like we can't create any more, we can't go get UT EXO's. I mean I don't think we've really thought about all these things and there's so many different ways for this to go wrong from Product standpoint. If you're looking in the rearview mirror, you've just seen You know, each cycle starts with Mount gox and then everybody there's always a body bag. Yeah. A lot of risk here. I think I think you nailed it there, where like Wall Street is going to burn their hand on the stove and it's a question of do they do that sooner like sooner or later if they do it soon enough where the holes that they create from, you know, not treating Bitcoin with the appropriate level of respect is fillable. If they can fill that, Whole the then maybe they'll learn their lesson and not rehypothecation, for example, but you could end up in a scenario where even these giants, like Black Rock, could let there's a very plausible scenario of BlackRock manages to ingest a million Bitcoin and to this fund and 10 years from now, the price of Bitcoin is a million dollars per Bitcoin. That's so that that's a trillion. Our fund. And if they if in some crash happens then and they've been rehypothecation and they're caught swimming without any clothes on that hole is bigger than the Enterprise Value. What Michael is getting it earlier of that, entire business, the biggest Behemoth on Wall Street and, you know, the Bitcoin has the potential to take out every institution on wall. Eat that doesn't learn to respect it soon enough. Yeah, I think another thing going back to the custody model depending on coinbase. A single custodian and that you brought up like individual UT EXO's. And that's the thing with allocating your Custody of coinbase like the coinbase is not going to like be registering those you tx's and I can be able to go to like the filings of the BlackRock fund and find the individually. T, UT X OS where the shares are held. I find it very hard to believe. I don't think coinbase does that for grayscale right now or gbtc. And so, it's bad for two reasons. Number one, in the event of a fork, like Black Rock can number one. Choose what they deem to be. Bitcoin, the true Bitcoin. And then since you don't have visibility into the individual utx, oh, is that the fun actually owns? They could say. All right, we're just going to run with this. This Fork as Bitcoin, we're not going to do anything with the other fork and they could market sell that and not tell their customers, and just just recall that in, in a way, we'll know that like, yes. Stop getting a bid. And once that, like, know this, this this BlackRock chain, like, we've Got them. These These are good utx. Us know, it'll show up in the market price. Yes. Yeah, you know what, you just made me think of Marty. So there's something interesting, without going too far, like down the rabbit hole coinbase basically being blessed with this because it is a blessing like that. They are going to hold this. They're going to get these. There's a lot happening from that. And we've always had these thoughts or discussions, like the government really can't like build custody solution in the same way they can actually build whatever currency that is going to be digital. So, there'd be like this, public-private partnership. That's what coinbase feels like in this world and similar Circle. And if you could take that further, it's like Black Rock, basically on Circle and coinbase. Now, the problem with that is coinbase outside of the fund and it amassing a million PTC. Coinbase hold, what's the number right now? A Bitcoin outside and just in general, like between Zappo gbtc and coin basis, you like 2.2 million or something that's above 2 million. Yeah so So, there's a big problem here. Yeah. Alan Farrington included that in his excellent piece about the BlackRock product. He enumerates eight reasons to be worried about this and one of them is, is that black rock is, you know, so interconnected with the US government that using coinbase, as their custody provider effectively is going to like Bring coinbase into the government's control in terms of what what they're doing. If they weren't already one of four, one of eight facets and to be worried about with regard to back, rocks product. Yeah. On top of the three that I enumerated, which which weren't actually called out in his weren't fully called out in his excellent piece that called Trust me bro. Excellent name for an article. I mean it's a very interesting 5 to 10 business days. When you think about coinbase sued, you know, whatever by Nancy will, it's not even count that and then BlackRock ETF blessing coinbase with it like that doesn't, you know, they're all talking to the same people, the icc's involved in all of this, the government, you know, it doesn't. There's just it's a very interesting Dynamic to now think that Block rock is working with Is that holds 2.2 million btcd? Yeah. So do you think upstarts like on-ramp compete with Wall Street? You think this is a move to sort of box out the the startup culture in Bitcoin and let the adults in the room come in? Or are they going to be forced to let us compete, you know, we're an ant to to Black Rock where nothing, but from the perspective of a client, You can still choose you know whether you want to have a bike that has this good wheel. This good normal wheel the grantor trust model, it's a good fit for Bitcoin and then a square wheel which is the custody and governance. The black rock is bringing in. You can choose that that you, that can be your option. If you're if you're if you don't want to take on self custody and you want to get direct exposure to bitcoin while leaving yourself open to Actually taking self custody without a taxable event. Your options are that BlackRock vehicle one, good wheel. One square wheel or a Bitcoin native investment vehicle like on ramp where we've got the good wheel. Same thing. But you also have Bitcoin native custody through multisig through multi-party, vaults. And that is genuinely a better investment. You're called for preserving you as the client your rights, and minimizing your risks in that process because BlackRock is introducing a lot of risks in how they're going to govern this fund. And it doesn't need to be that way, and it shouldn't be that way and bitcoiners like us at on-ramp want to make one to bring people into Bitcoin the right way. And Empower them to take self custody when they want and help them preserve their rights. And access to this this asset and not try to dupe anybody into ESG coin. And sorry, this is what you get because you got exposure to bitcoin through BlackRock. Now you're holding BlackRock ESG, Bitcoin doesn't need to be that way and it's ultimately up to the individual and the Institution to decide what they value. Do you want to go with the big name of BlackRock? And frankly, most institutions will do that because, you know, black rocks clients will probably get exposure to bitcoin through BlackRock rather than upstart on-ramp. But every individual and every institution can make that choice for themselves, I'm Jesse little more bearish on honoring than I am. I, I tend where I've been having a lot of fun as again, this is like pattern, recognition of what we just, you know, did we've seen this. Whether it's an unchanged or river when you think about all this stuff from first principles, it's very darwinistic in the sense of like whether you choose the right money or the wrong money, you know, as we really to Parker's, you know, greatest asymmetry, it's not only to the upside of the downsides if you make the wrong decision, can insulate yourself from it? It and the same way from the product. So you know, the idea is like, we need two keys to be distributed Bitcoin for it to work. It's pathetic is going to have to happen it. Let's say we game out. Pick one successful, then your decision on where you secure. The Bitcoin is going to be the difference between you holding back when long term and not, and we just seen this play out with the past five years, whether it's a lending example with block fine and chain or, you know, custody and thinking about building your own infrastructure like River or whatever tapping out crying. Trust like, it's This is the where I'm bullish just like on the education because that's what this games going to be. For the next ten years, were dealing with alien technology, a new asset and it's up to us to be able to disseminate and explain that. And, you know, credit to Jesse Parker individuals that are able to pull from their traditional Finance backgrounds, along with understanding deep understanding of Bitcoin and monetary Theory and all the things that go along with it and articulating that two individuals and you couple that with a product that's native and that it's inherently native, when You look at it it's like do you want a single institution hole in it? There's no difference at the end of the day, whether it's Block rock, coinbase, FTX block fire, any institution of single, or do you want to use a native properties, that reduce that counterparty risk? And from a game theoretical perspective, especially if you do it from your stick tional perspective, you're not adherent to a single institution or somebody rugged you from that key over time, the best products going to win. It's a free market. And so again, having lived this the past few years in previous roles in the space. I don't I see. That it's just education that it all comes down to, and then the market takes care of, well, that's why we're here filming to educate. That's why the last trade exist. I completely agree with you Michael. I think that's the I want to say maybe Wall Street, may have an innovators Dilemma on their hand. Where there are two massive and due to the regulatory environment or not able to move as quickly with these unique, custody models that exist with multi-institution multi-city. Who knows, maybe The Regulators will get smart and they'll be able to move more nimbly, but I'm not going to hold my breath for that, and I think that's the beauty of the time. We live in right now. The inflection point. We live in. There's a grab going on wall, Street's going for their grab right now. We would argue on the show that they're they're approaching it the wrong way and because they're doing that we view it as a massive opportunity to do it the right way and show people do it the right way. Educate people on what the right way is, which is why we're here, is there anything with the black rock filing? We want to want to tie the knot on here because I think we should one thing I do want to add, is we've been doing like, forget about like the funder were you talking to folks whether on the union side or people that are managing, something like the everybody, these funds that are allocating capital or made of real people, maybe this ties in the transition to what Matt's working on. And also, just his understanding of the mismatch with, you know, Social Security pensions endowments that when it comes to the conversation, it is people's money. They're they're managing. And that they need to think your Russia area. And so, as the education happens, that's part of it, is that there's a real people that they have returns that they have to, they're responsible for. And if they don't have to take that counterparty risk, given all the things we just talked about definitionally, they shouldn't if they care. And so there's a lot here that we're going to be able to do to help a lot of these funds and then we all know like that it's in your, in the better for, you know, the return. So that's really weird as I've been going about the bath a couple weeks. It's like there's a real duty to help educate these large pools of capital because somebody on the other end of it is depending on it for the retirement among Social Security and other things that are associated That was I was just going to close on this, this one out I think. I don't think there's ever been kind of a situation, like this. Maybe there is a case study, we can find in history, where the playing field on this new paradigm tilt towards the individual, not the scale player, not the, you know, large pool fund. This is hard to do to map Bitcoin onto the Legacy system, like the Legacy infrastructure, like you're going to keep seeing it. There are going to be problems. You know, you rep of the floorboards. I didn't think about that, but for an individual, it's super easy. To onboard figure this out. It does take homework, you do have to put the time in, but you know, there's never been more. I would say just Alpha on the table for you. If you do buy any, you're going to your. You make that choice to on board on to bitcoin. Learn. Learn learn how to do seed words. You know, learn how to use a sign device, like a cool card. Go to one of these on-site events, do a workshop and take personal responsibility. So I'd say that's that's the huge lie. Foolish thing is you as an individual. Have a have a table set up in front of you. Where personal responsibility has never been more rewarded. I'd say in this framework, as opposed to, you know, so many other facets and life right now where you can take as much personal responsibility as you want like I can, you know, diet exercise. Get enough sleep at night try to stay healthy. My health insurance premiums are going to go up just like everybody else's 10 to 15 percent a year, right? I can't do anything about that. It's Just a complete change in Paradigm, one system versus the others. I think that's the extremely bullish thing here is, if you do choose to opt out of, you know, your existing option, your existing Financial investment choices will talk about this, what people are invested in and saving. And for retirement, if you choose to come play in this game over here, game is not the right word there. This this new system, this emergent system personal responsibility carries He's 10 minutes, it's free office, the complete opposite of what you're used to. Yeah, absolutely. And I'd go so far as to say that the people who do that, who take on that, you know, the scary elements of the new and in and learn about Bitcoin, do their homework and take on personal responsibility here. I think that could be the deciding factor between whether middle class individuals get to a retire. Ever or not and and it's I see that as we're all of this is moving towards and I think we can dig into Matt your work on this about asset classes and and individual Networks. Marty. Did you die? You'll know. Good. Want to throw up the slides. We went over. Did you want to recent rehash? Any of those or just open in discussion? I think we'll start with open-end discussion. Just how bad is the retirement situation? Private retirement account? Yeah. Well Jesse I've heard you talk about this to on other podcast you but I'll maybe the Citadel best dispatch episode with Mana W, talked about the same, the same things where does the middle class like where they've been trained, just Two accumulations and preserve purchasing power for retirement. And it's two things it's their homes. It's a primary residence and that's the big one we can talk at talk about the housing market at a bit and then it's retirement accounts, right? So you've seen this, this whole infrastructure belt out, you know, since Orissa government acronym but an Act passed by Congress and I think the 70s up to put an oversight layer over. Plants. And then after that like the 80s they the IRS, the tax code was the Revenue code was implemented to make these like tax favored treatment accounts where you could either get a benefit and a kind of a traditional standpoint like a regular 401 k versus or II reverses like the Roth and it's all amounts to do. You either pay the tax today in a Roth and then save, you know, over your working years into retirement and then presumably, you won't have To pay tax when you turn 65. Or, you know, whenever you hit that retirement of and distribution age, it's a move. It's a, you know, moving goalposts on when that comes home or is it you get a tax benefit each paycheck where you can contribute it to this account, you know, every bi-weekly or monthly paycheck and not take a text hit on like right away, you get a tax deduction, then you save it then you pay the tax at the end but It was it's really been a system that's built out and in the incentive since the early 80s to get people to save in this vehicle and financial assets, build up a nest egg and then, you know, ideally if everything works, you hit 65 or you know that number just keeps going up, seven and a half now. Maybe 72 the next time we hit a new secure act. Do you have that Nest? A built-up? And that's presumably. What's going to make up the bulk of your, you know, consumption needs In retirement, right? You have no more income other than you have your financial assets producing income, but you have no labor income. And that's a model that over like a 40-year bull market and financial assets. We're kind of you were, you were leaning into growth for most of it, right? The 80's 90's Boomers finally work their way fully under the work, the work force. So you got a lot of earners, a lot of a lot of you know paychecks. If you throw me, the aggregate aggregate, your work. Force is rising. You got a lot of income coming in and then every month there's just a bid and in the stock market and a bid for bonds and rates are coming lower. So everything's just going up for 40 years, that model worked and then what what happens, you know, once you're on the other side of that mountain and all of those fundamental drivers start going into reverse and that's, you know, that's really concerning problem. If you're looking on a like a forward Horizon, when you see, you know, the waves. Baby Boomers. Like we heard about this like we knew it was coming 10,000 retirees per day and it's here and you're looking at the metrics, I have this pulled up. I won't screenshare can if you want to okay? Yeah I do love that. I love that point of like didn't know there's a lack of bid. There's been a bid every paycheck for 40 years and now that it is kind of diminishing, huh? Huh. Yep. Can you guys see this? Yeah, Logan's going to pull it up now. He's got it. Oh cool. Let me not feel me. It's it change the dimensions. And, and for everybody out there to like this is all in the context of interest rates like 1981, interest rates for 15%, you know, mortgage rate was 17%. So the value of homes couldn't be that much and we've had a pretty straight more or less straight line decline for 30 years of interest rates going from 15% to 0 and then stayed there. For 10 years and only in the last year. Have have we seen actual interest rates back again, but that decline is fuel for financial assets to get bid up because the discounted cash flow. Valuation models that underpin, all these asset valuations, they benefit when the discount rate is dropping in because the future cash flows from that asset. Whether that's a company or Or a rental property, you have to discount them less as the interest rates are dropping over time. So that structural Force for 30 years. 40 years, really helped bid up Financial assets to the sky. So sorry, Matt, you can take it back now. Yeah, it's exactly, right. And then once you see is like, are we through it, right? Are we on that other side of the mountain? You can't call it while you're in real time. This is not how anybody does it, you can't call it top called bottom. You don't know for sure until three years, five years, ten years have passed maybe. But if you're looking at this data and what's happened since you know, we got that that covid deceleration, right? This this credit bubble wanted to deflate upon itself and then we had to take the monetary policy and fiscal policy actions that took place, right? You look at what's happened and the the main asset classes that make up a retirement account. All right, it's just stocks and bonds. That's all you can buy in there and you look at kind of the mother of all fiscal and monetary stimulus. And that only put these markets or at least the bond market into kind of like a preservation mode. For I'm say, like four months, like they pull out the Bazooka as late March, bond market topped, and early August, so at they pull pull four months basically, Kind of like a rally there, holding up bond prices and then, it's just been leakage ever since the bond market has been selling off. I know everybody's kind of like, we're going to hear recession Bond markets will / or yields will come in, you know, maybe that's, maybe that's in front of us somewhere with six months, 12 months. 18, lets you know, what have you? This is the most highly called for recession in history. I think. But you still see bonds selling off like I'm, you know, Ferrara Existing funds accounts, like what we're trying to do is solve the this looming problem hitting hitting fixed-income, allocations, and I trade these things every day and you just keep seeing yields come up like bids are backing off on, it's not just you know the treasury curve. Its front end corporate issuers, right? You might see names that seemed rock-solid like at the beginning of this year, United Healthcare, I could just throw out names. It's like these yields wouldn't budge it seemed like. And then all the sudden they do so it's like the The levees just keep breaking and I don't like no one knows how this how this plays out over the cycle. But it just at this point from my perspective, having the hands on the keyboard with like just watching these things all day. It's not slowing down, right? So it with a thing, I wanted to share on these these asset classes. What I did is I took the total repair and indices for the Bloomberg, I as a pay 500, total returns, go include dividends. And then Bitcoin. And then you take that ratio Total return and then you divide it by the CPI Index, right? Not that not the you know, hey, it's nine percent year-over-year. Know it's the actual index, like they charted, and it just goes up and to the right. And that's that's kind of your proxy for what's your purchasing power of your say, dollar asset Savings in that investment class. So we can choose like, any any And when you want, like just roll it back forward before, you know, we even knew covid-19 Aang December 31st 2019. You're going to get a similar similar result, but I chose this when the bond market started to sell off in August of 2020, we've been tipped. It hasn't kind of bounced since and your bond purchasing power is down. It says 24.4 a percent. So you're you've lost almost a quarter of your purchasing power in that alley. Location to investment grade. Bonds, I say investment grade. That's the category of bonds, that kind of the street analyst. The consensus is, these are, you know, they're investable, they shouldn't be a significant credit risk, right? So that that stack sauce to 25% as a whole, what that's made up of it's made up of US, government and agency debt, it's made up of investment grade, corporate Sandman investment-grade securitize. So think about like, Mortgage-backed security holding just pulled and securitize into a bond fund. That's what goes in there down, 25%. Since since August 20 20, it's August 20 2008. So since that stimuli that is like it could work through at least the financial markets and then things just of course from there while Bitcoins up 200% in that same time period, dollar price? Yeah, we'll go. So, that's something 500, I'll get to bitcoin third SMP 500, it's up six point six, four percent Total. So about it says two point three seven percent annually. So once your haircut for purchasing power preservation, growing your purchasing power saving and the S&P 500 since August twenty, twenty two point three, seven percent and Bitcoin even after, you know, a massive draw down. Like where did it get to from November 20? 21. 22, November 22. Like the P that was Peak and trough is a 85%. Drawdown, write something like something pretty significant psych after believe. Yes. okay, even after that, you got Bitcoin up 98.6% Real purchasing power preservation. Like, in that time frame, Twenty Eight percent twenty Point, 36 percent annualized. So it's like, yeah, everybody. Look things as what happened this week or this month or, you know, in the last year. But it's, you know, numbers, don't lie, even though it is, go ahead. Sorry, I didn't see maybe to take a step back on. There's the chart on the allocations that I think you had previously. SLI went over with Marty. I think helps contextualize like taking a step back because if it was you mentioned 2020 but 08 was really where everything started and the allocations leading up to that on the retirement and homes from individuals and how most got pushed there and then basically everything's gone downhill from there. Do you have that chart to show where we can pull it up? They think that sets the stage for like the precarious situation from individuals, right? And what they're basically like their personal balance Sheet is and then where it pulls into institutions and their investment in these different asset classes. And how they're all basically, Not producing any return. So the the sighs I'm Marty and I covered where an Institutional, it was like American household balance sheets where they say, institutional allocations would be a different set. I don't know if you if you want me to put these up Marty and Logan I can I can I can put them on your docket if you want to if you want to play these guys. Yeah, it's okay. This one. Yeah, you get to the main one yet, this guy. Yeah. This this gets to what we were talking about Jesse and I earlier like, yeah, but this is restoring. Its those are most broadly owned assets and the only ones that have gained value for your kind of your middle class, its primary residence and your retirement accounts or saying those other three three buckets if we're working from left to right? There's a class that's, you know, really limited ownership and Gain value, think of these as just like you own Financial assets. Whether it's like you own share, you know, you're an LP and a hedge fund, you own the bond Holdings, like you own cue steps. Directly give other pooled investment funds or you have other residential, real estate. So your second home. Third home, etc. Those those did extremely well. There's a there's a slug. Then next kind of life. It's like an orange circle. These are declining ownership and not gaining any value for the typical or the median American holds them. So number one of your CDs, cash value life, insurance savings, bonds directly held stocks, that one's actually surprising. I'll walk through that a little bit. Retail Traders are like it's known. They're terrible Traders, right? We kind of have this idea that thing to do is you buy low sell high. This is this is shocking. Being actually in the like the mother of all bull markets for an equity Market. Any country in history ever to retail, investor doesn't do well, like they in this, this comes into Bitcoin to write. We have this like This, I guess we call just like a fatal fall as humans. We, when we're trying to invest or speculate right on on an asset, but we do is we go and rush to buy to it. When we hear the news then we sell it once, it's downright. And when we hear the news, or we hear like, hey bitcoin price like this week, for example, it's it's rallied from 24K to 30k, see it in the news and you rush to your brokerage and or you know, whatever coinbase or whatever, you know, most Most Americans are and how they acquire Bitcoin they'll go by then right you're buying on a distribution typically it's it's it's a really hard and rare mindset to do otherwise like not many people actually buy low in an accumulation phase and then sell high or or buy low and Holt right which which works well in Bitcoin to. But in stocks this this data point here number it's on the fourth line. It's a cyst. Tiny little arrow. Here, they get barely any games. And it doesn't even really create wealth for most Americans when they're buying just equities and in their brokerage accounts. So it's kind of shocking. And then other than that group is other Financial assets and other non-financial. They're just catch all's in this like Bill the pool in for financial assets like any other credit claims or you know, there's oil and gas rights in some of these and then other non-financial assets will be things like like a commodity. You hold precious metals or, you know, something else, something like anything. Physical, like any investment you would say, that's not a, not a financial security or claim if you will. So I think, when I look at that buck and I see things like CDs, cash value, life insurance is savings bonds. Like what I see in this or how I interpret this. These are kind of reflective of a a Mark or a product marketing. Or product space Financial assets. That may be used to work for people but they're no longer working right at build building and accumulating wealth Through Time, right? So Marty and I talked when I was on TC a few weeks ago about what our grandmothers would give us for Christmas. And my grandmother gave me savings bonds and Marty's gave him CDs. It's like right that anymore. Like this is This little it be system, that's no longer working and I think in the cash value life insurance, you see this to and the and the equities, right? Go look up Ellen see, you know Lincoln but you look at the insurers, like it's it's it's not a good picture, right? If you if you think about these things in terms of businesses and markets and and where the customers are, what what I love about that and that chart in particular is how it kind of connects to what we as As a society and a culture propagate as investment advice to the Next Generation you know us Millennials we've received the wisdom. That what all you got to do is go out there. Get a job max out your 401 k, get a mortgage, you're going to do great because that's what worked for our parents. That was the winning model. That's what that that's slide shows is that's all you had to do. Just max out your 401 k and pay down your mortgage and Those are the two assets that were the real winners in that whole landscape over the last 40 years. What's funny about your anecdote about Grandparents is that for that generation CDs, made more sense. Those might have been the winners for them and so that's what they are propagating was like, oh, this is a good thing to own because it will provide security and stability in a world where you can't trust You can't trust the stock market or, or equities are or home values to go up. So I and then I can't help but look forward with regard to that like we've received this wisdom, max out, your 401 k, get a mortgage but as we've talked about like this is a 40-year bull market, where the conditions that allowed for that to happen. Our over like they can't continue. The wind has reversed. And now it's headwinds. There were massive Tailwind for last 40 years and now those asset classes in particular face, headwinds. And and so then the question becomes what does when and what can deliver? The kind of performance that housing and retirement accounts did over the last 40 years, in the next 40 years. The question. Then remains is like our the headwinds actually stronger than the Tailwind that that got you to this way. Is because with the retirement accounts particularly you have like the demographic thing that mentioned it earlier the 10,000 retirees a day. And so that's like for selling you have all the money printing going on. So met indexed those charts that we showed earlier to CPI, like you're fighting inflation as well as a fall, in the value of the assets at the same time. And then Those two alone like that like was the last 30 years of Boomers investing in their 401K is investing in their housing. Maybe the housing market is like the last Bastion of savings for the retirement accounts. But when it comes to the financial assets outside of real estate like there was it all a mirage? They had this false sense of security for four decades leading up to retirement. Let's talk about housing and just, let's, let's go Common Sense. Here, the house. Um, stock the American housing stock, it's old, its aging like the medium house like you can go with this up. It's like 1980 half of the homes are built before, 1980. I think the exactly might be like 1978, so it's an aging housing stock. Odds are, if you're a new entry buyer, you know, you're in your You know, 25 to 40 type of age group, right now you're going to you're looking to buy your first home, get your down payment, whatever you're probably buying something from the existing housing stock, you know, if you're really lucky you're just not going out of the park. Maybe you can hear you get a new build right existing housing stock. You're buying an old home like it's 20, 30, 40 years old, maybe older and then right now, you know with the rate sell-off bonds are Not holding their value yields going up. You've got the 30-year mortgage rate at 7% now, like it's just his seven percent again. Back to the same level, you know, they haven't been at a seven handles since December 2000. So right at the end of the.com bubble. So now you're paying us seven handle. Again, you're signing up to finance his house 30 years and seven percent your sign up for all that, you know, that payment stream for, you know, most of the time it's probably gonna be a house that, you know, it's been through a few mortgages already, you're getting the same house. It's just depreciated. Another twenty twenty twenty, three years now, right, Right. What's happened since price or what's happened in that timeframe of price, the median existing home sale price. In December 2000 was about 150 K. Now it's 396 case over 100k to 400k. Like you've gone up 175 percent The new interest. Now in this system, what it's asking you to this financial system, what is asking you to do to buy your new house such as and on credit, with 30 years of payment, stream is asking by the same house at a 2.7 x 2.75. X value is older. Now it's, you know, it's got to take more input, more costs, you no more Replacements, replace, the AC unit to replace the, you know, just you name it. There's cost involved. It's a depreciating asset - A 2.75% on the same 30 years and seven percent. It's, it's it's truly mind-boggling, right? That asking this system that says, you know, hey what's that the American dream of homeownership like, you too? Young couple, you know, man, you know, you can have a garage for yourself, it's just absurd. It truly is like, we couldn't even hand it down, like that same set of opportunities for like one generation. And it's I don't know, just just common sense. It's also almost like guys some got rubbed, I was part of this. Like in 2021, you know, you're hearing. It's the common thing that Jesse was referring to is the in-laws or whoever is telling you the wise, the wisdom, you know, buy a home, diversify hold it. And you bought it two percent or whatever interest rate in the market falls out in most cities, it has, unless you're in, you know, in Austin and Asheville these markets. Now you're upside down and the recession hits. And so now you're out of a job and you're upset. Yeah, I'm in your, you know, inflation's running. So now your cost of living is going up. It's just, it's a, it's a complete vas. Every, every cycle you put through this, like it gets harder. But even still, I guess we're time. I like that. Does it work, right? When does it stop working if you had bought your house in 2018? Right now you've seen real estate prices go up now. You finance, like you got a chance like your purchase mortgage and then you got your rate cut there. Like you're going to Two and a half percent or three now for 30 years, you know, like wow, these new buyers coming in or pushing my house up and they're signing up for this, you know, indentured servitude for 30 years as I will really, really hard on them. But from your perspective, as you know, someone who was in the trade even like 35 years ago, he looks like you're in the money. So it's just, it just takes time to get past that Tipping Point, but when you frame it like we just did. And you see that At this new engine, like your new home, everybody's going to be happy once they get a pair of keys and approved for a mortgage and close on their house. But you look at it in reality, it's like no you just signed up for 30 years at 7% on the same house. That was financed at that, 25 years ago and now you just did it for two point seven, five, x, the price. It's like, all right. It's at what point does this? Stop working no one knows like when your You know, working through the credit bubble and I count the mortgages as a big part of that, right more, the home prices like Banks, lend against them at Scrabble collateral. It's, it's writing that same Trend up. So, at some point, like, your prior entrance of the market, well maybe I felt like in 2022, it wasn't going so well for your buyers and 2020 and 2021. But oh wait, this next batch, will will push the tab on them and I think that just push Is to the. So, the lack of fairness and the Dynamics of the system, right? We're asking the youth to sign up for that. It's just, it's it boggles. My mind that we are offering away. It's like, basically, we're choosing to eat our young and that's what that existing kind of framework that Financial that could be, the credit based Financial system is willing to do. And then if you go over here and play in Bitcoin, it's the, you know, those same set of rules and circumstances like you will Don't they don't expect that. That's not, you know, part of the part of the tape table Stakes of adopting onto under that system. Yeah, anyone need to earn talking about like, a long-term store value that coin your utx is don't depreciate. You don't have any maintenance fees on them. If you're cussing at yourself, you can it's extremely liquid. You know what to worry about the interest rate environment, and whether or not, you'll be able to offload your Bitcoin on the somebody else, there's always gonna be a buyer on the other side of the market there. You can take it wherever you want, it's not location dependent, Like Houses obviously has a state where it is. There's a few houses outside of RVs and mobile homes that you can, you can take with you. But yeah. Well, I'm going to comes to housing to. It does feel like we're at, like, the Wily coyote moment, where I think that's been the big theme the last couple weeks of the home builder. Stocks been ripping, because people are realizing that nobody wants to sell their house. And then go get a seven percent. Baggage if they have these two and a half three percent mortgages locked in. So people are literally being forced to go build new homes that they can then move into. Yeah I keep thinking about the book when money dies and that's a about all these little vignettes and stories from why my Germany of like what what that investment landscape and environment and climate looked like and how that evolved and just stories from And hard assets did so well and speculators on hard assets did well on the surface because it looked like they were doing well. But really, what was happening is the money was losing its value and and I am starting to wonder if we're kind of seeing that with housing in our current ERA where there's a flight to hard assets and for our Culture. That means a house and it's the only thing you can trust because they're printing more and more of the, of the currency and when money dies, in our current ERA is translating into, like, okay, just you just, you're going to be fine. If you have a house, you just get your house, you pay, whatever arm and a leg and ironically or paradoxically that can work out as a as Investment because as the money is dying, in their printing more and more of it, the inflation causes the value that home to shoot upwards. So like if the covid stimulus was the reason for the real estate, boom, that happened in the two years following, which I think it was, you know, house prices went up 30% in two years and during a pandemic and I think it was because the He was dying a little bit more, right then. And what's wild about that is that people who were sitting on a mortgage saw the equity of their home or the market Equity that they could realize increase because they were holding this debt, contract that they had to pay out in nominal dollars from the past. So the loser there in that situation is the bank. Which is kind of a surprising. And in rare feeling, if that is what's happening here. If if real estate continues to Boom, as the money dies, the dollar dies, the dollar has to be inflated away because we have to inflate away the national debt. Real estate could be one of those things that on paper works out well because it's sort of retaining, its purchasing power Power. Even if it is losing in real terms, it can still do well in nominal terms and and people will think that there are geniuses for investing in real estate. So I wonder if like a starter home here and Allah I went from before the pandemic starter home was like seven hundred thousand dollars in l.a. It's an expensive housing market. Now it's a million and it's not going down from or maybe it will but it hasn't gone down from the a pandemic rally. So now a starter home is million dollars, seven percent mortgage. Good luck thing, you're seventy thousand dollars of interest you know on an annualized. But and we could see another if we have another crisis that necessitates massive stimulus, which I think is what we're heading towards we have another covid style stimulus and they print you know they have to print a bunch more the housing market could see the same sort of 30-40 percent. Bump happen again. And then a starter home is is suddenly 1.3 1.4 million and whoever got in at this level looks like they're a winner, a nominal terms but it's the money dying. Ultimately there's a corridor here imagining right? There's there's the Melt up, right? They prices continue to go up or is there's the deflationary bust when you know we Lies in this game of musical chairs, right? There's not enough economic activity out there for everybody to service their debt. And then what the banks have to foreclose on everybody, you're saying end up with an angry populace, you know, one way or the other like you're leaving out the new general, the new entrance, you know, gets harder and harder for them to achieve the same things, you know, with each Progressive generation or it just ends in pain for, for everybody. It's It's an unstable kind of type your trying to very unstable to operate. So Jesse that's really a, there's something really. They're like when you said about because the common, there's something like Insidious about, the common monitor narrative is where do you put, you can't eat your, you can eat your balls, you're getting your say your stock, but you need a house, you can limit it. And so the thought is, you just buy you, buy your home. And that's where you put the money, and this I was Remember, like so Fannie Mae and the government subsidized for homes was happen after the Great Depression? And there's after this big craft and there's something to like this fact of? Well you don't know if the money stays in these other places but you can live in the home, we can put our dollars if the way for Capital to flow and it's not until you have the opportunity cost we talked about, I think on the first episode when you did I was part of this before finding Bitcoin is like you saved capital and what do you do with it? You don't really know about this dog. Ox and you remember something happen to know a and that it's not necessarily the safest place is your thing about where does it go and look well I guess you're supposed to buy a home and it appreciates and you see and Market but then that completely changes when you think about the opportunity cost. So you have the down payment then we talked about and then what's the current person BTC and the liquidity profile and and all the things that go along with that assessment that just doesn't exist. When you're looking at it from the traditional lens of what Matt was showing on. Traditionally balance sheet of an individual and I think, that's exactly, right. It's like when the money dies, when you don't have anywhere else to put it, you're putting in the place that at least if everything else do you have a place to like, live in a place to, you know, shelter, your family. It's a very, very sad and scary thing because when you're whenever the thing does fall out Maris point about the Wily coyote, like it's not gonna be good for anybody. And then just leave be holding these bags and mortgages at a talk about the price just ran them. Talking last night about the in-laws. Penthouse, that was 18,000 dollars. When they first bought it, I've been, I mean, this is like, you know, a small town or whatever, but it's still point that every year, your 20, 30 years depreciating, so the assets not getting better in the prices, basically, 10 to 20 x, that there's something very wrong with that system. Yeah. When the Wily coyote, Reality sets in and gravity takes over, I guess like the the historical parallel that pops out is Luke. Roman has been talking about Israel in the 80s and what they had to do to get out from under their debt situation, which was in massive inflation to inflate away, the debt. And the bondholders are the losers. So that's who gets robbed in order to get out from under a crushing debt. It's the bond holders and and you can think like that's the banks, but it's ultimately the people who have 60/40 portfolios in the 40% gets just just evaporated and in a way that's sort of happening. I mean what Matt was walking through, 25% purchasing power destruction, in three years, that's that process in action. Of course, it can go a lot further. And that's your debt Jubilee which is a funny thing where, you know, you could have homeowners who have this nominal debt contract suddenly find that it's much easier to pay that off but their 401K that includes it a large Bond. Allocation is also robbed from. So you know they depends on Your allocated, then, right? If you're overweight your house, then you come out ahead. If you know of torture 40% Bond portfolio on allocation well. So yeah, It ultimately, this could really hurt pensions is kind of the long and short of it like and retirees in particular, who shift? So greater percentages, they serve on allocations based off the charts that match just showed like it, it is. Unlike back to the Don't, you know, when to the, when money dies point that you make, like, people feel like they're Wealthy on paper because asset values are going like is that are like that. That was the point of trying to make earlier like has last 30 years of these Boomers building up to retire. It's just been the Mirage that they think it's their. So like if you mentioned a 60/40 stock Bond split but like towards like Matt and I went over it like the target date funds. Like they shift you to 80/20 bonds Stocks by the end and if you have a 25 percent fall Fall in person, power of those bonds of that. That's 20% of your overall portfolio as you're heading into retirement right now. Over the last three years, which is insane. I think. Yeah, what it amounts to is like, all that exists are the goods and services in the economy. Everything else is just claims on those, right? If you look at what we stacked the system, what it's done. Like just By, you know, trying to manage the business cycle, like with the fiscal policy, monetary policy and stimulus to try to smooth that out over, you know, basically the entire time since World War Two seventy years, what you've ended up doing is creating more claims on the goods and services that exist in the economy didn't than exists, right? Because we think like, oh you create more credit, that'll increase the amount of good. And services account. That'll that'll increase growth, right? That's the framework. It's like he just got the money. The money multiplier from just policy and fiscal stimulus, it will work whatever. And it clearly doesn't write you look at the charts, it's like the amount of credit creation versus the amount of economic growth and they it doesn't keep up. So at some point he has to make right now. What's the amount of dollar credit claims outstanding? Iif says, it's 300 trillion dollars. You don't really know how much credit of the out there and then you let the GDP just On the order of like 25 million dollars. Alright, even if you don't spend any are, you know, you put in no you know maintenance or who ate everything that goes into maintaining that GDP. The next 12 years is already spoken for like the claims already exists. So now if we just keep getting more credit, it got more claims. You got more claims built up on the same amount of goods and services essentially. Like you're not going to get real growth and we've known that like the book Has been written. That real growth is not coming out of this system, like we've known that. Since at least 2008, if you're a policy maker, it should be, you know, written written in stone, not in pencil anymore. Like it's known this system. The credit creation model is not creating and criminal growth. Yeah so not the Google. Yeah go ahead Jeff Booth in price of Tomorrow. Lays out how its incremental four dollars of debt to drive one dollar of GDP growth. Point just not a winning bargain and then if you keep doing that, right, like essentially get to a point where it just. It just keeps putting you further and further behind and I think yep so policymakers have realized this now and there is a hesitant so you're saying like there's going to be another deflationary crisis, something like 2008 something like 20 20 but at this point we know like the the Lessons Learned after 2020. I've shown you like the that is not, you know, an infinite trick. You just can't keep doing that. Expect this to get get better like for example like China stimulus, right there. They see the writing on the wall like the global economy is slowing their exports are slowing etcetera and they're only just starting to apply you know the The most like just a couple pinches of salt worth of stimulus and I will cut the policy rates by 10 bets or something. They're not coming in with Bazookas, you know, like they did in q1 of 2020 because they know that what they thought was a steroid. It's it's actually you know, more likely a poison and you just keep putting yourself more and more behind. And I think at this point, everybody is realize that. And now we're in the mode where it's like we like as policymakers, like if you're setting monetary policy, it's like oh no, we have to We have to earn her to the downside risks and try to over tighten, as you know, be stronger. You know, don't be so he like easy, don't be doves, be Hawks and you see that around the world like you saw to Central bank's today. Like Norway was one of the increasing rates. So they they're they're swinging the pendulum back, the other direction, almost. And then that goes banging back up to the point of, when money dies, their Lepard, you know, highlights Sorry for the that apologies highlights, the mermen and chartright the gold price in the Weimar inflation and if you just look at the average of, it's just like, oh that's a smooth edges by gold and hold it. And it's like, no, you realize like, it's it's a system that wants to toggle from like inflationary melt up to deflationary bus and just going to swing in between. And it's a, it's a really, and messy chaotic. Process. And I think we're, I collectively only just starting to awaken up to that fact. I think the bells went off in 2020 and that's the world we're living in now. Yeah, I get the sense that we are on track for a deflationary crunch that will then move around and has brought up this phrase that isn't from him, but I heard it from him. So I credit him that deflation is the Midwife of hyperinflation and and you know, you're the deflationary crunch causes the crisis that necessitates, the stimulus that causes the inflation and and that's what the trajectory. Why Marv was was increasing volatility in inflation. So not the average inflation rate went up over time, but it was actually just an increasing whipsaw between High inflation and negative inflation. Deflation that ultimately led to that to money dying. There Exciting times General. I like it all. I could think about was thinking about you know, chasing from a personal or institution perspective BlackRock ETF and trying to get a Bitcoin allocation over time to you know, be able to sustain the living that people will honor the average guns but then it ended up and I was thinking halfway through, this is oh there's very bullish and the other side was like, oh, but come with Bitcoin sets of coinbase. Right. It's a I mean, it's yeah. It is a call for us to build people out there to build products that are able for others to adopt that are have more principles that are, you know what we know about it. Just kind of help it go through that progression of. Okay, well, they're going to go, they're going to be a gradual. And, and Liam are going to recognize Bitcoin as a NASA, and black rocks, and the inability for that to happen. It's going to be helpful. But then, over time, that Simply put them in this position to hold a lot if they're in the majority of be PC via KOIN videos you can you can get it right here. You can you can have the right conclusion and have the right allocation and still pick the wrong investment vehicle that ends up becoming a goose egg because of some unknown risk. On some hidden risk in the governance or custody model of that vehicle. And I'm afraid that that's going to happen. It's happened in do with block five, people who put in there, their hard-earned money into Celsius because they thought that they could live off of the interest, you know? And that's going to be a winning model and I can retire early. Nope. That's a goose egg. Same with block, fi people who had lots of assets on FTX and wall Street's going to do that, too. In some different ways that outcome is going to happen. For Wall Street, firms, who are going to go through the learning curve of how to correctly, engage with this asset, this asset class in general, and it's a real shame because there's going to be a lot of people whose pensions they're going to have the bond portion of their pension go up in smoke, and they're going to be thrilled that they got some Bitcoin, you know, as part of their allocation. You and that part's going to do well. And some of those people are still going to get a goose egg because they had it with the wrong custodian or the wrong governance model. And that's why Bitcoin education is so important here. Yeah, and I think it's important like this is part of this podcast but also anchoring it to real-world practicality, Jesse, with Jesse just referenced we saw happen with Ira accounts with Gemini, So there's a firm and remember the name, but if you Google Gemini are a, it'll come up that you use Gemini at and there's actually two in both had Gemini involved. One was the firm used Gemini as the custodian and these are boomers so they have an allocation, they got fish. And so there was I think 50 to 75 million dollars and if you think about the one amount like the one allocation of funds is your retirement should just be offline Cold Storage, you don't need it they lost they got the trade completely right and They were drugged because of the custodian and like just the intermediary and in the other side of it, which Gemini also had involved in a different relation is they had a partnership with eagle Borough which is kind of a quasi. I'll get it a little wrong, but attack platform for a phase in our is that are supposed to be super prudent risk averse, but they love the yield in. So, between the FAA is looking at that and also, you know, Gemini having right next to their do the building to get that. Whatever Genesis was promising that these FAS and clients were like oh I see three percent. I can get this on there and now there's a close to a billion dollar hole that sitting between that from people. Oh and there's you still found the trade but because the vehicle wasn't correct because the assets different than just the dollars and whatever happened to Robin Hood, you click a button you revert. It doesn't work that way in this asset. And so that's a big part of all this is like we're not just saying these things because we're thinking about a possibly could like we see this happen time and time. Again, it's important to like talk about it. Then share so that it doesn't happen to the individuals were involved with and so you need to know what your belly, do. Some do your research, anytime you put Bitcoin or, you know, you were talking about dollars and yielding products and putting them in a rapper, right, history. You know, the young history of you know the Bitcoin experiment has made one thing. Clear? And that's ultimately those things that you thought were Bitcoin will turn into like once it's in the court of law it's a credit. You just bought a credit. And you took credit risk with no upside. Like, there's no positive upside in this for you, and it goes back to what I talked about. Like there's there's Alpha on the table here for the person, the individual or Partnerships who want to learn an exercise personal responsibility. Like this is, this is a tool but it's on you to learn how to, you know, understand it and kind of map. A path. Like the ownership structure that works on this and this new paradigm we had don't buy a what you thought was an equity that's the opposite of a convertible Bond, right? You think you have a bond with some upside like a turned into the good thing. If things went well you're very like when you buy products like that, it's you're doing the opposite, you're you're buying thumb, something you thought was like an equity like or risk like product, like with a return profile and turned out. You, you bought a credit, then it turned into the credit. When things ultimately went went bad for you, if you You want, you want Susan, his yard? Yeah, exactly. The yeah, I mean, and when you put it like in this context to, that would be one of the saddest things that could ever happen is, you're riding the wave. Bitcoin is the six figures, seven figures, maybe you're like, yes, I made it and you get to the end and you get robbed because, you know, who you know, who loves this, the lawyers, the lawyers, love it, like Isis long drawn-out. Out of court battles, Etc. And it just you know that's who you're your allocation is is ultimately going to go to like a big chunk of it will go to as the. Yeah, let me see. Now box is going on 10 years now of that, that whole case. So well that and that just remind me of it's in, may not even be the rugged, may be self-inflicted, in the sense of, not only the wrong decision, but the wrong philosophy. These, we talked about ESG, whatever the narrative is going to be. People may fall into that trap. Rap of like oh of course the proof of work is bad and what Block rock has it under or over the large entity is like oh that's that's that's not mine coin. Whatever, they know wrong decision there and they hold zero going, don't let Fink think for you, okay? It's an original thoughts. DSG is an ephemeral Trend That Dying. You do not want to get on the ESG Bitcoin train. You're going to get. You're ready. At present the coin bag isn't Bitcoin bad for the environment, Freddie, Prinze Bitcoin. Honestly, earnestly believe this Bitcoin is the Catalyst for The environmentalist future that like we want to see like we're going to be extremely efficient from an energy perspective. I mean, it can beat the dead horse on how Bitcoin mining makes us extremely energy-efficient off-grid and on-grid miners are economically, incentivize the find the lowest cost energy that is energy is wasted or stranded underutilized. So just by going and taking that electricity is being wasted and utilizing it to produce. Pick one. Efficiency, gain stranded energy. Same thing, you're tapping into something that is out in the wild and cannot be brought to Market. You bring the market to that thing and you might have ties a beautiful thing. That's the first-order effect of the energy. Second order effect is the monetary policy which actually brings opportunity cost back to markets. They have to weigh Capital, allocation decisions. You're not just able to print money and throat, willy-nilly at stuff that probably should have be invested or have Capital allocated it too. So yeah, Bitcoin is incredibly good for the environment directly and indirectly first order and second order effect. Again, most is the thing out there. Actually, if it was, if you sp was actually about environmental social governance, this is that because it's the greatest Tailwind for, for renewable energy and it brings like equity and property rights to everyone in the world whose unbanked And prevents those people from being robbed via inflation. And so it empowers the individual and a way that nothing on Earth, Currently does. And yet it is smeared as this thing that is bad for the world or bad for the environment when the opposite is true. But maybe, maybe Martin Larry know. Even with that being said, I was just about to say, I know what you're going to say when I was Jesse don't even fall into their framework. Yes G is a oh yeah is it dog wasn't for control like they just they don't care about the environment. They don't care about social justice. They don't care about go. That's right. They don't care if it was actually about that. Then then Would be in in the good graces of BlackRock, but it's not about e/s orgy. It's about what we deem to be, you know, a good corporate citizen based on what's good for BlackRock and the US government. Yeah, well to bring that this back in a long time, the energy and with the with the BlackRock ETF. I think as this plays out over time and we're talking like years, you see? I didn't ETF. We'll bring Capital into into Bitcoin, will go through layers, but it has to get there. And then you see how the mechanisms of how kind of the financialization kind of engine is now going to have to plug in and play in this new space, right? You see a market that has to go has to go by UT EXO's into it and do a into a no offer market. Now energy is kind of back. Instead of taking a back seat for the last 15 years and policy. I mean, and and every table that matters, now, now energy as backup, you know, at the front of the, the wedding reception at those tables, close to the, to the decision-making. So I think it gets energy back involved as a stakeholder and then I think it's just part of this broader process of financialization suppressing. Input costs throughout the economy, right? You can you see this everywhere? Like it's the WTF happened in 1971 charge, right? You see, labor costs like just flatlining, you can see it in Commodities. Charts you go go. Look at the Copper chart like long-term. You see it break right about between the.com bubble in 2008, see these cost inputs just going up, you see, iron, ore, Etc. And it's like, I think it's just a part of Everything breaking the kind of the engine of financialization that was, you know, keeping things. Stable prices low for 40 years and now you slowly see, everything, like just one rivet at a time. You know, people look at the oil markets, you saw pressure buildup in 2008, you saw the technology of fracking, you know, kind of alleviate some of that pressure, right? And provide a deflation in oil, but the thing about the credit system is, it has to fill any deflationary whole, any technological advancement You know, any a me, anything, anything new, it has to gobble it up and you know, just create more credit. You know. It will just abhor all of that vacuum. So I'll just continue to suck out here in space. I think if there's one positive coming out of this week, I think this is, you know, as as kind of Bitcoin and then the Legacy Financial system, the credit money You know, the credit dollar standard go head-to-head, you start see these two binary Stars orbiting and there can only be one winner coming out of this room over the long run, you know, that will be a messy process in between. But I think those linkages are there over time. The, the economics win at the end of the day. It's undefeated, and we're going, we're going to find out. This is the exciting thing. So you know what? What is on maintainable will not be maintained over the long run? Which then means what Marty what's that phrase that you like to say? We're going to throw a grenade at the Fiat system. Okay? Which phrase we're going to win. Oh we are going to with yeah cause we got the mechatronics wins. We got a binary star problem here. One doesn't have the economics to support it yet. Other does that mean I win? And I think as much as we've been doing our grading BlackRock and their particular fun structure and the custody model, I do think it is a signal like me, eat you compound that announcement with Jerome Powell to house sir Financial Services committee meeting saying. Yeah, I think crypto staying power with like Fidelity Schwab. Citadel, I think the incumbent Financial system does understand the gravity of the problem to a certain extent. And they at the very least view Bitcoin is something like, alright, if these guys are, right, we should at least have some exposure to this and, and lead in at least a little bit as a hedge, which yeah, yeah, yeah, reality is, you have to take what the market gives you. There's a lot of opining on. Is it? Good or bad for bigger ones like it's happening? And so you have to build products and services that the market wants that fit to the model of it. It's going to happen to well. Yeah exactly that's something mvk says all the time if she tweeted earlier this week it's we can have our critiques on particular ways. Bitcoin products are structured by certain companies. That's also the beauty bit more Bitcoins and open permission list system if people want to interact with the protocol there. There's nobody to stop them from doing something. Download the software, if they can get access to private, public key Pairs, and put UT x's, and then they can begin building. Structured Products around that. If you want to Michael's point, you can sit here and cry about it and whine about it and say, oh, this is the way to do it or you can go out and out-compete, build better products that the market will recognize over time. Which we're coming up on two hours. And before we we wrap up here, speaking of products and things that people are building in the space, I think is a good time to sort of wrap up on a good note on a white pill note on how Bitcoin fitting into traditional credit portfolios can sort of help ease the pain of the transition as we go with what you guys are building a bill bet. Awesome. Yeah, so I think I've been pretty public about this, but we're working on a project with unchain for a long time. Marty, you've talked a lot about Auntie FTC and our HR over time about their lending model and their best practices built around their, their multisig vaults. And then a lot like the, the on-ramp custody model where you bring in Key Management with multiple stakeholders on challenging works the same way. So, Unchained is really. If you think about it, we've talked about earlier about all these blow-ups block, feis Celsius, and they don't need to be named, they don't, they they shouldn't be remembered, just put them in the, you know, just tombstones of the body count of mistakes that have been made and lessons hard learned, as people try to figure out how to build upon the the resilience and soundness of Bitcoin infrastructure. But on chains, lending model is something that really stuck out to me. As I was Considering and 2020 and 2021 as we were watching that bond market, sell-off get underway and I realized this isn't going to work for our clients and this is a mission that I've kind of been going after four. I'd say 10 years, the last 10 years of my life. Just knowing that something was coming with these Bond allocations and that something had to be done to save our, you know, our parents friends families Etc. Are, you know, the workers aren't communities. You guys talked about municipal, As firefighters police officers Etc. Our communities need saving here. So this is where you know we got we need to build solutions to solve that and that means not just, you know, getting people to understand Bitcoin if they do choose to adopt teaching them, you know, the ways to do it soundly Key Management Center, that Marty and Matt do such a great job week in and week out, but it means like finding other ways. As well. And that's where the over the last. It's all it's coming up on almost two years since you know, I first met Parker and we were trying to figure out how we could get Bitcoin Incorporated to save the bond market problem that has materialized into launching billed. As a, my firm, I manage this my day job build Asset Management, we launched a private placement pooled fund, which exclusively back Invest in there in unchanged Bitcoin back loans. So if you look at the profile of how we could see a credit allocation having a fighting chance, to keep its head above water and preserve purchasing power in this environment. What are you looking for? While one minimize duration? Whereas the, you know, we Jesse part about the last 40 years, duration was your friend as raised, just kind of cycled down lower lows, lower highs for 40 years in the biggest credit bull market, you know, on the way up on that. What if things look like, on the other side this is where you have to really be clever and design solutions that you know hopefully protect your clients and allow them to preserve some purchasing power in this dollar system dollar credit system. So high nominal, you low duration and then also secured with a lot of value behind it. So 40% LTD loans, or equivalently 2.5 x over collateralized and then most importantly to Is perfecting the security interest as a lender in that in that collateral. And that's what I think as partners Unchained does a better job at or has done a better job of building, you know, very conservatively over the it's almost eight years now that they've been in existence. So shout out to Joe and the team there. We think they're onto something, I think they stood out, you know, in our due diligence as really pure 'less in. In this emergent space. So that's my day job, that's what we're doing. And then on top of that there's some other projects I'm working on. So my hometown is Jefferson City Missouri. I've been you know just shooting this idea with Marty for it's been a while but we're making it happen. We're going to hold an event in Jefferson City. Missouri, on October 26th and 27th, I'm going to call it the Bitcoin Expedition, find a good title, that's where the Lewis and Clark expedition, you know, close to a launch. It off and Jesse you've written about that to the you know, you got to go out and explore the the West, right? And that's what this this new opportunity, this new space is really exploring and educating how Bitcoin in this opportunity. I'm proud of us can really tap growth. It's that it's the next level, you know, the the next field to explore if you will. So we'll be doing that. There'll be an investor day, we're planning an education day. We were going to try to line it up with a Mizzou football game, so SEC football, hold there. Hold the tailgate other Bitcoin companies coming in and sponsor, and just meet and greet Q&A. Have a great time with your fans. Unfortunately, that's not going to work. We couldn't get a date that lined up on the schedule for just bitcoiners and in the audience as well with. There's a couple Marquee events going on around that time frame to. But hopefully, we put on a good one this year and we'll get that football game. On the calendar for next year but this is an event where you know if you're a Bitcoin or in Kansas City st. Louis Des Moines Springfield Omaha. Even go as far as like Memphis Nashville and you know, expand but it's a close drive for four to five hours and I think we're going to make a lot of Headway. Not just kind of the Marty last week on our HR. You and Matt were talking about it's the same people over and over. It's not going to be that I think will get A lot of your favorite friends and, you know, people your you've already met relationships built in the Bitcoin Community, but there's gonna be a lot of new blood here. We're making to make some some Headway Open Hearts and Minds to to learning about this new opportunity and what it can do for the region. So we're excited to announce that the website is going to be Bitcoin. Dash Expedition.com. We spun it up today, so we've got tickets available. For Friday, investor day will be on a invite basis. So just because everybody has to be an accredited investor or financial advisor and institutionalize our work in the industry. We do need to make sure that everybody coming in is just an appropriate audience by the nature. But Friday is going to be g a day. It's going to be a great time. We've got great venues book so bringing a kind of a Bitcoin, only Bitcoin focused event To hopefully somewhere that there's a lot of passionate that cleaners out there. Marty, you've probably learned this over and over again. People just reaching out to you on TFT CC episodes, but after our episode, I had people from our hometown career placement at my at where I went to graduate school at Washington. So the st. Louis, it sounded like he, they're out there, they just need that Gathering point and I think this will be submitting an event to help make that happen. Um, so that's that's something else were building. And looking to put on, I'm very much looking forward to it. That's something that has astonish me and Michael, and I talk about it every once in a while. The freaks are everywhere. It's crazy here. When you get people reaching out the across the Spectrum from your, from your plumber, to some of the wealthiest asset managers on the world, it's a special thing because we're like some special here. That's a good time to give a shout out. So there's another frequent says hi and thanks to says, hi. Thanks for Marty for helping one is Bitcoin journey and also hide in the team. He put together the audio that is going to be the new audio for the last trade he wanted. It is he goes by Johnny, hey little one on Twitter and he does musical services in Canada so he said he's available if he wants to reach out for weddings and bar mitzvahs. Well Johnny You did an incredible job. I love the intro. Should we play it now? Do you have it? Upload It should be in the slack. You should be able to is not possible when we If you can't, I'll give a little note on. If anybody seen the the Entourage when he goes on and you get the free speakers and it puts the Hat on. That's what I told him. That it feel very much like the putting on the hat to get the sneakers, but we would give them a shout out. The people have already heard. It's at the top of this episode. Matt hasn't heard it yet. What if a fast-forward? Yeah, well Matt, I think Matt Matt's gonna do it. You can well. Oh yeah, you're right. Everybody else. Let's do it twice. You guys hear that? Now, they wouldn't have heard that many whatever. All right. Well, you guys heard at the beginning of the episode for dragging on here? Matt, thank you for joining us this week. Anybody listening? Then once you learn more about the intricacies of the retirement fund landscape, go follow that. On Twitter is always tweeting. And go check out build. What's the website for build builds website is get building.com. If you'd like to learn more about this project I talked about with unchanging Go to build Bitcoin.com. And then my Twitter handle is at build CIO. Go check it out. Episode 5. The last trade in the books. Go forth and enjoy your weekend, freaks. Thanks guys. Thanks Matt. Thanks Johnnie hottel. Shut up jobs.
Transcript source: fountain