The Last Trade E014: Why Bitcoin is the Ultimate Form of Value Investing with Brian Cubellis

What you're telling me is that music is about to stop, and we're going to be left holding the biggest bag of bodarous extras ever assembled in the history of doubtless 1974198792972 thousand. 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. The button has been hit, gentlemen. We've got four of us in the studio today. It's great to have everybody in person. Jesse, how are you? Marty. This is some production magic by Logan behind the the computer back here in the studios, in the Bitcoin Commons in Austin, TX. Big week down here in Austin. We got the Bitlock Boom conference this weekend, tomorrow and Saturday. And they're. He's an army of bitcoiners in town. First slew of events. Activity started last night, rolling into today. Energy is high, obviously. We got people in town from all over the country, all over the world. One of those being Brian. Cabela's Brian, welcome to the show. Thank you for having me. Great to be here. Welcome to the Bitcoin capital of the world as well. I think that was true. Great to. Be in Austin my first time, first time. The big block boom. Pump for it. First time big block. Boom. Yeah, first one. That's the first one I'm gonna miss. You're gonna be here for a majority of that. Don't sell yourself, George. No, I have to leave tomorrow morning. Oh, really? Hey, I have a wedding. Oh, I thought. You're leaving. 1st I'm gonna miss. I've been to everyone. Gary, if you're listening, I'm deeply sorry, not disappointed because it's not something I can control. I can't control when two people decide to get married. It just so happened to be on the weekend a bit block boom. But it's a great, a great conference. You you should. You made it to the one that really counted, which was the 2020 where it all started. Yes, the. Conference in the middle of of COVID lockdowns. We all came to Texas. Some of us got COVID, but we all, I think everybody survived. Not that we lost anybody, but we're here. Jesse's in town, floating. Yeah, I flew in 5 minutes before the podcast. It's great to have you. Sorry we stuck you in this tight little corner here. For people who can't see, Logan spun up a little picture in picture where it looks like I'm part of the crew, but it's just my disembodied head. When you said you you flew in or just flew in, it hit me with Brian was saying coming in from New York, I was like, I don't even, I can't own do it. Just as how was the heat when you stepped up the flame? Yeah, it was a ton of bricks coming out of the coming out of the airport. Wasn't wasn't fully. Prepared for it. Humidity. Straight to the face. But yeah, like 110, that's my Uber driver was telling me like, oh, it's going to be really cool today. Looked at my weather app, it's going to be 110. I'm like, OK, I guess that's that's cool for here for now. I do love that. I love that departure out of the ATX airport. And and you hear like the crackle noises and it's like, ah yeah, the humidity. Suddenly your hair picks up and you know you're about to eat some BBQ. It's. It's a character builder gentleman for sure. You know, I was. I went on a 7 mile walk this morning in the heat. You know, it's nice to get a good sweat, and I don't want a humble brag on the show, but I guess I just did. You did. I mean, I like in, I like in the heat and and when individuals complain about it to Bitcoin's volatility, it's just like a it's a it's a filter like you you if you can't handle the heat, like should you really be in Texas? Like what do you stand for? Yeah, what's the old city? If you can't handle the heat, get out of the kitchen. Can't handle the heat. Get out of Texas, I. Think that's how in the place this is a inherent like friction, there's a you have to jump. Yeah, you get soft. If the the weather was always like San Diego, it it would be a different place. I mean, people from California are really soft it. Seems to be true. This isn't a weather podcast or a Manisphere podcast around here to call PeopleSoft. We're here to talk about Bitcoin. Brian, once you introduce yourself, you had a strategy and research at On RAMP. You've been doing some incredible things behind the scenes on the research side, on the content side, once you give us a little bit of information about your background, how you got in a Bitcoin and why you decided to join the On Ramp team. Yeah, yeah, absolutely. It's been, it's been an interesting and long journey. I mean, I, you know, when I was. Back in undergrad, so I graduated 2014 from from University of Virginia. And you know, at the time I majored in econ and history. And at the time I didn't know that that would be sort of a formative foundation for eventually understanding Bitcoin. But, you know, I didn't really come across Bitcoin in a real way until much later than that, you know, 20/17/2018. But I think that that was formative in terms of just getting my bearings on, you know? History and and you know I took multiple courses around like the history of technology so I already always had an appreciation for innovative things and and trying to you know dive deep into into those sorts of things and and from there you know I I didn't really know what I wanted to do after that right. Like coming out of college, I really all I knew is I wanted to move to New York and be in the finance world generally, which was sort of the case for a lot of people in my circles. Like that was just kind of that was the route, right and. So I applied to, you know, a bunch of different banking positions and ultimately found my way to Brown Brothers Harriman, which is a large private bank headquarters in New York, but they've offices around the country and globally. And there, you know, I was there for eight years. And so I was, you know, throughout that period became very ingrained in sort of the traditional finance world. And at the onset I was actually more on like the relationship side of things and. Pretty early on in that, in that role I I kind of decided that you know, I was much more interested in sort of the investment side of of the business. So I was within the private bank and there's a few different business lines at Brown Brothers, but the private banking business line is you know, lots of high net worth clients, some endowments and foundations and it's unique in the sense that it's largely like a discretionary model. So you know. Clients can sort of like opt out of certain strategies or investments, but for the most part like they take the, the investment team's best thinking, right. And so I eventually moved away from sort of the relationship side of things and got onto the sort of centralized investment team within the private bank and the small flat team and and was you know, working directly with our CIO and it was a really just formative experience for me because you know, I was. My early 20s and and you know my day-to-day was effectively going out and diligencing you know third party managers. So anything from you know hedge funds to long only equity strategies, private equity, you know I was a generalist and we were all generalist. So got to work sort of across the asset class spectrum and really every day I was just sort of like picking the brains of some of the smartest investors in the world And so along that journey, I mean. The Brown brothers like I said is a very old institution founded in 1818. You know they're very generally like conservative in in their in their thinking and had a very value oriented investment philosophy and so that's that's sort of how I honed my own investment philosophy was through that lens of value investing and and you know generally we were all sort of. Praising at the altar of Warren Buffett to an extent right, like Warren Buffett, Ben Graham, security analysis, all that stuff, buying things you know cheaply and and and basically understanding the fundamentals in the long term trajectory of something. And so that was, that was sort of how I I honed my own personal investment philosophy over that time was by talking to you know some really smart people and and ultimately you know making investment decisions and allocating capital on on behalf of our, our private clients. And so, you know, I, like I said, I didn't really come across Bitcoin until sort of late 2017, end of that bull run. And, you know, I had buddies who were like pulling out their Coinbase apps and like, showing me this thing. I was like, OK, seems interesting, but I don't really know what this thing is. I think it was around that time that I actually heard of you, Marty, from The Barstool Days, Tales from the Crypt. And that sort of prompted me to take a take a. Deeper look honestly and like I said, like I had that sort of history in fascination around new technologies and innovations and it sort of the whole area sort of struck me immediately as like there's so much intellectual capital moving towards this thing that it was hard to ignore. And so, so from sort of 2017 to 2021, I was still Brown Brothers and you know. Having that value investing lens, but sort of on my own personal time trying to apply that lens to Bitcoin effectively. And you know it's not entirely intuitive that the value investing framework could be applied to something like Bitcoin. Because if you, you know, if you read security analysis, you go back to all these sort of frameworks, you know they're they're really more geared towards securities, right, like cash flowing businesses and so. It was my only lens though at the time. And so like, you know that that's what I had been learning and experiencing throughout my career. And so I just sort of force, you know, force functioned it. Force applied that lens to this thing that was Bitcoin and ultimately found that there's a lot of sort of foundational tenants of value investing that really apply to the Bitcoin thesis and and being able to understand Bitcoin. And we can we can go more into into that but just to sort of continue the story a bit you know sort of end of 2020 I guess early 21 or no end of 21, early 22. I kind of realized like you know, I wasn't I wasn't changing hearts and minds within Brown Brothers like it was. I would try to talk to my CIO and and you know chief investment, you know chief strategists and economists that that were there. Talk to them about Bitcoin and just, you know, pick their brain on it and see if they were even open to it. And it largely largely fell on deaf ears. And so I kind of realized at a certain point, like, in order to really embrace this thing and, you know, not only learn more about it, but just be serious about it and more so align what I was becoming very passionate about with sort of my occupational trajectory. Like I needed to eventually leave Brown Brothers and so. Actually before I left, it was interesting because there was, there was sort of this like working group like a digital asset working group at Brown Brothers. It wasn't actually within the private bank. It was with in another business line, our investor services business line, which actually got bought by State Street like a year or two years ago. But that that business line was more of like a global custody business. And within there, there was a working group that was just thinking about digital assets, but. And I and so I talked to them and and like, you know, tried to see if there was a fit there where I could help them better understand this thing. But they were so entrenched in blockchain, not Bitcoin at the time and like distributed Ledger technology and it was just kind of a nonstarter and and I I didn't want to be in the position of having to really convince these people that of something that I I thought to be true and and to be worthwhile. And they were kind of just, you know, going along this other path and so. Ultimately, I left and started figuring out how I could sort of jump head first into Bitcoin and sort of the broader digital asset space. And I had a buddy who was at Coinbase at the time and he honestly pinged me and was like this new position just got listed. Seems like it's kind of up your alley and so. I applied to it and and was hired as the first analyst to a dedicated research team within the institutional line of business at Coinbase. And to be honest like and I've told you this guy, you guys this before but like you know at the time I my my main conviction was was with Bitcoin. But you know at that point it was sort of me doing this on my personal time. Like I didn't feel necessarily like an expert on any of this, and so in some ways. Coinbase opportunity was interesting to me because it would force me to, you know, test my hypothesis, right, test my own thesis and and really challenge myself to look at the rest of the crypto space and you know, do actual diligence on it and and ensure that like, I'm not wrong about this stuff and that the rest of crypto, my my skepticism was was rooted in reality. And so in that sense it was a formative year. So, so I was there for about 12 months. And it was a really interesting experience in many different respects, which I'm sure we'll get into. But the main one just being, again, codifying my own thesis around why Bitcoin is different. And I always sort of had this trajectory in the back of my own mind, like I ultimately want to be working on Bitcoin only. But you know, coming from eight years in Trid 5, didn't really know anything else. I'd only ever worked at one company like. Making that jump, it felt Coinbase honestly at the time felt like a safe bet because this was early 22. Luna Terra was collapsing, like entering a bear market. I was pretty confident that like Coinbase wouldn't go out of business within the next like 12 months. And so in that respect, it was a good opportunity that I felt confident in and always sort of viewed it as like a stepping stone to to doing something in in Bitcoin only and then. Back in April of this year saw Michael and Jesse on your podcast Marty and heard about on RAMP. And it really sort of immediately resonated with me in terms of the approach and how you guys were going about it. Because throughout my time at Brown Brothers and at Coinbase, I saw the gap in the market like that white space of institutional capital. That's. Still on the sideline, maybe they're thinking about Bitcoin. They want to get exposure, but they're nervous for a variety of reasons, whether it's regulatory fears, custodial risks or just like a general lack of understanding. And so I thought the approach that Y'all were taking was spot on in that let's have a better custody set up. Let's continue to educate these people about this thing because it is complex and there is a lot of. Honestly, misinformation out there and misunderstanding generally. And so it just really struck me as something that that could be really, really powerful and so reached out to you guys and I guess the rest is history. And here we are. Here we are in Austin, TX, Michael Jill. I just, I think it's so interesting how Brian's story is is such a perfect little like microcosm of what's happening for lots of people in our generation in particular like. When you're working at A at a large private bank with 200 years of history, you're not going to get far talking about digital assets yet with leadership. Well and OK. That's one thing I want to jump It's Brown brothers been around for 205 years, Like to make it this far, they had to be pretty conservative, like you said, but also innovative in a way to be able to adapt. And survive for two centuries. They I'm not going to try to talk about like. Well like you you survive by by not being the 1st through the door when any new trend arrives or something changes. But you know you you move when the when the middle of the bell curve is starting to move right like. For sure. That's a big part of it. That's a big part of it, Jesse. It's like. The career risk associated with diving into something like Bitcoin, it's just not worth it to those people, right? Like they'd rather see it. They'd rather see other people try it first and make sure that they're not gonna be coming out looking foolish. Yeah, the gravity of being the managing team that's holding the bag when that multi century institution goes down, it's not, yeah, it's pretty heavy I imagine. I think I think this is really where. A lot of the weight falls on on your shoulders and and and not just yours but there's a lot of the opportunity and it hasn't been figured out yet in the delivery for these firms and how do you package what's happening here in a way to meet them. And we think we're starting to do that and and that's where a lot of the things that we're doing are intentional including this podcast. But we've seen glimpses of this Parker's writing graduated and suddenly is an excellent. Example of a Ross Stevens, a Michael Saylor referencing it before they made large positions delivering it. I think Jesse's content there's a lot of versions of this but it hasn't fully been put together in the right way for the experience that Brian's had to say okay. Now we can like create the right playbook and the right way and and it's different mediums, right. It's like just when somebody gets Bitcoin, they don't. Ultimately, they all come from different angles and. So that's the the rub. It's like once it gets figured out then everybody's just going to like fall in but it hasn't been done yet and that's really like the opportunity the the, the, the back end stuff is interesting, right like better custody, better client services, all the things that that still need to be done. But those those are like the table stakes. It's the the real like opportunity almost Alpha is being able to figure out how do you actually deliver this value, prop this opportunity in a way that somebody says, Oh my God, like. There's something here and it doesn't have to be a big position. It's just enough to like start looking at it because we all know whether it's the single individual on cash up that buys a little bit or it's an institution with, you know, whatever small amount basis points. Then everybody starts paying attention, and that's when it begins. Yeah. And and I and I think that part you know big this is a common talking point for me, but I think a big part of that is that the having cadence where you know the having implements this increased scarcity. The price drifts upwards. It's A and it turns into a little mini or not so many bubble and then you know crashes and we have a higher low on the on the back end of that. But we've had three of those and it's pretty easy to wave away the early days. You know the 2012 having who who really knows who's starting from such a small point and it was just drug money on the Internet. So you know. Wave away that one and then there's and then you've got two data points of the having happening in the bull market following. So you can't really rely on that if you're, you know, if you're thinking from like a traditional investment point of view. But here comes another one. And if, if it happens again, how many people start to view that career risk of continuing to ignore it? Becoming, you know, competing with the career risk of of of taking the risk of entertaining it as as a serious investment class. And so you know, over time I I think that the, I think that the difficulty of understanding Bitcoin trends down because more people are doing it, more people are creating content explaining it. There's a longer track record, more Lindy, and there's more data points of what happens when having rolls through. And that downward trend of of the difficulty of understanding Bitcoin is what we're, you know what we're relying on. People will get it as it gets easier to get and we just need to be a part of communicating why it's happening. One thing to pull a little on that thread of the the having and and you know the marketability and all the things with price appreciation is there was a share with Marty there. I got an e-mail from Name Cheap for Domains about the raising prices, you know, close to 10%, it was 9% and it hit me that we've seen the having and there's, you know been this consistent inflation since bitcoins existed. But it hasn't been like the inflation topic hasn't been at the forefront. And so thinking about that just contrasts next year when the supply cuts in half programmatically while inflation runs and it will run, we see it even though people say 3%. It's just going to be magnificent to see just in real time that happened. Well it's funny because the last having April, May 2020 never was exactly, I forget, but that was right at the beginning of the massive monetary base expansion and diving up interest rates post COVID lockdowns. And so we have like 2 havings book ending like the the beginning and the end of of that saga. 6 trillion at that time 6 trillion printed and and the mainstream point of view at that time it it was May 2020 was that there wouldn't be any inflation from stimulus like that was still the firmly held belief of everyone except these crazy bitcoiners who were saying you can't just print a bunch of money and not expect inflation to creep through the system And then we weren't even yet at inflation is transitory at that point. That came a few months later. So, you know, I think Michael's right that the, in a way the Overton window of is inflation, a part of our landscape has shifted in this last four years and so now we're going into a new. Can we play the J Pal clip? Do we have it? Did you get put it? I can send it to. Logan, send it to Logan. But before we even get into that, like the J Pal clip. Ever referencing was I think it was represented from Nevada asked him why the Fed targets 2% inflation, Like why did they pick that number and his response was pretty funny. But beyond that, this week, Harvard economist Jason Furman wrote an oped in the Wall Street Journal saying that the Fed should target 3% that was picked up. On social media, most notably by Paul Krugman, A Blogger for the New York Times who likes to think of himself as an economist. And he said yes, we should be targeting 3% inflation. So again, going back to the Overton window shifting, it is even shifting at the academic economist level where they're saying that the Fed needs to target 3% inflation instead of 2% and just the arbitrary nature of picking. These inflation targets out of the hat is astonishing #1, but #2 the the impact and like that's a 50% increase of the inflation rate that you're going to target and that has material impacts and the speed at which the purchasing power of a dollar decays. I believe the half life of a dollar with 2% inflation, so like 30-4 years at 3% drops down to like 22. Yeah, 2223. And so I didn't know this fact that Zero Hedge tweeted about this this week of where does that 2% inflation target come from? Like this, this law. Yeah, it was 0 Hedge said New Zealand in the 1980s. It was just like a thing they tried and and that became, yeah, oh this, this little experiment from 1983 to 1988 suddenly becomes in New Zealand, suddenly becomes like the hard, hard and fast rule of economics, globally, indefinitely into the future. How the hell did that happen? And it just shows you how arbitrary it really is. Well, not only is it arbitrary in the context of the Federal Reserve, the Federal Reserve has two mandates, price stability and. Making sure that that unemployment is full employment and price stability a 2%. They're doing a magnificent job, by the way. What do you mean not just being physicians? 2% inflation target or 3% now inflation target. It's a literal double speak, like their mandate is price stability, and they attempt to create price stability by targeting A perpetual inflation rate of two, or now potentially 3%. Which over a 33 year period is extremely unstable. It literally decays the purchasing power by 50%. Yeah, and. And that's where all the charts from What the Fuck Happened in 1971 come from. For anyone who hasn't checked out that website, WTF happened in 1970? one.com. Just a collection of charts of like there's a a, a divergence that occurs in all of these economic indicators around 1971 when we went off the gold standard and the the most painful one in in my book is the the productivity and compensation were lockstep up until 1971 and then productivity continues chugging on up and to the right and compensation really meaning for the working class flat lines there because that's when we started to see more inflation and the easiest thing to do is just kind of lag on keeping up with workers wages like to update workers wages in line with true inflation. Pretty easy to fudge the numbers or just kind of delay on that or obfuscate from the fact that workers salaries aren't aren't earning as much anymore and that right there, that little trend. The divergence of those two lines is I think the the heart of the decay of the American middle class since 1971. And you know, the rise of like the Hillbilly Elegy kind of suffering of the working class in America and the rise of populist politicians like like Trump is because of the pain that the perceived falling out of middle class status and into, you know, poverty that so many blue collar folks have suffered and families and communities have suffered over the last 50 years. And it all comes back to that inflation driver. How? How did Browns Brothers like? I would imagine Inflation doesn't get talked about when it's an analysis. It's just benchmarks are completely different. Going to go there with it, like when I said, you know, I would talk to people about Bitcoin. You know, this is 3-4 years ago now and it fell on deaf ears. It was largely because they didn't think inflation was a problem and it was just like a complete blind spot and you know, historically had like no exposure to gold like they didn't. Because of that value investing framework, there's almost, there's almost this reluctance to even think about hard assets because there's no yield. There's no yield and there's no, like, advanced models and due diligence that you can rely on to say, oh, I've done the work, this thing is cheap, so it's inherently harder to value. And so, you know, what I found is like there was sort of this almost an air of sophistication around value investing that sort of like perpetuated the idea of it being a valuable thing. And and to be clear, like I do think there is merit to a lot of it, right? That's a fundamental core piece of of the value investing framework is that volatility is actually your friend. Like buying something for cheaper than it's worth should be an axiom of all investing, right? And and Jesse, going back to what you were saying about the cyclical nature of the thing, you know, one of one of the way, one of the first ways that I sort of tried to apply that lens to Bitcoin was saying volatility is not. Like you know, Buffett has a ton of quotes around that. It's an opportunity to get in cheaply right like you should. You should be comfortable with that volatility because if you have a real deep fundamental understanding of the thing and its trajectory and it and what you think, it will be valued in the future as the market comes to appreciate that value. Volatility is is just an opportunity, right? And it's not a risk And and the unfortunate thing about the cyclical nature in some ways is that people perceive that as risk and it's like it. It's just they're missing the point in that you know Bitcoin has its own risks, right? It's not necessarily risk free. You might think it is, but like there's perceived risks around it. But it's not that it's volatile like that is not the risk, but. That seems to be, you know, a big sticking point for people still which which is wild to me. But you know that was that was one of the first ways that I applied that lens in saying the near term volatility is just noise and this is just an opportunity to get a better entry. Yeah, I think an example of that's also the hurdle rate cuz Jesse and I were talking about. It's like, well, what is the true hurdle rate? And there's the numbers. On the sophisticated version or the hurdle, the true hurdle rate would be your cost or the the purchasing power of your money. And that's not how they measure it. They measure it from a nominal versus real. And so there it's a game that's being played that's just it's it's the wrong game. And that's I think part of why it's so hard because it's an ephemeral academic exercise versus I think Marty and I were talking about it last night. It's like at the end of the day, for us as individuals, you have to look at. Like a portfolio or how you would map to like you know whether whether it's real estate, equities in the bank, but we know what which has happened with Silicon Valley Bank and then we know that SF and these cities are starting, you know the liquidity of real estate, it's like so at the end of the day if you need to put food on the table and you need your money to work, well then where do you start to look And that is like at the micro level, but when you go back to the macro, it's so hard to get from there to the to that point. And I think that. The overarching point that we're getting into during that part of the discussion last night was in building on your comments about volatility. Yes, the volatility is there. It's not a risk. I can stomach the volatility because I know the liquidity profile, if I'm holding Bitcoin a certain way, is better than anything on the planet outside of like cash in your pocket, maybe even better like I can. It's definitely better send Bitcoin whenever I want anywhere around the world. I need to liquidate on an exchange. They trade 24/7, 365 like that. Volatility is easy to stomach when you know that that liquidity profiles there. And then if you're holding it in self custody like that, counterparty risk is eliminated. You have your money, you can go buy groceries if you need to. You're holding real estate, very illiquid stocks, even not as liquid. Yeah, that. That's my my recent piece was to try to explore the opportunity cost of capital between different asset classes and right now U.S. Treasuries are yielding 4.3% a year, which is just in terms of recent history high. And you know, then then equities over the last 30 years deliver 8% on average, your average compounding annual growth rate, your kegger and private equity 15% and venture capital 25%. And whereas Bitcoin over last halving era has returned 45% annually on average. And there's been a diminishing over time of of the annual growth rate. But looking forward, you know what, what will it be? I think it's reasonable to conclude that because of the in the playing out of of the having mechanics and following the same diminishing returns over time, a phenomenon something like 25%, which would mean that Bitcoin with the liquidity characteristics of U.S. Treasuries, OK, you can buy it and sell it immediately. You can, there's no lock up time period that you have to hold it whereas with private equity funds or venture capital funds you are locking up your capital for 10 years. So with Bitcoin you get US Treasury's liquidity and and you know time periods but you get venture capital returns going forward. So that becomes the an important part of that is assessing that it's actually low risk because the volatility is is misdiagnosed as risk, but it's not risk it, it's just volatility. So you have a low risk asset with great liquidity that delivers venture capital returns and so then that becomes the the opportunity cost for any incremental dollar for you know where where should you park your dollars. You want to park it in the place that has the best opportunity and lowest risk and Bitcoin seems to have the lowest risk you know or or at least matches in my opinion is better than U.S. Treasuries and yet delivers the highest risk asset classes returns. Looking forward, there are assumptions there, but that's the place to hold capital then, and I, and you know then the the entire world of value has to learn this lesson that the four of us have stumbled into earlier. And everyone listening to this podcast just happened to stumble into this, this stupid simple north star of investing in modern era, which is Bitcoin should be the default. I was going to say like, I think it's a really interesting conversation to be diving into. Right now because like value investing is like really hard these days. Like feds monetary policy really dictates the perceived value of any given company on the market, any given point in time, particularly the public markets. And I think important point to add to this conversation is like through Bitcoin and eventually if Bitcoin does become the reserve currency of the world, like actually be able to get back to value investing the correct way, which is you have a monetary system. That operates on a sound monetary policy and then you actually bring opportunity cost back to the market, a true cost of capital back to the market. And they can actually do good due diligence as a value investor, actually make good decisions about what's actually producing sats flows and what is actually producing value and not just just something that's manipulated by Fed policy. So two things. That was something that I was I don't know who I was talking about it with but it's like what is the cost of capital like what is the true cost of capital and I don't know if we if we know it's like yeah but even on bit with Bitcoin it's like like what is your Bitcoin worth today to give up for tomorrow whether it's the equity in a in a in a firm or you know risk adjusted if what the Bitcoin would be in the future. And then what ultimately, if we're on a Bitcoin standard, what is the interest rate that would need to be returned if you were going to give up your Bitcoin to invest in something? So it's just an interesting thought experiment that we'll see play out, but going back to what Jesse was saying about. The benchmark with venture that is caveat in in the upper quartile which almost nobody gets access to just no just to get but so that's just this. So it's a lot more like a 10X more pronounced and like that delta of that most people are losing all their money if they go into to venture there's like 2 to 3%. And the equity returns to like yeah, 8%, but what is that in real terms? That exactly was thinking about it in real terms and and Marty just going touching on the point you just made around. How value investing is so hard now you've seen that reflected in, you know, the past two decades of really underperformance generally speaking from sort of value strict value strategies compared to like growth strategies where you're really just chasing revenue and chasing growth and that is a function of that low cost of capital, right? And so you've seen this divergence over the past 20 years where these value strategies have largely underperformed. And then at the same time because of that dynamic you've seen massive concentration in the actual indices of you know we've seen the charts of like the top six to seven companies accounting for the vast majority of the performance of the index. And so that's you know also indicative of the general sort of shift from active investing to passive investing and and really like it, it's it's. Getting to your point much harder to actually execute a value oriented strategy where you're going to outperform the S&P like it's it's extraordinarily difficult. If you're being sort of strict about margin of of safety and like and how you're you know the price at which you're entering certain security, it just becomes very, very difficult and and you know when I was at Brown Brothers like you know sitting on the allocator side. I mean, we had a few, we had a few sort of challenges in that. One was like sort of logistically like we were allocating from a 50 to $60 billion base of capital. And so if we wanted to go out to a manager and and make a 1% position, you're talking about 1/2 a billion dollars. And so really talented managers with like outstanding track records don't have half a billion of capacity to give you. So we were in this interesting situation where we were trying to thread this needle of. Really talented smart people have a great track record, but also can you know take a billion dollars from us because you know ideally we, I mean we were making allocations the, the entire aggregate portfolio was actually relatively concentrated in the sense that there weren't a ton of managers, right. Like if you go to like a Goldman Sachs or one of these other sort of more commercial private banks, they give you a roster of 300 to 400 funds to pick from. And like I mentioned, like our model is much more discretionary where we were actually. Creating policy portfolios with a concentrated roster of managers and you know we had sort of four different portfolios and it sort of varied by client risk appetite and you know on sort of the stable value side it was much, much higher percent to bonds and then sort of on the gross side obviously a higher allocation to equities. But it became very difficult to find managers that we were comfortable with and fit our mandate strategically and philosophically. But we're also able to to take our money basically because those people who are really good and have a 10 year track record like their fund is full and they're not going to take your money. And so I mean a lot of our best investments were actually finding like investors who had a track record somewhere else and then spun out and started their own thing and then we could become like an anchor investor and get a lot of capacity. But it's interesting because you know, one thing that I noticed while I was there is that if you've heard sort of the phrase like style drift and investing, like generally seen as a bad thing, right. And I think Gary from last week was talking about this a bit in terms of like you know, there's sort of this perception that as an investor, as a portfolio manager, like you need to have your strategy, your process, your philosophy and it needs to be repeatable. And if you're drifting from that, it's a bad thing. And so like when we were you know, we would on board a fund and we would have sort of quarterly calls with them and do annual reviews of the fund. And one of the things that we were assessing was, is there any style drift here? Are they changing their strategy at all? Is there anything we should be concerned about? Are they doing things that they previously said they would never do? And interestingly over time, not only did we see it at the manager level, but we actually saw it at our level like our investment team level because value was underperforming for a decade and we had a we had a bias towards these value strategies. And so you know there were years where we were underperforming the market and we started to sort of in some ways chase growthier strategies. And so you did see that style drift even from our point of view. But I guess what I come back to is what Gary said last week in that I don't think that's a bad thing. Like you should be able to adapt and be and be flexible and and understand new things and be willing to change your mind about stuff. And so I think in a weird way, like style drift over the long term, it's kind of like a good thing for Bitcoin because ultimately people will wake up to this thing and they'll they'll be more open minded about it. Yeah, that's a very good point. Hey, you have to be adaptable and flexible as time changes, policy changes like that makes a lot of sense. I want to apologize to anybody watching. The video Right now we've got former MLB All Star CJ Wilson doing some calisthenics right behind us in that video. Sorry if that's that's distracting for you now, but it's it's hard out there like like and I I listen to and invest like the best Podcast. Patrick O'Shaughnessy interviewed David Einhorn, who's infamous. Yep. Value investor of the last 30 years and he essentially admitted on that puck because he's like, I think value investing is dead at the moment. Like it's literally impossible to allocate as a value investor. And that's that's a symptom of the money dying. Like when when the measuring stick starts to make less sense as a, as a as a place to store your value, your savings, you shift your strategy to what makes sense and. I mean over the last 20 years what's emerged is pilot into your 4O1K and so this, this, this automatic bid every two weeks in America of equities being bid up and and really your core equities and and that's sort of starting to trend towards Fang stocks like that becomes money that's that's monetization of tech stocks over the last 1020 years and and then you start to see these silly price. PE ratios a price to earnings, ratios of which are outside of what is you know, value. Investing is designed around finding PE ratios that are are low. What's What's the video's P/E ratio after this week? And they have like another 25%. Good question. I I don't even know there there's there's always there's like few outliers that are silly right? Like. Vivian or or you know other EV companies in particular, there's this mimetic investing that has been a part of crypto investing and and is very much a part of the stock market now. Which is silly, but it like that is crowded out value investing over time. Like Preston Pitch talks about, he's come to this conclusion too of. The the thing that he's planning on doing is just holding Bitcoin until it appreciates enough that and restore sanity to markets such that value investing opportunities reemerge and and that's his that's going to be his strategy for the next decade or two and yeah I I so I think that everybody is chasing a way to store their money safely. In the stock market and and that is where the mainstream continues to be. And yet, if you think through this logic and get to this conclusion that Bitcoin is delivering venture capital returns for US Treasury's risk, that's the place to be. Yeah, Jesse, I wanna, I wanna see your live reaction to this chart we're about to pull out. And everybody's reaction, It's pretty, pretty insane. Nvidia's price earnings ratio. It's the third chart. I I don't even know what like, oh boy, it's two. 45.5. So I I remember a decade ago people talking about like, you know, price to earnings ratios of 30 are are just silly high, right? And now we've entered this, this this absolute nonsense world 200 and and one of the one of the knock on effects of this you know broader sort of consolidation of of indices and sort of chasing growth and and mega mega cap tech is that it really hinders sort of the entire presentation and and perception of value investing in the sense that you can't justify the fees. Like if if the best portfolio to own over the past two decades was like Google, Amazon, Apple maybe a few others no one's, no one should be paying you fees to do that right. Like you either just own the S&P or you own those five companies and it's pretty easy to do. And so all of these active investors are now in the position of having to justify a 2% management fee and and probably even a a performance fee of some kind and that's just become really, really hard to deal in this context. You need. So this is a good transition to talk about. I think there's two parts what we're describing in. Traditional investors and and what a portfolio and diversification and how that fits into crypto and where individuals have come in And then what you saw at Coinbase, but then also some of the conversations we've been having of like, so wait, will you know what's the strategy? Right. And yeah, no, I mean Coinbase was interesting for a number of reasons. I mean in terms of just the mindset, it was, it was such a stark difference from being at Brown Brothers for eight years. And I say that because, you know, part of that value investing philosophy, part of what I had honed my own investment philosophy on was a very longterm approach, like a longterm investment horizon And everything at Coinbase and in in sort of the crypto world, generally speaking is extremely shortterm in nature, right? Like you're thinking about things more so as a trader and really I mean ultimately the entire business model of Coinbase was inherently tied to that short termism and and and pushing people out the risk curve and getting them to trade all these other tokens. When in reality like I wanted to be telling institutional clients like you guys should just buy a Bitcoin but that was not that was not aligned with the business model of Coinbase as you might imagine. So that was, that was certainly frustrating in a certain sense, but it was kind of just interesting to see that stark difference of short termism move out the risk curve, trade all these tokens and at the same time being there, I really saw sort of under the hood of a lot of just inherent conflicts of interest at the business. Where like you know, at the same time where you know Coinbase is like a launch partner for token XYZ, launch partner for X protocol and like being early liquidity to it. The same time, like I'm being prompted to like maybe write about these things and it's like well, no, like I should just be coming at this from a first principles point of view and and writing about what I think is interesting. And I tried to do that as much as I could. But ultimately there was some amount of like party line, right. And so you know throughout that year I forced myself to write about like Tesos and fucking like Matic and some of these other coins. And and frankly I couldn't really write what I actually thought which was frustrating and and tiring in some sense. You know towards the end. Towards the end of my stint there, I did write a report about File Coin, which I thought was was pretty good in the sense that like it was probably the most like, polite takedown of an alt coin that you could you could write like it was just enough along party lines. But I was really just calling out the entire incentive models and just really calling it out for what it was. And and yeah, I think there were some people that didn't like that report, but it got published because it was all factual. It might be down the street, the file Queen offices somewhere in the city. I mean I do you think it's and as you I think recognize it is an important journey though because it's one like to internally recognize it but then it there it had so much credibility when you go back to the market. And it's like been on the other side of that. And I had a cent. I was at the block for, you know, six months. I was like, holy crap, what am I doing here? You know, just like. I was in Barstool trying to get everybody to stop trading ass coin and everything. Yeah. And it's it's also formative in the in the experience or getting to the place because it just requires to hone the thesis, the understanding to see and then also just go back. To the market and explain that you said in that those shoes, you experience it, you understand the angle of the incentive model. So when they come in and it's well, we gotta diversify or we gotta be more open minded just like, no, we actually don't. Let me explain why. Yeah. And that goes back to the value investing thing is like, you don't need diversification. Like, if you know the winners and you're confident in the trajectory of whatever you're looking at, you should size accordingly. And you should. You should mostly own that one thing. What's the quote of a diversification? Is selling your winners to buy losers? Yeah, something says that along those lines. I think Sailors said the I think it's a sailing. I mean, it's probably a a try, Yeah. I think it appreciates Sailor. Yeah. And and I think Buffett likes to say that concentration is how you get rich and diversification is how you stay rich, something like that. Which is to say like that's how you flatline your wealth relative to the rest of the world and and maintain that in in the equities model in particular. But if you're trying to outperform, you have to concentrate. Yeah, that's true. I mean even just thinking about the the funds that we had our on our platform at Brown Brothers, the best performing funds were the most concentrated funds like long only equities like six to seven stocks in the portfolio and those were the best performers for the entire time that it was there. So that that really resonated with me too. And and I applied that lens to like, yeah, just think, just be focused on this one thing. And you've got that, you've got Portnoy figuring out that the take away from that after not too long in the stock market if stocks only go up you. Have the green hammer it was. His latest, his latest comments on Bitcoin are interesting of the he. He plans to, I guess. It was with Jack Mallers on that podcast. He plans to put Bitcoin on the balance sheet when he when he gets the opportunity, which is the latest chapter in his long journey. Isn't it, Marty? It is Dave. I sent you a text earlier this week. If you're listening to this, you should respond I. Think he's probably generally waking up. It's just a process of the amount of dollars. I I think what just happened to Barstool is sort of a product of what we're seeing in the markets right now with interest rates where they are. Obviously Pence stock was suffering. They had this opportunity to make a move with ESPN bets they had to take it. Part of that was getting rid of Barstool, which was essentially a marketing arm for pen Gaming, which is a loss leader, and they were spending millions of dollars via Barstool and not really making up for it. With sports book with the stock price obviously. And so I think yes, Dave got the company back, he's got 100%, it's incredible. But I do think there is an aspect of the current marketing conditions that really drove that decision for Penn. Yeah, yeah he's he's had that he got into. I mean everybody has their own journey. We're we're we're hearing about Brian's journey and Dave Portnoy has his own very separate journey. And all of these journeys end up converging on Bitcoin ultimately because in some way, whether you research it and you learn about how some of these altcoins are, incentives are screwed up. And there's really they're built on a foundation of sand. You can research your way into knowing that, or you can get burned by touching the stove. And Dave Portnoy went into Bitcoin. Then he quickly went moved on to chain Link and other things. And got burned. And so a year ago, his conclusion was maybe Bitcoin's the only thing worth touching the screw cane link. That was a year ago. Sailor Moon or Sailor Moon? Sailor Moon was the anime cartoon on Cartoon Network, but Dave's got some work to do. I listen to a couple clips from that Money Matters episode that Mowers and Dylan did with him. He's still. Is not fully. They're not there. Yeah, everybody gets there though. You know you you either take a an approach like Brian or you take an approach like Dave out, you know which is the more expensive approach and everybody figures out that there's only one thing that doesn't screw you over over A4 plus year time period. I mean, we were laughing about this last night at dinner. Sorry, Jesse, that you couldn't be there. You were missed. But again, we were I. Got plenty of sleep instead last night? Not a bad trade off. Parker and I have gone back and forth for years because when we go pitch Bitcoin, if we find ourselves pitching Bitcoin together with somebody, he is the king of 21,000,000 monetary policy. Like we're going to this is the shelling point. Everybody's going to pull less about around this, which, yes, this is exactly what you should do. But I lean into the network side of things like yes, we do have this I think. You lean into both, obviously. It's 21,000,000 cap supply extremely scarce, most scarce thing we've ever come in contact with. You cannot change that monetary policy. It's distributed consensus set of full nodes and then the network side really enables these things that were literally impossible before Bitcoin launched. So the point I'm trying to make is I actually think that's what's going to get Dave's head the the light bulb to go off in his head with Bitcoin. Is the network side like seeing? How you can monetize content and stuff like that, cuz that's what he focuses on in content, like how it can make his business better. That's what I think. And honestly? Like I thought you were gonna go and explain how you think that decentralization is more important than 21,000,000 decentralization of nodes. I don't think I've ever said that. I thought that was the stick of like Parker's, that 21,000,000 matters and that and that. You're no, no, no. That's sufficiently dissent. You're mischaracterizing our our kerfuffles. It's no it's like he's like don't even bring up the network. It's not worth it. Just focus on 21,000,000. I do think it is worth it to bring up the network that it can do things that. We're literally impossible before 2009. If we're going down this memory lane of last night, it it's just to send people. If you've never heard, I've obviously heard of TF TC, but going back we were sitting at a table with like maybe six people, 7 people, and we brought up the montage from the first episodes. I don't even know if, Jesse, if you if you listen to this, it is. I'm not sure if I have. You just go back in your podcast player and go to the first three episode is the most I I gotta really listen to it cuz we start playing it. It's Marty like essentially manic, like explaining Bitcoin up into the point that he launches the pod and it's talking about white paper dropping like Halloween. 2010, like pizzas. Pizza day. And like, it's with Lou from Barstool and he's just screaming like, who fucking sells for pizza? I'd kill myself. It's $80 billion. Yeah, just like it's it's incredible. I was, I was. So I literally. It's so funny. It was six years ago now at this point. I literally scripted that podcast. Like, I wrote it on many pieces of paper and read it until my that's how little I knew about podcasting at that. Like, Lou thought I was crazy. I was like in the Barstool offices, people walking by, like, what the hell is this kid doing over there? Yeah, it's amazing. Yeah, it's a good. I gotta go really listen to it because, I mean, I haven't heard. It when you started playing last night was the first time I've heard that episode, and I've got a few years and it is. I mean, it is nostalgic and it is fond to look back on, but it is also like Fringe for everything. Like God and every couple years. It's so nervous. Every couple years, people are like, when's the next montage? I started writing. The next montage. Is that 100K once we get to 100K, so it could could take us five years. It's gonna be a long montage if that's the case. Conference day. The content, I mean maybe on that is the the content. It, I mean, you know this more than anybody how important the content is. I think about my experience in that at the time, listening to that and thinking, you know, the prices like just crashed. You're sitting there 1718, it's 18 and you can't talk to this, to anybody about this stuff because there's too many to talk to you everybody's either gone or you're an idiot. You don't even know if you're You're in the whole you're in the red. And you're still buying, but then like you listen to the pod and then you listen the week, you know, week over week with like you, man and all the stuff. And it's just like this reinforcing, helping like there's other people out there that are doing it and then that understand it. You're not crazy. But then I think about, you know, the experience. You talk about what's the secret or the trying to put together the package to go talk to these investors. And I'm insanely excited about, like, what Brian's background in the stuff he's already been doing or whether it's like formally on the blog or the the tweet threads on Sundays that are pulling these disparate pieces that we talk about. There's like this alpha when you come and you pull it two sides of the spectrum and when it meets in the middle is like when real like magic happens. And so I don't know if you want to talk about any of the Sunday things, but also just like some of the ideas to the extent you feel comfortable and then the others you want to just throw when you launch. Generally, generally speaking, like my point of view on it is. You know, we talked about this before like meeting people where they are. I think that's part of it. But it's also just recognizing the fact that people understand things in different ways and and different things are going to resonate for different people in different ways. And so you need to just have sort of a toolkit of all different ways of approaching this thing and and so one thing that we've been working on the past few weeks is like framing the perception of like and and you guys have talked about this on the pod before, but like. How do I bucket it and it's like okay you could think about it like that and let's let's run through some possible ways that you could bucket it in your traditional asset portfolio. Whether you want to take sort of a private equity venture capital lens to it and say you know this is early stage growth tech with you know similar sort of risk reward dynamics. Another similarity, there is again that long term horizon. Jesse mentioned the lockups with you know VC and and private equity similar in that sense like you need to be thinking about this thing long term. So that's sort of one way you could bucket it. Another one is just sort of most squarely as a commodity, right, like this is a real asset, this is a digital commodity and and some people get that. But back to what I said earlier, it's like some people just don't care about commodities because they've been living in a world where they think 2% of inflation is okay and it's not a problem and. So they haven't ever thought about hard assets, but that is another way to bucket it is you know digital commodity, it's digital gold. And 3rd way is what Michael Saylor did which is this is cash, this is a cash equivalent. It's just a better version and I'm gonna put it on my balance sheet and just and hold it instead of holding cash. And so those are sort of like some different frameworks that you could think through around trying to meet people where they are in terms of how they think about asset classes and the buckets. But ultimately, it's going to be different for everyone. In my mind, like I think people have their own experiences and their own history looking at different things and that influences how they're going to grasp this thing because it is so multidisciplinary that there are a number of ways that you could come at it. And Marty, I like what you said about let's focus on the network too because there is so much sort of. Outside of price and number go up, there's ways where this network, the monetary rails is impacting society. And one of my favorite things to tell the normies are just people that are on the outside looking in. A Bitcoin is like, for the first time in human history, we can monetize stranded energy through Bitcoin mining and that typically kind of like makes people step back cuz nobody really realizes that. And it's things like that that's like. You don't have to care about the price. Like just I'm telling you that this is a technology that is doing something that's never been done before. Yeah, yeah, I was our friend Griffin Habees in in Austin this weekend. He is the king of the. I mean that exact quote is what he says. Like he's an oilman, Landman, wildcatter, wildcatter, whole 7th generation Texan. We will have to get him on the last trade. I don't know if Jesse, if we we've spoken of him before, but he's a. Might be too much stash for Jesse, I don't know he's seen. His photo. It is glorious. Yeah, we'll definitely, we'll do it when Jesse's in Austin. So we'll have this whole group just, you know, all in person. But, and he was Texas last night, but that just made me think of like it. That was his light bulb, he explained. He's like, I realized that there was no such thing as stranded energy ever again and he couldn't and it could never look back. Yeah. Yeah, it's, I mean, being. Up close and personal with that particular aspect of a Bitcoin and Bitcoin mining with Great American Mining, Cathedral and Standard Bitcoin, it is truly astonishing. Like particularly the flare gas stuff like being in the middle of nowhere, North Dakota, middle of winter. But you just have these generators, these shipping containers with these computers in it and you're literally able to monetize this natural gas that otherwise would have been set on fire in the middle. Of the North Dakotan wilderness, it's like literally you monetize it, you bring the market to the molecule, monetize it there and then it's digital gold. You can send it to China from North Dakota if you want to immediately after mining it. It's pretty crazy, yeah. And the utilities, important to everybody's point that's made is because at the micro level and you key in on this like in real time, it's like if you at a previous episode, it's if it's valuable and it increases in value, then people will want it. And so you'll need to be able to have it to spend i.e. You don't want it stuck in a in a fund that you can't actually take it out of. Similarly to an institution that if there's utility in this and it gets a cash equivalent or there's some other financial products that will be delivered around having the ability to get the asset in some other form. You don't want it stuck in a fund because you can't do any of that. Like we we don't even know the different ways that credit markets will expand. And I mean, we have ideas and we know that been involved with them. The Unchained Loan products, an example, there's battery finance, it's doing stuff like that. But ultimately, it's just ties back to the utility of like explaining to them it's just not like something you just park your money and you know it's it's you're going to want to understand that you at least want optionality to take possession of the Bitcoin. Yeah. And I think the most people, when they come in, they're not going to recognize that. And then we know they're going to go to BlackRock, and then they're gonna wake up one day and they realize, oh, maybe I need this for whatever reason. And now they're gonna have a cap, gains it or whatever. Yeah, well, I think like setting the cap gains and the overburden some tax regime here in the United States and other places of the world aside, I do think there are tangible examples like this show for example, if you anybody listening out there on a podcast app actually wants to it hasn't done this yet. Maybe have exposure via GB, TC, or some other fun that it doesn't actually give you. Spot Bitcoin that you know, hold a UTXO yourself. You can actually use this podcast via podcasting 2.0 apps like Fountain Breeze, Podverse. Just download these apps, listen to the podcast that way, and they double as Bitcoin wallets. You load it up with some Bitcoin as you listen. You can send a little bit of Bitcoin to each of our wallets, which is pretty crazy. I mean, if you're looking for an example of how you actually use Bitcoin in the real world, like listening to this podcast could be. One of those things that hasn't unlocked for you, yeah. And even in that example, we don't even know like podcasting relatively, you know, new or like the medium and when you can interact in a form of money that's Program programmable. How does that change this interaction? Like ideally we play with that at some point. Yeah, I mean, Matt and I play with it on the live stream rapid, we'll recap, we'll do that. In 45 minutes when we begin recording, but we'll stream this out over Noster and we have a Lightning network public address associated with our rabbit hole recap Noster account and people go to ZAP dot stream and they'll listen live and they'll be able to comment and send us Bitcoin. Do like super chat stuff, using Bitcoin to get us to interact with them. Vita is another good example. I think they're onto some stuff. Yeah, yeah, definitely. Vita is the same. The same way. And then what they're doing, what they're doing on the telecom side is I think it's really important. This gets back to I think part of your story, Brian, which is like going to Coinbase with the skeptic lens. Like I'd pretty certain the bitcoins, the signal, but let me actually do my due diligence and dive into the stuff, right? The research about Tesla, some of this crap out, it is actually crap back to Bitcoin, but I think. This is one of the big categorical errors that Coinbase and everybody in crypto makes is particularly around like Web 3 point OD Phi. It's creating all these asinine COCK and Annie tokenomic schemes with a token for each use case. Where in reality, what, quote UN quote Web 3 point O is at the end of the day is combining open protocols, the open communications protocols, open content distribution protocols with open money and Bitcoin. Particularly over the Lightning Network. So with this podcast that's RSS in Lightning Network, we put a Lightning Network address in our RSS feed that this podcast goes on, goes out to the world. You can find that lightning address in our RSS. And if you have an app that has a Bitcoin wallet as that double s as a podcast player, you can send us Bitcoin Vita. Another example combining the open SIP protocol Voipin SIP protocols for telecoms like they have. 402 hours payment required errors in that stack too, for telecommunications, and you can inject Bitcoin into that. That's what's Vita's doing. One of the things they're doing, just another example, L 402, we talked about it in a few weeks or a month ago when I was in Nashville. Like they did the same thing that Lyle and the team at Vita are doing for VoIP and SIP, and they're doing it with the HTTP stack, like fitting it in. And really, solving the 402 payment required error at the HTTP level. So it's again, when you, if you're an institutional investor, like trying to discern what's going on here, like you've heard the Web 3.0 meme, you hear defy. I'm 100% Sir, and I've become convinced that that the whole Web 3.0 meme in the crypto space has it completely wrong. It's really taking open protocols that already exists and just adding. Open money to them. Yeah, they're all competing with money. Something you just said made me think of a like there's this long game being played if if it's if it's Bitcoin only and you don't do certain things like rehypothecate collateral and and all the things that either blow you up or put like a sour taste. And you know if you're allocating capital and you go into one of these Ftx's and you're just kind of like burned, your Lp's are burned. Everybody's burned. Your your reputation is. But then it made me think of like the ultimate value investment over Bitcoin is actually working or if you if there's interest I guess I would say but working or investing in like a Bitcoin only not investing but like investing time in a Bitcoin only firm and and what it hit me in like Brian's an example of this and it's actually happened previously for years. It's like the best people I've met have cold reached out in the space because it's this form of proof of work. When somebody has a solid background and they're they're extending themselves and they don't know if they're going to respond to how it's going to, you know, happen. But they they make that jump and then to get involved if we know this to be right. And on the other side of it, Bitcoin is the winner. Whether it's relationships, the actual learnings, the the education through the process, the whether it's equity in the business, the the writing, all of it. It's like, Can you imagine any better investment of your personal time? No, Even more than Bitcoin, to be honest. Like I think it's not. Even fulfillment, it's fulfillment, but it's like the network at this point you're just watching this whole thing grow in at the very like ground level and everybody and everybody you think about the people you've known from the pod and we like talk about Matt and like meeting you guys to the pod and just like all these different interactions in the vehicles, whether it was previously on chain or this vehicle and Brian now joining and where that goes, nobody will know. But like the amount of opportunity, like actual economic opportunity, is It's just insane if this is right, so. I don't think we could fully grasp or fathom the overall opportunity. Yeah, because we're going to be shocked to the upside. That's how I thought about it to be honest. And and part of it was also like recognizing kind of Tamari what you were saying just earlier is like we have this really great foundation like let's try as hard as we can to build around it and and create all of these other things that that work around this solid foundation like you don't need all those other tokens to do those things. Let's focus on the the foundation and and build around it and that's what really you know, excited me about. Getting into you know focus focusing specifically on Bitcoin and and was just so different than from being a Coinbase. And and I'll say this like there are, there's well-intentioned people at Coinbase. There's very smart people at Coinbase, but there's also just a ton of cognitive dissonance and generally it comes back to the business model, right? Like the reason? They want all these other tokens is because that's how the business model grows, like getting people out the risk curve and having them trade all these different things. And you know what? They say? The road to hell is paid with good intentions. Yeah, I don't even know if the intentions are good. I. I don't want to shit on your former employer, Brian, but I've done that on other shows. You can go find that if you're if you're really curious about it. Yeah, it's it's the whole incentive model over there with A16Z and the the various Silicon Valley venture capital arms that have figured out that if they use their connections, their clout to get an allocation to a new crypto token and then hype it up and then use their connections to coin base or. Other, you know, legitimate tech startups to then dump those tokens. They can get great returns in a very short time frame when, you know, we talked about how venture capital usually takes 10 years because you have to go find the winners. And to Michael's point earlier, there's no guarantee that you're in one of the winners of the decade and venture capital is all about finding the Google. For the next decade, the Uber, you know there's only a handful of those every decade and you need to be in one of them otherwise you're going to under deliver you could you could deliver a 0 ultimately if if you pick the wrong ones. And so that average of 25% a year is is really a a small percentage of venture funds delivering well above that and then quite a few venture funds delivering well below that and. Being able to use these token models and dressing up in whatever the latest narrative is Web three recently, metaverse recently you know in 2017 it was it was specific use cases for niche. People like I popped into my head that Denta Coin existed, which was the cryptocurrency which was marketed as the cryptocurrency. Dentists, well, and that and that got to $2 billion. I just looked it up it got. To two Bill. Holy crap. Well. And now it's $1,000,000 in total valuation. I'll never forget that since we've been talking about Barstool Lot on this episode, I'll never forget like, during. Winter December 2017. Like by that point leading through the summer, you literally had like ICO agencies popped up that were doing consultancy work, consultancy work for companies like here. Here's we're gonna help you like ICO not ever forget like literally being pulled into an e-mail thread with like Erica Dave and people from the Churn in Group and like this ICO consultanty group like. And they were like, Marty, like your Bitcoin Marty, Like, what do you think about this ICO? It's like you can't even run a WordPress website. Like, why? Why are you gonna launch a token and attach it to your company? Like, this is the dumbest idea ever. Luckily they didn't launch an ICO, but that's how crazy got people are like approaching Barstool like you need a token. Well, yeah, one of the one of the other clear sort of manifestations of this these dynamics that we're talking about is like the reluctance of Coinbase overtime to like work on lightning, right, like. That was always so clearly reflective of the business model being tied to all the other tokens. To me, because it's like, OK, even if you have your issues with Lightning and you think it's immature, like you should be working on it to make it better. Like, why aren't you? Some cognitive distance because they can't. Like they literally need Bitcoin to be a dumb gold. No Windows 7 transactions per second right? Is expensive. They can't acknowledge that there are these. Other layers being built to completely debunk that narrative? Do you have a strong take on security tokens? And token is a tokenizing like real world assets. I don't have a strong take on it. I mean, we need to I. Think people are gonna continue to try to do it. That would be my take. Like I don't think that concept is going away because that in some sense has ultimately some amount of like more of a sort of regulatory trajectory where it'll be OK to do those things because if you're just. Mirroring other assets that's less nefarious than creating some new thing. So I think it has a a stronger path to relevance but I don't think it's necessary that that would be my take. Yeah. Yeah. I mean I I agree. I think I, I, I don't have a strong I fall in the camp there. I haven't fully thought through and articulated or have the like opinion. I want to sure completely. But I know that there's a lot of people very excited about it and I feel like we need to have somebody on that. We should chat. We should. Probably talk to Alan about this. He's got some good thoughts on it. But I think just generally like Alan Farrington, but I I don't know, I do think there certainly is a bit of opaqueness and just pure logistical incompetence at the DTCC layer like it is really. Confusing. Like most people don't even know how many actually shares are like floating around the market at any given point in time. And like the settlement for that layer of like securities is like literally working on 1970s tech. But do you need a blockchain? For it, I don't know. I do think like the point I'm trying to make is there's definitely efficiencies to be gained to that particular layer of. I I think there's. I think there's an argument to be made that the. This is a technology that can reduce the overhead for fractionalized ownership of attractive assets, like issuing shares for commercial real estate or fine art. There's a world for that. But it's but it's it's not. Doesn't, doesn't. Amount to like a. Currency. It amounts to like a different database administration system part of our angels list. Yeah, yeah, It's like, right, it's. And the reason I brought it up is because it was just like the, I think the the folks that we talk with in the circles that we've seen this, I mean to ping you every time it comes up in a feed of or like it's just like triggers, Michael. It didn't trigger. It's just like we saw in an 18 the STO. At the time it was STO security token offerings. And then you start hearing through the runways and I think a lot of finance individuals or tied to it because it feels like an innovation. And there's and I don't know the angle of how they're going to like take their spread and doing this because it will Well let me finish the thought. So I think that is where where I was going is it. It ultimately, in my mind will end up as an affinity scam in the sense that when we say Icos or we say these other things, what they do is they play off of this innovation that's in the middle. And then you start moving like the blockchain, the distributed Ledger technology, the ICO. And I think this is this like revamp that will start next year. They'll go into next year of the tokenizing the real estate. And it's just something that again don't have a fully formed opinion but would love somebody that is in those world. Because my understanding like the equity market is the most efficient market on the planet Earth. And so, do you really need a token to make it more efficient is the question. But yeah, but it's expensive to to IPO. You know, like I think that's the argument is that you can reduce your overhead if you have this sort of, but I think that's on purpose. I think that's just cumbersome of bureaucracy. I don't think that has to do anything with techno like technology. People form a company like an angels less than a but they click a button. Yeah. And and at the end of the day like the these Stos will just be stocks at the other day. So like this token should just trade like on the value of their cash flows and their margins. Go through, you go through the affinity scams like it and they get the most egregious affinity scams happen and then people learn from them and and four years later they fall for less egregious affinity scams. Less sweeping and and horrendous. You know we went through our our bit connect and and then now we had FTX and those are a little bit different in terms of the the magnitude of scam. And I think that sort of process just continues with this technology in general that you go through your your overhyped over promised affinity scams with St. O's and we had that probably in 2017. And going forward there will be less and less of that until the terminal state of it is it's just a different form of issuing stock in a cheaper way. So we're just gonna have a longer what I heard was like a bit bit connect was whatever six months and then FTX was 18 months and now we're gonna have like a 36 month affinity scan that's just gonna go until. Until the rug. Now you have to compare is it compare Ftx to like the cryptopias and milk oxes of the world. Yeah, right. They're different. But you know FTT ultimately it's fraud. Bitconnect is straight up Ponzi scam fraud. Yeah. Do you think BNB and finances? Yeah, maybe we should maybe now have some time to get into. That, Yeah. You do want to talk about that? Yeah. Because that is possibly the biggest story for the rest of the year in cryptocurrency markets. Will finance. Follow Ftx's collapse and for people who aren't aware, there's considerable evidence which is speculative in nature, but there's quite a bit of it. Speculative evidence. Yeah. There's a lot of things that line up, let's put it. There's a lot of smoke. And so there may or may not be fire here suggesting that finance. Followed a similar playbook as FTX with their their token FTT which which was to what what FTX did was they took on leverage bets. They they borrowed against their FTT positions with it, and that created a certain liquidation price point. Where if the price of FTT fell below that price point they their margin their their loan would be, there would be a margin call and they would get liquidated. And that's ultimately what happened to FTX. And that was the the, you know, the, the final chapter of the collapse of of what turned out to be a $10 billion hole that FTX had on on its balance sheet. And that was the. You know the the carnage that came out of that and right now what's happening is that finance seems to be the finances token. BNB got up to $600.00 per coin at the end of 2021 and right now it's been since then it's been trailing off. It's now in the low two hundreds and there's some evidence that finance has margin loans. That get liquidated somewhere in the low two hundreds and there's there they seem to be. Since June on finances platform, there have been moments periods where Bitcoin trades at a discount relative to other platforms, so other exchanges and in those periods finances token BNB has been surging. Which sort of suggests that finance has been selling Bitcoin in order to buy B&B, to bid up B&B in those moments in time in order to defend against B&B dropping below a certain price level. So if that's happening, they may or may not have dipped into customer Bitcoin in order to sell that and bid up B&B as they're trying to defend this price point. Which could create the same paper Bitcoin claims situation where there's a fractional, A fractional reserve for finance where they don't have as much Bitcoin as customers think they collectively have at, you know, on hand at finance based on their current accounts. So do we get to a point where finance sells off enough and runs out of cash runs out of crypto currencies to sell in order to bid up? BMB if that's what they're doing, in which case we will have a collapse larger than FTX in our near future. Yeah, I mean, I think they're definitely trying to prop up BMB. BMB is a complete scam. So is BMB connected to finance mark chain or do they have their own BSc token with that too? I forget. Good question. I don't. I never really looked too much into the mechanics. Yeah, So I'm pretty sure it's connected to the smart chain. Thanks. Yeah, yeah. And so like the all these stupid. That's right. It's the utility token for BSc, yeah. Yeah, yeah. So buying in smarts like each of these exchange tokens have different flare. FTT essentially got you profit share, right? You got to yield on the the profits that never materialized for FTX. We were just stealing people's money. Finance, the BMB has done a bit different and they've like I think they Fort Salon or some other smart contract chain and like you can actually build smart contracts with it. So like that's like a different flare, but it's complete manufactured activity. I would argue again, speculative evidence there. It's just using the heuristics of being in this industry for 10 years. They're just propping it up and gaming metrics to make it look like people are using it. I think that the best. Indicator of that the most suspicious thing in in my book is is if you look at the price chart of BNB versus Bitcoin over the last six years it it has just soared it relentlessly. Like it's the only token over a six year period that I'm aware of that has dramatically outperformed Bitcoin. And like it's not even close. It's it's it's just stair steps up and to the right versus Bitcoin and. That feels like an Icarus flight to me, like something, something unnatural is driving that. So what is the thought that like they they are bidding it up because they're skimming, like they're just selling into like liquidity into exit liquidity. So people are behind it. But if that's the case, the position one would have to be very big to whatever their balance sheet. Like the only way I could see that this actually happening because of the thing. Fundamentally, FTX was a completely different game in the sense of like it was from the start, never whole. So yeah, so, so like the to go to like this is a casino. This is like a very valuable casino. And so to make to let it fall would ultimately mean in my mind what you describe because I haven't even followed this. I haven't been able to looked at Twitter, but would mean that CZ has a bunch of Bitcoin. We know it and he's ultimately going to say I'm going to take my Bitcoin and go home and I'm going to let this run out because that's effectively what would have to happen, that all the money they've made, all the money he had, we know it's there unless it's just he keeps trying to prop it up until it goes out. But but that also like is the whole, how would a hole be that? I just don't see how holes that big versus like FTX made complete sense because it was a Ponzi from the start. I mean, going to Jesse's point of like the crazy performance that it's had over the last years, like creates like the need to keep that pressure. Up right. It could be that they've. Been successfully using a like leverage trading strategy over time and that they just happened to, you know maybe they got a little too greedy and they thought, OK B&B token is at $600.00 per coin, there's no way it'll get down to 200. We'll we'll lever up to there like that'll be our liquidation point and right now, you know maybe they miscalculated basically. Maybe it doesn't pass the smell test like the whole thing with FTX when people no. No, definitely no, no, I'll, I'll explain. I'll explain. Why is be like the FTX just from a from a logical perspective. When FTX went down the common trope or the thought from everybody was like why would they ever do this? They were printing money. That was the thought. They actually weren't printing money and it was always a Ponzi. It's like finance does print money. They do have a golden goose. So like why would they risk that far is like? Degenerate trader. That's perfect, but that's perfectly fine. But that's not there's an extent where you like. Or just a businessman. We've been on the pod talking about CZ being a businessman, being a pirate. Like to just burn that down for an additional 20%. I mean, unless maybe these guys are. Degenerate gambler, You go back to like the history of CZ. They started, OK, so are you on the record saying that finances but you think finance fails? I don't eventually, yes, that would you probably. What's the probability? Let's go on the records. Over what time? Because if we're gonna, if we're gonna fall, if we're gonna talk about it and feel strong about, we should like at least. Have a feeling on the podcast for this one because he feels strongly he. Feel he's been it's. Really stupid and they all. He might just be timing it well enough where he can. He can prop it up until. And that's like all this, that's probably what he's trying to do and all the signals, I think that's right. Are there like particularly like curbing withdrawals like? Ninja launching stricter KYC AML compliance on users if they would, if they're trying to withdraw Bitcoin to delay having to deliver that Bitcoin. Like this is, again, having been around for a day. This is like all the heuristic alarm bells are going off. Like, all right, they're propping up their own their own exchange token check coin. They're the price of bitcoins moving in lockstep with this thing and they have this massive exchange, they're withholding withdrawals from people. So percentage chance. 100% eventually 50% this year. Wow, Jesse. 50% end of this year. I would say 90% eventually and 50% this year, yeah that's I mean if we if it's 50% that means we see probably like sub $20,000 Bitcoin. Bring it may or may or may not. So one thing about FTX was that was at the the very end of the bear market, right? That was the capitulation. Wick where? There was the order book. That. Was in finance goes down, we can get another one. Yeah, we'll get another one because people just get scared shitless. Yeah, we'll get another one. But will it be at a moment in the market where there's so much fear and people are so worn out after a year of downtrend? That there weren't really that many people bidding, that's what I mean. Versus now. People would love to get an entry below 20 K because they missed it. You know, what if the Fed hikes 2 times? All that happens. And and the other thing that Michael about like. That actually actually conspiracy theory Marty Jones for the tin foil hide on now like I think this is one of the big comments that the SEC has made in regards to like the ETF approvals is like hey we really don't like these offshore. Yeah. Exchanges. So I think this is actually this would actually be really good for Bitcoin if sooner than later finance goes down. Because I I do think, and there's been sort of some back channel rumors about this, that the SEC is very unhappy with their perception that finance can manipulate the Bitcoin market because they're so big and they're flouting US regulators and. And and so, you know, that may be what's holding up an ETF and and it may be that if and when finance washes out, there's fear in the market for a while and then, you know, daddy Wall Street steps in and. Says you can trust. Me, I'll, I'll issue an ETF and it'll be regulatory compliant and then the SEC green lights that and and you know for better and worse. That would be that would bring a lot more capital to Bitcoin. So that there I think that is part of the story here. I think the other thing to to Michael's phone earlier of like, how did they screw this up? Like they've got the golden goose to. Generate gamblers. Yes, they're the generate gamblers. They're also the regulators are coming down on them hard right now. So they may have, they may have expected, you know, they they've survived this long because I think that they probably had good risk assessments of like how much of a drawdown. Can we should we expect in in Bitcoin and crypto and then B and B's token price and they may have correctly accounted for that, but they may not have accounted for a simultaneous regulatory clampdown which is now cutting. They're now cut off from the US dollar. They do not have a banking partner that can get in Europe and that's now happening in Europe as well. Their Their auditor pulled out and and retracted their. Statements the DOJ is now has now charged Finance with a variety of things and several of their top executives have bailed recently. You just made me think of something. Well. They're going bad, so I'll actually start. Should we bring that in to give this? Well, hold on before that way just one second before we do that, that where I will say that it I could see this actually happening based on from the heuristic of like everybody died. Yeah, everybody blew up. So, like, it'd be weird if Binance was the only one it feels like. To you and Matt would agree, if we want to pull it in and get us quick thoughts on this, all right, let's pull them in. Here we. Just do a Jesse thing. I'm I'm gonna. I'm gonna there was a great highlights all of the shit that's going wrong for Binance right now. Are we live right now? Yeah, we're live. No. We're not live or recording. Recording. We wanted to pull you in because we're talking by Nance. What are your thoughts? Well, we're in the middle of the episode right now. No, we're at the tail in tail end, but maybe Jesse set the scene of what we're in, the sides all. Right. So we're so we're talking about you know is by Nance the repeat. Is it a repeat of FTX? Is that what's happening right now? Michael pressed us to bet, put out our wagers on what's the likelihood of finance collapsing eventually and likelihood this year. Marty and I feel similarly that it's 90 to 100% eventually, 50% chance this year. Do you think that this golden goose of finance is going to succumb to some? Fraudulent activity or over leveraged bullshit that they may or may not have been engaging in. What are your thoughts? You think 90% This is why we brought you in? Because I was just, I had this same response. I was like, what the hell? 90% eventually. 90% eventually. What does that mean? At some point, well. My my take on that is all points tend to 0. Yeah, they they're the the DOJ has accused them of flagrant money laundering, particularly with Russians like, So that camera comes down at some. Point I I I mean, I think it's completely different than the FTX situation. I'm gonna be very careful not to do a Roger veer Matt. I said. Exactly what you basically are gonna say or afraid to say or like a Mount Cox is fine comment but you know fine. Finance has been around for a long fucking time. It does not mean that they can't rug at will. Every custodian can rug at will and everyone should learn how to hold Bitcoin themselves and and and self custody. But finance has been around for a long time. They have a massive market share. It's hard to track volume numbers because they can be faked. But I I think, I think objectively everyone agrees that finance is the leader by far in terms of actual, you know, market penetration and users and and and volume and and Bitcoin held on the platform. They make their addresses very clear so people can track their addresses. I think Glass node has them at over 700,000 Bitcoin or nearly 700,000 Bitcoin in in deposits held on their platform. That's like $18 billion at current valuation. And just for some context, Glass Node didn't know how much FTX had and everyone thought that they had like great opsec on their wallets, but it's probably because they had no fucking Bitcoin the whole fucking time. And you know SPF came out of nowhere. He's like this Fiat Maxi that came out of nowhere flew too close to the sun and then of course like on the Bind side you have the DOJ issues. But I I that has always been the case. I mean it's it's kind of like a tether situation in my book is like CZ is his enemy, has always been the US government. He's obviously running a shadow bank that's completely detached from them and their hegemony. So they He has a huge target on his back, so does tether. But that doesn't mean that the Tether Truthers are based in reality when they say like that. You know, Tether's an outright scam. Like Tether can rug at will. the US government could hit him with the cruise missile or some shit and it could be worthless overnight. And I kind of like I've kind of put finance in the same bucket. Like I think CZ is a massive shit corner. I think B&B is is is essentially a scam. But I think stick around. He's grounded. He's one of these like OG shit corners that's like grounded in the value of Bitcoin. I don't know how to put that but he's a he's a bitcoiner first shit corner 2nd and it's it's like a different category. It's hard to you know. Man I wanna, I wanna say that's very impressive that you you like ninja, launched you into a pod and you just rattle off exactly the case with all the data. Well, everyone's been screaming by Nance Bank Run, so I was like looking. I was actually looking into it this last few days. Just like Ninja launched in a party, right? Yeah, just to the audience, where I thought I was recording rabbit hole recap. So I joined the link and these fellas were recording the last trade. Well, we are wrapping up the last trade. I know you have to go. I'm we mean, I'm good now, but we're. Matt and I have to record rabbit hole recap. Should we just wrap recap? Should we just roll into a party? RIP for rabbit hole recap can. You like use a restroom really quick or? Yeah, yeah, let's do a break and then roll into a party, RIP. Let's do it. Works for me all. Right. Sure.