Transcript+
Welcome back to another episode of Wake Up Call. Before we get started, please like, share and subscribe to on ramp media channels to receive the best Bitcoin education and content in the industry. And also be sure to check out our latest research report titled Bitcoin the Emergent Asset class has arrived. This is a three-part series aimed at introducing important Bitcoin centric concepts to the institutional allocator world. Part 1 available now and LinkedIn. The show notes explores Bitcoins volatility and why it is a uniquely desirable characteristic of the asset that can boost returns and dampen volatility in traditional portfolios. Wake Up Call aims to educate financial professionals on the merits of the Bitcoin investment thesis. How this asset class represents both a threat to legacy financial service businesses and an opportunity to differentiate oneselves to retain and attract new clients. Hosted by Mark Connors on Ramp's Head of Global Macro Strategy and Rich Kerr on Ramp's President of Managed Wealth, this weekly show seeks to provide financial professionals the wake up call they need, prompt them to have an open mind with respect to Bitcoin, rethink their prior assumptions, become more educated on the topic, and learn from others who are already farther down this path. Wake Up Call is live streamed on LinkedIn every Monday morning and the recording can be found across on RAMP media channels. Now time for the show. All right, well, good morning, everybody, and welcome back to wake up call. We have a wonderful guest today, Lisa Huff, who will be joining us. She's got a great background, you know, frankly, one that traverses energy and trad fi and straight into Bitcoin. And and so we're we're dying to hear her expertise and the things that she has to share with our audience today. So Lisa, welcome. Thank you. Yeah. And then Mark, good to see you. I understand you had a big paddle tennis tournament this weekend, got after it probably a championship victory it was. Pretty impressive. Rich all around, really. We can't get into it right now, but maybe later. Right, exactly. Well, good, Mark. Maybe we've got a few things that are happening in the world today. Obviously there's some some important elections that are happening here in the United States. And and so would love to kind of hear your thoughts on what, what you're, you're focusing on at least for the week and, and maybe you can share that with the audience. Yeah, well, you know, all races are close here and you know, you can't drop the ball like Aaron Judge because then if you do that, you're going to you're going to lose the game. So I had to throw that in there because that was between our our episodes of last week. Still mourning that loss as a New York Yankee fan. But you're right. I mean, here we are. We are t -, 1 day on the election. And I did want to share one aspect. This is going to there'll there'll be a reason I'm talking about this polymark it and predict it are gaming sites and we've talked about that and there's been a shift in the last week. You know, there's a big Trump surge and now it's giving away. We've gotten some calls rich from folks asking what they should make of the slight reversal of, you know, 65% Trump to say 58 to 60. And I think the one insight we want to give people, and that's what we try to do here, give context to content is that the prediction markets are not always about sentiment. If someone has a 65% in the money bet on Trump, the risk reward on that trade changes dramatically and they are incentivized to take it off because the risk reward decreases as they go to expiry. So I'm getting in the weeds here because it's about trad fine about about markets and informing our clients about information. So the new services that say that the betting markets are a better indicator and only show momentum and changing sentiment of the wage of the betters is incorrect. It also has to do with the fact that they'll be a natural reversion closer to a mean as people get more in the money. What does this mean? It means that we should focus on the structural drivers of opportunity that Lisa is going to bring up. And I'm going to touch on right now, which we talked about, which is how do you become a winner? You become a winner by investing in technology and we're going to show a longer range performance of the equity markets before we hand it over to Lisa globally and why Bitcoin may be the next animal that folks are focusing on. So let's look at equity markets. We all know it's been a good year overall for NASDAQ up 21, S&P up 20. Now this has been the case forever. The European indices, the stocks 50 is up 8%. It's 20 year compounded rate is up less than 3%. So the reason we're going to kind of stepping away from the narrow focus on the election, which is one day away, probably take a week to resolve is that it's better to focus your time on what can bring you value. And Europe missed the boat on technology. Their indices are about 7% technology and their wealth effect has been impaired since that decision not to allow investment in technology versus what the US did. The Nikkei is up 6.5%. That's mostly from debasement of the yen over time. The CSI 300 China up 7.3%, which is pretty good except when you consider that their economy has grown 500% over the last 20 years and you would expect their equity markets to reflect it, but it's not because they're in more abundant industries. They don't have technology, which Lisa is going to touch on again in a minute. So the reason I bring this up is because over time, the winners in the equity markets have been those that have invested in technology and that's now shifting a little bit as gold shows us into now a inflationary or scarce asset that can preserve value. So equities, yes, but now scarce assets, which brings into obviously, obviously Bitcoin and why we're going to be talking about a new topic today, how energy folds in and if you invest in, should people be investing in energy. And I guess, Rich, the other news story newsworthy point is bringing this 20 year view into the weekend. Europe may be listening because Deutsche Telekom just decided, I think they announced and correct me if I'm wrong, because you had the, you had the story for me that they decide to invest in Bitcoin mining. That's was not on my bingo card, Deutsche Telekom Bitcoin mining. Maybe that's a good segue to have Lisa shed some light on it, unless you want to bring in some other thoughts. 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Onrep provides Peace of Mind for your Bitcoin journey, whether for your whole stack or for part of it as a complement to your existing self custody setup. For more information about our services as well as our new Bitcoin IRA product, check us out at on rampbitcoin.com. No, I think that I think that that's that's sufficient and we'll let Lisa kind of riff from there. But, you know, one of the things that I think is important for the audience to understand is, you know, often times when people think about Bitcoin, they're thinking about it as in terms of the monetary implications, right? We're looking at the price of Bitcoin and, and we're and we're discussing the sound money principles of Bitcoin and we're thinking about the integration of Bitcoin into traditional finance, you know, and what does that ultimately look like? And, and we spend a lot of time, you know, you know, focusing on the currency implications of Bitcoin. And I think one of the most important things for anybody to understand is the energy implications of Bitcoin. You know, Bitcoin is, is, is more than just digital currency. It's the largest, most powerful energy back net distributed network. And, and so when you think about it in those terms, you know, you, you'd be remiss not to have an energy expert and somebody like Lisa who's spending a lot of her time not only working with miners, but actually energy companies and, and, and private equity and, and advising and leading, you know, greater adoption of Bitcoin, you know, and so there's some really, really cool things that she's working on. And so Lisa, maybe maybe, you know, let's kick it over to you to just kind of hear your thoughts. I, you know, one of the things that we talked about on Friday in our prep call when we, when we had a chance to get together was the, the national security implications of, of, you know, Bitcoin and, and how did that kind of folds into the bigger conversation. And so I'd love to kind of hear some of your thoughts. We're delighted to have you. So what? What's on your mind? That's a gigantic question. Thank you. And you know, one more time for the people in the back, Mark your statement that, you know, you really do need to be embracing technology. There is no truer statement than today, no truer statement than today. And it is what brought me into Bitcoin. I had a fight with a wealth manager who had me in a bunch of mutual funds of stuff that I wasn't interested in. And I didn't know what I wanted to be invested in, but I knew it had to be very tech forward and very energy forward. And this was at a time when energy was like 2 or 3% of the S&P. And when I took control of My Portfolio, I made it about 38% I think of My Portfolio because I understood it. But so let's like just take a quick look back at technology adoption and there's there's really a pretty historic example that that people need to know about. And if if you don't. And that goes back to the early 90s as China was considering beginning to use the Internet and Bill Clinton really famously said controlling the Internet is like nailing jello to the wall. And when we in the US came to understand that they would be opening up the Internet and allowing Chinese companies on the Internet, we really viewed it as them cracking the door on democracy, right? We thought it was a real shift in their political ambitions or their political mindset, but it wasn't. It was about them embracing a technology and they're embracing the Internet has dramatically shifted where they are as a people. We in the United States, obviously we can't. We've come to depend on them for, you know, every plastic object that we buy in Walmart and a lot of our technology, we harness the horsepower of their people for our benefit. All of these things should be pointing people to the importance of looking at new technology and not waiting until it's too late. China's economy would be drastically different without the Internet. The future economies of the world will be dependent on whether or not they adopt Bitcoin as this new technology. So there's so many things I could say it's it's very it's been very frustrating to me over the last few years to watch all of the distraction that's happened in our country around what Bitcoin is or Bitcoin mining doesn't use too much energy. You know, you're burning the you're burning the earth. It's for terrorists. I have long said, and I stand by this statement, that Elizabeth Warren has done more to damage our national security than most people can even perceive. Her anti crypto stance has implanted this malware into most people's brains that Bitcoin is somehow bad and it isn't bad. And, and actually I would really correlate what she's done or what she's attempted to do to China again to go to China. When they destroyed their merchant fleet during the Ming Dynasty, they did had a maritime prohibition. They wanted to keep the keep the power within the country, control all foreign influence, focus inward rather than outward, right? Imagine if they would have kept that stance and not adopted the Internet, right? They'd be in a completely different place. And so the work that I do now after, you know, maybe I should say for your audience, I do have a background in the energy business. I traded natural gas was a long time ago, but I was in the risk management group at Enron on a new derivatives product that became one of the most traded derivatives in that gas, one of the most liquid. I went on to traded a few other companies, but wound up running East Coast trading for PG&E, the National Energy Group, and we were based in Bethesda. What that gave me the opportunity to do was really look at energy assets from salt Dome storage in the Gulf Coast to pipeline capacity to generation assets. And my specific area as I said it was the East Coast and we we had three big power plants on the East Coast. So we were the main market maker in some really widow maker I think is what they call them couple of pipelines. And it really taught me that that asset arbitrage is the whole game. I mean, and when you trade commodities, it is not, you know, higher or lower, right like this guess it's information gathering and it's using the assets that you have at your disposal in order to really to harness the power of the capital that that you've put at stake. So all I have to say I have a background in energy when I found Bitcoin and then really began to be immersed in the Houston community. We have a big community of Bitcoin miners and Bitcoiners and a lot of former energy folks are getting into Bitcoin mining or at that time, we're getting into Bitcoin mining and and now more and more, but I really began to see this for what it is. And Bitcoin and Bitcoin mining is as important of infrastructure as our energy infrastructure is, right. So I really believe that energy infrastructure is absolutely at the base of our national security. Without onshore energy and onshore energy production, we would not be able to have an outwardly facing strong presence in the world, but we do. And it, it, you know, like Elizabeth Warren just burns me up. The, the climate activists burn me up, the ESG activists burn me up. I think we can all probably agree that we'd like to live on a clean planet and breathe clean air and drink clean water and all of those things, right? I have kids. You guys have kids. Like we want our kids to have kids. No one is arguing for a dirty planet, but at the expense of giving control of energy assets to another country. Like why are we even existing? You know, when you look at the globe and you look at the land masses, we have created our entitled military around protecting land mass, right? So why would and, and why do we want to protect that land mass? We want to protect it because it has natural resources within our borders. We have natural resources within Russia's borders. They're the second largest producer of natural gas on Earth. They're. Protected Lisa it it sounds like I hear you saying there's an either or discussion being presented us and instead of saying clean planet means stop fossil now and and don't and and that anything that is new on the scene like Bitcoin that requires energy, push it away. And I think Rich and I hear you saying something like, yes, we want a clean planet. It's a yes and. It's a yes and Rich exactly. And we need the technology to give us more. Well, and it it also speaks to just human nature, right? I mean it we're, we're, we're blessed with resources and if we choose not to use those resources to advance humanity, well then what good are we doing with those gifts? And you know, I, I agree with the premise, right, that that there's this, this desire to not tap into new technologies, to not leverage energy resources. And in fact. Many of much of the of the fear and misunderstanding that you were talking about that it's been pervasive in the Bitcoin world that hey, wow, it's not a efficient use of energy in it. You know, it's it's going to affect, you know, the climate and things on that nature. Well, you know, that's already in many respects been completely debunked because what Bitcoin and Bitcoin miners have done in many regards and energy companies, frankly, is that they're capturing, you know, stranded energy or wasted energy and stabilizing our network. And you know, it. It's amazing to me to look at how that fear in that misunderstanding that's been implanted into, you know, many people's minds, right as is actually getting unwound, you know, over a period of time. And, and you know, the best parts of, of, of humanity is when we innovate, right? And, and when we actually think critically about the things that advance the human experience, and if we're advancing that human experience in positive ways and, and empowering other people and other nations that are impoverished. And, and you know, you know, to me, I just think it's, it's probably one of the greatest feel good stories ever, ever out there. When you start looking at what Bitcoin is doing from a technological standpoint, it's incentivizing, you know, people to, to, to think about power and think about energy in completely different ways. I don't know. Yeah, for sure, for sure. But but again, let's like dial back to what is Bitcoin, right? And to me it is the first use case that became popular within this cyber network of computers. But if we think of cyberspace as this giant global network where information flows and it can flow right between people, companies, nations, you are really building an invisible highway, travels to reach a destination. So how do you protect your highway? How do you put a military along your highway? You require zero trust and you require people who travel your highway to show their ID at every checkpoint. This is what we have with Bitcoin mining. Your highway is made-up of this computational power, this hash right. The hash that is created is your gate key. It keeps things fair by only letting in those who are willing to pay in power and an effort to ensure the integrity of cyberspace. So if we make things costly enough to attack, we are not just protecting systems, we are building an energy fueled unbreakable network for the world to harness. We need to focus on building the most energy intensive network on the globe. We need hash power. It needs to be in the United States. And in my opinion, we really need to be focused not to on grid opportunities because I do see that in the very probably near future, we will have very credible threats at our grids. We need to focus on harnessing power from other sources. And that can look like a whole bunch of things. But in my case, because of my experience, what I lean into are these midstream really these energy assets that exist. And, you know, I, I do tell people that I live in Houston, energy capital of the world. The people that work in these energy companies and these private equity groups are my friends. These are the people that I see at holiday parties and sat with at soccer games and, you know, all of that. So I never try to convince somebody to buy the first use case of the technology. I mean, I own it and I openly tell people that I own it. I think it is the safest asset on earth, Earth because of its scarcity. But really what we're talking about is building our national security. We have a standing military now. We need a standing military in cyberspace and that is a direct function of our onshore energy production and in the, you know now and going forward our onshore digital infrastructure. Yeah. So you would, you would just said we need to, we need to be the leaders in the world in, in how did you say it, securing this energy infrastructure, this technology, we need to be the ones who are at the forefront of it. Can you tell, can you share a little bit about why that is? I mean, I obviously intuitive, we always want to be the leader in that space, but but why, what are the implications there? And and why does US becoming the biggest Bitcoin miner and you know, and, and securing that Bitcoin, those Bitcoin rewards and things on that nature, Why is that important? OK, so again, let's go back to the traditional energy world. Let's let's again visualize a globe and let's look at the land masses on the globe. And let's consider the standing militaries that were built by the nations on those land masses. Those were built in order to protect land and natural resources. So one of the examples that I gave recently when I was addressing kind of energy infrastructure and national security is the example of the Trans Siberian pipeline and the explosion that may or may not have taken place in 1982. It you know, we all are pretty familiar with the Nord Stream pipeline that was going from Russia into Europe. It was a huge threat to Europe that if that pipeline, if something happened to that pipeline, would they have enough energy? And you know, mysteriously, excuse me, it blew up. Whether or not we did it I think is irrelevant. It it blew up and it took the ability, excuse me, for Europe to have energy security, but this wasn't the first time we've done this. So if you look back to 1982, the CIA allegedly sabotaged the Trans Siberian pipeline and this was a gas pipeline that went 2600 miles from Russia or the Soviet Union to Europe. And it, this is a really interesting story. I highly encourage people to like take a few minutes at some point and look up the farewell dossier because it's actually not been proven. I or I think there's much discussion over whether it's an accurate account as to whether or not the CIA blew up this pipeline. But what we know for sure is that Ronald Reagan and his administration went to leaders of other countries and said, hey, Russia's trying to build this, the Soviet Union's trying to build this pipeline. We want you not to help them. We want you don't. Don't give resources, don't send technology, don't put any manpower towards this project. You know, we need to snuff out their ability to monetize natural resources so that we can put, you know, what? We want to extinguish all of the rest of the Cold War, right? But we've got to cut off their ability to sell into the dollarized world or the European world. OK, well, actually what ended up happening is that our allies said no way our energy security is more important than your political aims. So Germany and France and others said no way US. And they helped with, you know, the getting that pipeline stood up for their own energy security. And so when we sanctioned Russia back when they began the invasion of Ukraine, my immediate reaction was, Oh, no, right. I mean, they will find another way to monetize their resources. They're very resourceful people, right? They have all of this energy sitting on shore. They have national security by way of resources. And what did they do? What did they do, Lisa? What? What did they turn to? They started mining Bitcoin and they announced in 2023 that they had mined one out of every Bitcoin, one out of every five bitcoins. They have constructed a huge amount of computational hash rate on shore. So again, please put Elizabeth Warren at the front of your mind and think of her as an impediment to our own national security because she has falsely implanted in people's mind that Bitcoin mining is anything other than the utmost importance to our national security. And so, you know, again, to like go back to where I think we need to focus, it is with our energy companies. I mean, yes, fine, go build an on grid mine. But again, I think that that our grid system could vary. I think it's very vulnerable. Let me say that. So my work is typically with, you know, producers. So guys that are that actually have production, companies that have production perhaps that they have stranded gas, perhaps they have gas that's just disadvantaged, meaning that you know, it can go into a pipeline like Waha pipeline. But 47% of the time in the last 12 months, Waha has traded below 0, right? So that's not really a great use of your energy infrastructure to sell into a negative market. So that causes those wells to be shut in. So my partner and I are are collaborating to work with all sorts of energy companies to help them again, like deprogram the malware that quite possibly they could they could have been assimilated into their organizations because of the false narratives of those in power in the US government. So. Forgive me, I was had my mic off. But Lisa, I want to pick your brain because there's there's something in the Bitcoin world that a lot of people are not familiar with and love for you to just quickly enlighten our audience on why hash rate matters, why people should focus on it. Yeah. Well, again, if if the Bitcoin network is a way for us to transfer information again, let's let's really think about it like a highway or a shipping lane, right? We have our Navy out protecting our shipping lanes in the ocean. Miners hash rate is what's protecting the digital highway. So we must have the ability to have hash rate on shore in order to protect EU s s interest to transfer information to whomever, whether that's, you know, to another entity inside the US or perhaps we are exchanging information, whether that be value. You know, I think Bitcoin could the network could grow to offer implications for for many things. But you know, when I see 36 countries stand together and take a picture, and I'm referring to bricks and I follow that. When I see them doing that, I see that as a middle finger to the USI see that as them saying, we just don't need you anymore. We're not going to play in this dollarized world. And you know, I think this is one of the biggest mistakes that the US has made is the how they have disincentivized financial actors from participating in our system. They have done it in a variety of ways, right? They, they bail people out that don't deserve to be pailed out. They inflate the currency, they've caused all this inflation, all of these things, but what part of it you you're just disincentivizing people to use your system? And we kick people off of Swift, you know, there, there there's a whole number of things that we've done that have emboldened this 36 country, you know, bricks to stand together and take that picture. Right. So just so again, if you are the architects of a government, you don't want to motivate your people and your industries to leave your borders. And when nations kick miners out of their country, they are forfeiting access to the future digital highway, the highway everyone in the world will use. I mean, it's my opinion that the BRICS currency will be rather short lived. I believe it could be within the next 12 months that we see Russia beginning to sell their natural resources for Bitcoin. It only makes sense for them to do so, right? You are removing all, all risk elements to a secure transaction. You know, why should they have foreign exchange risk and counterparty risk and system risk, right? I mean SWIFT has failed, the US banking system has failures and cyber packs etcetera, etcetera. But that's why the strength of an onshore mining operation, right? The more hash rate we have within our borders, the more secure and and the bigger the highway we are building for our own nation, people, companies to use. What is the current hash rate, Lisa you think in the US and has it changed over time across the whole network? You know, I haven't looked in the last few days. It's easy to Google it though. But yeah, we, we see it as, you know, unfortunately, I guess maybe for some Bitcoin miners, because the price they get paid for hash has stayed relatively low or decreased, but hash rate has gone up over time. It I think pretty closely follows the adoption rate of Bitcoin and Bitcoin price. There's this whole conversation around power law, which I find pretty fascinating. And when the power law guys started, you know, really making these correlations to Bitcoin price. What, what I think I found more interesting was that when they mapped hash rate and when they mapped adoption, like it followed the power law also. And I think hash rate goes up forever, right? As other countries see the benefit of Bitcoin mining, not just from a, I'm going to make Bitcoin and hold it in my strategic reserve, which I think every country should be doing, like El Salvador and like Trump has said he will do here, A. National stockpile, I think is, is what he said, which I think is quite interesting, the implications of that, right, because in many respects it changes the dynamic stockpile. Is it it, you know, kind of has the implication of weaponry and there have been a lot of parallels in the Bitcoin space to, you know, next generational, you know, weaponry, you know, going from, you know, musket to right to rifle to machine gun to boats, to airplanes, to drones. And then, of course, you know, Bitcoin becoming this new and interesting weapon and, and, and in many respects, right to, to your point, right with of national security, which is not only does it potentially disincentivize cyber warfare, it can also disincentivize kinetic warfare. But it's quite an interesting, quite an interesting technology. I, I just sit back and I've always, I'm always amazed at how deep this rabbit hole can go. And it shouldn't intimidate people. I think people ought to lean into. You know, a new innovation and say, wow, maybe this is not only a solution from a monetary, you know, standpoint with the war on our own currencies, you know, and I'm talking globally, you know, currencies have been debased around the globe excessively for a very, very long time. And you know, Bitcoin solves that problem, right? There is no debasement of, of, of Bitcoin because of the scarcity of the asset. And then you you flip to, you know, other human problems, energy independence, energy inefficiencies, you know, all sorts of problems in that space. And you're kind of showing us that this really can help us one become more efficient with our energy, but also secure our national interests 100. Percent. Well said. I'm learning, I'm learning, I'm growing. To your, to your point Lisa about adoption and, and hash rate, we have a, we have a terminal that we share with, with clients and I think people can get access to it by going to onramp.com and one of the charts that you know, I would say it's top five Bitcoin dominance and price are probably number one and two or two and one respectively. But here you have it, like you said in blue is hash rate. And I think we might remember what happened here in May of 21. To your point about do we don't we 1994 in China, they decided to adopt Internet that helped them here. They wanted to kick out miners hash rate dropped, but but it went to the US, it went to other areas. And then think of that guys. Think of where hash rate was at you know Bitcoin price of 50 or 60K and where hash rate is today at 69 or 68 K. Yeah, that's phenomenal, right. You've got the previous highs of the 2021 run and and now you've got what north of 700 XA hash, you know, being produced in in and into the network, right. You know, people always say, well, what's the US dollar backed by? It's the full faith and credit of the US government. And then you and then you sit back and go, well, what does that mean? And then you go, what is Bitcoin backed by? Well, the most powerful energy packed network in decentralized network in the entire world. It's just amazing to me. Right. And so, but just to repeat that, right, people believe that the dollar was backed by the US government. And then sometimes they get a little further down the road and they go, OK, well, actually it's backed by the military, right? Because what we're really trying to do is protect the resources within our own borders, OK. But if now we realize that the Bitcoin network is this global decentralized Hwy. of information, you've got to protect that by putting energy in so that you get access out on the other side. That has to happen on shore. And, you know, I can't remember exactly what she was saying, but, and I can't remember which Democrat was saying this, but it was like, thank the longshoremen or think of whatever. Like we need to be thanking our energy companies. Instead, we have like put them over the barrel and just like beat them into a pulp, which is absolute lunacy. I mean, they are some of the smartest people on Earth and they are protecting us. I mean, they, they see that light switch. It's magic every day when I turn that thing and I hit it up and everything works and my 18 Apple devices that are all plugged in are fully charged. It's nothing short of sheer magic and our energy companies get no credit. And so I would like for them to take a dominant position in this Bitcoin mining space because when people realize that having onshore mining is the whole thing like they will, the energy companies will again, you know, look and they are like the smartest people on Earth. So you know, that's what gets me excited every day. I think I I shared this, I think I shared this with you. But I was at a party last week and I met a guy that was in a private equity team and he says, Lisa, great to meet you. I run energy for the firm, but I office in Houston. So not in Dallas this week. But please tell Dan my partner to go by and see his Co founder. He says I'll be hunting but easy to take a break. I would love to get together and talk Bitcoin after meeting you at this party. I boned up a bit on Bitcoin out of embarrassment of seeming naive on the topic and I have many more questions. I am intensely interested in your mentioning that some gas centered companies are turning to Bitcoin. Let me know your availability. Right. I was at another event at a it was a nuclear alliance, Texas nuclear alliance. It was a fantastic event and a guy there that is actually holds public office. We exchanged numbers. We're going to try and get together. Great meeting you. I would like to continue the discussion. I need to understand Bitcoin and I think you can help. I'm out of town till next week. But should we taste touch base then? I mean, these guys, like, no one has really explained to them this what we're really focused on here, which is national security. But man, I mean, once I mention it, there's no like, oh, but Elizabeth Warren and the terrorists, none of that. They're like instantly, OK, let's talk about this, right? They are the defenders of the integrity of America. So why now, Lisa, it's it, this is out there. You've mentioned and Rich's touched on the fact that there's trapped energy that can be used or wasted energy rather that there's flaring that Bitcoin miners can solve because of the nature of zeros and ones going to the satellite that other entities can't reach those those flaring stations. But why now? What is it? Is it the messenger? Is it that you are again 2 feet and a foot in each world? Why are these folks just hearing about it now? I. Think a lot of the energy companies have been hearing about it for years. But, you know, I mean, if, if I'm a, if I'm a driller and you know, I'm going to plunk millions of dollars into poking holes in the ground to bring crude oil out of the ground, like I, I kind of have a lot on my plate. You know, if some woman in Texas is, you know, acting like a Bitcoin zealot, I mean, I'm probably not really paying attention to her. And so that's why Dan and I really shifted. We didn't really shift our focus, but we just realized that if we went and we spoke to private equity groups, we could probably get their attention because we can demonstrate to them, wow, you have a gas processing plant and you're not using all of the available energy to process gas. So you have 200 megawatts. You're using 100 megawatts for your current operations. But what if you sold access to your energy, just a portion of it? What if you sold 20 megawatts and you did a partnership, some sort of AJV or you did it yourself? But let's just assume you do AJV with a Bitcoin mining company. You can sell access to power. And you know, and we, we actually did this for a company in Dallas, Dan kind of just ran some really simple math. But if you sell US 20 megawatts of power at the end of the year, that looks like $4 million a year to the gas processing plant. Now I forget what their actual number was. Maybe they're making $60 million a year, I don't remember. But because these are private equity backed companies and they have kind of a 5 to 10 year goal or you know, these these private equity groups want to have their investment maybe out in 10 years. Well, if we're showing you how to add $4 million a year and these assets are trading on an 8 multiple, that's $32 million that you can realize during a sale. You know that pretty much gets their attention. Yeah, in a hurry. Got it. So you're speaking their language on on how they on how they monetize assets over the time frame and so you're. Right. And so I mean, same thing. I, I met with a power generation company, this is like 3 years ago and I said, how much of the time do you guys sell power into the grid and achieve less than desirable return? And, and this was just a casual conversation and they were like, oh, probably 4%, OK. So 4% of the time they're either getting a really low price for their power or they could be effectively, it could be costing them money in order to keep their generation assets running, right? Because it's costly and it takes a lot of time to shut them down and then bring them back online, as I remember from my days of being on that generation hedge team at PG&E. So my conversation with this generation company was, well, hey, how about you do AJV with a Bitcoin miner or set up your own Bitcoin mining operation? And when you can't monetize to the level that you'd like to by putting power on the grid, just mine Bitcoin, right? Direct your load to this sponge for energy, for excess energy that is Bitcoin. It is actually more accretive to your business. When I go so far as to say now that I've told you this, it is a responsibility to your shareholders or your stakeholders. Again, like this sort of gets their attention. Got it. And it's I and I think we just don't understand, you know, talk about, you know, the reason I spend time on the prediction markets is we have information coming at US 1000 miles an hour where all these factotums, these mile wide inch deep, you know, masters of none, experts because of the amount of data coming at us. And what you just told us is that people are wasting 4% or more of their energy because of the nature of the market in there and the structure of the business and that enter Bitcoin and it can turn that from a structural and persistent loss to salvage. And how many people know that in the planet like I think both 3 here now and we'll and we'll build from there. No, they're, they're, I mean, they're obviously there's a lot of folks that that talk about this. You know, what I really like to do in Houston is I put together these dinners like once 1/4 and invite different groups of people. And it may be, you know, the former ambassador to a a very energy rich nation happens to be my neighbor and former head of a huge retail electricity provider, probably have included the heads of some of the US mining companies. And just have these conversations at a level that really put the pieces together. And that's what you have to do. You really need patience and you need to understand what the business is that that someone else has and prove to them why this is an improvement and that that's not really dissimilar to what you're doing at On Ramp. You're really trying to help people see that adding Bitcoin to their portfolio is beneficial. My angle is just trying to help the energy companies see how it's not only accretive, but it's operationally beneficial for them. 011 other thing I'll tell you I had this and this is really what I'd like to see happen we had this dinner maybe it was like a year ago and I invited the founder of one of the largest offshore exploration companies private, not public private company and then a couple of Bitcoin miners and there was an investment banking team that I've worked with they were there and I said to the founder of the the offshore company in the not too distant future you will be having drill ships pull up next to your rigs and you will be sending natural gas to the drill ship and on the drill ship you will be mining Bitcoin and he went no that will never happen you have no idea about OSHA. You have no idea about blah, blah, blah, blah, blah. Totally right. I don't. But I said yes. But what if instead of you putting this in a pipeline and, you know, traversing the sea in order to bring it back to the Gulf Coast and then enter Henry Hub or, you know, one of the Gulf Coast pipelines. And let's just say that Henry Hub, the Nymex is 225. I mean, you're getting less than 225 for your gas. What if I told you you could just send it to the drill ship that you've got parked next door and you could achieve $4.00 gas? Is this interesting and I could just see the wheels turning? Isn't that great? Yes, it's so fun. It's just rethinking. It's just it, it's, it's, it's, it's just looking at things with a fresh set of eyes. And that's the beautiful thing. I, I think in many respects about Bitcoin is it, it forces you to, to look at a problem and reimagine that problem as an opportunity in many respects. And it doesn't make a difference if it's, you know, a portfolio level, you know, question or if it is, you know, an energy level question, you know, how do we, how do we get a level of clarity? And we're all in this, in, in, in this, in this, you know, learning space where we're really starting to concentrate our focus and our energies and, and, and look at old problems or old ways of doing things and getting a little bit smarter, a little bit sharper about, you know, what the solutions really ought to be. And that's the beautiful thing in my mind about Bitcoin. And, and it's one of the reasons why I was so excited to have you on the show, because I think, you know, the energy space is it, it's not my expertise, nor is it Marks, but we're, we're not naive to the implications of it. And so, you know, how do you think about this new emergent asset class, you know, and what the monetary implications are and then not pay attention to the energy and implications and the national security implications. And so in my mind, you know, I think any investor in the space needs to, you know, spend time, you know, doing their study and, and, and really, you know, going down and exploring different concepts of how Bitcoin can actually empower mankind to make smarter decisions around our resources, You know, improve efficiencies in the way that we, we communicate, operate, share information, exchange money, exchange value. I mean, there's just so many different things. And that's what gets me so energized every single day. You know, I get up on a Monday, I get excited because I get to speak like with people like you, Lisa and, and, and learn a little bit along the way. So I want to just take a moment to, to thank you for joining and sharing some of your deep experiences, not only in, in, in the finance world, in financial infrastructure, but but in the energy infrastructure and helping us kind of change the lens a little bit and, and see Bitcoin as something a little bit bigger than maybe then then just a financial asset, which is enough in my mind. But you know, here is something that's completely paradigm shifting. So thank you very, very much for joining us today. If somebody wants to reach out to you, Lisa, what's the best way for them to get a hold of you or Dan, your partner? Yeah, I do try to respond on LinkedIn, so you can send me Adm. You can go to my website. It's Lisa Huff dot IO. You can find Dan on Twitter. He's amalgamated sludge. I think his handle is at a sludge. I know it's the greatest name, the greatest name. So shout out to Dan. I mean, he is one of the people that's really helped me get so much clarity on the energy space and he has incredible relationships. He was an Exxon engineer, but then a buy side and a sell side analyst in the energy space. So you know, it's really helpful when we go into a lot of these companies. He will, he will have known the founder, he will have known a former CEO, he knows the current CEO. So just, you know, kind of having access to being able to speak with people is, is kind of all it takes. So, you know, my overall strategy in life is. Just try to be of service, do good things for other people, help other people win. And again, like shout out to on Ramp. That is I think what your mission is. You're really trying to help your clients win. Well, thank you. That is that is our goal. I think in many respects, we, you know, we want to see people come to Bitcoin and we want them to secure their Bitcoin properly so that they don't lose that Bitcoin, you know, to, you know, single party failure or counterparty risks and things on that nature. And that's, that's, that's a big piece of our mission. But but like you said, it's really about education and, and being of service to others and helping them find a, a better path to the problems that they face. And and that's what we do every single day, regardless of what role somebody performs inside of our company, whether they're an engineer or an analyst. And like Mark, you know, or somebody like myself that's focusing on trying to unlock the institutional channels for for the masses. And so we appreciate you joining us today and all of the information that you shared. And I know our audience will appreciate it because they're learners as well. They're constantly trying to refine their businesses and add value to the clients that they serve. And so thank you for changing that lens a little bit with us and, and, and let's, let's hope that we, we come through, you know, the next several months with the elections and everything in a, in a peaceful and productive manner. And that we, we all get clarity on where our energies ought to be focused. Not, not wasted on negative thoughts, but really getting productive and, and leaning into innovation because I think that that's core to the American experience. So thank you for joining us. Well said Rich and thank you Lisa, echoing Rich's comments wonderful to have an expert being able to bring experience from both worlds and and really show the importance of energy and Bitcoin and proper policy it's. Been my pleasure. Thank you. Take care. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Ramp Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit on rampbitcoin.com/contact to schedule a consultation with one of our private Client advisors.
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