The Last Trade E009: More Bullish Than Ever with Dylan LeClair

What you're telling me is that music is about the stuff, and we're going to be left holding the biggest bag of bodarous extras ever assembled in the history of Doubtless. 1970. 419-8790, 297-2000, and whatever we want to call this. It's all just the same thing over and over. We can't help ourselves. I say when we sell, hey, I say when we sell. Michael, that background is really depressing right now. I know I've heard I was you know, we started this pod, I was on the on the road in the East Coast with the Inlaws family and so I was moving around, got got back to Texas and you know I'm not a professional influencer like our like our buddies here on the on the pod. So my background is not up to snuff, but well, well we're working on it. It's a progress. I mean, I'm throwing rocks in a glass house right now. I'm on a back deck with a. Fiat Plastic Deck Divider behind me, so at least I got some trees right up here. You. Have a nice mix of background and you listen to like since you've been out like on RHR and you hear like seagulls, we hear sirens, cars, people honking neighbors, moans, very diverse and. We're going to look out today. It's a rainy day here at the Jersey Shore and so there will be no advertising single prop. Planes flying over the beach, they're not going to waste those ad dollars. But as you may be able to hear, somebody decided to mow their lawn as soon as we hit record and the weed whacker is out. But I'm not here to talk about backgrounds in the Jersey Shore. We're here to talk about Bitcoin and we are joined again by Dylan Leclair. Dylan, welcome back to the show, Sir. Happy to be back guys. I've been been a fan of what you guys have been doing in the in the in the meantime. I think that's after episode one. What is this episode? What what? What number is this one? 9. Nice. You're almost in the double digits, guys. Coming a little bit. But yeah, we got a lot of feedback from our first episode. Came out of the the the gate guns blazing. We were a little excited about launching the new show, and myself, Michael and Jesse sort of hogged the bike and people were like, hey, let Dylan talk more and so. Taking that feedback into mind, I think we start today by jumping into a piece that you wrote within the last week on disinflation in the current state of the economy. What's going on? Yeah, sure. I guess so. I mean, I would preface it by saying that there's somewhat of like kind of a fear mongering section of a Fintwit that's like. You know disinflation, deflation, you know bust like this is the the end state of things like well like just to you know for anyone that's not familiar with statistics like there still is inflation right there still is the level of prices is obviously still rising. It's just rising less frequently at a slower rate of change. But I think people you know with with the CPI coming in and we can debate whether like CPI is like a good gauge of inflation, but it's what we're working with. You know came in at 3% right, 12 months in a row of of lower inflation. And I the key thing that that stuck with me was from that was like while you know the stock market was celebrating you know S&P, NASDAQ melt into new highs. You know we're basically in a second tech bubble that's you know if you look at the top seven stocks in the stock market like they're almost surpassing their 2021 bubble highs like $12 trillion market cap. So you know the stock market's back disinflation. Inflation was transitory after all. But I think it misses the the point a bit at least temporarily an interim. I still think a decade of of of higher inflation and financial repression is ahead. But in the short to medium term, I think that the disinflation is is the main thing to to focus on and here's why. It's because you know we went through the fastest rate hike cycle ever right, like 500 bits of of of rate hikes in the span of. You know 912 months something along those lines in 2022, but it was, it was masked by the the high rate of inflation, right. So so that tightening of monetary policy if you just think of like of of a real yield, right. And like you know technically the the bond market guys would say real rates are looking ahead, not looking behind, but if you just look at the Fed funds rate right now it's like 5% inflation's 3%, right. So in the past ten years post great financial crisis rates were zero, inflation was 22 something percent. Post COVID rates were zero for a long time. Massive QE in 2021. Inflation start starts to fly right? And everyone's saying it's not transitory. Obviously this is here to stay. Inflation gets up to 9 percent, 10% plus in the EU. You know, the energy crisis of the Ukraine war kind of soaked the flames, but those rate, those rate hikes weren't really felt because inflation was still so high, right? So, so like there really wasn't. Tight monetary policy, right, Real yields, you could still borrow at a lower rate than inflation. That dynamic has flipped. And so I think what if you just look at previous cycles, right, like the economic downturns, the kind of the the bust phase of these short term debt cycles we see of these asset bubbles, they don't really happen until the Fed starts cutting rates. And why does the Fed cut rates, right, because the economic, you know, the economic cycle, economic activity that the economy is deteriorating really fast. And so they start to cut rates and then you look at what happens to the SP, you look at what happens to the labor market, the real economy. It doesn't actually bottom for a while and it really, it's almost looks like it's sparked by that first cut. So everybody's kind of like disinflation is here, soft landing, everything's great and the pessimistic side of me. Is I think there's a bit more nuance and it's the fact that you know we're seeing the labor market just start to turn. There's you know a lot of research from you know the banking sector says that default rates for retail and like you know the real estate side of things is ticking up delinquencies across the board for all all kinds of credit and financing. And you know with this this inflation rates are now positive for the first time since like before the great financial crisis on a real on a real basis real yields also you know backwards looking in forwards looking. Are higher than they've been for most for many investors entire lifetime. Also if you look at Bitcoin for all of Bitcoin's existence. So that's not like necessarily an absolute bearish thing. It's just the reality that we still have a whole lot of debt out there that the GDP is still very high, still you know 120% at the federal level and real rates are actually positive at least forecasted to be and you know on a trailing basis. So I just think that that's a temporary, that's a transitory outcome cuz real yields can't remain positive for long without things without the wheels falling off. So it'll be really interesting. I think the soft landing calls are premature and we're gonna, we're still not out of the woods yet. I think people think that we did it. We engineered a soft landing. You know Powell and the inflation, inflation is transitory. Camp was right. We we're so back and I think that's you know we this thing is far from over. So that was a long form version of of kind of the state of things. And you know what I was trying to get out with the disinflation post I put out, but yeah, yeah. Yeah, but. And it's so interesting because like you know, at this point I've spent a fair bit of time studying the 70s, a little bit the 40s to see what happened, but. In the 70s there were three waves of inflation, which meant there were three waves of disinflation along the way and obviously they kept coming back. It was not a problem that that was solved as soon as it started to ebb away. And yeah, like even thinking about 2008, We Bear Stearns went under in March and then it took until the fall for the other shoe to shoes to drop. It takes time for the for the bodies to show up. You know, as the tide is going out and right now we're seeing record bankruptcies, like there's your indicator that things are not all well. And I keep biasing back to what Stan Druckenmiller has said of, you know that this is, this is a terrible environment to predict. First of all, the hardest he's ever seen. He's in the hard landing camp still because. The damage is done, you know the the damage is done is yet to show up fully. Yeah, I think the labor market is key. You know if you look at the 70s, a lot of that at least like the first initial waiver was an energy crisis. And we saw somewhat to a similar extent in, you know, 2021 or 2022, you know the Ukraine war. Oil went to like 130 bucks a barrel. Natural gas was was spiraling out of control. There was there was an energy crisis. And that faded away and you know, actually, you know, on a year over year basis, part of the reason why the CPI is so low is because you know, the energy inflation is actually like deeply negative, at least in the trailing 12 months. So. So why is inflation so high And and it's the core basket, right, Which, you know, I will say there is merit to saying like well core inflation, what does that, oh exclude food and energy costs and like you know, some some from the Bitcoin camp including like a little bit myself will be like that's the stupidest thing I've ever heard. Why would you exclude? Food and energy from an inflation gauge and and well the reason is at least at least from an economist standpoint is that those baskets are very volatile and if core inflation is just like services, wages, right. So, So all that it's differentiating is core inflation is higher than the CPI which means what? Well this is a wage driven thing. So like if you think back to like I think six months ago, right late, late 2022 Powell is saying. Yeah, we in a Fed speak way, right, Kind of all jargon. He's saying we need unemployment to get to like 4 1/2%, which employment at that time was like the unemployment rate was like 3 1/2%. So he's saying we need Americans out of the workforce. Well, why is he saying that? Saying that so that the labor market cools down and wage pressure goes away, right. So this is like, you know, the kind of like messed up dial and and kind of like Rube Goldberg machine economy that we live in where you know, central bank bosses are trying to, you know play God with the economy. But this is, this is a state of things, right. So I think they're going to be effective. I think they keep things tight until we start to see inflation cool down because of it's already cooled down. But the labor market I think cracks a bit. And I if you just look at like excess savings, right, they pumped everybody's with money in COVID. You know the the bottom 2 quintiles and this is part of the post I share the bottom 2 quintiles of of the US economy from a savings perspective has already ran out of money. And then soon that third, you know that 40 to 60% quintile is also going to be out of money. It's really just the richest 20% of Americans that have all the excess cash and the rest are now starting to rely on credit, right. So, So this is where, especially with unemployment taking up, this is where it gets a bit ugly. And you know people have been kind of coaxed to be to think that you know recessions don't occur anymore. This like post QE era is, is you know everything is is fine and golden and we don't see downturns anymore and I think that's a naive perspective. So it'll be really interesting partially I think it'll be interesting because we might see this this downturn whether it's you know equity market related or just the real economy and or both occurs somewhat at the same time as you know. Bitcoin halves and the response to these downturns to these, you know, deteriorations and economic data, you know also asset crashes whether it's commercial real estate or equities or whatever it is the bonds is, is 1 and the same. It's always they're going to, you know pump this thing back full of money. And I think that's where like the timeline gets really, really, really interesting is like we might see, you know Fed cuts and or you know some form of stimulative effect from Congress fiscal spending, maybe not with the presidential elections but after that. Right, right. Somewhat in line with the Bitcoin having and that's like a a pretty exciting timeline for me. And I wonder if we even have that much time. Logan, you can pull up the picture. I just put in our Slack channel. We discussed this yesterday on Rabbit Hole recap of Peter St. Onge wrote a really good piece on his sub stack about the commercial real estate market. And I'm becoming more convinced that outside the labor market this is going to be one of the bigger shoes to drop and if you just look at these numbers. They're pretty startling. So for anybody listening at home and not seeing what's up on the screen, here's a section of one of Peter St. Onge's recent sub stacks at the Money dries up, commercial real estate prices are not plunging with institutional quality offices losing 27% in the past year, apartment buildings down 21% and malls down 18%. And this is the most startling stat in this piece. And it makes sense if you consider the the state of San Francisco. And the squalor that is found itself in San Francisco's office vacancy rate is now 32.7%. Pre pandemic was 4%. A recent study from Berkeley found cell phone traffic is actually down 70% in city compared to pre pandemic. And so in the context of commercial real estate, obviously it will likely affect some cities more than others, but San Francisco being one of the most popular commercial real estate cities in the world pre pandemic. It seems like there's going to be massive losses in that market coming, coming to bear soon. Got any CL O's? Yeah, the I mean, it's a human story for me because I lived in San Francisco until 2018 and you know, had a bunch of friends up there after school and. They're all gone now, like there's one or two people in the Bay Area still. Everybody else has left. It's been a general exodus from the city in general. But you know, like we all used to go downtown to work every day, like my whole cohort, and none of us are there anymore. Yeah, the the commercial real estate thing, but I I think particularly like not even just just that but just like what what COVID did to the the like perception of like office work. And and you know the kind of like the information economy I think is is a one way shift. And you're seeing like you know a lot of these these guys that are like you know coincidentally like you know commercial commercial real estate holders or you know have some stake in like investment firms or private equity firms and they're like. Like, yeah, you know, remote work I think is going to transition back to going into the office. And it's like they're talking their own book, obviously. But yeah, yeah, this is this that COVID was like, I think a massive accelerator to a lot of this stuff. And everybody kind of realizes, like, no, I don't need to commute an hour and a half to to go sit in a desk when I can just do this from my house. Like, obviously not. And to paint a little bit more of a picture about why this is a kind of a ticking time bomb. A lot of these assets, these office buildings basically like 90% of them I believe this is stat at this point are on interest only loans. So these are these are mortgages effectively where the owner is only paying interest, they're not paying down their mortgage which is just a riskier form of of loan and means that any drawdown in in valuations you know? Exposes them more quickly and more and more dramatically and so, so that's happening at the same time that nobody's, you know, there's huge drop in demand for these spaces. So at what point in time does that shoe drop and then who does that impact because for most of these assets these live on the books of regional banks that they're actually the the leading lenders for commercial real estate because it's. Historically been kind of a niche. They can have some expertise and they know the area. This is their region and so they've served these markets in, in that way. So what happens then? Do we have it, you know, the the next wave of the banking crisis because suddenly commercial real estate investors are going bankrupt and that hits the books of the regional banks that provided those loans and suddenly they're underwater and and a lot of them. And now you're you're the Fed, What do you do? Do you just let them go out of business because it's capitalism and that's what should happen? Well, that's not what happened in the spring when we had the banking crisis and they stepped in to create the BTFP and calm the panic and you know, backstop these underwater assets. So when does that shoe drop is really, I think the question at this point for me rather than is there a problem? I think it's when does that manifest? You know what I think, I think that the BTFP like you mentioned, I think that is going to be an indefinite program. If you just look at the mechanics of it, it's like okay treasury bonds went the risk free asset treasury bonds, long dated treasuries. You know that everybody just said was cash equivalent essentially and you know, they just locked in for 30 years because interest rates were zero and that was the only yield they could get. Well, yeah, actually they saw a twenty 2530% drawdown. And so BTFP comes in, says, oh, just for one year, a special program, you can take this collateral and you can mark it at par. And it's not just treasuries, it's actually it's agency debt and mortgage-backed securities too. So I think they come in, they're going to have some more word salad, maybe it's the same, you know, acronym facility, maybe it's a different one. But if there is any crisis, maybe even if there's not a crisis, it's just, you know, they wait the full year BTFP continues and they just say, oh, no, we're going to continue on with this program indefinitely. And some like, you know, kind of press release that they don't even really project publicly that like that loudly. They're going to be like, yeah, you know, we'll continue this thing. And any losses that are incurred in the commercial real estate, like obviously if you default, you know, you don't own the asset anymore. But who's what's the, you know, the chain effect, what's the the kind of the counterparty risk well. It's just the Fed's balance sheet and they don't care because they're not a real actually asset allocator. They just print money. Any losses they just mark down. Like Jesse, you had a really good post about that picture of the feds. Basically P&L right, they hold all these long dated bonds that are giving them 1233 percent. Meanwhile they're paying 5% fed funds, 5% on the reverse repo. So they have losses every single, every single day. And they're not even, they're not recording those losses. It's just like a deferred asset or deferred liability or whatever they call it. So I think that's the same thing they're gonna do with commercial real estate mortgage-backed securities. They're just all this pile of crap assets are gonna be, they're gonna be securitized, the Fed's gonna buy them. And they're just never going to actually mark down the losses. Or maybe, you know, marginally, but it's just gonna that the feds just gonna eat it and that, you know, they're just gonna socialize the losses once again. No investment bank or no, like, you know, maybe a few of them isolated, but there's not going to be some like. Mass banking crisis where all of these, you know, the whole bank system fails or like they they sustain massive losses because they made bad investments. The Fed's just going to make them whole, right? Like that's essentially what the BTFP already is. It's like, oh, it's only one year, don't worry about it. But here's your, you know, here's here's this asset that's, you know, 70 cents, $0.65 on the dollar you get to post as collateral at par, right. And oh, also any, any institution using this domestic international, we're not going to reveal your name, right, like. Like what is this? And no one even understands the mechanics of this, but it was a bailout, right? Like like can I pledge my Bitcoin as collateral at $69,000 value? No, duh, right. Like that's that doesn't that doesn't compute. But you know, they they play at a different set of rules, obviously. Yeah, if you could pull up Jesse's tweet, really visualizing the amount of losses that, yeah, the Fed is holding on their balance sheet right now, it's pretty. Pretty astonishing to see this chart. Yeah I I came across this chart on on Twitter. It's for people not watching it's it's kind of a straight line at like basically 0 but in the positive this is their profit the Feds profits and remittance. Remittance is due to the treasury is is the the term that they use. But it when you dig into it what that means is actually profits for the Fed is generating but then in the last six months. In really nine months it has fallen off a Cliff like dramatically. It looks like a AD peg of a stable coin and the accounting on this is comical. Dylan nailed it that, you know, this remittance is due to the Treasury is Fed profits that they feed back to the US Treasury for use in in general spending. So that's you know that's the the agreement for the Fed and and their operating mandate they any profits get used for you know general spending elsewhere but if they have losses those losses just sit on the on the Fed's balance sheet which is central bank balance sheet expansion which is this cardinal sin that we're all shouting from the rooftops about like you know this is a problem we we got to watch out for this. This is Japanification. So when you hear that term, you know, that means the central bank stepping in to buy all that distressed assets because there's no other buyer and okay. Great, That's, that's fine. But what does that mean? Well, it, it means inflation. It means that you're growing the monetary base because the Fed is writing blank checks and that manifests somewhere as inflation. So you're paying for it in this indirect tax of inflation. Ultimately and that process has now has now begun and I think Dylan's right that you know these underwater securities, these U.S. Treasuries that were, you know, 1% yield, we're not going to go back to that. So they're going to be underwater indefinitely. And in that scenario, they're just going to have to roll this program and keep expanding this program as other shoes drop like commercial real estate and they have to step in and create a new acronym facility. For regional banks that have commercial real estate exposure and that Japanification process just will snowball and continue. These are these are layers that will be added over time and then the net of it is balance sheet expansion creating inflation and the overall deterioration of our fiscal system. As we walk through this, it's like. The stuff we're talking about, it's been talked about, you know, all year we knew real estate, COVID, it was going to change the trajectory and we're breaking down like how after the tits up, everything goes. But it made me realize This is why there's so much moral hazard baked into. There's more hazard baked in the products because we know real estate, we know what happens to commercial estate, but we're not necessarily concerned because we know some form of BTFP pensions also have large exposure to commercial real estate. They owe, you know, capital to people retired. So that's going to have to be made whole by somebody. But I think this is what makes it so hard to explain Bitcoin, especially when it comes to the financial products and how you actually secure. Because most people inherently have in their their mind like when they go and secure assets. Like, yeah, I know there's maybe something that might happen, but it'll be figured out we'll we'll get it done with like they would never let me start like we're in the United States. There's all these like things that the moral hazards baked into financial products in the US. And so like, what we talk about, we all know and I think intuitively more and more people are raking up. But it's similar to like what happened with COVID in the sense that most people are like, like they could never really put us in a box. They could really never shut us down. And then it happened and I think some people woke up, but we still have so many people a slave that like, people inherently know there's a lot wrong. But at the same time, I think just bailout after bailout. Record after decade, it's just baked into the site that it can't really actually spin out of control. And I think that ties up to just why it's so hard with this new asset, like in how you secure it and how you deal with it. Because it's like, I'm not worried about it. It'll be figured out. But every year and then every decade in the Bitcoin space, we just realized that's actually not how it works. And a bunch of people end up with holding zeros where they thought they were holding, you know, Bitcoin. Yeah. And Jesse and Dillon both reference Fed speak, the Fed trying to posture a particular way to exude a confidence on the markets. And Jesse, you just fell for some Fed speak, you said regional banks they'll have to bail out and that's one thing I think we do need to make clear with what happened earlier this year with signature, First Republic, Silvergate and those free banks predominantly that was. Marketed as a regional banking crisis. But we cannot forget that those are three of the five largest banking failures in U.S. history. Like they're trying to say, Oh no, it's just the regional banks. Yes, it's not the JP Morgan's, the Wells, Wells Fargo's of the world quite yet, But labeling those banks as regional banks to exude a sort of contained crisis in a smaller segment of the banking sector is. Some Fed speak that that people have fallen for. Yeah, I'd go even as far as saying inflation, there's no inflation or it's reduced to 3% is another component of Fed speed. It feels like there's a tale of two worlds like of uh just in the US when you think about coastal kind of like you turn on CNN and what's actually happening in the world and there's a tale of two economies. When you hear of like the Wall Street top 10 to 20% and would actually people are feeling and there's completely two different things like Marty posted or I don't know if you posted but it or you posted on Twitter. I don't think we showed it on the show. Where the the haircut the Barber been like the in upstate New York basically had been trying to hold off as long as possible to increase prices. And like anecdotally where where I live there's a lady that like delivers food as part of one of these services. And she was just sharing how she's seen like every quarter in the past two years. How her number of like clients just start to reduce in the amount of groceries they're buying. Where she used to have a whole like ultimately like a book of business that's just been like. Cut down 75% because people don't have the disposable income to either buy more groceries or have to use those services. And so this is like across the whole economy where people are getting like kneecapped. And you know we talked about credit and in debt and credit cards and all the things associated, but it's just it's not as cut and dry. I think and I think Dylan, you talked about it where there's like core and CPI but in the reality they're both like tied in together. It's kind of like the Fed and the economists that decide to like start to pull out and the different levers they want to describe. How they are separate, but in reality, like, they both feed directly into, you know, disposable income and how dollars are used. Yeah, and this. Next. Well, to tie back to Dillon, I want to get your thoughts on this, like talking about the Fed trying to induce a soft landing, really targeting the labor market and unemployment. Logan, if you pull up the participation rate chart, the screenshot I shared and slacks, one thing I'm very interested to see is. Does the participation rate like obviously we're coming off the back end of the economic lockdowns. We've had a lot of layoffs in the tech sector and there are a lot of jobs available, but they're typically in the service sector. And so this is one thing I wonder the participation rate specifically, does it throw a wrench in the Fed's ability to create a soft landing because as people remain unemployed for longer and fall out of the unemployment calculation? And fall into the falling participation rate, like does that really prevent the Fed from actually reaching that target because so many people are falling out the denominator. If you see on the right side of this chart, the participation rate after increasing pretty significantly after the COVID lockdowns, never reached the point where it was right before the lockdowns. But it seems to be flatlining and could be going lower moving forward. Yeah, I have a lot of interesting thoughts about the participation rate and like some of them aren't, aren't too nuanced, but I think there's like a huge bifurcation in the labor market that just like you know, unemployment rate or like even labor participation rate doesn't capture. And like some of this is anecdotal, but like you know, especially especially in 2022 when you know all these tech stocks got decimated and you know the VC bubble somewhat burst like. AI seems to be reinvigorating that kind of like micro bubble in a way, but I can just tell I wouldn't have graduated college a couple months ago talking to all my friends. A lot of these people are applying, close friends are applying to good jobs. They have great degrees, got good resumes. And none of them can get like you know, basic entry level jobs and you know into like the remote workforce, right. Where as two years ago these people would have been making six figures off the bat at a tech firm in San Francisco, like no problem with stock options right. And and you know meanwhile like if you look at just like the blue collar sector like you know, my dad is is he has, he's a small family business like does some electrical work. The median age for those blue collar guys is like. 5657 years old and there's no one coming down the pipe, right? So like, and at the same time you have like AI that's like apps and the AI memes are kind of outrageous. Like AI is going to bring our utopia or it's going to like displace 100 billion jobs. It's like, OK, let's settle down a bit. But it is definitely going to displace a lot of entry level like e-mail type jobs, right? Like you just see it like Microsoft record profit, they laid off like 1000 workers or a couple thousand. I don't remember the exact number. And I think this is a trend that will continue, right. And so, yeah, is the unemployment rate gonna go up a bit while we're in this tightening cycle? Probably. I don't really know the direction of the labor force participation rate, but I do know there's a massive mismatch. In, you know, the type of jobs that especially like for America, the world reserve currency, we kind of have this artificially strong dollar, right? Like the coastal elites for the past 40 years, 20 years in particular have have really benefited. You know, Silicon Valley, Wall Street, DC have done great. Meanwhile, like, you know, the Rust Belt, American manufacturing gets absolutely hollowed out. And I think maybe that's not reversing, but you know, the whole COVID thing. Working remote and also like AI has kind of opened up this. You know, it kind of was like the the genies not maybe fully out of the bottle yet, but I think people are figuring out that you know work work is available globally, anybody can do it and even AI can do it. A lot of these like kind of really high paying like entry starter level jobs. And so I think there's a mismatch in terms of like especially in the American labor market where it's going to take a while to figure out and also like from a demographic perspective the boomers, a lot of these people that are working. These like blue collar jobs are all retiring, right? So like, I think that's something that can, you know, take a while to to shake out and also can kind of throw a wrench through a lot of these like, you know, employment models per se, right. Because like there's a lot of people looking for jobs. But like, you know, there's not a lot of people that are like looking to be a plumber, right? There's there's a lot of people that are looking to be a consultant at Deloitte. And that's like, you know, those aren't the same, Those aren't the, you know, one and the same in in the labor, in the labor market, but they are in the data. Yeah, That's something I think about a lot like there's gonna be, you hit the nail on the head like that's gonna be the next decade. We talk about like hard assets, hard skills are gonna be like, you know, hot commodities and being able to actually produce value in like meat space. And yeah, like we talk about like opportunity costs or cost of capital. And you think about like I was at Google and we work and I just always remember, you know, there was a. You know, two I was, I never spent more than three years at any of the firms and part of it was like going there and it was fun. But then you realize like these people aren't working. Like what are they doing? And it was just there was this baking in of the models of like growth and hiring. And we saw this at Twitter when Musk came in and basically cut you know 50% and nothing stopped working. You know where I think because we had been in the bull market for 10 plus years that it hadn't really been understood or felt one that. You can have a more efficient way to grow a company. But two, that the market could churn like this and the fact that it's happened and now it's in the psyche whenever it does and interest rates start to lower, it's still not going to come back fully where people just say, Oh yeah, let's just hire all these people and have them do nothing. And so there's going to be a lot of basically stock in people that to your point went to school to get out and be you know, whether it's consulting or work at Google that. Are going to have to go into the real world and and work. And I think a lot of those people have been sitting on the sidelines even have historically been sitting on the sidelines. But I think they also are now waiting for a market to come back or to your friends kind of like trying to see what's out there versus just getting in. So it's going to be a very crazy decade I think for folks that went to school because they were told to and they're in $100,000 in debt and now have to figure out how to like produce value in the real world. And that's the only like value right now that's like looking for it to pay. Yeah. And to tie a couple of these themes together, I mean, interesting anecdote. I ran into an old, like middle school buddy from my hometown. He's down the shore, ran into him on the beach and we got the conversation start. And he's actually one of the few, you know, smart individuals in our generation and went and started his own plumbing business. But to tie this into. Like the real estate thing, like he's his business is crushing it. But he was telling me he's noticed in the last few months he's going to make small repairs to people's houses and he's he's showing them like his cost and what their bills are. And they're like looking at it in shock and they're actually a bit panicked because a number of his clients have told him, like, yeah, during COVID I took out a he lock on my house. And since interest rates have gone up like my my monthly mortgage rate, my monthly mortgage payments have gone up significantly, like I I don't think I can afford to actually make this repair. And so just another anecdote out there tying it back to the real estate market particularly I think and we're from like a small, humble blue collar town and there's a lot of people who made those decisions during the COVID lockdowns to take out. Equity loans from their houses that are sitting in precarious situations right now. Yep, the the amortization schedule and like the the calculation with interest rates from 2 and some change percent to like 6 1/2, seven, seven half percent is absolutely mind blowing. I saw some posts on Twitter, it was like people on Reddit being like like they didn't, you know, they didn't actually look into the math and they bought, they bought a house and they were like. Why is 90% of my payment in the first year going to interest? And it's like, it's like, well, that's how the math works, man. You know, you're paying 1,000,000 bucks for a $400,000 house. That's, you know, that's the reality of a 7% interest rate. So, you know, it's not an immediate thing. But like, you know, no, no millennial can afford that. The median, the average net worth is negative, right. Never mind the Zoomers, like, you know, like there's there's just no way. That you know they have unsecured unsecured student loan debt and six figures. You know you're not buying a house that costs, you know X amount of your your average income. It's just it's just not realistic. So I think there has to be some equilibrium felt there. I think a lot of the boomers, maybe not this year, but a lot of the boomers over the next you know maybe 5-10 years are going to go to liquidate their home and realize that you know the the, the listing price that they thought that they would have. You know that clearing that clearing exchange rates actually a lot lower because no one can afford it, right like. Oh, you want to sell that second home you have? Well, you know, that market for buyers really doesn't have any money or not enough of it. So maybe houses continue to go up in nominal terms, but like, in real terms that the housing market was fueled by interest rates going lower for 40 years straight, Right. Like a lot of people thought they were genius for just levering up and, you know, house hacking or real estate hacking, and it was really just a leverage game with cost of capital going lower forever and that reversed. And it's almost like that kind of like Wiley Coyote meme where they run off the Cliff but gravity hasn't been felt yet. Not like saying like a great financial crisis. Wait, it's gonna happen again? The real estate market's doomed, but the valuation's out there. It's not really. Yeah, it's not really supportive for new buyers. Let's just say that. Yeah, this one makes it sort of makes it so precarious and the gradual and suddenly. Meme is like is generally real. Because I was on a conversation earlier and anecdotally one of the largest REITs in the Middle East for real estate was talking about the guy had been like the family office fear between London and like Dubai. And he was saying that his friends is kind of like the proxy for sharing the sentiment in the market and had reached out saying looking at the space, looking at Bitcoin, waiting for BlackRock to step in. And we're joking around, and we've talked about this before, but it's just like, you think about it like real estate is just a shitty form of Bitcoin, right? It's like a liquid. It's scarce, but you know, has a similar profile. And you know why? It's had some monetization around it. But as people wake up, it's like the first people through the door are going to probably make out okay, but then the door is only so wide until you have everybody trying to get out of these liquid assets. And we're right now in the context of real estate. And so I think that's how it ends up where like all you mentioned leverage like all the you know whether it's big short and it's the strippers with the multiple houses or it was you know basically the last trade the past two years and all the Airbnb leverage and the 10 to 30 houses. That everybody's going to be left holding this bag at some point. When that happens, there's only so many people like to be able to to move out of it in the Bitcoin before kind of the mismatch in like what the price of the house is versus like where they where they can purchase a Bitcoin at. Yeah. And I I mean, I do think we have to pay homage to the forgotten generation, Gen. XI. Mean we're talking about millennials not having enough money to buy these houses. But right after the boomers finish retiring, we're going to get this generation, Generation X. Setting up to retire and those born in 67, which I think is the front end of Generation XI, mean they'll be retiring 10 years from now. And if you look at this chart was shared in Zero Hedge earlier this week. Like the median Gen. Xer doesn't have more than $40,000 saved up for for retirement, which is insane. And they've got 10 years to build that nest egg if they hope to. Be able to retire in any sense. And so this isn't a problem. I think it's a more immediate problem than just defining it as a Millennium millennial problem. The Gen. Xers obviously not as large as the Boomers from a demographics perspective, but they're in a terrible position as well. Insane. That's an insane Just graphic. Second, median, median, median savings. Logan, can you throw out the the one I just put in the chat? Yeah. So this is a trend that's been happening basically like this chart for people who can't see it. It shows the the wealth, the percentage of the wealth owned by each generation as they age at that point in time. So the baby boomers is kind of up and to the right. They were accumulating wealth as they got older. Generation X has has had half the slope that the baby boomers had, which is to say they are accumulating. Half the percentage of the wealth as time goes on as they progress through their lives and the millennials are half of that. So you know even though we haven't gotten as far into life as Gen. X or the baby boomers, we are on track to achieve much less wealth than either Gen. X and you know like four times less than than the baby boomers. So and and if you were to put the, you know the next generation on this chart, it would probably be the same story again at a diminishing. Portion of the world's wealth accumulation over time because the circumstances are just so much harder for younger people. And like Dylan, I wanted to ask earlier, what's the sentiment for, like, your friend group about, you know, like the prospect of how you as a generation are are likely to do in terms of accumulating wealth? Or like being able to buy a house? Like, what's that like in your friend group? I mean there's a probably a small small part of that friend group that's very much orange pilled, but that's obviously not the the average perception or thinking, you know, so. So a small number of them have, you know, been buying and holding some Bitcoin. But I think for the most, for the most part the average or maybe median Gen. Z Zoomer doesn't actually think about any of this at all. You know, it's kind of just like live, live life in your 20s and then you know, like kind of a cold hard dose of reality. As you get older and still have that student debt and you know like there's there's no one really is looking to you know accumulate wealth build a family like the the kind of like American like you know nuclear family traditions that many like think of in terms of like the ideal maybe maybe it's not thought of as ideal anymore but like I think that's that's not the reality for the average for the average American Gen. Z it's it's you know it's just like kind of live it up we'll we'll figure it out like. Ethic we ball and you know, there's not much, not much longterm thinking there, unfortunately. For our generation, we had the, you know, the Yolo era of of cringy, you know, nihilism in the moment. And I feel like at some point that has to Crest and recede, but and I think that Bitcoin is the reason why that happens because without hope for building a better financial future by saving. And accumulating wealth then you're going to live in the moment because there's no incentive to save. And so Bitcoin brings back that incentive and I think is I I see it as the most likely thing to turn the tide ultimately in terms of shifting our country and and the world back to the incentives of building a a life and saving for the future on an individual basis and you know an institutional basis as well. And I think. I was going to say I think Gen. Z's at a disadvantage to really wrap their heads around this too. I mean as millennials, I'm 32, I was a senior in high school when 08 happened and that was the obviously the largest financial crisis in my life up to that point. And we watched at a very young age the banks get bailed out, TARP get past and then QE happen and as a young 18 year old that radicalized me and. I think this time around for Gen. ZI Guess, their baby financial crisis was COVID and the lockdowns and they saw markets tank. But on the back end of that, it was a different type of stimulus, which was direct deposits in the bank accounts. And so they probably have this false sense of security that the financial crises happen in the future. The government's going to be there, they're going to bail out the banks, but they're also going to bail out individual Americans will start air dropping. Money into our bank accounts like they did post COVID, not internalizing the destructive nature that has on the value of your of your currency and your pursing power over time. And so there there may be a false sense of security sitting within the generation of zoomers that just went to the COVID crisis. Yeah, you know, Well, I'll take my $2000 check. Meanwhile, you know, businesses get, you know. Loans that are granted away for hundreds of thousands of dollars. Like there is really no understanding of that. It's pretty sad. One thing I I will say when you were showing the graphic of Gen. X median and and mean net worth, something really struck me and it was that and I'm not sure exactly how that was calculated but I would, I would bet and I could be totally wrong here but I would bet that in the those statistics it you know accounts for like 401 k's and pensions or whatever else And The funny thing or maybe not funny but kind of sad thing is that. It's, you know, that is not savings, right? It's it's just passive indexation into a broad basket of, you know, equities and bond securities and like, oh, so you know, you're just passively buying tech at 30X multiples, right? Like after after they've gone up, you know, 20X over the past two decades, right? Like Apple's gone up 30% a year for the last 20 years, right. And so now you're just like DC ING into like a mega Corp that, you know, BlackRock and Vanguard are going to have like. You know that are going to own the shares and you'll get your ETF and and that's savings now like that's you know that's equivalent to savings is just like Oh yeah you know we'll have some financial advisor DCAU into into equity indices no matter the price and that's just like considered normal that's actually considered a prudent decision because the money's bad the money doesn't work and and you know now like you know for the past 20 years bonds haven't even been a valuable form of of investment with no yield. That's changing, at least temporarily. But like, savings isn't actually a concept that's understood at all, because there's been no incentive to understand it. In the 80s it was like different, right? Or like there was an interest rate. Now it's like, who's gonna sit no one saves in a checking or savings account? You know anybody that does understand like savings like oh you know I'll I'll trade futures on the on Robin Hood it's like no like that there's the whole perception of like wealth accumulation has been distorted and particularly like post COVID for anybody that's kind of like new to the game but you know that's not savings like that that's just like you know we're just going along for the ride and people have been rewarded for it. Right. It's been it's been right because that's been the direction has been up because of the stimulus because everybody's passively indexing into these things. Like, stocks don't go up forever, right? Like this is people, like Americans especially, think that this is a reality. It's like all you have to do is look to Europe, You have to look to any really emerging market to know that actually, no, stocks don't only go up forever. And at some point there's going to be, you know, a point of reckoning and not saying it happens a cycle or whatever, right. But like, you know, the real estate market, the stock market, you know, we, the bond market kind of already had this moment and topping in 2020. And then it went down 30% and everybody was like, whoa, what is happening? But like this is what you get. You know, people aren't investing based on like the quality of a company or it's balance sheet or it's, you know, it's discounted cash flows. People are passively just chucking money at a basket of companies at any price. And it's leading to these like you know, gross distortions that nobody really knows the long term impacts of until, you know, we run into a, you know, crisis and then things are like, you know, panic mode. And so I, you know, that's just like something like I think a lot of people see like can't see the forest for the trees. It's like. You know, this is, this is a warped, grotesque kind of monstrosity of an economy that, you know, Fiat has built over the last, you know, I mean a long time but last 50 years, 40 years in particular. And and we're just kind of like on this train that's headed off the tracks on a long on a long time frame and everybody's just kind of docile and okay with it. And like without Bitcoin, like we wouldn't have, you know, any, we wouldn't have anything to like protest that we wouldn't have anything to like opt out of. That system other than like, you know, vote harder, which is like what? What does that, what does that lead to? So, like, you know, it's a pessimistic world if you don't have an optionality or you don't have a choice. But like, thankfully we have a choice and we're all voting with our capital to, to opt into that world. But a lot of people get like, you know, they think of the Bitcoin thing as just like, you know, some mancaps and some weirdos and some laser ad guys on Twitter. It's like, no, like actually we see the world for what it is. It's actually not. Not how it should be. If you just kind of peel back the onion and it doesn't logically makes no sense that you save in a basket of equities. But like, Oh yeah, they only go up and they go up 10% a year. Like you ever see like, like all all over, like TikTok, which is like Gen. Z Financial advice. People are like, Oh yeah, just, you know, if you just passively invest for 50 years, you'll have 1,000,000 bucks by retirement. And it's like, and people believe that people are like, Oh yeah, like that's how I get rich. It's just like, you know, punt money into stocks. And it only goes up and it's just like these preconceived notions are totally wrong. And at some point it's gonna lead to a lot of people getting hurt. And at some point, I mean, that's gonna be the case for people that have been doing this for a long time, The pensioners, right? Like the people that think they have money that's not there, Marty, you just tweeted about it. It's a sad, sad reality. And without Bitcoin, there wouldn't be much hope. Yeah, you you didn't know. It really is sad. And what's crazy is everything you just described is really so like obvious and conservative. If you think about we go back 50 or 100 years, if we switch Bitcoin for gold or savings or getting married and start producing value at the age of 18, like these are all just like concepts that existed for thousands of years in between like propaganda, societal change and all the things that go along with it, what you just described. To the majority of individuals that say you're insane, you're nuts. Like I even have like you know family members are like, Oh yeah, like you know, they still find out like wife has a 401K that's hanging. I'm like converted to bitcoins. Like, no, we gotta like just be careful just because in her head it's like it's a 401K, it's like my old account. It has to be safe like just in case that Bitcoin thing doesn't work out and it's just it's just sad like that. It's the like the narrative and the things that society like everybody, whether it's because it's work that's required or just going against a narrative that like. They just accept all it takes is looking just right behind the curtains to see everything you just described on. And it really is sad because it's just like right there. All you have to do is just like peek behind it and realize that everything that's been explained or told or all the debt and all the things that you've learned are not actually what they seem to be. And then you're just ready to like. Understand what's happening here and you can take that different position of understanding, Okay. Well, I can accumulate, I can have a plan to raise a family, have a child, retire, start the business. But instead it's just like going further and further out the risk curve. I was at the store a couple weeks back and I don't know how Bitcoin came up with the checker. But then the bagger, I was like, hey, I'm curious like, what is your thought about Bitcoin? He's like, oh man, this shit's crazy. He's like, you know, crypto. Like, I know you can make some money, which you can lose it all. And that's like the perception of the of the markets. Just like, oh, well, I'll play with crypto. But I know I can lose it all, but maybe I can make it all back as similar as a lottery ticket. So there's still so much education and just, yeah, education on this part and within society to get that intolerant minority to the place where it's like, okay, this is the thing that I can actually hold my value in, to increase purchase and power and actually have a better life for myself and family. Yeah. And. I listened to a podcast earlier this week. I highly recommend anybody listening you'll listen to this episode of Invest like the best. Patrick O'Shaughnessy had David Einhorn on recently and he basically went on an hour long diatribe of how value investing is completely dead right now just because of the role of passive investing and people just DC ING in the stocks the way Dylan described like it is somebody. Who made their whole career around value investing essentially tapped out and saying, like, yeah, I don't. I don't think there's room for value investors right now because the market is so insane. Yeah, I mean, you're fighting a £10,000 gorilla, right? Like, like, oh, this, this thing is undervalued or overvalued, right? Like, oh, I don't think NVIDIA should be worth, you know, 400 times revenue or, you know, that. I just made that up off the top of my head. But like, you know, it logically doesn't really make much sense, right? But like, no, you're fighting billions and billions and billions of dollars indiscriminate flows and actually the bigger they. Get the more index weight they have right? Like, oh, Tesla, you know, worth, you know, 2X more than every single automotive company in the world combined. Like that doesn't make sense like at the peak of the, you know, 2021 bubble, right. But like you know, just like throw some call option gamblers and throw some ETF index flows and throw a couple leverage ETF's and you know you Tesla can be whatever you want it to be, right? Like that's the the state of things and it's it's really, you know, just it's. It is what it is. But that's not like that. People think of that as like investing. It's not right. It's not investing. It's somewhat of a casino. And this is a little bit of like a tangential point. But growing up where I grew up, where I went to school, very, very leftist progressive state. And once I kind of got my political bearings, I was like. Almost like repulsed by it. I'm like, how could they think this? And then as I matured a bit in my understanding of how it all works, I sympathize with them. I was like, no, I get it. Actually, I get why these people are protesting and saying eat the rich. Not that I disagree with it, and I think that they lack an understanding and a bit of a nuance of how this all occurred. But like, yeah, like, why should that person that literally did nothing except just leverage up his real estate holdings for 40 years, be, you know, be on his third yacht and have 4 vacation homes? Like, what did they work harder than me, right. And like that's that's where we are. That's why the boomer wealth disparities is is so, is is, you know, so disproportionate. Like, it's not their fault. I'm not, you know, I don't hate, like hate someone for being rich. And I don't think anybody should. They played the game. They played it right. But like. You know, the fact that there is a game to play into almost like, you know, a rigged game, right. And the fact that, like, you know, 90% of people, 95% of people don't even understand that there's a game being played is the problem. But yeah, it's led to these gross distortions. It's led to the greatest wealth disparity ever. And we can see that these things lead to, you know, oftentimes like very, very polarized, polarized, populist, polarized political discourse. So like does it make sense that you know that there's a, you know, Bernie has supporters and AOC and those type of politicians have supporters on the left? Yeah, of course that makes a total sense. And I think, you know, unfortunately the the reality is that you know as we go into the, you know, late twenty 20s, early twenty 30s and there is this massive wealth disparity still and you know the the consequences of Fiat monetary policy continue to. To take course, there's going to be a lot of people that are very, very angry and there's going to be a lot, you know, the 2nd and 3rd order effects of that from a political standpoint are going to be scary for people that actually understand where it like where it leads and what it can lead to. So I mean I don't really have like a political solution to it other than like, you know, opt out and and vote with my capital for a better world. But like, you know, the people that think that we're just going to vote harder to get out of this is it's naive and you know, lacks a bit of understanding to how we got here. Yeah. Yeah, vote harder with your value. That's the only real thing that you can do, I think. I mean that's the only real vote you have right at the end of the day particularly in America in 2023 if you understand the political landscape and the way the, I mean RFK has a lot of support right now, it's likely that the. DNC is going to box him out of being able to actually run in this election because they're they have their guy and they're just going to push him forward whether or not he can speak a full sentence or not. Like they they want to hold the power they have and they're going to use everything at their disposal to ensure that they keep that power and there's nothing you can do. I know this is controversial and people really don't like to hear it, but your vote in that system does not matter. Your your vote. With your capital has much more leverage than any vote that you can put in the ballot box for the President of the United States. Yeah, the change is going to be emergent, just like money emerges in a free market. Like when Dylan, like what you said, really resonated because I've had this thought from like an investment opportunity. I don't have the time, but I think somebody should do this and it will happen is and they do this. Landry's is a good example. I think he's a partial owner in the Houston Rockets. Marty, if you remember his name, because I know he's like, I think he's a bitcoiner. But what he did was he was like in restaurants for a while and he he found this like part of the market that was inefficient in the sense that he understood like people that run restaurants are generally, you know, they really. Like food and they like the hospitality, but they don't run a company in the most like efficient way. And so Long story short he basically aggregated, he was buying up restaurants and then he centralized the point of like operations back office into a central point I think it was in Houston to really just like increase margin and operational fitness and he runs like one of the largest Landry's food. Kind of like conglomerates or whatever. Or if he's a billionaire. The point being is like I think there's something interesting to be done just in like helping blue collar work. Whether it's electricians, plumbers in certain like localities or markets to be able to aggregate and then help them get like on a Bitcoin standard or like at least start to accept Bitcoin, understand Bitcoin. Because at the end of the day like when we go to the most micro level, the individual. Just the single plumber or the restaurant individual that accepts a unit of currency that increases and purchasing power is going to have an unfair advantage by definition, than the person that doesn't. That's holding the dollar. And when that person increases its purchasing power, it can increase its marketability, the products and services it can offer, And ultimately, like the good or the societal impact, it can give back to its close network. Its. Town of the people around it and that starts to build up into and I know Marty talk a lot about the strong towns. I've ever read it. But I would imagine this is talks a lot about like you have to start there before change can really happen and that's where we we talk about this. And I think it's so important from like a business perspective for folks to like at least start to hold a little bit because you start to see that and it really is the the ultimate unfair advantage because year over year if you're able to withstand the withstand the volatility size it correctly. Over time you get this like freedom to do the things that you need to do, whether it's personally or for your business to expand versus be on this hamster wheel where you're going backwards. Like the guy that took the, you know home equity line of credit and now he can't even pay for the the, the, the repair versus having a formal currency that he can take care of that and also expand whatever he's doing. So yeah, I think the, yeah, I think most people on this, on this pod, but like I've never voted in my life. I've never thought any. Anything I could ever do personally would ever change, even from a, you know, like equities and stuff. I had Google stock. I sold it the second it would vest. I never have held an equity outside of that. It's just like it never. It was, it was never trust that I was going to give my money to somebody else and then they were going to give me some more back. And I think that's felt more and more over time. I agreed on the voting standpoint. I mean, I haven't registered to vote either, only been through one election cycle where I have been able to, but I'm not gonna register again. I am a supporter of Rfk's potential ability to shift the Overton window. You know, I like people I think are missing the forest for the trees again. They're like, no, he's never gonna win or no. You know, imagine if he did buy Bitcoin. It would crash and then and it would crash the dollar and all these but blah, blah, blah, blah, blah. And it's like guys like the, you know, he has plus 1400 odds. And I would say, you know, I think maybe they're a bit higher, maybe not. And you know, Joe Biden can't speak a word, He's over there in Congress, you know, on both the right and the left, getting an applause for his ability to just have a compassionate conversation. And he's saying. Hey, you know, I think we should lift capital gains on Bitcoin to, you know give some privacy back to, you know Americans with their transactions and to attract foreign and intellectual capital the US shores and Oh yeah, let's you know, passively just back, you know, maybe 1%, less than 1% of of new debt issuance with, you know, hard currencies will say, you know, Bitcoin, gold, silver, platinum, whatever, you know, a piece of boomers with the the metals, you know. But like, how is that a bad thing? I don't think. I think from a Bitcoin standpoint, when you understand what he's doing, he's obviously gunning for the for the Bitcoin crypto vote, duh. But like is that a bad thing whatsoever from a Bitcoin standpoint? No, it's not. It's actually a really great thing and I think maybe it's not front and center this presidential election. Next one it will be 100% and I'm I'm really curious to see if it'll be a, you know, right or left that embraces it. Like imagine if RFK and Trump. Had a debate. I mean, I I doubt RFK makes it out of the DNC. But imagine and Trump's like, you know, the the nationalist dollar supporter and RFK is saying no Bitcoin. This is you know imagine they had a debate on monetary policy like imagine that. Like that's what shifting the Overton window does, right. Like I think that's that's where it's a bit exciting right. However unrealistic it may be. Like people are again missing the point here we have a presidential candidate third in the polls polling better than Biden whether he gets a shot or not. Saying let's put Bitcoin on the treasury balance sheet and people are up there on spaces like debating the legal framework and stuff. It's like guys, you're totally missing. Like it's it's like it doesn't even why? What do you like? You totally missed the point of what? Of what this means. I completely agree. I think the shifting of the Overton window, even if it's done by presidential actually, especially if it's done by presidential candidate, is massive. For Bitcoin forces people to talk about it, to think about it. And I'm all for pushing that window closer and closer to our worldview. Yeah. And and I think it it forces every would be presidential candidate to watch how this is going and see like, oh wow, he's getting a lot of traction, a lot of attention, a lot of support just because he's pandering to the bitcoiners. So it gives him this incentive four years on the road or. Or two or six or eight for, you know whatever elections for other politicians to try to adopt A similar strategy and then it's part of the mainstream. So Marty, you talked about, you wrote about how Bitcoin wins from the margins and this is how that process goes. You you start with a more extreme political candidate and then the the success of that gambit induces the more mainstream candidates to adopt that strategy in the future. Yeah. And you're already see, I mean at the Bitcoin conference, I'm pretty sure like Vivek Ramaswami, who's been rising in the polls in the Republican side, he was very supportive of Bitcoin and I think that forced DeSantis to come out and support. Obviously he was very against, very vocally against central bank digital currencies, but he's had to at least pay some lip service to Bitcoin. Whether or not he would allow it to flourish if he becomes president. So yeah, I completely agree, like. Just. Forcing people to talk about this and it will be very interesting. In the heat of the 2024 election, we're going to have a having. There's going to be another Bitcoin conference right in the lead up to November a few months before people actually go to vote. And I think the conversation around Bitcoin if we think it's. Pretty substantial. Now I don't, I don't even think we can imagine how, how front and center it will be, especially if there's some economic turmoil that's going on at the same time as well. I think the the conditions from a narrative perspective are lining up very much in Bitcoin's favor over the next year and a half. The narrative of like you know FOMC press conferences and like it's it's always it's always fun on on days where like you know they it's not like 100% locked in what they're gonna do like some days you know the market essentially or Powell through their you know signaling and Fed speak kind of say what they're gonna do before but sometimes it's like oh is the Fed gonna cut? Is the Fed gonna hold? Is the Fed gonna pause and it's like you know who knows or like you know it's like a Sunday night press release for some intervention or some like emergency rate. Rate cut or whatever versus like Bitcoin programmatic next block next block next block having right. And it's like, it's like, oh you know it's gonna be like mid-april. And as it gets closer and closer and closer and we see what the difficulty is and what hash rate does, that time gets more and more and more precise. And then all of a sudden inevitable no matter what you say, no matter what you do, it halves. And like, we obviously all understand that function like for Bitcoiners, but for like the majority of people like just like I wasn't COVID, they're printing a bunch of money and then it's like, wait. This thing, what do you mean have like the supply have. Oh no, the the inflation rate have the issuance. Oh like that's interesting. And you know it was more just like kind of the people interested in finance and economics that paid attention. But like, yeah, imagine if it's RFK or Vivek or whatever who's like rising and probably outpaces to Santis at some point. He's a pretty reasonable candidate talking about Bitcoin and its merits and sound money while boom halves, while, you know Jerome Powell and the Fed cut rates and you know, say that BTFP. Is going to because look at BTFP the one year, right that was that was late March when late March 2023, right. So if they're going to renew that or they're going to let you know 100 plus billion worth of bonds you know marked at a you know par value collateral roll off or are they going to extend that right at the time of the Bitcoin having right. So like yeah, I I think like the having is you know people including Jesse at your post and maybe we shift to this after this the stock to flow thing like. The supply side of it is is the main topic of discussion. But often times, and maybe this is a bit contrary to like the the typical view is that I think that the having is also a demand driver because it it like reinforces people's understanding or maybe lack thereof changes that understanding of like what it actually is like the programmatic monetary policy. Not everybody understands that people don't know what a Bitcoin block is or you know. 210,000 blocks until having, like, nobody really knows what that is. They don't really Bitcoin, just kind of this, you know, thing that trades and has a price, but it's like, oh wait, it halved. What? What is, what is that? What are the implications there? Meanwhile, you know the Fed balance sheet is off to all time highs or whatever. And like even if it's just the Wall Street types that understand it or some, you know, some chunk of the political discourse that that gets orange pilled because of it, with each having more and more people understand it and it becomes more and more of a global event. And you know, the bitcoiners are partying, but like. That's gonna be it's gonna dominate the headlines that day. Bitcoin having nobody can stop it. Nobody can change it. Next one 2028, it's like whoa, that's powerful. So I think that from a demand driver the having will also be pretty, pretty damn significant. Guys, I haven't been this bullish for for about Bitcoin in a very long time. It's kind of crazy to think about like you guys just jogging all the like the lexicon and the. They're just like a stat establishment talking about bitcoins kind of crazy would make me think maybe you talk about the margins is like Senator Lummis was like patient zero in there and everybody's trying to they see like you know the response and they're all trying to pander to that crowd And then you know they're having 2020 seems like, you know so long ago that were so long and then also short that we're going to be right up four years again. And the stage is like set and the awareness is orders of magnitude larger and against the backdrop Dylan just shared. So it's. I can't imagine we're exciting time and then we're all building in this space and contributing that we get. So we're just front run it a little bit ahead of what's what's happening along with BlackRock, I think Black Rocks trying to frontrun it as well. Like think about what happens. It's the last having though right? We had we had micro strategy come out and say we're adopting a Bitcoin standard. We're going to we're going to sell shares by Bitcoin. We're going to issue debt by Bitcoin. This is our reserve ass that we're not selling it. We're going to post it as collateral borrow more money by Bitcoin. Yet 20 public miners that are trading with Bitcoin on their balance sheet that access credit lines and and whatever else. Yeah El Salvador come out oh it's only a small nation okay. That is established. You know bitcoin's legal tender lightning network, Bitcoin. We're going to DCA. You know a Bitcoin, one Bitcoin. Day right. It's a nation that's small. Whatever. But it's a precedent right. It's a it's a nation saying you know what, IMF we don't need your financing. Giving them the middle finger and saying we're gonna buy a Bitcoin. Now we have you know only the 3rd. The third leading presidential candidate say I'm gonna eliminate cap gains taxes and put Bitcoin in the balance sheet and people are like Oh no, you know he has no chance and it's like do you see what's happening directionally? Like only BlackRock said the ETF is you know they Bitcoin ETF like. Wake up, this is this is the trend and you know Bitcoin on a log scale is going up only and people are still just missing the whole point of this like haha, it's down 56% from all time highs and it's like you know man, I I can't really help you because you can't help yourself. It's only black Rockdale and I don't know what there is to be so excited about. It's only the largest capital allocator in the world. And then? I mean, we talked about it last week, but I've never been more bullish on the technical side of Bitcoin, like how strong the protocol is, all of the upgrades that have happened since the last having with Taproot and particularly in the maturation of the Lightning Network. Like I recorded an episode of TFTC with Cody Lowe, who's the head of developer Relations at Fetty. And I mean AI, to an extent it is a meme, but to another extent there is. A lot of fundamental value there and it is becoming abundantly clear that for a I to be, I mean we described this last week, but for a I to be as capital efficient as possible, they are going to have to integrate Lightning gated API access. And again the tooling around the lightning network with the different implementations and the different wallet development kits that are out there like it has reached a point of maturation. Over the last four years, where it can actually begin to be implemented broadly in different sectors of the economy, I happen to think that the AI industry will be a massive first mover, but we're going to have that quit that arrow in our quiver as well around the next having. It's like, yeah, you can actually implement the payments layer of Bitcoin rather easily now too. Yeah. That's a great point. Like the programmatic programmatic money, whether it's for AI or just the Internet. While the price appreciates and awareness grows from a technological perspective and engineers and some of the best talent looking at this and then it being able to be engineered via you know. The Internet and a I and just like we are like some of the investments like or companies like Wavelake or different firms that have a native unit embedded in their tech stack that is going to be an insane demand driver from 2024 to 2028. I think are there A's had the piece about A I, but I think there's just like 1 component once people wake up to it and the price is a function of the awareness, that's something that we don't even talk about enough of the like the amount of demand that's just on the supply. As it gets embedded into the text stack of the Internet. Exactly. And it's funny how, like Jack Dorsey nailed this where you said this is the native currency of the Internet and you think you understand all that. That means on the surface, like, oh OK, there's a now there's a currency that you can use on the Internet. But it's a really deep meme because it really talks about how all of these systems. Whether that's AI or or businesses or whatever, you can create this functionality and transactional ability that you can't with conventional currencies using this currency. So adoption starts to shift towards this thing where you can do something that you can you can't do with any other currency and that that that's a tailwind, that's a tailwind over time, over over decades, we think of the Internet as as being fully built out already like the Internet has happened, it's it's reached its. Final state that's not true. We're still in really in the middle of the Internet revolution and you know Bitcoin becoming the value unit that the the Internet can build on is kind of the the second-half of this Internet revolution overall. So that that's just one of the tailwinds you know as is the. The mainstreamification of the Overton window and in Bitcoin, at the same time that we're going to have, I think, massive stimulus to get us out of whatever financial crisis happens over the next 12 months because of interest rates getting jacked up and being and held there and the body showing up over the coming months. And all of those things converge at the same time, such that there's tailwinds that we've never had with Bitcoin before going into a having. So I think there's a case for, and I've written about this, that next cycle could be bigger. It may not be, but I think there's a better case for this next cycle being bigger than for any previous cycle. So are you saying that on the other side of the next having the debate over stock to flow is that it was too bearish? Yeah, I in terms of stock to flow, who knows? I think that that's that's the reality with stock to flow, who knows. I guess that's my cue to get into that stuff. So all right, let's talk about stock to flow because we. Call. Natural, yeah. Made a bit of a flash by standing up for the the idea. So just to describe my thoughts on this and I'll try to pack it in to start stock to flow. So the stock to flow model is specifically wrong and directionally correct. And what does that mean? Well, okay, well, we're actually talking about we have to disentangle it a bit stock to flow. The stock to flow model is has become three things. It's that we think of us together. It's the man, it's Plan B, the person who created it. It's the stock to flow model, uppercase letters. The specific price model with with specific price targets and then there's the idea, the idea of stock to flow, lower case stock to flow that a commodity that has a higher stock to flow ratio meaning lower annual issuance relative to the existing stock and ends up becoming more valuable because it's a better store value. Those are three different things. And we jumble them all together and we throw out the baby with the bathwater. I think because people take issue with the man Plan B's behavior over the last few years, how he's handled critics hasn't. The optics haven't been great and so people are salty about that. The the model has flaws and it's a it's an attempt to. Take a data set and and explain what's what. A trend that appears to be happening. That's what a model is. And that and and that has pissed pissed people off. And especially pissed off statisticians, mathematicians who take issue with the specifics about the model that aren't statistically valid from their point of view. And and I actually totally will concede that, you know, like we, I think we. Have to be prepared to toss out the model, the specific price model. I do think that there's some valid one of the major complaints about it is that you can't have a time based correlation. You can't just track with time. Value appreciation can't be linked to time because how is that statistically valid? But Bitcoin is time. The havings are time. The increasing scarcity that comes from the havings, that's time based. And so I think there's some issues there in terms of statisticians not really seeing how stock to flow as a concept kind of sits outside of the normal correlations that they're looking at between 2 variables. But okay, fine, we'll toss out the model. You know we should. There shouldn't have been specific numbers about it. Because those numbers got got turned into promises and those promises were broken and people are angry about it. There should never have been specific numbers in in my book. So fine, the the the man has made his missteps. The the model has its flaws and we should discount it as a as a valid model. Yep, But what about the idea? So the idea of stock to flow is just this observation that when you line up, when you on a on a plot graph the amount different commodities with their stock to flow against their total valuation of the existing supply. There is an upward and to the right trend and it's there's some noise in there sure, but there's a trend of of the the less stock less annual issuance there is. The more value is stored in that asset. So gold has a high stock to flow and this is what Safidine includes in the Bitcoin standard kind of the whole first third of the book is about how gold won as a commodity money because it had the highest stock to flow compared to any of the other options. So it became the best, most reliable store value. That's why it won. That's stock to flow as a concept, as an idea and so. That's what I'm trying to advocate for in my writing about this. My article about why the stock to flow model is specifically wrong but directionally correct. And I think that it's time to swing the pendulum back a little bit to appreciate the the potential merits and discuss the potential merits of the concept as an idea. And we can toss out the model in its specificity entirely. I'm fine with that. And I think it's time to bring that discussion back into what's allowed in Bitcoin. Because this is a taboo topic that you're not supposed to talk about for some reason. Because the the people who who you know browbeat everyone on how this isn't statistically valid seem to be proven right in the bear market. And now that the prices kind of rebound a little bit, we're sort of going sideways towards the next having the same mechanics could play out again. This idea, as a the conceptual level seems to be tracking decently, so let's talk about it. Yeah, I mean I'll go left side of the bell curve here. The there's only 21 million Bitcoin. Everybody's going to need it. Number will go up stock to flow like. Correctly. I see like regression theory and all this crazy shit people are saying. It's like. There's a certain amount of stock and the flow gets cut in half every four years. If you have all the monetary properties that you can't change that, but you would think it would go up. It's like the thesis when initially all the Plan B stuff happened. I never understood why everybody was so angry at them. I understand like getting mad at like Mashinsky or like certain people that are like naturally defrauding people. But it's fucking model. Like if he made a price quote, it's the same as like Michael Saylor taking leverage. Is that the prudent thing to do? Who fucking knows? But like you get to decide to do it. You get to decide if you're going to allocate this on a model, not a veteran. It's really insane. I know Dylan, you might have to run in a bit. So do you want to share some some thoughts on this before you do? Yeah, no, I mean, I'm gonna be honest, like I I was in high school, stumbled upon Bitcoin, my cousin was in the ICO. Boom. I didn't participate at all. I mean, I didn't have any money. But you know, I'm, I'm looking at finance and kind of trying to learn, learn my way around things. I know crypto and don't immediately dismiss it because I don't know any better. Kind of stumble upon Bitcoin on on Twitter, like find the right side of of crypto Twitter, like the bitcoiners. And then, you know, my 18th birthday comes and boom, like within, I don't know, a couple weeks before or after Plan B launches that model. And I'm a math guy. Like, I, you know, I'd never, I, like, didn't really understand much about Bitcoin at that point. But like, made sense to me. Like from like, from a math perspective, you know, I was like in calculus class ignoring my, you know, my, the work I'm supposed to be doing, looking at this thing being like. Wait, what causes that? And I just, you know, forced me to like go down a rabbit hole of having difficulty adjustment understand like the protocol at a deeper level. So, like, no, I mean it's just a model. People are like, no, it's gospel or like, you know, think it's like, you know, heresy. Like, I don't think it's either. I just think it's it was a, it was a cool thing to like conceptualize bitcoins, scarcity, bitcoins, you know, supply issuance, it's monetary policy. It. I mean it will fail eventually. I mean, if it hasn't already technically failed now but like. I mean, it's a great thing to understand. Like people oftentimes will just like look at search Bitcoin or look at like Robin Hood and it's like a chart and it's just like bubble crash and they're like, you know, whatever that thing is. But like if you understand math like at the not a basic level but a little bit more than the most basic level and you look at a log scale Bitcoin chart and then when it halves, you're like. Well, you know, this is maybe there's something here. Yeah. So again like, I don't. I think the debate is blown out of proportion. People are calling Plan B like names and going back and forth. It's, you know, I don't really even care to get into that. But I think it's cool. It helped Orange kill me, right or wrong. So, you know, I'm a I think it's cool. I'm thankful for that. You know, him publishing it. Yeah, it's greatly spurred my thinking, I think. A lot of my work over the last three years has been around trying to trying to like pressure test the stock to flow concept that just the idea and you know I I write about increasing scarcity and I think that is the engine for Bitcoin's growth. Dylan you mentioned this earlier that like the Havings, the Havings are a supply side event but they also spur demand, increase demand and and that's very interesting because. From Bitcoin's point of view, like to anthropomorphize Bitcoin, how does it induce adoption? It it can't control demand, but it can control its own supply schedule. So it has this function of okay. Well, I'm going to you know you've got your your supply line and your demand line and they meet right at the Marshall Cross and prices set where they where they meet but. You can move the supply line and that's the having. The having is this this prime mover to to jokingly refer to the religious connotation. The prime mover of of adoption, because it creates the supply shock changes the that Marshall cross that one line gets bumped in a direction that causes the price to to have to rise and that whole. Cycle creates you know a speculative bubble that in that brings in an incremental slice of the adoption curve. Some of them get washed out because they speculate and don't understand. Some do their homework and become sat stackers. That's what we've lived through for 14 years. So increasing scarcity to me is the beauty of Bitcoin. It's the adoption engine for Bitcoin and that's a fundamentally a stock to flow related concept. So I think it it greatly spurred my thinking. And you know like if you're excited for the having, like who's? Who's excited for the having? I'm excited for the having. Why are we excited for the having? Because there's reduced issuance at that point in time. There's increasing scarcity. The stock to flow number is going to go up at that point in time. That's why we're all excited for the having. And so if you're excited for the having, you are in a way a believer of the stock to flow idea, not the model, just the idea. As. A, as a Bitcoin miner, I want to say I'm particularly excited for the having, but I I think I'm well positioned to to survive the initial. And I do think completely agree because I think I do understand what you're trying to say, Jesse. But I do think we have to be very particular with language like there is not a supply shock, there's a supply inflation shock, right, Like there will, yes. Like you're not reducing the amount of Bitcoin and reducing the amount of issuance and that's where I think. Actually, when I think the critics of stock to flow and particularly Plan B's model, they really, they really lean into like you can't predict demand. It's like, yeah, obviously you can't predict demand. It's going to be volatile in the short to medium term. But over the long run, you'd be pretty certain due to the properties that Bitcoin has as an asset and then the properties it has as a network like there's going to be increasing demand because that's fundamental utility. As a store of value asset and then as a distributed network that can act as native payments layer of the Internet. And so unless you're living under a rock and not able to think multi decades into the future like the the critics say you can't predict demand are. I would I would put forth either stupid or disingenuous where it's like yeah obviously you can't predict demand like in a particular month day week year even but. And if you understand what's going on here, you can essentially predict out that, yes, there's gonna be significant demand for Bitcoin because of the utility it provides in many different ways. You just get the nail on the head. I was trying to rational or to understand where the the like animosity comes from something like this and it's not actually an intellectual thing, it's an emotional thing that anybody that actually thought initially that stock to flow was the price. They show it through the emotions that they're pissed off that somebody's looking at it. Because anybody that I know like you look at, we talk about safe. And there's other people within our friend group that like saw. It's like, oh, that's interesting. But they never subscribed or like thought, oh, the price is going to hit this number. It's like that's something. But you could see how somebody would be very annoyed or angry if they initially looked at that and even made a like personal economic calculation or tied to it. So it's just like, I thought that came to my mind when you you reference like, where somebody would be upset. But Dylan hit on a key point and this is where, like I most appreciative Jesse, like what you put out and just some of the content you do. It's like part of the show. The realization is we've been in this bubble and I was thinking about this the other day like we've been looking at Bitcoin 5. But I don't know, you know, Marty, eight years, like you just look at this stuff and your whole kind of like mine starts to shift on how you look at the asset, other assets. You know, we we shit on 4/01, KS and bonds and everything else on the show. It's just like, so we we forget what traditional finance and individuals, how they're approaching the space, the frameworks they're using to look at it until like as Dylan described, it's just like a framework to look at it and there's a certain amount of stock to surround a supply. It changes, price may go up. Interesting once you pay more attention. That's as simple as it is. And like we look at like over time, the new vintages of bitcoiners, whether it comes in this year, next year in in subsequent years, the content needs to get resurfaced. The good content, the right content, the right framework, because it's important. Like if it's by definition good, then it's Evergreen in this ecosystem and it's gonna be important to like bring and I think that's what Jesse was attempting to do. And it's actually like in my mind, you can share if you want, Jesse, it's like you almost like. Everybody like fell into the trap. Like you put it out there. It's on purpose, like you don't believe in the exact number targets, but it's like, hey, we should talk about this. And instead of realizing it's like everyone up in arms and it's like you fell in the trap and I was sitting here and everybody's talking about exactly what he wrote about, so. Hey guys, I gotta, I gotta run here. But it was a hell of a rip. Excited to see this one published. Don't really have anything else on my end, but it was fun and let's do it again. Yeah, Dylan's always awesome having you on. We'll do it again, yeah? Just gotta keep crossing that dude. Thanks. Jesse, did you said the trap intentionally. Not really. I knew that it would trigger some people. I knew that it would trigger all the stock to flow haters. That's a trap. I actually, I actually think that at some point in time. This becomes a non taboo topic again and and I think a part of that process is disentangling the whatever perceived sins Plan B committed from the idea of stock to flow as it is laid out in Safe Dean's book. And you know, I I think that how this could play out is the having. The havings keep happening and price keeps drifting up in the 12 to 18 months following the havings and establishes a new price equilibrium in that four year era. And and it happens again and it happens again. And at some point that pattern is pretty hard to deny right? Like the having seems to move something whether it's whether it's purely psychological because the, you know, impact of the reducing. Block reward size change, you know, that gets smaller but it still triggers some psychological behavior in the populace. The fine, maybe that's part of it, but I think that, you know, I think the mechanics of the having increasing scarcity will continue to cause some bull markets post having and then and then seeking an equilibrium. For the rest of that having era and that is the stock to flow idea. So at some point that has to reenter what's what we're allowed to talk about by whoever is policing the narrative and I decided to you know since stock to flow has been so important in my. Education and journey in terms of building my conviction and stimulating my thought about like what? How do these mechanics work? I have a whole thread on what happens with the supply, how the supply shock manifests for new supply issuance and how that eats through available for sale supply in the 12 months following and having and how that those mechanics drive a bull market. That came from, you know, me trying to understand these this stock to flow mechanics at the having and how that plays out. So it was important. It's been important for me. I think it's a key part of deeply understanding why this thing is the best savings technology ever because it has this unique property of an increasing scarcity that no other asset out there can match. And so we have to appreciate increasing scarcity. And and the fact that that delivers value appreciation over time. And that means talking about stock to flow as an idea, not as a model, Not trying to put the man or the model on a pedestal, but bring that idea back into the conversation. Yeah, again, I'm going to grab my my caveman club and just say number of Bitcoin produced per block go down, demand go up, number go up. It's pretty goddamn simple. People convention over this there are doing. Yeah. And and actually that's sort of one of the arguments against doctor flows is like don't think about it, just just think about 21 million and and think about the absolute scarcity at the end of this increasing scarcity sequence, which is the easiest thing to think about it and a totally valid thing to do, but. You know, the reason I think this is the fastest horse is because it has this increasing scarcity on the way to that terminal absolute scarcity, and that's exciting. So let's talk about it. Yeah, Yeah. And again, it's just all semantics like you you can never predict demand in the short to medium term. But again, going back to what I said earlier, like if you understand what's going on here. On the asset side and on the network side, it's pretty obvious that nothing can do what Bitcoin can do in both regards and that is going to drive demand over the long run. It's actually it's funny, like we talk about the difficulty adjustment being like a beautiful feature, right? Or like absolutely necessary, but like the thing we don't, we it's in the narrative but we don't fully like. Brass and I don't know when we will, if we ever it's like the supply shock of every four years and why it was programmatically set up and in the 50% reduction like in the the the flow of like awareness and the dollar, you know appreciation and how it goes back like I think that obviously has a like if it didn't exist what what is that like demand and awareness look like and does it do we end up as success? I don't know but I know we like it's been discussed but I don't think there's enough. Understanding and I don't know if if you guys like have thoughts or if it's even like you know point anybody including myself in a direction of like that being discussed of the supply shock every four years of 50% and how that just you know sends it out into the awareness via price function comes back and it does it every four years is how that was necessary versus anything, any alternative. Yeah, I I think it's the marketing department for Bitcoin is that otherwise if it was a a smooth scale, you know smooth issuance schedule, then there's no moment in time to talk about it, to think about it to to have something jarring happen. So I think that it, I think there was, it may be unintentional but genius inclusion in the issuance schedule. I don't know if it I mean it's it had to be intentional in my mind. Yeah, of course. And I think she actually touched on it like it was like you start a 50 Bitcoin, you cut it in half at 210,000 blocks because you need a way to distribute the supply and a lot of it in the bootstrapping phase to incentivize people to plug in their minors. Right. Earlier adopters too, like that's how you that's the promise for the very earliest cohort of like get your supply now because it gets way more scarce in in four years like. That that's the marketing department for Bitcoin and. It was his way to dispel or their way to dispel efficient market hypothesis. It's like you remember in that. Having it's already priced in, it's already. Priced people In 2023, it's the same thing. It's like 23 priced in. That's part of the hate for, you know, it's weird because there's this coalition of of people with various reasons for hating the stock to flow model. The bulk of them are people who put too much, too much stock in that model and bet on it, right? Like they hundred X long, you know, because we're going to 100K. So they got burned and they're pissed. That's a huge portion. Then there's the like statisticians who find issue with the specific model okay, yeah. They're of a small and very vocal group and they've got great receipts, you know, because it's hard to argue with that and I don't argue with it. Like ultimately the the flaw, the flaws in the model are are real. There's the time based thing that that I take some issue with and and then there's the EMH people, people who are coming from traditional markets who think it's not possible for the having to matter because it is known information in advance. So therefore it must be priced in. That's the efficient market hypothesis in Bitcoin's entire 14 year history. Flies in the face of the efficient market hypothesis because why has it appreciated over time? Why didn't it it instantly go to $30,000 per coin? Because you saw the issue in schedule ahead, so why didn't you price it in? That's that's not how it has played out. I mean, it hasn't played out like that in any market. But they still teach you the market. Like correctly in 2007 that was the case. At Stanford Business School they teach you the weak form efficient market hypothesis. And at the time I was like this doesn't seem right, like how do you get an edge in a market, but that's what they teach you. This is the insanity of the Fiat world we're coming up on almost two hours here. But I do think if you guys are open to it, touching on the other controversy that you were thrust into yesterday, because I do think it's good. Teaching opportunity to really help listeners that are coming in and learning about Bitcoin and have the question of why Bitcoin not crypto to really show the perverse incentives that exist in the crypto market. So Jesse, well, I'll, I'll find the tweet, you can explain it, then we'll watch the video. I I came across a video of. Meltham or however you say her name to her credit, to her credit, she I think was explaining why there needs to be regulatory intervention in the crypto VC space as it exists. However, she is kind of roughly in that world. She's an Angel investor in crypto things. She may not directly work for a fund, but that's part of her world. And she's explaining the game. She does a great job of articulating the game that crypto VCs are playing at the expense of retail investors. We got the video playing. We're. Here, nothing on our end. What is an exit event? A lot of the venture capital that has come into crypto more broadly as an asset class has come because there is liquidity in investing in tokens and we can ignore it. We can pretend it doesn't exist. But incentives, Dr. behavior, and I think one of the big incentives we've seen, we've seen play out in the crypto venture space, 35 billion. In LP Capital last year went into funds. Why did that capital go into a lot of these funds? Because they're able to deliver cash back to their Lps by investing in new L ones, L twos. Perhaps things that have a token that enable this faster turn on getting an exit event to liquidity event, that's where the challenge really is for the Bitcoin space. So that's why I'm excited that we have ordinals with BRC 20s because they actually start to maybe enable us to generate new streams of revenue. What is that? Yeah, Marty, how does that make me feel? I want to be a preface this with like, yeah, I think you described it well. Nelson was just describing the game. But I do think there are some misguided notions that B, RC20 tokens and ordinals coming to Bitcoin will be additive to Bitcoin because there's going to be these quick liquidity events that are possible in the Bitcoin ecosystem. Like I don't think anything in the Ethereum ecosystem, Solana. The E RC20 world or the NFT world has really proven to have any long staying value. It's all, in my opinion a product of late stage Fiat, people speculating to make a quick buck. And the nefarious thing here is that it's institutional capital. Knowing that they're dumping on retail making insane gains, good for them. Returning capital to LB's as a venture capitalist myself, like that is the goal and they are succeeding in that goal. But yeah, this gets into like the Gray area of ethics and morality and whether or not this is something that should be normalized and we should be championing on Bitcoin. And I'll make it clear, like I don't think, in my opinion, I don't think ordinals and B RC20 tokens really have long staying power. I think they will pump. I think there will be a lot of fervor around them this next cycle. But at the end of the day, I think Bitcoin as a monetary asset and a payments. Like layered protocol is going to be the killer app and we don't need any of that stuff and it's really catered towards very niche markets that it is very clout Chasy to me all that. Stuff. This is what you're describing is what Dylan was describing earlier about getting out on the risk curve. I I I'm glad you brought this up. Not to the sense to say anything bad about anybody, but more to drive awareness that. Over these cycles we see consistent narratives change and we see like all coins continue. We saw the ICO buzz, St. O's defy and when the price kind of like we talk of these havings, when the price goes out then like all the activity dries up because it's all speculative and you pump the bags, you get this additional capital in. You don't retail, it's rent and repeat. But you have to change the narrative over time to continue to let go because over time people catch on. And so you see you know part of this is like going and. And it's basically affinity scamming. We've seen it for the past thirteen years in Bitcoin, where it's the BRC 20 and all these other, you know, acronyms. And I think it's just important to discuss here to people as they go. And it's like, OK, I understand the Bitcoin signal, but now there's interesting things happening on Bitcoin and I can get a higher, you know, appreciation of return on my personal portfolio or whatever if I buy this token versus just the underlying. But the reality is you just need a native unit. They're all competing with money. Bitcoin is the best form of money and that's why you just want to hold the underline and not engage in any of this like crazy stuff. So if we can help anybody in doing that, whether it's via the show or reaching out directly, that's what our goal is. Not only to get you a whole Bitcoin, but not to buy all this other crazy shit. Yeah, and to make the other crazy shit a little more explicit, Melton on Pomps podcast describes the. Shit, coin waterfall. The mechanics of it of you've got your when a when a coin is launching you start with your pre presale and it's ultra insiders. It's all the big money in crypto who have had success backing projects and you get them in a room and you say we're going to give you portion of the supply at this price and they're like okay, we're in and then. They hype it up to the next layer of the onion, the the not quite as inside insiders. So then you do your presale and you charge them 10X the price. So suddenly the the, the ultra insiders have already made a 10X profit on you know, unrealized but great, everybody's happy. Then you go to the next layer and you do your sale. And charge 10X the price there. So the ultra insiders are made 100X, then 10X, then, then you get these new people coming in and then you go to retail and set the price high. Everybody who's participated so far as an insider hypes it up, talks about how it's the next big thing. It's going to change the world. Everyone's going to, you're going to kill yourself if you miss out. And that's them exiting, that's them selling their cut. To retail when it finally hits the market after all this hype has built up. And that's a 12 to 18 month process. Rinse and repeat. Retail gets fleeced. I'm just going to name names like Novo during Terra Luna like he has a Terra Luna tattoo which he marketed and showed off on Twitter like a couple weeks before Terra Luna officially blew up around all time highs. It quickly went to zero after reaching all time highs and. Apparently weren't on the street is he only gets a tattoo when he books a billion dollars on the trade. So he's already like booked that trade, pumped it to the markets and. Yeah. And it's, I appreciate like Marty when you get a little, you get a little Marty Jones on like these people or like the situation because when you really boil boils down like what Jesse just described as we talked about early, like the guy that was a bagger, that's like I can't mess with this stuff because it's kind of crazy. It's like, imagine if the lens was, oh, this is how I can increase like my purchasing power or like my life. My life will be better off if I just have this. But he, he doesn't understand that because of everything that Jesse just described and we're talking about and what, you know, all coins and just like this kind of like risk curve, we basically turn into the Robin Hood of vacation of like, maybe I buy, maybe it ends up 0. So there's just so much like noise out there. And so it does have to be like called out and there has to be like. I don't know. There has to be a recognition and continue to like explain it because it really like hurts a lot of people damages whether you know, think about how many people are holding zeros because of FTX block by cell system list goes on and on and will continue to go on and on because it's just a information asymmetry and this stuff is new and so there's people out there to continue to sell basically snake oil. Yeah, and I'm I've reached a point in my 10 years. Of being in this market and seeing many of these cycles where, and I mean I have actually been very ardent and calling the stuff out, calling them shit coins, saying that none of this will amount to anything. But for like the 1st 8 to 9 years there was always that that small little doubt in the back of my mind. Like maybe these shit corners are right, maybe there is something here, but in the last two years it's become abundantly clear. But no, there will be nothing there you don't need. And their tokenomic schemes, You don't need their block chains, you don't need their functionalities to achieve the goals that Bitcoin has set out to achieve. And you can even make the argument that even if a another token or project markets that it's not really trying to achieve the goals of Bitcoin, it's doing something completely different. If you do enough research and dig into the fundamentals of the problem they're trying to solve, they don't need a blockchain or a token at all. They're just trying to. Affinity scam, like Michael said, to use the new buzzwords and the new technology to bamboozle people into believing that it is the solution to the problem they're proclaiming to solve. And yeah, I've I've reached a point where I do think a lot of the people pushing these scams, particularly those that have been through many cycles, are reprehensible humans that should know better yet. For some reason or another refuse to stop scamming people and they do need to get called out. And as a free market capitalist who really doesn't want the SEC or the federal government to come in and over regulate and throw the baby out with the bathwater with Bitcoin and lumping it in to all crypto like that is how you regulate as social signaling and self policing and within this industry that's something. That Bitcoin has been much for is attacking the self police and just being called salty individuals who are mad that other coins are outperforming Bitcoin within certain time frames. But no, it's like for me personally, I don't think I'm wrong, Could be wrong. My gut is telling me 100% right like these people are scamming retail investors. They're getting insane profits returning it to Lps, get on you as a venture capitalist. But at the end of the day, these people have nothing to show for it except their returns and the ravages of the retail investors they burnt along the way. And it's something I will not support publicly, have never supported publicly, but will be more vocal in calling out moving forward. Yeah. I think very well said. I think at the end of the day this is like we're in the financial service business. We think about like what we're doing. You mentioned on the venture side or you know we're doing it on ramp and it's all built on trust and it's something that recognized very early on at Unchained. Folks would come in and I felt like kind of a little arrogant or less very bold to say it's like you found the signal here. If you just decide to say stay or not, it's up to you because during the bull market, right, people are coming in and they're doing all the sorts of sorts of stuff. They're running on block by either going to Celsius, it's like. We want to help on like the journey because we can help along like the years there of like how do we we looked at all this stuff and we can tell you like this is the plot hold it's almost like a one way hash functions like you hear it and you're like oh this actually makes sense in the direction of like oh I can I understand it where it was hard if you didn't know what you were looking at. And so even to the extent on our side like on the on ramp from an institutional family office individual if you're looking at this and you're like curious like I think there's something these guys are saying. But I would like to learn more like you can come book a consultation, jump on a call, walk you through it. Because over the three years while we did this and a chain like from personal anecdotes, there was people that were able to say 500 plus BTC off of Genesis Block 5, paying off the loans, you know, self custody versus leaving on Celsius like there's real, there's real like. Affect if like taking action whether it's via the pod, talking to other people, going on chain, going on ramp, other other trusted parties, we're not doing anything because reality is like all these people are using individuals that have less knowledge as exit liquidity and it doesn't have to be that and that's part of like this whole show is just like education and being able to share with other individuals. So those mistakes don't happen and overtime once it gets to a certain. Like they were afraid to do it because you're going to get called out ahead of time. It's like do I really right now it's still there. We're like the Intel minority because crypto. If you're Bitcoin only, you're still I think close minded in most people's view. And then the whitewash history and like everybody was Bitcoin only, it was so obvious the same way as everybody's gold only it's not copper or aluminum. So we're in this weird period and we're just going to continue to do the part. We're going to win Marty. We're. Winning, guys, we're winning. I'm. I've never been more bullish in my life. Like, it's all there. We just got to keep trucking. Keep going. Bitcoin is an idea whose time has come. Like even like piggybacking on that. People have been shitting on lightning for five years and I said this on a rabbit hole recap yesterday. But I think it's important to reiterate here is a lot. Of what you're seeing in terms of people going speculating in shit coins, people shooting on Bitcoin for it being relatively slow, low transactions per second and scaling in this layered fashion, which hasn't had immediate success, is driven by an impatience that has been normalized in the Fiat economy. We are building cathedrals here, as we said a couple weeks ago with Alex Leishman. Like it takes time to build out Bitcoin at the protocol layer. It takes time. To build out the Lightning Network from a liquidity and no topography perspective and then from a tooling perspective, like it literally takes time to build out these cathedrals to the point where they have utility in the wider economy and people who point at bitcoins volatility and say it can't be a store of value, it's like, do you really expect the best money? That humans have ever come into contact with? That is a foreign concept to most. Being a digital currency run on a distributed network is going to monetize overnight. Like your impatience is blinding you to the fact that this volatility should be expected. Similarly with lightning, like, oh it was launched in 2018, Why is it not embedded in everything in every online company today like #1? Space symmetry of information. People simply don't understand Bitcoin, let alone the Lightning Network and how it interacts with the protocol. Layer #2. It literally takes time to build out the tools to enable people to build on lightning, and that's what we're saying. And that's why I'm so bullish right now because I do think we have hit a tipping point in maturation, particularly for the Lightning Network, where the tooling is at a place where it's going to be a lot easier to implement the stuff into online services. Don't be impatient. People want, it's the Fiat mindset we want quick, bang, bang, bang. It's the the quarterly mindset. Lower your time preference. I know it's cliche, but like again, we're building cathedrals here. It is going to take time and there are scammers out there who are going to take advantage of your relative impatience and say, hey, you don't like that with Bitcoin. You don't have that with Bitcoin. Here's this token for you. It can do it, but at the end of the day it doesn't have the fundamental base layer necessities primitives to actually make it a potential long term success. Because for these things to be successful in the long term, they need to have sufficient distribution of full nosed sufficient distribution of hash power. They have to be proof of work chains, which people don't realize yet. They have to have distribution of private key ownership and then. Fractal that up to other layers as well. It takes time and people are trying to leverage your impatience to stack more Bitcoin themselves. We need more Uncle Marty's if they're. If they don't they don't take advantage of your relative you know patients they'll take care of. They'll take advantage of your relatives. So you need to send them you know for 4:11 send them to listen to the pod. Send them to us. We will. We will support and helping because it. There's a lot of bitcoins that get this stuff, but there's a lot of people on the external side that are going to get the next way to having comes the price appreciates and the next people are going to take advantage of them. And if you can, if we can get ahead of that, everybody's going to be better off. Yes, I want to apologize for looking like a complete slob today. I had a bunch of calls this morning. I'm not able to spruce up. I'm not able to shave. I'm sweating right now. I went from a rainy day to a beautiful sunny day here over the course of the last two hours, but it's a great rip. Yeah, it was great you brought you're fired up, so all we can ask for. How can you not be fired up? Baby, we're changing the world. Let's go. Yes. Weekend at the Shore. Need to go. We'll see you next. You're coming back to Texas next. Next week. I'll be in Texas next week. We'll be recording in person. Michael and I will, at least. Nice. Hopefully that'll be fun. Yeah. Just to be here soon enough. It's nice. It was at Cooper's yesterday. Parker having lunch? Look back. Your brother walks in. How's it going? I mean, Justin's going back in town. Bitcoin capital of the world. We've been the Austin dream, but they they're passing a housing ordinance to allow for smaller lots like San Francisco, based on San Francisco. That's I don't think we should be tracking what San Francisco is doing so. People are celebrating it and it's a little concerning. All right, something to be aware of. We'll see you guys next week. If you're liking the the show, please subscribe. If you're listening on the podcast app, subscribe there. If you're listening on Fountain Podcasting 2.0 and you're streaming us Bitcoin, leveraging the network side of Bitcoin to give us sats over the Lightning Network as you listen, thank you. If you're on YouTube, hit that subscribe button, hit the notifications and share this if you're an institutional investor. A high net worth individual or just somebody who's looking to educate others about Bitcoin? Please share the show with them. Like Michael said, we're really trying to help get ahead and prevent people from getting confused and bamboozled number #2 #1 to try to get you to realize why Bitcoin's important and why it's going to be extremely valuable in the future. Absolutely. We'll do this every week. Yes, with that, I'm gonna hit the beach, have a. Great weekend guys.